Sirius XM Revenues, Income Up For First Quarter

Solid Q1

SIRIUS XM RADIO first-quarter revenues rose 11% to a record $805 million with its subscriber count up by 405,000 to a record 22.3 million, the company reported TODAY (5/1).  Net income jumped 38% to $108 million (2 cents/diluted share), and adjusted EBITDA grew 15% to $208 million.

"SIRIUS XM is starting the year with tremendous operational momentum. We grew subscribers faster than any first quarter since our 2008 merger of SIRIUS and XM, and we improved our self-pay monthly churn rate to 1.9% despite implementing a price increase at the beginning of the year. Rising auto sales and our strong execution should enable us to exceed our prior 2012 subscriber growth guidance of 1.3 million, which today we are raising to 1.5 million," said CEO MEL KARMAZIN in a press release.

"In 2012, we continue to expect record revenue, adjusted EBITDA, and free cash flow, and our subscriber base will also finish this year at another all-time record high," added KARMAZIN. "Our number-one focus is on delivering the best possible content to our subscribers -- we are rolling out more satellite channels via factory-installed 2.0 radios, and we are improving our online offering by delivering even more live sports coverage, updated apps with enhanced features, and later this year, on-demand content and personalized radio. There has never been a better time to be a SIRIUS XM subscriber, and we think our unparalleled audio product will produce strong operating and financial performance for our company in the years to come, which should result in great value to our stockholders."

Among other results, self-pay net subscriber additions grew 148% to 299,348, with total paid and unpaid trial inventory up over 200,000 to 5.7 million, based on strong auto sales.  Free cash flow was $15 million, up from negative $17 million and the first time the company has shown positive free cash flow in the first quarter of a year.

"We ended the first quarter with $747 million of cash, after the repurchase of approximately $57 million in aggregate principal amount of our debt during the first quarter. Our leverage at the end of the first quarter improved to 3.9 times our adjusted EBITDA on a gross basis and 2.9 times our adjusted EBITDA on a net basis," said EVP/CFO DAVID FREAR. "Our growing cash flow is reducing our leverage substantially, and this improving credit profile should benefit stockholders as we refinance or pay down more than $1 billion of high-coupon debt over the next 15 months."

KARMAZIN offered guidance for subscriber growth, saying, "With auto sales in the first quarter exceeding expectations and better than expected churn, we now expect to grow our net new subscribers by 1.5 million in 2012."   The company is sticking with its previous guidance of $3.3 billion in revenue, adjusted EBITDA of about $875 million, and free cash flow of approximately $700 million.

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