Directed Electronics, the retail distribution partner of Sirius, issued some new guidance today, and part of their presentation centered on satellite radio volume.  Of particular note for investors, Directed anticipates a 15% to 20% decrease in sales volume as compared to last year.  Many analysts have have anticipated a dip at retail between 20% and 30%.  Directed, as sellers of these receivers, should have a pretty good idea of anticipated volume, especially considering that they have counted numbers at least through Father’s Day.

Report Excerpts and Key Data:  

As of May 10, 2007

- Sales in the range of $475 – $510 million      

     – 8%-16% increase over 2006 sales   

- Gross sales in security & entertainment products to grow in the range of 40% – $46%      

     – Excluding Polk growth would be in mid-single digits   

- Gross sales in satellite radio products to decline by 11% – $22%

     – SIRI decreased subscriber growth from 2.7 million in 2006 to over 2 million 2007   

- EBITDA to increase to $74 – $78 million   

- Pro forma net income in the range of $0.95-$1.05 per diluted share      

- Top-line growth in core business to be offset by declining satellite radio sales      

- Negative impact of non-cash stock-based compensation expense, higher         investments in infrastructure and provision for litigation expenses 

As of July 6, 2007

- Based on recent YTD sell-thru experience (thru and including Father’s Day) in our Satellite Radio Business and our projections for the balance of the year, where lower priced SIRIUS receivers are composing a meaningfully larger percentage of our total satellite radio sales than in our original plan, we now anticipate a reduction in our SIRIUS revenues from prior year in the range of approximately 35-40%.  This change in guidance is driven principally by a mix shift to lower priced units and an approximate 15-20% reduction in planned unit volume.  We plan to provide full year guidance to our sales and earnings at our Q2      

Earnings Release on August 9th, 2007.

Position – Long Sirius, Long XM, No Position Directed