2Q Report Thread August 6th 2009!!!

Good morning everyone,here is first part of Report for 2Q,haven't read it all through yet,but we need this thread to discuss it..


http://money.aol.com/rtn/pr/sirius-x...349?channel=pf


NEW YORK, Aug. 6 /PRNewswire-FirstCall/ -- SIRIUS XM Radio (Nasdaq: SIRI) today announced second quarter 2009 financial and operating results, including $132 million in adjusted income from operations, marking the company's third consecutive quarter of positive adjusted income. The company also announced a 28% decrease in total cash operating expenses since the merger of SIRIUS and XM one year ago. SIRIUS XM also increased its full-year 2009 guidance for adjusted income from operations to over $400 million from over $350 million.


(Logo: http://www.newscom.com/cgi-bin/prnh/...19/NYTU044LOGO )


"Just one year ago, combined operations produced negative adjusted income from operations of $61 million," said Mel Karmazin, SIRIUS XM's CEO. "This year our revenue increase in the second quarter, paired with a $187 million expense reduction, drove an improvement of approximately $193 million in adjusted income from operations to $132 million in second quarter 2009. Based on these results we are increasing guidance again and expect to exceed over $400 million in adjusted income from operations during 2009. Growing our revenue in the face of broad declines in the advertising and automotive markets is a remarkable accomplishment, and we are well positioned for a rebound in auto sales."


Second quarter 2009 pro forma total revenue was $608 million, up 1% from second quarter 2008 pro forma total revenue of $601 million. Second quarter 2009 subscription revenue was $577 million, up 3% from the second quarter 2008 subscription revenue of $558 million. Subscriber acquisition cost (SAC) per gross subscriber addition was $57 in the second quarter 2009, an improvement of 20% over the $71 in pro forma SAC per gross subscriber addition in the second quarter 2008.


SIRIUS XM ended the second quarter 2009 with 18,413,435 total subscribers, a decrease of 1% from the second quarter 2008 pro forma total subscribers of 18,576,830 and a decrease of 185,999 from the first quarter 2009 subscribers of 18,599,434. Self-pay subscribers were 15,421,414 in second quarter 2009, virtually unchanged from first quarter 2009 self-pay subscribers of 15,436,410 and up 592,264, or 4%, from the 14,829,150 self-pay subscribers in the second quarter 2008. Promotional subscribers were 2,992,021 in second quarter 2009.


Monthly average revenue per subscriber (ARPU) was $10.66 in the second quarter 2009, up from $10.55 in the second quarter 2008. The pro forma self-pay monthly customer churn rate was 2.0% in the second quarter 2009 down from 2.2% in the first quarter 2009, and up from 1.7% in second quarter 2008 pro forma self-pay churn.


In the second quarter 2009, SIRIUS XM achieved positive pro forma adjusted income from operations of $132 million as compared to a pro forma loss from operations of ($61) million in the second quarter 2008. The second quarter 2009 US GAAP net loss was ($157) million, or ($0.04) per share, and includes $108 million, or ($0.03) per share, in net charges for the loss on the extinguishment of debt and credit facilities and a $24 million write-off, or ($.007) per share, of prepayments for future launch services attributable to the counterparty's bankruptcy filing. Absent these charges, the US GAAP net loss per share of ($0.01) was in line with Wall Street estimates. In the second quarter 2008 the US GAAP net loss was ($84) million, or ($0.06) per share. Second quarter 2009 free cash flow was $13 million compared to ($169) million of free cash flow in the second quarter 2008.


2009 OUTLOOK


SIRIUS XM now expects to achieve over $400 million in 2009 adjusted income from operations. This is an increase from the company's previous guidance of over $350 million in 2009 adjusted income from operations provided on May 7, 2009.


BALANCE SHEET IMPROVEMENTS


During the second quarter the company made improvements to its balance sheet including refinancing some of its debt at lower rates, extending maturities, and improving amortization schedules and covenants.


"These transactions have significantly improved the credit profile of the company, and we intend to be opportunistic in pursuing additional balance sheet improvements," said David Frear, SIRIUS XM's EVP and CFO.


Based upon the company's current plans, it has sufficient cash, cash equivalents, available borrowings under credit facilities and marketable securities to cover the company's estimated funding needs through cash flow breakeven, the point at which revenues are sufficient to fund expected operating expenses, capital expenditures, working capital requirements, interest payments and taxes. The company's projections are based on assumptions, which it believes are reasonable but contain uncertainties.


PRO FORMA RESULTS OF OPERATIONS


The discussion of operating results below is based upon pro forma comparisons as if the merger of SIRIUS and XM occurred on January 1, 2008 and excludes the effects of stock-based compensation and purchase accounting adjustments.


SECOND QUARTER 2009 VERSUS SECOND QUARTER 2008


For the second quarter of 2009, SIRIUS XM recognized total pro forma revenue of $608 million compared to $601 million for the second quarter 2008. This 1%, or $7 million, increase in revenue was driven by a 1% growth in weighted average subscribers from the second quarter 2008 as well as an increase in ARPU.


Total ARPU for the three months ended June 30, 2009 was $10.66, compared to $10.55 for the three months ended June 30, 2008. The increase was driven mainly by the sale of "Best of" programming, increased rates on the company's multi-subscription packages and revenues earned on the company's internet packages, partially offset by a decline in net advertising revenue per average subscriber.


In the second quarter 2009, the company achieved positive pro forma adjusted income from operations of $132 million, compared to an adjusted loss from operations of ($61) million for the second quarter of 2008 (refer to the reconciliation table of net loss to adjusted income (loss) from operations). The improvement was driven by the increase in total revenue of $7 million and a $187 million decrease, or 28%, in expenses included in adjusted income (loss) from operations.


Satellite and transmission costs decreased 27%, or $7 million, in the three months ended June 30, 2009 compared to the same period in 2008 due to reductions in maintenance costs, repeater lease expense, and personnel costs.


Programming and content costs decreased 14%, or $14 million, in the three months ended June 30, 2009 compared to the same period in 2008, mainly due to reductions in personnel and on-air talent costs as well as savings on certain content agreements.


Revenue share and royalties decreased by 5%, or $6 million, compared to the same period in 2008.


Customer service and billing costs remained relatively flat for the three months ended June 30, 2009 compared to the same period in 2008.


Cost of equipment decreased by 49%, or $8 million, in the three months ended June 30, 2009 compared to the same period in 2008 as a result of a decrease in the company's direct to customer sales and lower inventory write-downs.

Sales and marketing costs decreased 46%, or $83 million, and decreased as a percentage of revenue to 8% from 15% in the six months ended June 30, 2009 compared to the same period in 2008 due to reduced advertising and cooperative marketing spend as well as reductions to personnel costs and third party distribution support expenses.


Subscriber acquisition costs decreased 47%, or $147 million, and decreased as a percentage of revenue to 14% from 26% in the six months ended June 30, 2009 compared to the same period in 2008. This decrease was driven by a 23% improvement in SAC, as adjusted, per gross addition due to fewer OEM installations relative to gross subscriber additions, decreased production of certain radios, lower OEM subsidies and lower aftermarket inventory reserves in the six months ended June 30, 2009 as compared to the six months ended June 30, 2008. Subscriber acquisition costs also decreased as a result of the 35% decline in gross additions during the six months ended June 30, 2009.


General and administrative costs decreased 32%, or $45 million, mainly due to the absence of certain legal and regulatory charges incurred in 2008 and lower personnel costs.


Engineering, design and development costs decreased 42%, or $13 million, in the six months ended June 30, 2009 compared to the same period in 2008, due to lower costs associated with the manufacturing of radios, OEM tooling and manufacturing, and personnel.


Restructuring, impairments and related costs increased $28 million mainly due to a loss of $24 million on capitalized installment payments, which are expected to provide no future benefits due to the counterparty's bankruptcy filing, for the launch of a satellite.


Other expenses increased 190%, or $194 million, in the six months ended June 30, 2009 compared to the same period in 2008 driven mainly by the loss on extinguishment of debt and credit facilities of $126 million, and an increase in interest expense of $79 million, offset by an increase of $9 million in gain on investments. The loss on the extinguishment of debt and credit facilities was incurred on the full repayment of XM's Amended and Restated Credit Agreement and its Second-Lien Credit Agreement. Interest expense increased due primarily to the issuance of XM's 13% Senior Notes due 2013 and the 7% Exchangeable Senior Subordinated Notes due 2014 in the third quarter of 2008.





Unaudited
---------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- --------------------
2009 2008 2009 2008
---- ----- ---- ----
(Actual) (Pro Forma) (Actual) (Pro Forma)

Beginning subscribers 18,599,434 17,974,531 19,003,856 17,348,622
Gross subscriber additions 1,380,125 2,111,655 2,719,086 4,153,311
Deactivated subscribers (1,566,124) (1,509,356) (3,309,507) (2,925,103)
---------- ---------- ---------- ----------
Net additions (185,999) 602,299 (590,421) 1,228,208
---------- ---------- ---------- ----------
Ending subscribers 18,413,435 18,576,830 18,413,435 18,576,830
========== ========== ========== ==========

Retail 8,235,761 9,185,837 8,235,761 9,185,837
OEM 10,081,514 9,285,488 10,081,514 9,285,488
Rental 96,160 105,505 96,160 105,505
---------- ---------- ---------- ----------
Ending subscribers 18,413,435 18,576,830 18,413,435 18,576,830
========== ========== ========== ==========

Retail (301,295) (4,090) (669,326) (52,878)
OEM 123,165 593,169 85,561 1,252,220
Rental (7,869) 13,220 (6,656) 28,866
---------- ---------- ---------- ----------
Net additions (185,999) 602,299 (590,421) 1,228,208
========== ========== ========== ==========

Self-pay 15,421,414 14,829,150 15,421,414 14,829,150
Paid promotional 2,992,021 3,747,680 2,992,021 3,747,680
---------- ---------- ---------- ----------
Ending subscribers 18,413,435 18,576,830 18,413,435 18,576,830
========== ========== ========== ==========

Self-pay (14,996) 515,744 (128,243) 955,804
Paid promotional (171,003) 86,555 (462,178) 272,404
---------- ---------- ---------- ----------
Net additions (185,999) 602,299 (590,421) 1,228,208
========== ========== ========== ==========

Daily weighted average
number of subscribers 18,438,473 18,240,018 18,575,219 17,931,515
========== ========== ========== ==========


Unaudited Pro Forma
-------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
------------------ --------------------
2009 2008 2009 2008

Average self-pay
monthly churn (1)(7) 2.0% 1.7% 2.1% 1.8%
Conversion rate (2)(7) 44.4% 50.6% 44.7% 50.8%
ARPU (3)(7) $10.66 $10.55 $10.57 $10.54
SAC, as adjusted,
per gross subscriber
addition (4)(7) $57 $71 $59 $77
Customer service and
Billing expenses, as
adjusted, per average
subscriber (5)(7) $1.05 $1.06 $1.06 $1.10
Total revenue $607,836 $601,052 $1,213,317 $1,179,857
Free cash flow (6)(7) $12,694 $(168,955) $9,048 $(480,054)
Adjusted income (loss)
From operations (8) $132,219 $(61,118) $241,055 $(131,273)
Net loss $(171,280) $(203,471) $(234,155) $(436,858)



Unaudited Pro Forma
-------------------
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
(in thousands) 2009 2008 2009 2008
---- ---- ---- ----

Revenue:
Subscriber revenue,
including effects of
rebates $576,958 $558,290 $1,153,034 $1,097,345
Advertising revenue, net of
agency fees 12,564 18,764 24,869 36,290
Equipment revenue 10,928 15,447 20,837 25,831
Other revenue 7,386 8,551 14,577 20,391
--------- --------- --------- ---------
Total revenue 607,836 601,052 1,213,317 1,179,857

Operating expenses:
Satellite and transmission 18,659 25,467 38,401 51,202
Programming and content 87,707 101,871 184,386 209,793
Revenue share and royalties 117,671 123,309 238,932 234,451
Customer service and billing 58,054 58,236 117,723 118,302
Cost of equipment 8,051 15,702 16,044 31,840
Sales and marketing 48,610 103,326 99,212 182,403
Subscriber acquisition costs 80,988 150,585 164,698 311,919
General and administrative 45,754 67,980 94,331 139,460
Engineering, design and
development 10,123 15,694 18,535 31,760
Depreciation and
amortization 46,118 59,551 97,599 131,940
Share-based payment expense 31,003 30,098 52,501 69,864
Restructuring, impairments
and related costs 27,000 - 27,614 -
--------- --------- --------- ---------
Total operating expenses 579,738 751,819 1,149,976 1,512,934
--------- --------- --------- ---------
Income (loss) from
operations 28,098 (150,767) 63,341 (333,077)
Other expense (198,263) (51,488) (295,267) (101,691)
--------- --------- --------- ---------
Loss before
income taxes (170,165) (202,255) (231,926) (434,768)
Income tax expense (1,115) (1,216) (2,229) (2,090)

Net loss $(171,280) $(203,471) $(234,155) $(436,858)
========= ========== ========== ==========

Actual
------
For the Three Months For the Six Months
Ended June 30, Ended June 30,
-------------------- ------------------
(in thousands, except per
share data) 2009 2008 2009 2008
---- ---- ---- ----

Revenue:
Subscriber revenue,
including effects of
rebates $561,763 $266,518 $1,121,151 $522,158
Advertising revenue, net of
agency fees 12,564 8,332 24,869 16,740
Equipment revenue 10,928 7,956 20,837 14,019
Other revenue 5,574 211 10,951 450
--------- --------- --------- ---------
Total revenue 590,829 283,017 1,177,808 553,367
Operating expenses
(depreciation and
amortization shown
separately below) (1):
Cost of services:
Satellite and transmission 19,615 7,451 39,894 15,275
Programming and content 72,102 55,247 152,511 116,939
Revenue share and royalties 95,831 49,723 196,297 92,043
Customer service and billing 58,833 22,865 119,041 49,786
Cost of equipment 8,051 6,647 16,044 14,234
Sales and marketing 48,693 49,133 100,116 87,598
Subscriber acquisition costs 67,651 81,392 140,719 171,216
General and administrative 66,716 42,467 126,031 91,246
Engineering, design and
development 11,944 9,028 21,723 17,684
Depreciation and
amortization 77,158 27,113 159,524 54,019

Restructuring, impairments
and related costs 27,000 - 27,614 -
-------- --------- --------- ---------
Total operating expenses 553,594 351,066 1,099,514 710,040
-------- --------- --------- ---------
Income (loss) from
operations 37,235 (68,049) 78,294 (156,673)
Other income (expense):
Interest and investment income 901 1,425 1,641 4,227
Interest expense, net of
amounts capitalized (95,794) (16,745) (161,535) (34,421)
Loss on extinguishment
of debt and credit
facilities, net (107,756) - (125,713) -
Gain on investments 8,422 - 516 -
Other income (expense) 749 13 1,259 (64)
-------- --------- --------- ---------
Total other expense (193,478) (15,307) (283,832) (30,258)
-------- --------- --------- ---------
Loss before income taxes (156,243) (83,356) (205,538) (186,931)
Income tax expense (1,115) (543) (2,229) (1,086)

Net loss (157,358) (83,899) (207,767) (188,017)
Preferred stock beneficial
conversion feature - - (186,188) -
--------- --------- --------- ---------
Net loss attributable to
common stockholders $(157,358) $(83,899) $(393,955) $(188,017)
========= ========= ========= =========
Net loss per common share
(basic and diluted) $(0.04) $(0.06) $(0.11) $(0.13)
========= ========= ========= =========
Weighted average common shares
outstanding
(basic and diluted) 3,586,742 1,499,723 3,555,489 1,487,610
========= ========= ========= =========



(1) Amounts related to share-based payment expense included in operating
expenses were as follows:

Satellite and transmission $1,177 $759 $1,934 $1,555
Programming and content 1,891 1,160 4,381 3,949
Customer service and billing 779 265 1,318 541
Sales and marketing 3,072 2,464 7,358 7,704
Subscriber acquisition costs - - - 14
General and administrative 20,961 11,457 31,699 23,455
Engineering, design and
development 1,821 1,046 3,188 2,195

Total share-based payment expense $29,701 $17,151 $49,878 $39,413
======= ======= ======= =======




June 30, December 31,
2009 2008
--------- -----------
(in thousands, except share and per share data) (Unaudited)

ASSETS
Current assets:
Cash and cash equivalents $541,688 $380,446
Accounts receivable, net of allowance
for doubtful accounts of $10,313 and
$10,860, respectively 77,263 102,024
Receivables from distributors 33,673 45,950
Inventory, net 27,886 24,462
Prepaid expenses 120,273 67,203
Related party current assets 108,527 114,177
Other current assets 57,613 58,744
------ ------
Total current assets 966,923 793,006
Property and equipment, net 1,690,864 1,703,476
FCC licenses 2,083,654 2,083,654
Restricted investments 3,400 141,250
Deferred financing fees, net 63,279 40,156
Intangible assets, net 647,936 688,671
Goodwill 1,834,856 1,834,856
Related party long-term assets 118,628 124,607
Other long-term assets 97,792 81,019
------ ------
Total assets

I think it was a so-so quarter. Things i wanted to hear that i didn't hear:

1) The satellite that was launched july 1st whats the word on that
2) MLB when is that gonna combine into sirius-xm instead of xm every game says MLB on sirius-xm radio!!!
3) Howard stern?? Is he coming back retiring or going back to fm radio?

I'm giving this company till the 3rd quarter earning to get their acts together play better music and programming otherwise!!!

Once again i say: cost cutting playing the same music over and over and over again and shitty programming= loss of subscribers!!! I actually predicted the stock was gonna be down 2-3 cents then comeback and maybe be unchanged or up a little we shall see the only way to go now is forward and not fail I thought Mel did a great job presenting himself this morning it was the best i've seen him yet

Thanks Irish.

Quote:

---

Originally Posted by JohnnyIrishXM

Sales and marketing costs decreased 46%, or $83 million, and decreased as a percentage of revenue to 8% from 15% in the six months ended June 30, 2009

---

This is a problem not a benefit. We saved lots of money by not advertising ...ummm yay?

Transcript of 2Qcc:

http://seekingalpha.com/article/1542...nscript?page=1