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Special Notice: All Sirius XM Investors! Conference Call to announce Full-Year and Q-4 operating results, tomorrow 2/15. I encourage all SB regulars to tune-in and listen to the call for yourselves, as you will unlikely see any immediate reporting of it here . . Spencer is much too busy tending to his Internet Radio blog.
Subscriber Statistics
During the fourth quarter of 2010, SIRIUS XM added 328,789 net subscribers, which raised the company’s total subscriber base to 20,190,964 at the end of December 31, 2010. Of the total, OEM subscriber was 13,104,972; Retail subscriber was 6,947,830; and Rental subscriber was 138,162. Payment category wise, Self-Pay subscriber was 16,686,799 and Paid Promotional subscriber was 3,504,165.
Important Operating Metrics
In the fourth quarter of 2010, ARPU came in at $11.80 compared with $11.58 in the year-ago quarter. Average self-pay monthly churn rate was 1.9% compared with 2% in the year-ago quarter. Subscriber acquisition cost was $58 compared with $64 in the prior-year quarter. Customer services & billing expenses per subscriber was $1.11 compared with $1.06 in the year-ago quarter.
Future Financial Outlook
Management projected that full-year 2011 revenue of SIRIUS XM will be approximately $3 billion. Free cash flow in 2011 will approach $300 million. The company estimated that it will add 1.4 million net new subscribers in 2011. Adjusted EBITDA, in fiscal 2011, is likely to reach $715 million.
http://www.dailymarkets.com/stock/20...osts-mixed-4q/
SRK - do you think Mel is sandbagging 2011 guidence? It appears that "the street" has latched onto this bit of news.
Mel's modus operandi has been to under-promise/over-deliver . . much like the past year. I for one like that approach . . it presents opportunity for those who follow the company closely to capitalize on the irrational price swings spawned by the more casual speculator.Quote:
Originally Posted by SiriuslyLong
Was Mel being a bit coy about the potential functionalities of satrad 2.0? None of us really know . . . but the Tyler Savery's of the world will most certainly seize the opportunity here to decry what they perceive as the company's "lack of innovation," regardless of the implications to commerce.
On balance, the metrics continue to move in the right direction and the cashflow story that is emerging will be largely ignored by those who are looking for flashy headlines. Buying back company debt early is not sexy or glamorous or catchy but it is music to the ears of those who understand the fruit that these seeds will bear in future years.
The pullback we are witnessing now is merely an opportunity to lock-in future gains at a discounted price . . . $1.87 was the sneak preview.
I anticipate a Tyler Savery recap which will focus on increasing churn, lack of innovation and lost opportunity . . . as that is his modus operandi.
P.S. btw, only the David Bank's of the world are pouring-over the Revenue Growth line . . . and trying to improperly correlate that to companies such as Viacom. That methodology hasn't helped RBC clients during the past year and will certainly not do so going forward.
Sirius XM ends the year with $587 million in available cash. "With only $104 million of debt maturing before 2013, declining capital expenditures and growing free cash flow, our financial strength and flexibility has never been better," Sirius XM CFO David Frear said in a statement.
http://www.satellitetoday.com/st/hea...011_36168.html
"As those investors who have known me for a long time appreciate, the most important measure of a business' success to me is free cash flow. It's free cash flow that enables you to pay down debt, make acquisitions or return capital to shareholders. In that regard, we generated $210 million of free cash flow in 2010. That's despite launching a satellite last year and paying for a great deal of the construction of another satellite that will launch later this year. Free cash flow was also a record amount for the company. That's two consecutive years of strong free cash flow generation, $185 million in 2009, and $210 million in 2010. What a difference from of the over $500 million of negative free cash flow in 2008. And free cash flow over the next several years should ramp dramatically given that we will not be spending any cash on satellite capital expenditures following this year's launch of SIRIUS 6 nor will we be a meaningful income taxpayer."
Mel Karmazin
2/15/11 CC
http://seekingalpha.com/article/2529...ipt?part=qanda
"So the obvious question that arises from this is what will we do with the cash that we accumulate over time. There are only three things a company can deal with a significant amount of excess cash, pay down debt, buy assets to grow the business or return capital to the shareholders. Our board of directors will consider all the alternatives and make the big decision that is in the best interest of our shareholders."
Mel K
2/15/11 CC
http://seekingalpha.com/article/2529...ipt?part=qanda
"Long term, we expect to maintain some debt leverage at SiriusXM. As a subscription based business, we can probably tolerate a significant amount of leverage but just assume we keep leverage at a modest level like 3x adjusted EBITDA. In that case, we clearly would not be diverting much of the future cash generation toward reducing debt. In fact, we might more likely increase gross indebtedness overtime as we continue to grow the business."
"So will we buy assets with our excess cash? Perhaps, but we haven't seen anything yet that's worthy of any meaningful investment or acquisition. Then will we return capital to shareholders, although I certainly can't quantify the amount or the timing for this, I think it is reasonable to expect that the company will return capital to shareholders over time."
Mel K
2/15/11 CC
http://seekingalpha.com/article/2529...ipt?part=qanda
"As a result of the successful launch of XM-5, we no longer believe SIRIUS-4, which we've kept as a ground spare, will be used in our satellite operations. As a result, we have recorded a $56 million charge to restructuring, impairments and related costs in the quarter to write off the remaining book value of this satellite."
David Frear
2/15/11 CC
http://seekingalpha.com/article/2529...ipt?part=qanda
"Since December, we've also bought back $131 million of debt, including the remaining $37 million of the 11 1/4% Notes and $94 million of the 3 1/4% converts due in October 2011. We now have only $104 million of scheduled debt maturities between now and the middle of 2013."
David Frear
2/15/11 CC
http://seekingalpha.com/article/2529...ipt?part=qanda