3rd Quarter Earnings

SIRI reported 3rd quarter 2008 earnings of USD -.07 per share on 11/10/08.This beat the consensus of USD -0.091 by USD 0.021 of the 8 analysts covering this company.

WTF !!! I though they had reported -.09, did they revise the number ?

It is their bigest surprise ever, 23.08%, this is good news (eventhough they still lost money) !!! Did someone mention this in the forum ? Did I miss it ?

The consensus of the 7 analysts covering SIRI for 4th quarter 2008 is a per share value of USD -.08.

They need to BEAT that number, in other words they can not go from -.07 to -.08 even if that is the consensus. The earnings announcement will be 2/23/09.

It looks like in the last 3 years they have had a rough 4th quarter. In fact the 4th quarter has been their worst every single year !!! Damn ! This does not look good.

I got this information from my broker.

Fire your broker immediately. Sirius beat estimates in Q3. They will beat in Q4. They have already stated that losses for the year will decrease another $50M in Q4.

Q4 is one of the strongest months, not the weakest.

Q4 has been the STRONGEST quarter for the past few years, at least for Sirius individually. The Q4 2007 for XM was ugly, but nearly all of that was one time charges and merger related expenses.

Is your broker saying that Q4 is estimated to be a loss or is that for Full Year 2008? If that is the estimate for Q4, they will blow the roof off of that number. They will be cash flow positive for Q4, as they have been for the past 2 years (sirius-wize anyways).

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Originally Posted by Newman

Q4 has been the STRONGEST quarter for the past few years, at least for Sirius individually. The Q4 2007 for XM was ugly, but nearly all of that was one time charges and merger related expenses.

Is your broker saying that Q4 is estimated to be a loss or is that for Full Year 2008? If that is the estimate for Q4, they will blow the roof off of that number. They will be cash flow positive for Q4, as they have been for the past 2 years (sirius-wize anyways).

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See the atachment...

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Originally Posted by jmm232

Fire your broker immediately. Sirius beat estimates in Q3. They will beat in Q4. They have already stated that losses for the year will decrease another $50M in Q4.

Q4 is one of the strongest months, not the weakest.

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Follow this link and read the last post from 11/10/08...- http://siriusbuzz.com/forum/showthread.php?t=1017

Also, check the attached file from today. It clearly states the projections and what they have done in the past.

Why should I fire the broker ?

Ask your broker if he/she is including XM results along with Sirius's as a combined company.

Since this is their first Q4 as a combined company, it will be very difficult to get a grip on how the metrics will weight out, but Q4 has always been the strongest - NOT weakest - in all of the quarters. I looked at the attatched file. Have YOU looked at the numbers to verify their accuracy?

I take it back: Your broker is correct.

According to the 2007 Annual Report released on Feb. 29, 2008, the 2007 numbers were exactly what were posted in that graph. This is for Sirius only, and include all of the merger costs and one time charges/fees, and are not the pro-forma results, which we are used to seeing posted.

One thing to look at in this is the improvement.

Q1 06 Net Loss 458.5 million, Q1 07 Net Loss 144.7 million. 68% Reduction in Losses
Q2 06 Net Loss 237.8 million, Q2 07 Net Loss 134.1 million. 43% Reduction in Losses
Q3 06 Net Loss 162.9 million, Q3 07 Net Loss 120.1 million. 25% Reduction in Losses
Q4 o6 Net Loss 245.6 million, Q4 07 Net Loss 166.2 million. 33% Reduction in Losses

While the numbers may not look great, it is still a drastic improvement over where they were. Cash flow will still be grossly positive, and you will see many more merger related synergies in the Q4 report.

As far as the date earnings will be released: It was a complete guess on the part of your broker or whoever they get their information from.

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Originally Posted by Newman

I take it back: Your broker is correct.

According to the 2007 Annual Report released on Feb. 29, 2008, the 2007 numbers were exactly what were posted in that graph. This is for Sirius only, and include all of the merger costs and one time charges/fees, and are not the pro-forma results, which we are used to seeing posted.

One thing to look at in this is the improvement.

Q1 06 Net Loss 458.5 million, Q1 07 Net Loss 144.7 million. 68% Reduction in Losses
Q2 06 Net Loss 237.8 million, Q2 07 Net Loss 134.1 million. 43% Reduction in Losses
Q3 06 Net Loss 162.9 million, Q3 07 Net Loss 120.1 million. 25% Reduction in Losses
Q4 o6 Net Loss 245.6 million, Q4 07 Net Loss 166.2 million. 33% Reduction in Losses

While the numbers may not look great, it is still a drastic improvement over where they were. Cash flow will still be grossly positive, and you will see many more merger related synergies in the Q4 report.

As far as the date earnings will be released: It was a complete guess on the part of your broker or whoever they get their information from.

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I am not saying that they have not been improving, what I was saying is that according to the numbers for the past 3 years the 4th quarter seems to be their worst in net losses for some reason... and still, losing money is never good, even if they have been improving.

The other question was, when did they revise 3rd quarter results from -.09 to -.07 EPS ? If you click on the link I included in one of my previous responses you can see the last post from Demian saying that the EPS for the 3rd quarter was in fact -.09 and not -.07.

Im sort of guessing but I think I read that the "actual" number was .07 which beat the estimates....but when factoring in some of the costs for the merger it dropped it to .09.

hope that helps and is correct.

Q4 has traditionally been the strongest cashflow quarter, then any other quarter... but due to the large number of sales/new subscriber signups, it is also a very high operating expense quarter -- and depending on the marketing used to bring in those subscribers, the net loss has at times been quite large comparatively. However, cashflow is key in Q4, IMHO. Both XM and Sirius have had positive cashflow in Q4's going back awhile (except XM last year, which bought out several expensive contracts and had merger-related expenses that drove their cashflow down).

I believe that Sirius is waiting to finalize/announce their February financing issue when they get a handle on what kind of cashflow they'll have coming in post-Christmas. Because I believe a good chunk of it will be used to pay against the $210 million coming due -- with the rest going on a Term Loan. In which case, I wouldn't (and haven't) expected any announcement on this until perhaps mid-January.



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Hi Gang!
Homer - if they where waiting to see what cashflow was available before anouncing (this would suggest that they have things almost ready to go?????) how they where going to handle the Feb finance - can you speculate on why they would need an investment bank to assist them??? I suspect that eveyone has seen this article but .....

http://www.businessweek.com/technolo...mpaign_id=yhoo

"In recent weeks the company retained investment bank Evercore Partners (EVR) as a financial advisor to help in the effort, according to Debtwire, a financial news service"

newbie here and appreciate everyones help!!!

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Originally Posted by homer

Because I believe a good chunk of it will be used to pay against the $210 million coming due -- with the rest going on a Term Loan.

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With the rest going on a term loan - That is why they would need an investment banker. Mel said in his interview that he did not want to eat up all of his free cash to pay back the debt, but he was waiting for acceptible terms. I agree with homer, in that Mel wants to see exactly how much free cash he will actually have before he makes a deal. (And, FYI: I think he is going to be making a deal for ALL of the 2009 debt, not just February. Would you agree with this Homer?)

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Originally Posted by Newman

I think he is going to be making a deal for ALL of the 2009 debt, not just February.

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WOW! Ok - so I am admittedly no genuis when it comes to understanding this stuff but my thoughts of this statement are that .... wouldn't that make for "clear sailing" for Sirius and allow them to get down to business rather than spinning cycles trying to work the debt restructure?? This would be awesome ..... right??

Right. The fact is, there are no debt maturities for 2010, 11, or 12. Once the 2009 debt is taken care of, there is nothing to worry about until 2013... that would give 4 years worth of not working the debt restructure, which would definately be awsome.

It will still be there, but in the back of people's minds. Out of sight - Out of mind. (Which is why I did not think Mel would let it take this long to get it done, but debt markets are horrid these days after all).

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Originally Posted by Newman

Right. The fact is, there are no debt maturities for 2010, 11, or 12. Once the 2009 debt is taken care of, there is nothing to worry about until 2013... that would give 4 years worth of not working the debt restructure, which would definately be awsome.

It will still be there, but in the back of people's minds. Out of sight - Out of mind. (Which is why I did not think Mel would let it take this long to get it done, but debt markets are horrid these days after all).

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Just guessing, and I repeat, just guessing, what is the most likely scenario that you see, Newman? The only place I can get any logical answers is here on this forum.

Everybody else is all over the map and don't really have money invested, especially the newsletters (which I keep to a minimum). I know, by reading, that a lot of people here have a lot of serious money invested. I probably own the least amount of shares of anyone here, but still, I like to be informed.

Thanks,
Bill

As you clearly state, this is nothing but an educated guess: The company has a total of around 1 bllion in debt due in 2009:
210 Million is due in February 2009.
350 Million bank facility expires May 2009 (two seperate facilities, 250 and 100 mil)
1.75 Million due 9/29/09
400 Million due 12/09
33.2 Million is due December 21, 2009
Total = 994.95 Million.

Mel has stated that he is confident that the May bank notes can and will be extended. Total is now 644.95 million. As of the Q3 conference call, the company had nearly 360 million in cash on hand. That means that the company has cash on hand RIGHT NOW to pay off over half of the total 2009 debt due. Add to that the fact that Q4 should be grossly cash flow positive, that adds cash to the bank. Add to that the GM credit facility and Loral facility (strictly as payment deferals to those companies) and you can assume even more cash on hand.

I think that Mel is waiting to see how the Q4 numbers are going to look before making any decisions. If they will have quite a bit of Free Cash Flow, they can pay off the Feb debt and still have plenty of cash on hand for Q1 and Q2. If the cash flow is not going to be that great, they may need to hold back a bit of that cash in order to sustain themselves. I think Mel is looking for about 400 million in financing as of now. No need to deplete all of your cash reserves if you do not need to.

They had 360 million cash on hand at end of quarter, and have 210 million due in Feb. They could pay it off and still have 150 million, plus Q4 FCF. They are not in despiration mode yet as most people would like you to believe...

**edit: The 33.2 million dollars due 12/21/09 is a convert they have with Honda that has a strike price of 0.6913. If the stock is above 70 cents at that time, it will convert and Sirius will not have to pay it off.

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Originally Posted by Newman

As you clearly state, this is nothing but an educated Add to that the GM credit facility and Loral facility (strictly as payment deferals to those companies) and you can assume even more cash on hand.

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I may be mistaken, but I believe the GM credit facility is no longer available and the Loral facility has a stipulation that our market cap be above $1 Billion. We could get there with some good news, but our MC is well under $500 mil today.

win: I believe that is only for the "cash advance" portion of the credit line. I believe the credit facilities are still there to make payments to those entities, just not to borrow money from, which is why I stated "strictly as payment deferals to those companies".