Sirius just surprise reported 4Q - 10Q

[homer985]

Am I missing something or are they really basing their headline from comparing the combined loss from both companies to the year ago loss for just Sirius here (the numbers are from the actual results for Sirius, not pro forma results)?! Boy, talk spinning the numbers!! I guess that's about what you expect from the WSJ.

Yes, in looking at it -- you are right. They are looking at the unaudited actual Q4 comparison... 2008 included XM, but 2007 excluded XM.

[JohnnyIrishXM]

Looking at the numbers some of them look pretty much in-line to my expectations... while others are very much improved and others not so good. I am comparing the PRO FORMA numbers for Q4 and Full Year. These are the most accurate in painting the picture I want...


PRO FORMA, Q4 Year over Year
REVENUE improves to $644 million from $557 million... (increase of 15.6%)
OPERATING EXPENSES improves to $689 million from $909 million... (decrease of 25%)
OPERATING LOSS improves to ($45 million) from ($352 million)... (decrease of 88%)
NET LOSS improves to ($248 million) from ($405 million)... (decrease of 39%)
FCF improves to $25.8 million from $5.4 million... (increase of 377%)
ADJUSTED OPERATING LOSS (ADJ EBITDA) improves to $31.8 million from ($224 million)


PRO FORMA FULL YEAR, 2008 vs 2007
REVENUE improves to $2.4 billion from $2.0 billion... (increase of 20%)
OPERATING EXPENSES improves to $2.9 billion from $3.0 billion... (decrease of 4%)
OPERATING LOSS improves to ($516 million) from ($1.0 billion)... (decrease of 49%)
NET LOSS improves to ($902 million) from ($1.2 billion)... (decrease of 25%)
FCF decreased to ($551 million) from ($504 million)... (decrease of 9%)
ADJUSTED OPERATING LOSS (ADJ EBITDA) improves to ($136 million) from ($565 million)... (decrease of 76%)

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The 25% decrease in Q4 Operating expenses is very noteworthy -- presuming that continues here in 2009, we'll begin to notice these improvements in their numbers soon. While the drop didn't carry over for all of 2008 -- there were still a lot of charges in 2008 -- from contract buyouts that cost a lot of money. This drop needs to continue.

The Operating Loss improvement for Q4 (88%) and Full Year (49%) is also eye catching. I'll be watching these two estimates this year to see if it continues.

The Net Loss improvement is a given -- because of the improvement in Operating expenses and Loss.

While the full year didn't have any improvement in FCF, there was improvement in Q4... again, this is more of a result of all the earlier merger expenses and contract buyouts, undoubtedly. I look to see if this improves in 2009... or at least Operating CF, since their CAPEX will be artificially high in 2009 -- that won't be a fair comparison.

Finally, the improvement in Adj Operating Loss (Adj EBITDA)... is the last metric that I will continue to monitor. The Q4 improvement was very nice to see... from a big negative figure to a positive; what more can you say?

It was also nice to see churn remain relative stable -- given the economic turmoil of 2008. The drop in conversion rate is troublesome and will need to be watched. All in churn looks to come out to 2.77% for the year... a bit on the higher side than I expected.


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Homer,excellent analysis, I trust you the most with the numbers.I think it is very important to see a proforma profit in cash flow from operations and expenses down 25% for the 4Q...it needs watching for 1Q and 2Q agreed.

[sxminvestor]

They may have had to have shown Liberty the books in order to close the 2nd phase of the investment by them -- triggering an FD issue that would have required a release like this within a specific timeframe.

In all the years, I have only a seen a quarterly/annual report and PR issued like this -- just one time -- and it was released like that because of an FD issue I later found out.

That's my belief and I'm sticking to it.



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Forgive me for being ignorant, but what does FD stand for - is it Financial Disclosure ?

[trippingthespeculatingpos]

2009 will be even better as we wont have merger related costs, i think if we stayed flat with subs we could still post a profit.

[JohnnyIrishXM]

Yes i read the WSJ article and laughed,that's why i didn't post it...What are they thinking there,trying to get it out without proofing it i guess..

[homer985]

I guess 25 million is nowhere near what I had thought was correct. I was wrong and you were more correct.

I had it at $50 million... I guess the contract buyouts cost more than I thought... plus the other closing expenses.

[john]

I also think it was a pretty good quarter. Holy crap what did you expect. I agree with homer if they carry these metrics into the next year it will be a good one for them.


homer I know I remember you said that thats why I said you were more correct then me. Man I cant believe they were that much but you did I give you credit for that one.

P.S. I really should have said "way way way more correct".

[JohnnyIrishXM]

Forgive me for being ignorant, but what does FD stand for - is it Financial Disclosure ?

I could be wrong,but i think it is Fiduciary duty( a legal requirement)

[SIRI4LIFE]

Forgive me for being ignorant, but what does FD stand for - is it Financial Disclosure ?

Homer already answered this on post 90 I believe

[homer985]

2009 will be even better as we wont have merger related costs, i think if we stayed flat with subs we could still post a profit.

Well, I won't go as far as claiming a profit for the year -- but they were estimating having positive EBITDA for 2009. That could be possible. They just had positive Adj EBITDA numbers for Q4. We'll see.

As for subs... if the market in 2009 really is that bad and the OEM's do just 9.1 million in sales -- factor in a 58% penatration rate, gives you 5.27 million in OEM subs.

It looks like 2008 retail gross was around 1.5 total. If 2009 comes in at around 1.3 million, added to the 5.27 million at OEM -- that gives you nearly 6.6 million in gross additions.

Factor 2.77% monthly churn on 19.5 million average subs -- gives me churn out of 6.5 million.

So that Net's out a slight positive in subs for 2009... as a worst case scenario.



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