Directed Extends Sirius Contract
By Amy Gilroy -- TWICE, 11/27/2007
Vista, Calif. — Directed Electronics will extend its contract to distribute Sirius Satellite Radio products to Aug. 31, 2008.
This agreement is significant in light of the uncertainty caused by the pending merger between Sirius and XM.
Directed’s contract with Sirius was due to expire in April of 2008.
It is not known if a merged Sirius and XM, which each has an exclusive distributor, would cause the termination of one of those distributors.
Directed president and CEO Jim Minarik said, "While the pending merger between Sirius and XM has added a degree of uncertainty to the satellite radio market during 2007, as well as our agreement renewal discussions, we believe this amended agreement will serve as an excellent template for future extensions we plan to discuss after regulatory review of their merger is fully resolved in the coming months," said Minarik.
Audiovox is currently the distributor for XM and Directed has been the exclusive distributor for Sirius since the fall of 2004.
Directed’s new contract also contains some changes in Sirius’ distribution policy effective Jan. 1, 2008, regarding the handling of product returns “that Directed expects will enhance cost recovery, reduce uncertainty and volatility with respect to returns and meaningfully improve the predictability of the company's earnings in the satellite radio category,” it said
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