Vista, Calif. — Directed Electronics has amended certain terms and extended its distribution agreement with Sirius Satellite Radio to Jan. 31, 2009.
Jim Minarik, president/CEO of Directed, said in a prepared statement, “Together with Sirius over the past three years we have achieved the No. 1 position in aftermarket satellite radio sales, and are once again pleased to extend our relationship. By extending the contract from Aug. 31, 2008, into 2009, we have the opportunity to generate significant sales of Sirius-branded products this year, given that roughly 50 percent of our 2007 satellite radio sales occurred in the fourth quarter.”
He added, “We also look forward to what we hope will be the final approval of the Sirius/XM merger in the very near future, which we expect to improve retail consumer demand.”
The amendment also contains certain provisions that further reduce Directed’s exposure to satellite radio product-warranty costs.
Minarik added, “In the third quarter of 2007, our earnings were adversely impacted by a $4.3 million increase to our warranty expense principally related to our satellite radio business. With this new amendment, the risk of unexpected satellite radio warranty expense is expected to decrease significantly, while concurrently improving our ability to provide superior service to our satellite radio customers. Cumulatively, we believe these changes will lead to improved financial results for this business.”
