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Sirius Expects To Meet 2002 Sub Estimates For 2002

5/27/2002 02:00:00 AM Eastern

Sirius Satellite Radio announced it sold 412 subscriptions from its launch on Feb. 14 to the end of March, at a conference to discuss first quarter results earlier this month.

Joe Clayton, president and CEO, explained that the service was only available in four markets with very little advertising, and that the company had expected very low subscription rates for the quarter ending March 31, as a result. Clayton said he was still comfortable with analyst projections of 100,000 to 150,000 subscriptions for the year.

"We emphasized from the beginning that our first sub announcements would be very low. For us the clock starts ticking on July 1 when we launch our advertising and marketing campaigns and go national," a company spokesperson said.

Sirius launched in 10 new markets in mid-May and will add 10 other markets June 1, with a full U.S. rollout by July 1. According to Sirius, it added Alabama, Indiana, Kentucky, Michigan, Mississippi, Ohio, Tennessee, Texas, West Virginia and Wisconsin in May. Service is already available throughout the Western and Midwestern parts of the country.

To target the smaller independent retailers, Sirius announced it signed on leading satellite distributor DSI Systems of Des Moines, Iowa. DSI will carry Jensen, Sirius-ready equipment within the next few weeks, although it may add other Sirius equipment partners in the future. DSI will also offer installation training to its network of 13,000 dealers.

In further announcements, Sirius said Daimler-Chrysler will offer Sirius radios as an option installed at the car dealer for Jeep, Dodge, Mercedes-Benz as well as Chrysler vehicles beginning this fall. Sirius equipment and service will be available from Mopar. In addition, the Chrysler Group expects to offer Sirius radios as a factory-installed option on select 2003 model vehicles with specific details to be announced in June. Both Daimler-Chrysler and Ford are investors in Sirius, but Ford has not yet announced specific rollout plans.

As in XM's launch, Sirius is facing product supply challenges. Clayton said that Kenwood is targeting shipments of 30,000 units for retail shelves by July 1 and more than 150,000 by the end of the year. He said more than 30,000 Jensen receivers have shipped to date with 80,000 targeted by year's end. Including Clarion, total receiver shipments should hit 300,000 by the end of the year. A spokesman said Panasonic may also begin delivering receivers late in 2002.

Sirius also reported a loss before interest, taxes, depreciation, amortization and non-cash stock compensation (EBITDA) of $45.3 million for the first quarter, up from an EBITDA loss of $36.3 million in the year-ago period.

Net loss for the first quarter climbed to $78.9 million, up from $54.1 million in the year-ago quarter. Total revenue for the first quarter ended March 31 was $33,000 versus no revenue in the same period in 2001. Sirius said it had $423 million in cash, cash equivalents, marketable securities and restricted investments as of March 31.

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