New
York –
increased its net subscriber base for the second
consecutive quarter, ended December 2009, but the gains weren’t enough to offset
first-half subscriber losses.
The
satellite-radio company added 257,028 net new subscribers in the fourth quarter
following a third-quarter gain of 102,295. The year-end subscriber base
contracted 1.2 percent from year-end 2008 to 18.8 million, the company
reported.
In another
sign of a turnaround, the company said it expects to report more than
$100 million of free cash flow for 2009,
compared with 2009’s pro forma negative free cash flow of $552 million, said Mel
Karmazin, Sirius XM CEO. “This is the first year in our history that we have
generated positive free cash flow for the entire year.”
The fourth-quarter net subscriber adds
were the highest since the third quarter of 2008, he added, citing improvements
in new car sales, conversion rates of OEM trial subscriptions into paying
subscriptions, and “better-than-anticipated self-pay churn.”
The fourth-quarter conversion rate to
self-pay subscriptions from trial subscriptions included in the sale of a new
vehicle rose to 46.4 percent from the year-ago 44.2 percent. Fourth-quarter
self-pay churn was 1.97 percent, and though said to be better than expected, it
was nonetheless higher from the year-ago 1.8 percent and fourth-quarter 2007’s
1.7 percent.
CFO David Frear said the company expects
to meet its guidance to report more then $400 million in pro forma adjusted
operating income in 2009. That would mark a turnaround from 2008’s $136.3
million pro forma adjusted operating loss and 2007’s $565.5 pro forma adjusted
operating loss.
Sirius XM plans to release full-year
2009 financial results in February 2010
