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XM Doubles Q3 Revenue, Sub Adds Rise 75%

11/04/2004 08:53:00 AM Eastern

Washington — XM Satellite Radio more than doubled third quarter revenue, while subscriber additions for the three months jumped 75 percent.

Third quarter revenue at the satellite radio service provider increased to $65.4 million, up from $26.9 million in the year-ago period. XM — which reported 2.52 million total subscribers as of Sept. 30, the end of the quarter, compared with 929,648 at the end of the third quarter in 2003 — recorded a net subscriber addition of 415,671 in the third quarter, up from 237,395 in the year-earlier period.

XM reduced its net loss in the third quarter, to $118 million, compared with a net loss of $133.4 million in the same three months last year. The company’s negative earnings before interest, taxes, depreciation and amortization (EBITDA) reached $62.9 million, compared with a negative $64.4 million year-on-year.

“XM’s subscriber momentum, combined with our outstanding new programming and unmatched technology, sets the table for an outstanding holiday season and beyond,” said Hugh Panero, president/CEO.

XM reported it continues to focus on successful business execution as indicated by “significant” subscriber growth, declining cost per gross addition (CPGA) and improved operating margins. In the third quarter, CPGA hit $89, down from $127 in the third quarter of last year. XM’s CPGA represents the fully-loaded cost to acquire each new subscriber, including subscriber acquisition costs of $57, which were down from a year-over-year $76, as well as advertising and marketing expenses.

Subscription revenue per subscriber, which includes monthly subscription revenue from all subscribers and premium service revenue, net of any promotions or discounts, came in at $8.64 in the third quarter, down from $8.84 in the same three months a year ago.

Nine month XM revenue climbed to $161.3 million, up from $58.3 million in the same period in 2003. XM’s net loss for the nine months grew to $454.2 million, from a net loss of $421.6 million in the first nine months of the previous year. EBITDA for the nine months hit a negative $248.7 million, up from an EBITDA loss of $223.4 million in the year-ago period

In other news, XM is launching "XM Nation: Operation Helping Hand," an effort to raise funds to support the American Red Cross disaster relief fund in the wake of four devastating hurricanes that have struck the United States in the last seven weeks.

Due to hurricanes Charley, Frances, Ivan and Jeanne, the Red Cross is mobilizing the largest feeding, sheltering and human resources deployment effort in response to a natural disaster in its history. But the Relief Funds sources are nearly depleted.In response, XM will broadcast on-air appeals to contribute to the Red Cross via the XM Web site.

XM's effort will culminate with a fund-raising drive to be broadcast on XM Live (XM Channel 200) Oct. 8-9. Artists and XM talent supporting the effort include Quincy Jones, Phil Collins, Willie Nelson, Bob Edwards and talk radio duo Opie and Anthony. The show will also feature highlights of concerts recorded at the XM Performance Theater, here. Several other XM channels will urge listeners to make donations during the broadcast for a total of 36 hours of programming on XM.

"We are calling on the XM Nation to help the Red Cross provide relief for the thousands of people whose lives were impacted by the recent hurricanes," said Hugh Panero, president and CEO of XM. "The recovery effort is going to take months and cost many millions of dollars, and the Red Cross deserves all the help it can get."