SiriusXM Reports 1Q Revenue Grew 11% YTD

SiriusXM announced first quarter 2014 financial and operating results, including revenue of $998 million, up 11% from the first quarter 2013 revenue of $897 million.  Earnings per diluted share were $0.02 in both the first quarter of 2014 and 2013.

Net income of $94 million, adjusted for a non-recurring item associated with accounting for the Liberty Media stock repurchase agreement and purchase price accounting adjustments from the Sirius and XM merger, net of taxes, resulted in adjusted net income of $121 million, a 46% increase over $83 million in last year's first quarter.  Adjusted EBITDA for the first quarter of 2014 reached a record $335 million, up 28% from $262 million in the first quarter of 2013.

Jim Meyer

"SiriusXM performed ahead of our expectations in the first quarter, with 266,799 net subscriber additions including 173,480 self-pay net additions.  For the ninth consecutive quarter we grew revenue at a double digit pace, and once again we set a new quarterly record for adjusted EBITDA and adjusted EBITDA margin.  Free cash flow grew 56% compared to the prior year to a new first quarter record, and we resumed our stock repurchase program, helping to drive free cash flow per share up 64%," stated Jim Meyer, Chief Executive Officer, SiriusXM.

"Our business continues to perform well.  New car installations and trial conversions set first quarter records, and our trial funnel stands near an all-time high at 6.9 million.  We are excited about this year's strong growth of subscribers, revenue, adjusted EBITDA, and free cash flow, and we are eager to continue deploying our capital to benefit our stockholders and grow free cash flow per share even faster," added Meyer.

Additional highlights of the first quarter include:

• Subscribers Reach a Record 25.8 Million.  Net subscriber additions in the first quarter of 2014 were 266,799.  The total paid subscriber base reached a record 25.8 million, up 6% from the prior-year period.  Self-pay net subscriber additions were 173,480, while the self-pay subscriber base reached a record high of 21.3 million, up 7% from the prior-year period. Total paid and unpaid trials were 6.9 million at the end of the first quarter of 2014.
• Adjusted EBITDA and Adjusted EBITDA Margin Reach New Record Highs.   Adjusted EBITDA climbed 28% from the first quarter of 2013 to a record quarterly figure of $335 million, and the Company's adjusted EBITDA margin reached a record 33.5% in the first quarter of 2014.
• Free Cash Flow Per Share Climbs 64%.   Free cash flow in the first quarter of 2014 was $223 million, up 56% from $142 million in the first quarter of 2013.  Free cash flow per diluted share was 3.6 cents in the first quarter of 2014, up 64% from 2.2 cents in the first quarter of 2013.

"Last year we took steps to lower our average cost of debt, and this year we have focused our efforts on significantly increasing our flexibility to return capital to stockholders by eliminating covenants in our 5.25% Notes and increasing the threshold for restricted payments in our Credit Facility," said David Frear, SiriusXM's Executive Vice President and Chief Financial Officer.

"Tomorrow, we are scheduled to repurchase 93 million shares from Liberty Media for $340 million, bringing total share repurchases for the year to 158 million shares for $550 million and leaving us with $1.7 billion remaining under our share repurchase authorization.  Total debt to adjusted EBITDA at the end of the first quarter 2014 was 2.8 times, below our 4.0 times leverage target.  We expect to opportunistically tap the debt markets this year as we move towards our leverage target," added Frear.