SILVER SPRING, MD, May 14, 2007 - Satnews Daily - Satellite-based digital radio services provider Worldspace Satellite Radio’s (Nasdaq: WRSP) results for the first quarter of 2007 ended March 31 reflected the impact of subscriber churn in its major markets.
Worldspace reported revenues of $3.0 million, compared with $3.5 million for the first quarter of 2006. Subscription revenue was $1.8 million for the first quarter of 2007, an increase of 14% compared with $1.6 million for the first quarter of 2006. On a sequential basis, subscription revenues in the first quarter of 2007 were 7% lower than the $2.0 million recorded in the fourth quarter of 2006.
Worldspace recorded a net loss for the first quarter of 2007 of $35.5 million, or $0.91 per share, compared with a net loss of $29.2 million, or $0.79 per share for the first quarter of 2006. Worldspace had an Ebitda (earnings before interest income, interest expense, income taxes, depreciation and amortization) loss of $23.4 million for the first quarter of 2007, compared with an Ebitda loss of $31.2 million for the first quarter of 2006.
The company ended the quarter with 191,646 subscribers worldwide, a loss of 7,459 from the close of the prior quarter, reflecting low net additions in India and the expiration of its educational service contract in Kenya, accounting for 13,000 subscribers. In India, the company added 8,344 net subscribers during the first quarter of 2007, ending the first quarter of 2007, with 170,354 subscribers in India, 52% higher than at the end of the first quarter of 2006.
Gross subscriber additions of 29,298 in India were down from 38,908 over the fourth quarter of 2006, and net additions in India of 8,344 were down 65% from the fourth quarter of 2006, as the company transitioned its marketing efforts during the first quarter of 2007. Subscriber declines outside of India primarily reflected the expiration of the company's contract with Kenya Institute of Education on January 1, 2007.
The company continued to experience high churn rates in the first quarter in India. As of the end of the first quarter, about 54% of subscribers who came up for renewal during 2007 had renewed their subscriptions to a six- month or higher package on a pre-paid basis.
Worldspace chairman and CEO Noah Samara said the company is very pleased to have agreed to refinance its convertible notes a few weeks ago. “The financial flexibility that this step allows is critical to our continued operational development. As we stated earlier, we are simultaneously finalizing a comprehensive review of our strategies and alternatives to drive growth in our key markets. It includes the launching of our mobile service in the Middle East and the build-out of the Italian business, as well as enhancing the long- term value proposition of Worldspace's global satellite radio business. We are also in active strategic alliance discussions that would capitalize on our existing assets and infrastructure while enabling us to develop meaningful businesses in the key markets on a more rationalized cost basis."
Worldspace offers a satellite radio experience to consumers in more than 130 countries with five billion people, driving 300 million cars. Worldspace delivers the latest tunes, trends and information from around the world and around the corner. Worldspace's satellites cover two-thirds of the earth's population with six beams. Each beam is capable of delivering up to 80 channels of high quality digital audio and multimedia programming directly to Worldspace Satellite Radios anytime and virtually anywhere in its coverage areas.
