WORLDSPACE� Satellite Radio (NASDAQ:WRSP), one of the world leaders
in satellite-based digital radio services, today announced results
for the fourth quarter and year ended December 31, 2007. The
Company ended the quarter with 174,166 subscribers worldwide, a
loss of 3,478 from the close of the prior quarter, reflecting the
cessation of current marketing efforts in Europe ahead of the
company�s efforts to commence mobile service there beginning with
Italy in 2009. In India, the Company lost 1,827 net subscribers
during the fourth quarter of 2007, reflecting continued reduced
marketing in that region while the Company awaits regulatory
approval for its mobile system, ending the period with 163,075
subscribers in India, compared to 162,010 at the end of the fourth
quarter of 2006. Other highlights include: Following the close of
the quarter, WorldSpace secured a financing facility for up to $40
million of subordinated financing, from Yenura Pte. Ltd., a company
controlled by Mr. Noah Samara, chairman and CEO of WORLDSPACE.
About half this amount has been available to the Company and drawn
by the Company to date. Yenura assures the Company that the balance
will be available to draw in the next few weeks. The Company also
secured a waiver of certain pre-payment obligations owed to the
holders of its existing debt. The facility supports the Company's
preparations for the launch of its European mobile service in the
Italian market and business development activities in selected
markets, while the Company continues to seek additional financing
from a variety of sources, including existing and new investors.
Roberto Zaino was appointed content director for WORLDSPACE�
Italia, a majority-owned subsidiary of the Company. WORLDSPACE
Italia is expected to bring mobile satellite radio services to the
Italian marketplace with some 40-50 channels of music, sports, news
and entertainment programming in after market equipment available
early in 2009 and in certain Fiat Group Automobiles' models as
original equipment beginning in late 2009. Mr. Zaino is known in
Italy as a pioneer of the radio broadcasting industry, having begun
his career with the launch of Radio Milano International more than
30 years ago. In a separate announcement today, the Company
disclosed it has received a terrestrial repeater license from
Switzerland. Noah Samara stated, "We continue to make progress in
Italy towards the first European launch of mobile satellite radio
service contemplated for the end of this year or early next year.
We appreciate the support of our partners who are working closely
with us to make this launch successful. We believe the Italian
market, and indeed the broader European market, represents a
remarkable business opportunity for a robust mobile service. We
remain confident that WorldSpace, along with our partners -- Class
Editori, Fiat, Telecom Italia, Delphi, Fraunhofer ISS and others --
can effectively implement our strategy, once we secure the
financial resources required to support it.� Samara added, �Our
goals for 2008 include securing licenses and approvals in at least
four additional major European countries as well as India. We are
working on the development of a satellite/terrestrial hybrid
service for India and the Middle East, with the Indian service
still remaining subject to securing the necessary government
approvals for the terrestrial component. Through this hybrid DARS
service offering, we expect to broaden services to automobiles
while improving the reliability of our service in urban areas. And
we continue to evolve our plans for a hybrid DARS service in the
Middle East. We also expect to introduce new receivers targeted at
stratified market segments, all subject to securing additional
long-term capital to fund these plans.� Subscriber Growth Gross
subscriber adds of 18,226 in India were down from 20,132 in the
third quarter of 2007. Net subscriber losses in India of 1,827
continued the downward trend from net losses of 8,713 in the third
quarter of 2007, as the Company continued to minimize its marketing
efforts this year. Subscriber declines outside of India primarily
reflected the cessation of marketing outreach in Europe, as
WorldSpace prepares for its planned mobile offering in that region
starting with Italy in early 2009. Revenue For the fourth quarter
of 2007, WorldSpace reported revenues of approximately $3.8
million, compared to revenues of approximately $5.0 million for the
fourth quarter of 2006. Subscription revenue was approximately $2.0
million for the fourth quarter of 2007, flat with the approximately
$2.0 million in the fourth quarter of 2006. On a sequential basis,
subscription revenues in the fourth quarter of 2007 were slightly
higher than the approximately $1.9 million recorded in the third
quarter of 2007 as well. Net Loss and EBITDA Loss WorldSpace
recorded a net loss for the fourth quarter of 2007 of $46.0
million, or $1.10 per share, compared with a net loss of $33.8
million, or $0.89 per share for the fourth quarter of 2006.
WorldSpace had an EBITDA (earnings before interest income, interest
expense, income taxes, depreciation and amortization) loss of $22.5
million for the fourth quarter of 2007, compared with an EBITDA
loss of $39.0 million for the fourth quarter of 2006. SAC and CPGA
Subscriber Acquisition Costs (SAC) were $16 in the fourth quarter
of 2007 on a blended basis (India and the rest of the world) and
$18 in India, compared with $10 on a blended basis and $12 in India
for the third quarter of 2007. Cost Per Gross Addition (CPGA)
decreased in the quarter to $79 on a blended basis, down from the
$80 CPGA in the prior quarter, reflecting the lower marketing
activity in India, where the CPGA decreased to $68 for the fourth
quarter of 2007 from $75 in the third quarter of 2007. WorldSpace's
CPGA is the fully-loaded cost to acquire each new subscriber,
including SAC, as well as advertising and marketing expenses. SAC
also represents a subsidy on equipment sales. Full Year Results For
2007, WorldSpace recorded net revenues of approximately $13.8
million, compared with net revenues of approximately $15.6 million
in 2006. The net loss for 2007 was $169.5 million, or $4.22 per
share, compared with a net loss of $128.6 million, or $3.44 per
share, in 2006. EBITDA in 2007 was a loss of $92.5 million; in
2006, EBITDA was a loss of $128.2 million. WorldSpace expects to
file its financial statements for the year ended December 31, 2007,
with the Securities and Exchange Commission on or before March 31,
2008. The Company anticipates that its independent registered
public accounting firm, Grant Thornton LLP, will include an
explanatory paragraph in their audit opinion that expresses doubt
about the Company�s ability to continue as a going concern based on
its current financial resources. WorldSpace confirms its need to
secure additional capital to fund its operations. Conference Call
WorldSpace plans to hold a conference call to discuss these results
and other developments on Thursday, March 20, 2008 at 4:30 pm. The
call will also be available as a webcast, which can be accessed via
the Company�s website, www.worldspace.com, by following the links
to investor relations and webcasts. To participate in the call,
please dial 1-866-713-8307, using passcode 72883105;
internationally, the call may be accessed by dialing
1-617-597-5307, using the same passcode. The call will be available
as an archived webcast beginning approximately one hour after
completion in the investor relations section of the Company�s
website. Non GAAP Reconciliation Earnings before interest income,
interest expense, income taxes, depreciation and amortization is
commonly referred to in our business as "EBITDA." EBITDA is not a
measure of financial performance under generally accepted
accounting principles. The Company believes EBITDA is often a
useful measure of a Company's operating performance and is a
significant basis used by the Company's management to measure the
operating performance of the Company's business because EBITDA
excludes charges for depreciation, amortization and interest
expense that have resulted from our debt financings, as well as our
provision for income tax expense. Accordingly, the Company believes
that EBITDA provides helpful information about the operating
performance of its business, apart from the expenses associated
with its physical assets or capital structure. EBITDA is frequently
used as one of the bases for comparing businesses in the Company's
industry, although the Company's measure of EBITDA may not be
identical to similarly titled measures of other companies. EBITDA
does not purport to represent operating income or cash flow from
operating activities, as those terms are defined under generally
accepted accounting principles, and should not be considered as
alternatives to those measurements as an indicator of our
performance. A reconciliation of net loss to EBITDA has been
provided in this release. About WORLDSPACE� Satellite Radio Based
in the Washington, DC metropolitan area, WorldSpace, Inc.
(Nasdaq:WRSP) is the world's only global media and entertainment
company positioned to offer 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 subscribers benefit from a unique combination of local
programming, original WorldSpace content and content from leading
brands around the globe including the BBC, CNN International,
Virgin Radio UK, and RFI. 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. WorldSpace is
a pioneer of satellite-based digital radio services (DARS) and was
instrumental in the development of the technology infrastructure
used today by XM Satellite Radio. For more information, visit
http://www.WorldSpace.com. Forward-looking Statements This press
release may contain certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
These statements are based on management's current expectations or
beliefs about future events and financial, political and social
trends and assumptions it has made based on information currently
available to it. The Company cannot assure that any expectations,
forecasts or assumptions made by management in preparing these
forward-looking statements will prove accurate, or that any
projections will be realized. Such forward-looking statements may
be affected by inaccurate assumptions or by known or unknown risks
or uncertainties. Actual results may vary materially from those
expressed or implied by the statements herein. For factors that
could cause actual results to vary, perhaps materially, from these
forward-looking statements, please refer to the Company's Form
10-K, filed with the Securities and Exchange Commission, and other
subsequent filings. Forward-looking statements contained herein
speak only as of the date of this release. The Company does not
undertake any obligation to update or revise publicly any
forward-looking statements, whether to reflect new information,
future events or otherwise. FINANCIAL TABLES FOLLOW � � � � RESULTS
OF OPERATIONS � � � � Three Months Ended Twelve Months Ended
December 31, December 31, 2007 2006 2007 2006 (unaudited) (in
thousands, except share information) STATEMENT OF OPERATIONS DATA:
REVENUE: Subscription revenue $ 1,953 $ 1,954 $ 7,528 $ 7,294
Equipment revenue 454 623 2,049 3,056 Other revenue � 1,393 � �
2,451 � � 4,207 � � 5,261 � Total revenue � 3,800 � � 5,028 � �
13,784 � � 15,611 � � OPERATING EXPENSES: Satellite and
transmission, programming and other 6,581 5,899 30,078 27,556 Cost
of equipment 3,998 8,471 7,569 16,615 Research and development
5,034 1,807 7,100 2,563 Selling and marketing 2,270 6,829 10,866
24,028 General and administrative 6,747 19,383 48,632 68,243
Depreciation and amortization � 14,969 � � 14,840 � � 59,258 � �
58,896 � Total Operating Expenses � 39,599 � � 57,229 � � 163,503 �
� 197,901 � � Loss from Operations (35,799 ) (52,201 ) (149,719 )
(182,290 ) OTHER INCOME (EXPENSE): Loss on extinguishment of debt
(1,435 ) - (1,435 ) - Interest income (169 ) 2,577 4,689 11,331
Interest expense (3,892 ) (2,336 ) (13,460 ) (9,332 ) Write-off of
deferred debt issuance costs - - (11,516 ) - Other expense � (210 )
� (1,618 ) � (559 ) � (4,759 ) � Loss Before Income Taxes (41,505 )
(53,578 ) (172,000 ) (185,050 ) Income Tax Benefit (Provision) �
(4,530 ) � 19,761 � � 2,493 � � 56,447 � � Net Loss $ (46,035 ) $
(33,817 ) $ (169,507 ) $ (128,603 ) � � Three Months Ended Twelve
Months Ended December 31, December 31, 2007 2006 2007 2006
(unaudited) PER SHARE DATA- Basic & Diluted: Net Loss per share
$ 1.10 $ 0.89 $ 4.22 $ 3.44 � Weighted Average Number of Shares
Outstanding 41,851,632 37,817,729 40,187,346 37,395,558 � Three
Months Ended � Twelve Months Ended December 31, December 31,
(unaudited) � 2007 � 2006 2007 2006 � Net Subscriber Additions
(3,478 ) 22,274 (24,939 ) 83,799 India (1,827 ) 23,945 1,065 87,436
Rest of World (�ROW�) (1,651 ) (1,671 ) (26,004 ) (3,637 ) � Total
End Of Period Subscribers 174,166 199,105 174,166 199,105 India
163,075 162,010 163,075 162,010 ROW 11,091 37,095 11,091 37,095 �
ARPU (1) $ 3.70 $ 3.75 $ 3.39 $ 3.83 ARPU (India) 3.36 3.15 3.11
3.01 ARPU (ROW) 8.28 6.05 6.46 6.22 � SAC (2) $ 16 $ 23 $ 23 $ 35
SAC (India) 18 32 24 38 SAC (ROW) 0 0 0 0 � CPGA (3) $ 79 $ 154 $
87 $ 140 CPGA (India) 68 164 82 136 CPGA (ROW) 217 124 153 208
SELECTED BALANCE SHEETS DATA: � � December 31, 2007 2006 (In
thousands) Cash and cash equivalents $ 3,597 $ 27,565 Restricted
Cash and Marketable Securities 6,312 143,763 Satellites and Related
Systems, net 298,503 345,046 Total Assets 340,014 568,645 Total
Debt ( including current portion) 94,013 155,368 Contingent Royalty
Obligation 1,814,175 1,814,175 Total Liabilities 2,091,745
2,172,000 Minority Interest 689 304 Total Shareholders� Deficit
(1,752,420 ) (1,603,659 ) EBITDA Reconciliation (4): � � � Three
Months Ended December 31, Twelve Months Ended December 31, 2007
2006 2007 2006 (in thousands) Reconciliation of Net Loss to EBITDA
Net Loss as reported $ (46,035 ) $ (33,817 ) $ (169,507 ) $
(128,603 ) Addback non-EBITDA items included in net loss: Interest
income 169 (2,577 ) (4,689 ) (11,331 ) Interest expense (inc. debt
cost write-off) 3,892 2,336 24,976 9,332 Depreciation &
amortization 14,969 14,840 59,258 58,896 Deferred income tax
provision (benefit) � 4,530 � � (19,761 ) � (2,493 ) � (56,447 )
EBITDA $ (22,475 ) $ (38,979 ) $ (92,455 ) $ (128,153 ) Notes: 1.
Average Revenue per User (ARPU) is derived from the total of
monthly earned subscription revenue (net of promotion and rebates)
divided by the monthly average number of subscribers for the period
reported. ARPU is a measure of operational performance and not a
measure of financial performance under generally accepted
accounting principles. � 2. Subscriber Acquisition Cost (SAC)
includes the negative margins from equipment sales to end
customers, but does not include ongoing loyalty payments to
retailers and distribution partners, and payments under revenue
sharing arrangements to content providers. � 3. Cost per Gross
Addition (CPGA) includes amounts in SAC described above, as well as
advertising, media and other discretionary marketing expenses, but
does not include headcount related to sales and marketing staff. �
4. "EBITDA" refers to net loss before interest income, interest
expense, income taxes, depreciation and amortization. EBITDA is not
a measure of financial performance under generally accepted
accounting principles. EBITDA is often a useful measure of a
company's operating performance and is a significant basis used by
WorldSpace's management to measure the operating performance of the
business. Because we have funded and completed the build-out of our
system through the raising and expenditure of large amounts of
capital, our results of operations reflect significant charges for
depreciation, amortization and interest expense. EBITDA, which
excludes this information, provides helpful information about the
operating performance of our business, apart from the expenses
associated with our physical plant or capital structure. EBITDA is
frequently used as one of the bases for comparing businesses in our
industry, although our measure of EBITDA may not be comparable to
similarly titled measures of other companies. EBITDA does not
purport to represent operating loss or cash flow from operating
activities, as those terms are defined under generally accepted
accounting principles and should not be considered as an
alternative to those measurements as an indicator of our
performance.
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