XM Cuts Costs To Extend Cash

Communications Today, Nov 15, 2002

XM Satellite Radio [XMSR] reported third-quarter financial results including cost-cutting moves aimed at helping the company stretch its available cash until the end of first quarter 2003. The cost-cutting involved laying off roughly 80 out of 480 employees and negotiations to defer expense payments to General Motors [GM] and other partners, company officials said. Washington, D.C.-based XM reported that it had more than 201,000 subscribers at the end of the quarter and projected that the number would grow to 1.2 million subscribers by the end of 2003.

XM CEO Hugh Panero said he is aggressively pursuing new financing for the company and expects an arrangement to be firmed up by the end of the year. A formal announcement, however, may not occur until early next year to allow time for closing, he said during a conference call with Wall Street analysts Thursday.

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