BETHESDA, Md., Aug. 10 /PRNewswire-FirstCall/ --
- Subscribers Up 23.9% from Prior Year Quarter to 347,000
- Subscriber Growth of 71.4% in Emerging Machine-to-Machine Market
- Revenue Up 1.2% from Prior Year Quarter:
- Commercial Service Revenues Up 21.6%
- Government Service Revenues Up 15.2%
- Equipment Sales Declined 25.7%
- Operational EBITDA(1) Up 31.5% from Prior Year Quarter
- Net Income Up 52.9% from Prior Year Quarter
- Full Year 2009 Operational EBITDA Guidance Lifted to $123-130 Million
Iridium Satellite LLC ("Iridium"), the only provider of truly global mobile satellite services ("MSS"), today reported consolidated financial results for the three months ended June 30, 2009. The company reported growth in subscribers, revenue, Operational EBITDA and net income for the second quarter 2009 compared to the second quarter 2008. In addition, the company is on track to complete its planned transaction to combine with GHL Acquisition Corp. ("GHL Acquisition") (NYX: GHQ, GHQ.U and GHQ.WS), which will take Iridium public.
Operating Highlights and Transaction Update
The following consolidated financial results for the second quarter 2009 continue to demonstrate the company's strength despite the global economic downturn. Subscribers were up 23.9% to 347,000 at the close of the second quarter of 2009 from 280,000 at the close of the second quarter of 2008. Commercial service revenue increased 21.6% to $39.9 million in the second quarter of 2009 compared to $32.8 million during the same quarter in 2008. Government service revenue increased 15.2% to $18.2 million in the second quarter of 2009 compared to $15.8 million in the same quarter of 2008. Subscriber equipment revenue for the quarter declined 25.7% to $24.6 million compared to $33.1 million in the second quarter of 2008. Overall revenue increased 1.2% to $82.7 million in the second quarter of 2009 from $81.7 million in the previous year's second quarter. Operational EBITDA increased 31.5% to $36.7 million in the second quarter of 2009 from $27.9 million in the second quarter of 2008. Finally, net income increased 52.9% to $28.6 million in the second quarter 2009 from $18.7 million in the second quarter of 2008. New products, such as the Iridium OpenPort((R)) high-speed maritime communications system and the Iridium 9555 satellite phone, contributed to the company's gains in the second quarter of 2009.
"Our growth in Operational EBITDA is a result of increased commercial service and government service revenues, and more than offsets a decline in equipment revenue," said Matt Desch, CEO of Iridium. "Iridium is the only truly global MSS that works everywhere. Our products and services are reliable, cost effective and essential to both commercial and government users. And, we have built a large and growing subscriber base that has continued to generate strong recurring revenue even in a weak economy. From a strategic perspective, we are nearing the completion of our combination with GHL Acquisition, which will take us public. Completing the GHL Acquisition transaction will be valuable as we move forward with the development and launch of our NEXT constellation, which promises even broader applications and services to our growing user base."
The company expects further growth through the remainder of 2009 on the strength of its growing subscriber base. As such, Iridium now expects 2009 Operational EBITDA of between $123 million and $130 million, up 14% to 20% over 2008, on low single-digit revenue growth.
"Iridium's second quarter results are impressive," said Scott L. Bok, CEO of GHL Acquisition. "The company's continued growth - even in a weak global economy - is further confirmation of the strength of this company and the attractiveness of its value potential for GHL Acquisition and its sponsor, Greenhill. We continue to be enthusiastic about Iridium's strong prospects for the future."
Highlights - Commercial
In Iridium's rapidly emerging Machine-to-Machine ("M2M") business, short-burst data ("SBD") subscribers grew 71.4% in the second quarter of 2009 compared to the second quarter of 2008, and Iridium experienced 60.0% growth in SBD service revenue during the second quarter of 2009 over the same quarter in the prior year. The breadth of Iridium's data communications applications mirrors the expansion in the company's target vertical markets.
"There are a growing number of applications being developed in the M2M market, and we are only in the early stages of developing the full potential of this service," said Greg Ewert, executive vice president of global distribution channels for Iridium. "We are pleased by the many opportunities presented to us through new applications, such as asset tracking, that continue to add quantifiable value and represent cost-saving solutions to a wide array of industries."
Subscriber equipment sales remained slow in the quarter due to the weak economic environment. However, year-over-year comparisons of equipment revenue are affected by $1.4 million of equipment amortization relating to sales of equipment in prior years that are included in the second quarter of 2008. Without the impact of the amortization, overall revenue would have increased 3.0% versus 1.2%, and equipment revenue would have declined by 22.4% versus 25.7%.
"Despite the economy, sales of the Iridium 9555 and Iridium OpenPort increased in the second quarter," said Don Thoma, executive vice president of marketing for Iridium. "In fact, we shipped our 1,000(th) Iridium OpenPort unit in the quarter and realized strong revenue growth over the first quarter of 2009 with this ground-breaking product. With its attractive hardware package, ease of installation and low service costs, Iridium OpenPort has provided a cost-effective alternative to the status quo.
