(Source: Business Wire)
DigitalGlobe
(NYSE: DGI), a leading global provider of commercial high-resolution
earth imagery products and services, today reported financial results
for the third quarter ended September 30, 2009.
Third quarter 2009 revenue was $71.8million, an increase of 8% compared
to the same period last year. Third quarter net income was $14.6million
or $0.32 per diluted share as compared to net income of $14.3million or
$0.32 per diluted share for the third quarter 2008.
Third quarter 2009 Adjusted EBITDA, a non-GAAP financial measure, was
$43.8million, compared to third quarter 2008 Adjusted EBITDA of
$44.1million. The definition of Adjusted EBITDA and reconciliation to
net income are set forth in this press release.
Separately, the company announced the extension of the estimated useful
life of its QuickBird satellite by eighteen months. The satellite will
continue to be an important part of DigitalGlobe's constellation through
May 2012.
"We are very pleased with our strong third quarter performance,
reflecting continued momentum across our key customer segments," said
Jill Smith, Chairman, and Chief Executive Officer of DigitalGlobe. "We
are delighted that the launch of WorldView-2 was successful and
commissioning is progressing on plan. We anticipate that imagery from
WorldView-2 will be commercially available approximately 90 days
following the launch. Based on our results to date and our outlook for
the remainder of 2009, we are raising our full year outlook."
Business Highlights
On October 8, 2009, successfully launched WorldView-2, the company's
third high-resolution remote-sensing satellite and the first
commercial platform to offer eight band multispectral imagery.
Released first images from WorldView-2 on October 19, 2009.
Initiated service for the ground station based in Troll, Antarctica,
increasing the effective capacity of DigitalGlobe's WorldView-1 and
WorldView-2 satellites and enabling faster imagery delivery.
Signed Clear30 agreement with Microsoft
Corporation (NASDAQ: MSFT) for high-resolution aerial imagery.
This relationship will complement DigitalGlobe's high-resolution
satellite constellation and provide for complete coverage of the
United States and Europe, updated every other year.
Increased ImageLibrary size to 815 million square kilometers as of
September30, 2009.
Full Year 2009 Outlook
Based on DigitalGlobe's results for the first nine months of 2009 and
our outlook for the remainder of the year, management is revising its
full year outlook. The full year outlook assumes that WorldView-2 is not
operational in 2009.
Full year 2009 total revenue is expected to be between $278 million
and $283 million compared with the previous expectation of between
$267 million and $277 million.
Full year 2009 diluted earnings per share are expected to be between
$1.00 and $1.05 compared with the previous expectation of between
$0.80 and $0.90.
Full year 2009 Adjusted EBITDA is expected to be between $165 million
and $170 million compared with the previous expectation of between
$155 million and $160 million.
Capital expenditures for 2009 are expected to be between $165 million
and $170 million, including of approximately $155 million for
WorldView-2. This is compared with the previous expectation of between
$170 million and $180 million, including approximately $160 million
for WorldView-2.
Conference Call Information
DigitalGlobe's management will host a conference call today at 5:00p.m.
ET/ 3:00p.m. MT to discuss its third quarter 2009 financial results.
The conference call dial-in numbers are as follows:
US/Canada
dial-in: (866) 921-3936
International dial-in: (706) 679-9623
Passcode:
3485-0131
A replay of the call can be accessed by phone at the following number
for 30 days following the call:
US/Canada dial-in: (800) 642-1687
International dial-in: (706)
645-9291
Passcode: 3485-0131
DigitalGlobe will also sponsor a live and archived webcast of the
conference call on its website, www.digitalglobe.com.
About DigitalGlobe
Longmont, Colorado-based DigitalGlobe (http://www.digitalglobe.com)
is a leading global provider of commercial high-resolution earth imagery
products and services. Sourced from our own advanced satellite
constellation, our imagery solutions support a wide variety of uses
within defense and intelligence, civil agencies, mapping and analysis,
environmental monitoring, oil and gas exploration, infrastructure
management, internet portals and navigation technology.
With our collection sources and comprehensive ImageLibrary (containing
more than 815million square kilometers of earth imagery and imagery
products) we offer a range of on- and off-line products and services
designed to enable customers to easily access and integrate our imagery
into their business operations and applications.
DigitalGlobe is a registered trademark of DigitalGlobe.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This presentation and other of our reports, filings, and public
announcements may contain or incorporate forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of
1995, as amended. Forward-looking statements relate to future events or
our future financial performance. We generally identify forward-looking
statements by terminology such as "may," "will," "should," "expects,"
"plans," "anticipates," "could," "intends," "target," "projects,"
"contemplates," "believes," "estimates," "predicts," "potential" or
"continue" or the negative of these terms or other similar words,
although not all forward-looking statements contain these words.
Any forward-looking statements are based upon our historical performance
and on our current plans, estimates and expectations. The inclusion of
this forward-looking information should not be regarded as a
representation by us that the future plans, estimates or expectations
will be achieved. Such forward-looking statements are subject to various
risks and uncertainties and assumptions. A number of important factors
could cause our actual results or performance to differ materially from
those indicated by such forward looking statements, including: the loss
or reduction of any of our primary contracts; the failure of our
WorldView-2 satellite to commission successfully or as scheduled; the
loss or impairment of our satellites; loss or damage to the content
contained in our ImageLibrary; interruption or failure of our ground
system and other infrastructure, decrease in demand for our imagery
products and services; increased competition that may reduce our market
share or cause us to lower our prices; our failure to obtain or maintain
required regulatory approvals and licenses; changes in U.S. foreign law
or regulation that may limit our ability to distribute our imagery
products and services; the costs associated with being a public company;
and other important factors, all as described more fully in our filings
with the Securities and Exchange Commission, including our Prospectus
filed with the Commission on May 14, 2009.
We undertake no obligation to update any forward-looking statement to
reflect events or circumstances after the date on which the statement is
made or to reflect the occurrence of unanticipated events. Readers are
cautioned not to place undue reliance on any of these forward looking
statements.
Non-GAAP Financial Measures
Adjusted EBITDA is a key measure used in internal operating reports by
management and the board of directors to evaluate the performance of our
operations and is also used by analysts, investment banks and lenders
for the same purpose. Adjusted EBITDA is a measure of our current period
operating performance, excluding charges for capital, depreciation
related to prior period capital expenditures and items which are
considered non-core or non-recurring in nature.
We believe that the elimination of certain non-cash, non-operating or
non-recurring items enables a more consistent measurement of period to
period performance of our operations, as well as a comparison of our
operating performance to companies in our industry. We believe this
measure is particularly important in a capital intensive industry such
as ours, in which our current period depreciation is not a good
indication of our current or future period capital expenditures. The
cost to construct and launch a satellite and build the related ground
infrastructure may vary greatly from one satellite to another, depending
on the satellite's size, type and capabilities. For example, our
QuickBird satellite, which we are currently depreciating, cost
significantly less than our WorldView-1 or WorldView-2 satellites.
Current depreciation expense is not indicative of the revenue generating
potential of the satellites.
Adjusted EBITDA excludes interest income, interest expense, income taxes
and loss on early extinguishment of debt because these items are
associated with our capitalization and tax structures. Adjusted EBITDA
also excludes depreciation and amortization expense because these
non-cash expenses reflect the impact of prior capital expenditure
decisions which are not indicative of future capital expenditure
requirements. Adjusted EBITDA excludes other income (expense), net, and
loss on derivative instrument because these items are not related to our
primary operations.
We use Adjusted EBITDA in conjunction with traditional GAAP operating
performance measures as part of our overall assessment of our
performance and we do not place undue reliance on this measure as our
only measure of operating performance. Adjusted EBITDA should not be
considered a substitute for other measures of financial performance
reported in accordance with GAAP.
FINANCIAL TABLES TO FOLLOW
DigitalGlobe, Inc. Unaudited Condensed Consolidated Statements of Operations (in millions, except per share data)
For the three months ended September 30, For the nine months ended September 30,
2008 2009 2008 2009
Revenue $ 66.8 $ 71.8 $ 203.0 $ 209.0
Costs and expenses:
Cost of revenue, excluding depreciation and amortization 5.7 7.8 19.9 22.2
Selling, general and administrative 17.8 21.5 54.5 65.6
Depreciation and amortization 18.8 18.6 56.4 56.2
Income from operations 24.5 23.9 72.2 65.0
Loss from early extinguishment of debt - - - (7.7 )
Loss on derivative instruments - - - (1.8 )
Interest income (expense), net (0.7 ) - (3.2 ) 0.1
Income before income taxes 23.8 23.9 69.0 55.6
Income tax expense (9.5 ) (9.3 ) (29.0 ) (22.0 )
Net income $ 14.3 $ 14.6 $ 40.0 $ 33.6
Earnings per share:
Basic earnings per share $ 0.33 $ 0.33 $ 0.92 $ 0.76
Diluted earnings per share $ 0.32 $ 0.32 $ 0.91 $ 0.75
Weighted average common shares outstanding:
Basic 43,459,653 44,679,714 43,438,310 44,152,352
Diluted 44,346,877 45,397,989 44,095,320 44,740,004
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DigitalGlobe, Inc. Unaudited Reconciliation of Third Quarter GAAP Net Income to Adjusted EBITDA (in millions)
Three months ended September 30, Nine months ended September 30,
2008 2009 2008 2009
Net income $ 14.3 $ 14.6 $ 40.0 $ 33.6
Depreciation and amortization 18.8 18.6 56.4 56.2
Interest (income), expense net 0.7 - 3.2 (0.1 )
Loss on derivative instrument - - - 1.8
Loss from early extinguishment of debt - - - 7.7
Income tax expense 9.5 9.3 29.0 22.0
Non-cash stock compensation expense 0.8 1.3 2.5 5.5
Adjusted EBITDA $ 44.1 $ 43.8 $ 131.1 $ 126.7
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Adjusted EBITDA is not a recognized term under generally accepted
accounting principles, or GAAP, in the United States and may not be
defined similarly by other companies. Adjusted EBITDA should not be
considered an alternative to net income, as an indication of financial
performance, or as an alternative to cash flow from operations as a
measure of liquidity. There are limitations to using non-GAAP financial
measures, including the difficulty associated with comparing companies
that use similar performance measures whose calculations may differ from
ours.
DigitalGlobe, Inc. Unaudited Condensed Consolidated Balance Sheets (in millions, except per share data)
December 31, September 30,
2008 2009
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 60.8 $ 96.1
Restricted cash 2.5 8.6
Accounts receivable, net of allowance for doubtful accounts of $0.9 and $1.4, respectively 44.3 40.9
Accounts receivable from related party 2.5 -
Aerial image library 4.9 5.5
Prepaid and current assets 5.8 10.2
Deferred taxes 24.9 12.6
Total current assets 145.7 173.9
Property and equipment, net of accumulated depreciation of $288.6 and $343.3, respectively 792.9 880.4
Goodwill 8.7 8.7
Intangibles, net of accumulated amortization of $5.4 and $6.8, respectively 3.6 2.2
Long-term restricted cash - 16.7
Long-term deferred contract costs 5.7 32.8
Long-term deferred contract costs from related party 15.9 -
Other assets, net 7.7 9.6
Total assets $ 980.2 $ 1,124.3
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 0.7 4.4
Accounts payable to related party 1.8 -
Accrued interest 3.5 16.0
Other accrued liabilities 20.1 21.2
Other accrued liabilities to related party 2.7 -
Current portion of deferred revenue 28.1 32.0
8.5% Cumulative mandatorily redeemable preferred stock-Series-C; $0.001 par value; 50,000,000 shares authorized; 10 shares issued and outstanding; aggregate liquidation preference of $0.5 million as of December 31, 2008 and there was no balance as of September 30, 2009 0.5 -
Total current liabilities $ 57.4 $ 73.6
Deferred revenue 214.9 230.5
Deferred revenue related party 24.7 -
Deferred lease incentive 6.3 5.7
Long-term debt 230.0 342.9
Long-term debt and accrued interest to related parties 44.6 -
Long-term deferred tax liability - 9.2
Total liabilities $ 577.9 $ 661.9
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $0.001 par value; 24,000,000 shares authorized; no shares issued and outstanding at December 31, 2008 and September 30, 2009 - -
Common stock; $0.001 par value; 250,000,000 shares authorized; 43,468,941 shares issued and outstanding at December 31, 2008 and 44,934,831 shares issued and outstanding at September 30, 2009 0.2 0.2
Treasury stock, at cost; 21,555 shares at December 31, 2008 and 43,723 shares at September 30, 2009 (0.2 ) (0.7 )
Additional paid-in capital 467.2 492.7
Accumulated other comprehensive income (loss) (1.5 ) -
Accumulated deficit (63.4 ) (29.8 )
Total stockholders' equity 402.3 462.4
Total liabilities and stockholders' equity $ 980.2 $ 1,124.3
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DigitalGlobe, Inc. Unaudited Condensed Consolidated Statements of Cash Flows (in millions)
For the Nine Months Ended September 30,
2008 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 40.0 $ 33.6
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense 56.4 56.2
Non-cash recognition of deferred revenue (19.1 ) (19.8 )
Non-cash amortization 3.1 4.0
Non-cash stock compensation expense 2.5 5.5
Amortization of debt issuance costs 1.3 -
Write off of debt financing fees - 5.3
Deferred income taxes 26.6 20.5
Changes in working capital, net of investing activities:
Accounts receivable, net 14.9 6.1
Accounts receivable from related party (1.6 ) (0.2 )
Aerial image library (2.7 ) (4.7 )
Other assets 4.5 (4.6 )
Accounts payable 1.5 (0.8 )
Accounts payable and accrued liabilities to related parties (1.8 ) 3.5
Accrued liabilities 3.0 (0.4 )
Deferred contract costs from related party (7.7 ) (11.7 )
Deferred revenue (0.9 ) 12.4
Deferred revenue related party 6.5 2.1
Deferred lease incentive 0.8 -
Net cash flows provided by operating activities 127.3 107.0
CASH FLOWS USED IN INVESTING ACTIVITIES:
Construction in progress additions (100.8 ) (121.4 )
Other property, equipment and intangible additions (4.0 ) (7.2 )
Increase in restricted cash (0.1 ) (22.8 )
Settlements of derivative instruments (0.8 ) (2.8 )
Net cash flows used in investing activities (105.7 ) (154.2 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt, net of issuance costs 38.5 330.9
Proceeds from initial public offering, net of issuance costs (2.4 ) 21.7
Repayment of notes - (270.0 )
Proceeds from exercise of stock options 1.1 0.3
Repurchase of common stock - (0.4 )
Net cash flows provided by financing activities 37.2 82.5
Net increase in cash and cash equivalents 58.8 35.3
Cash and cash equivalents, beginning of period 22.9 60.8
Cash and cash equivalents, end of period $ 81.7 $ 96.1
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest, net of amounts capitalized $ 3.1 $ -
Cash paid for income taxes 2.0 2.4
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Non-cash items capitalized in construction in progress - 5.5
Changes to non-cash property and equipment accruals, including interest (14.7 ) 8.1
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