- Third Quarter non-IFRS revenue of $15.5
million increased by 68% over the prior year (IFRS revenue
of $20.7 million in Q3 increased by
37%)
- Non-IFRS adjusted EBITDA of $4.7
million in the third quarter increased by 211% over the
prior year
- Year-to-date Non-IFRS revenue is $38 millon, compared with $17 million for the same period last year, an
increase of 118% (IFRS revenue of $55
million year-to-date, compared to $23
million in 2015)
- Reaffirming our full-year guidance for 2016 of non-IFRS revenue
of between $55 and $60 million and
non-IFRS adjusted EBITDA of between $4.2 and
$6.2 million
VANCOUVER, Nov. 10, 2016 /CNW/ - UrtheCast Corp.
(TSX:UR) ("UrtheCast" or the "Company") today announces financial
results for the three and nine months ended on September 30, 2016.
Strong Growth in Revenue and Adjusted EBITDA
The Company is pleased to report Q3 non-IFRS revenues of
$15.5 million, a 68% increase over Q3
2015 non-IFRS revenue of $9.3
million. IFRS revenue for the quarter was $20.7 million, a 37% increase over the
$15.0 million reported in the same
period last year. Similarly, the Company's non-IFRS adjusted EBITDA
was positive $4.7 million in the
quarter compared to a loss of $4.3
million in the same quarter of 2015, amounting to a
$9 million improvement for Q3 in year
over year adjusted EBITDA. At September 30, 2016, the Company had total cash
balances of $21.0 million and working
capital of $22.4 million.
Revenues in Earth Observation Growing by 129% Quarter over
Quarter
Revenues in the Company's earth observation (EO) business in the
quarter grew by 129% compared with Q2 2016, growing from
$3.1 million to $7.1 million (non-IFRS reporting).
Growing Opportunities in Engineering Business
The Company continues to pursue opportunities for our technology
and engineering business. Though not limited to our Synthetic
Aperture Radar (SAR) technology, it is our SAR IP in particular which is creating a lot of
new commercial opportunities, both in Canada and internationally. The Company has
now filed 5 patents relating to the OptiSAR technology, some of
which have now reached the publication stage.
Non-Cash Impairment on ISS Cameras
During the quarter, the Company recorded a non-cash asset
impairment charge of $7.8 million for
the ISS cameras due to a slow revenue ramp, ongoing operational and
geopolitical challenges, and our ISS partner informing us of their
intention to renegotiate a new agreement with UrtheCast going
forward from January 1, 2017. The
Company is now in active discussions to monetize our ISS cameras
through alternative means, including licensing arrangements.
"We are very pleased to see our Earth Observation revenues
growing so robustly, from $1.3
million in Q1 to $7.1 million
in Q3," explained Wade Larson, CEO
and co-founder. "The continuous growth of both our earth
observation and engineering services businesses gives us the
confidence and financial strength to pursue our goals for
UrtheDaily and OptiSAR. The non-cash write-down we've taken
on our ISS cameras will not have not a measurable impact on our
business because of the proactive steps we took in not only buying
Deimos Imaging but, since the acquisition, in consolidating and
growing the our sales forces, distribution channels, and global
market presence for our Deimos satellites."
Business Highlights
Earth Observation Update
- The ramp-up in EO revenues in 2016, from $1.3 million in Q1 to $3.1
million in Q2 and $7.1 million
in Q3, allows us to reaffirm our guidance for 2016.
- In parallel, UrtheCast has been expanding its EO portfolio to
include imagery from other satellite imagery providers, including
those of the PanGeo Alliance, of which we are a founding member.
The capability of UrtheCast to offer an integrated
virtual-constellation service, which goes much beyond a simple
reseller offer, is allowing us to access new markets and customers
with a value proposition which is highly demanded.
- The sales ramp for high-resolution imagery data (Deimos-2) is
mainly in Europe, Latin America and Asia across a number of market verticals,
where our sales network has been working for a longer period.
Deimos-2's exceptionally fast turnaround times and our flexibility
in adapting to customers' service needs are the key differentiating
factors of our product offering.
- Sales of medium-resolution imagery (Deimos-1) are still
growing, with legacy customers maintaining or increasing their
orders and new customers signing for services in new geographies.
This growth can be achieved despite the competition of free data
(mainly US Landsat-8 and EU Sentinel-2), thanks to the unique
service level of the UrtheCast product, which is also tailored to
enable sustainable geo-analytics services.
UrtheDaily Update
- The Company is actively negotiating contracts with multiple
partners to bring to market the UrtheDaily constellation, which has
been designed to be the world's first Earth Observation system
planned, from the ground-up, to truly power machine-learning and
artificial intelligence-ready geoanalytics applications on a global
scale. Customers' urgency for the UrtheDaily service is being
created in part by the impending end-of-life of incumbent satellite
systems.
- The Company met with several key stakeholders within the supply
chain for the procurement of the satellites, further refining the
design, cost and timing of delivery and launch.
OptiSAR Progress
- The Company is in full contract negotiations with three
prospective OptiSAR customers to convert existing Memoranda of
Understanding, representing in total US$490
million of customer commitments for the constellation. If
successful, this will allow us to begin building the first series
of satelittes.
- The Company is witnessing increasing financial support and user
interest from the Government of Canada in OptiSAR, the world's most advanced
SAR technology. The company is pursuing this because the Canadian
Government is looking at a follow-on mission to the three-satellite
RCM program (RADARSAT Constellation Mission).
- UrtheCast's Request for Proposal ("RFP") to U.S. companies
interested in a long-term strategic partnership to serve the United
States Government has closed and the Company is reviewing the
responses submitted. At this time, the Company is inviting
down-selected U.S. bidders for partnership discussions.
Reaffirming 2016 Guidance
This continued significant year over year growth allows us to
reaffirm our full year 2016 guidance to achieve non-IFRS revenue
between $55 million and $60 million
(representing an IFRS revenue range of $78
million to $83 million) and non-IFRS adjusted EBITDA
guidance between $4.2 million and
$6.2 million in fiscal 2016.
SELECTED FINANCIAL INFORMATION
The following table provides selected financial information of
the Company, which was derived from, and should be read in
conjunction with, the unaudited consolidated financial statements
for the three and nine months ended September 30, 2016.
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenue
|
$
|
20,651
|
$
|
15,019
|
$
|
53,776
|
$
|
23,252
|
Other operating
income
|
|
61
|
|
411
|
|
756
|
|
4,476
|
|
|
20,712
|
|
15,430
|
|
54,532
|
|
27,728
|
Operating
costs
|
|
|
|
|
|
|
|
|
Direct costs,
selling, general and administrative expenses
|
|
13,853
|
|
12,618
|
|
42,895
|
|
20,734
|
Research
expenditures
|
|
844
|
|
5,215
|
|
4,073
|
|
10,317
|
Depreciation and
amortization
|
|
6,321
|
|
5,838
|
|
19,277
|
|
6,003
|
Asset
impairment
|
|
7,780
|
|
-
|
|
7,780
|
|
-
|
Share-based
payments
|
|
769
|
|
946
|
|
1,892
|
|
2,297
|
|
|
29,567
|
|
24,617
|
|
75,917
|
|
39,351
|
Operating
loss
|
|
(8,855)
|
|
(9,187)
|
|
(21,385)
|
|
(11,623)
|
Acquisition
costs
|
|
-
|
|
(2,295)
|
|
-
|
|
(5,325)
|
Net finance
costs
|
|
(535)
|
|
(147)
|
|
(1,636)
|
|
(276)
|
Loss on derivative
financial instruments
|
|
(775)
|
|
-
|
|
(775)
|
|
-
|
Foreign exchange
(loss) gain
|
|
296
|
|
(235)
|
|
(106)
|
|
(66)
|
Loss before income
taxes
|
|
(9,869)
|
|
(11,864)
|
|
(23,902)
|
|
(17,290)
|
Income tax recovery
(expense)
|
|
251
|
|
(83)
|
|
2,907
|
|
(83)
|
Net
loss
|
|
(9,618)
|
|
(11,947)
|
|
(20,995)
|
|
(17,373)
|
Other comprehensive
income (loss)
|
|
1,425
|
|
6,201
|
|
(2,031)
|
|
6,199
|
Comprehensive
loss
|
$
|
(8,193)
|
$
|
(5,746)
|
$
|
(23,026)
|
$
|
(11,174)
|
Net loss per share
– basic and diluted
|
$
|
(0.09)
|
$
|
(0.12)
|
$
|
(0.20)
|
$
|
(0.22)
|
|
Three Months ended
September 30,
|
Nine Months ended
September 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
NON-IFRS
REVENUE:
|
|
|
|
|
|
|
|
|
Revenue per income
statement
|
$
|
20,651
|
$
|
15,019
|
$
|
53,776
|
$
|
23,252
|
Non-cash
revenue
|
|
(5,128)
|
|
(5,753)
|
|
(15,541)
|
|
(5,753)
|
NON-IFRS
REVENUE
|
|
15,523
|
|
9,266
|
$
|
38,235
|
$
|
17,499
|
|
|
|
|
|
|
|
|
|
ADJUSTED
EBITDA:
|
|
|
|
|
|
|
|
|
Net
loss
|
$
|
(9,618)
|
$
|
(11,947)
|
$
|
(20,995)
|
$
|
(17,373)
|
Add back
(subtract):
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
6,321
|
|
5,838
|
|
19,277
|
|
6,003
|
Net finance
costs
|
|
535
|
|
147
|
|
1,636
|
|
276
|
Income tax
recovery
|
|
(251)
|
|
83
|
|
(2,907)
|
|
83
|
EBITDA
|
|
(3,013)
|
|
(5,879)
|
|
(2,989)
|
|
(11,011)
|
Non-cash
revenue
|
|
(5,128)
|
|
(5,753)
|
|
(15,541)
|
|
(5,753)
|
Non-cash operating
costs
|
|
3,859
|
|
3,876
|
|
11,736
|
|
3,876
|
Asset
impairment
|
|
7,780
|
|
-
|
|
7,780
|
|
-
|
Share-based payments
expense
|
|
769
|
|
946
|
|
1,892
|
|
2,297
|
Deimos acquisition
costs
|
|
-
|
|
2,295
|
|
-
|
|
5,325
|
Loss on derivative
financial instruments
|
|
775
|
|
-
|
|
775
|
|
-
|
Foreign exchange
losses (gains)
|
|
(296)
|
|
235
|
|
106
|
|
66
|
ADJUSTED
EBITDA
|
$
|
4,746
|
$
|
(4,280)
|
$
|
3,759
|
$
|
(5,200)
|
As previously announced, UrtheCast will host a conference call
regarding its 2016 third quarter financial results at 5:00 p.m. ET (2:00 p.m.
PT) today, November 10, 2016.
The live conference call will be available by calling
toll-free at +1 866-696-5910, or by toll call at +1 416-340-2217.
The participant pass code is 6974365.
An archived version of the conference call will be made
available on the Company's investor website
(investors.urthecast.com) following the live conference call.
ABOUT URTHECAST CORP.
UrtheCast Corp. is a Vancouver-based technology company that serves
the rapidly evolving geospatial and geoanalytics markets with a
wide range of information-rich products and services. The Company
currently operates four Earth Observation sensors in space,
including two cameras aboard the International Space Station and
two satellites, Deimos-1 and Deimos-2. Imagery and video data
captured by these sensors is downlinked to ground stations across
the planet and displayed on the UrthePlatform, or distributed
directly to partners and customers. UrtheCast is also developing
and anticipates launching the world's first fully-integrated
constellation of multispectral optical and SAR satellites, called
OptiSAR™, in addition to its proposed UrtheDaily™ constellation,
which the Company believes will together revolutionize monitoring
of our planet with high-quality, medium and high-resolution, and
high-coverage and high-revisit imagery in all weather conditions,
any time of day. Common shares of UrtheCast trade on the Toronto
Stock Exchange as ticker 'UR'.
Non-IFRS Financial Measures
The Company prepares its financial statements in accordance with
International Financial Reporting Standards ("IFRS"), as issued by
the International Accounting Standards Board. This release includes
certain non-IFRS financial measures, such as non-IFRS revenues,
EBITDA and adjusted EBITDA. The Company uses these non-IFRS
financial measures as supplemental indicators of its operating
performance and financial position. These measures do not have any
standardized meanings prescribed by IFRS and therefore are unlikely
to be comparable to the calculation of similar measures used by
other companies, and should not be viewed as alternatives to
measures of financial performance calculated in accordance with
IFRS or considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. These non-IFRS
financial measures should be read in conjunction with the Company's
financial statements and accompanying MD&A.
Forward Looking Information
This release contains certain information which, as
presented, constitutes "forward-looking information" or
"forward-oriented financial information" within the meaning of
applicable Canadian securities laws. Forward-looking information
involves statements that relate to future events and often
addresses expected future business and financial performance,
containing words such as "anticipate", "believe", "plan",
"estimate", "expect" and "guidance", statements that an action or
event "may", "might", "could" or "will" be taken or occur, or other
similar expressions and includes, but is not limited to, statements
relating to: UrtheCast's expectations with respect its current
sensors and proposed OptiSAR™ and
UrtheDailyTM constellations;
financial guidance for the 2016 financial year; anticipated cash
and financing needs; its plans for and timing of expansion of its
product offering and value-added services, including providing
additional data sources on the UrthePlatform; its future growth and
operations plans, including with respect to the RFP; expectations
regarding its sales funnel; significant changes expected in 2017 to
the agreement with our Russian partners related to the cameras
aboard the Russian segment of the International Space Station
("ISS"); efforts to monetize the cameras aboard the ISS through
alternative means; management's expectations regarding recoverable
amounts of such assets; and anticipated trends and challenges in
its business and the markets in which it operates. Such statements
reflect UrtheCast's current views with respect to future
events. Such statements are necessarily based upon a number of
estimates and assumptions that, while considered reasonable by
UrtheCast, are inherently subject to significant uncertainties and
contingencies. Many factors could cause UrtheCast's actual results,
performance or achievements to be materially different from any
future results, performance, or achievements that may be expressed
or implied by such forward-looking statements, including, among
others: any delays or failures in the design, development,
construction, launch and operational commissioning of the proposed
OptiSAR™ or UrtheDailyTM
constellations; the Company being unable to convert the
Memoranda of Understanding in respect of funding of the
OptiSAR™ constellation into binding, definitive
agreements; failures aboard the International Space Station ("ISS")
or the Deimos-1 or Deimos-2 satellites; failure to obtain, or loss
of, regulatory approvals; uncertainties and assumptions in
UrtheCast's revenue forecasts; as well as those factors and
assumptions discussed in UrtheCast's annual information form dated
March 29, 2016, (the "AIF"), which is
available under UrtheCast's SEDAR profile at www.sedar.com.
Forward-looking information is developed based on assumptions about
such risks, uncertainties and other factors set out herein, in the
AIF, and as disclosed from time to time on UrtheCast's SEDAR
profile. UrtheCast undertakes no obligation to update
forward-looking statements except as required by Canadian
securities laws. Readers are cautioned against attributing undue
certainty to forward-looking statements.
For more information, visit UrtheCast's website at
www.urthecast.com.
SOURCE UrtheCast Corp.