Iridium Communications Inc. (Nasdaq:IRDM) (“Iridium”) today
reported financial results for the fourth quarter of 2016 and
issued its full-year 2017 and long-range outlook. Net income
was $24.1 million, or $0.19 per diluted share, for the fourth
quarter of 2016, as compared to net loss of $69.4 million, or $0.77
per diluted share, for the fourth quarter of 2015. Net loss
for the fourth quarter of 2015 included a non-cash goodwill
impairment charge of $87.0 million, or $0.91 per diluted
share. Adjusted to eliminate this non-cash goodwill
impairment charge(1), net income would have been $17.6 million, or
$0.14 per diluted share, for the fourth quarter of 2015.
Operational EBITDA (“OEBITDA”)(1) for the fourth quarter was $61.3
million, as compared to $56.8 million for the prior-year period,
representing a year-over-year increase of 8% and an OEBITDA
margin(1) of 57%. OEBITDA grew largely due to higher
machine-to-machine (“M2M”) and government service revenue and
reduced non-income taxes.
Iridium reported fourth-quarter total revenue of $107.4 million,
which consisted of $84.2 million of service revenue and $23.2
million of revenue related to equipment sales and engineering and
support projects. Total revenue increased 1% versus the
comparable period of 2015, while service revenue grew 2% from the
year-ago period. Service revenue, which represents primarily
recurring revenue from Iridium’s growing subscriber base, was 78%
of total revenue for the fourth quarter of 2016.
The Company ended the quarter with 850,000 total billable
subscribers, which compares to 782,000 for the year-ago period and
is up from 838,000 for the quarter ended September 30, 2016.
Total billable subscribers grew 9% year-over-year, driven by growth
in machine-to-machine and government customers.
Full-Year 2016 Iridium Business Highlights
For the full year, Iridium reported net income of $111.0
million, or $0.89 per diluted share attributable to common
stockholders, as compared to a net income of $7.1 million, or a net
loss attributable to common stockholders of $0.09 per diluted
share, for 2015. Net income for 2015 included a non-cash
goodwill impairment charge of $87.0 million, or $0.86 per diluted
share. Adjusted to eliminate this non-cash goodwill
impairment charge, full year 2015 net income would have been $94.2
million, or $0.77 per diluted share. The Company reported
2016 total revenue of $433.6 million, which was up 5% from the
year-ago period. Total revenue included $334.8 million of
service revenue and $98.8 million of revenue related to equipment
sales and engineering and support projects. OEBITDA for 2016
was $254.2 million, a 9% increase from $234.0 million in the
prior-year, representing an OEBITDA margin of 59%. Capital
expenditures were $405.7 million for the full-year 2016.
“We successfully launched the first ten Iridium NEXT satellites
in January and are pleased to report that our first Iridium NEXT
satellite is now active, carrying live communications traffic
within our global network. While validation of these first
ten satellites is ongoing to confirm functionality, we anticipate
that eight of those initially launched will be put into service by
mid-April, while two continue to drift to an adjacent orbital plane
for planned deployment and pre-operational testing.”
Commenting on full-year financial and business performance,
Desch said, “2016 was another strong year for Iridium. The
Company delivered 6% total service revenue growth and 9% growth in
Operational EBITDA, driven by an increase in revenue from our
Government business and growth in personal tracking, as well as
leading heavy-equipment manufacturers. These expanding
relationships underscore Iridium’s strong market position in the
burgeoning market for real-time Internet of Things (IoT)
solutions. We reached a record 850,000 billable subscribers
in 2016, fueled by 15% subscriber growth in commercial M2M data,
which accounts for more than half of Iridium’s billable commercial
subscribers.”
Desch concluded, “Today, we affirmed our long-range outlook and
issued 2017 full-year guidance. Increased demand for IoT is
driving subscriber growth and should serve as an excellent
long-term catalyst for Iridium’s satellite services, global partner
development and customer base.”
Fourth-Quarter Iridium Business Highlights
Service – Commercial
Commercial service remained the largest part of Iridium’s
business, representing 58% of the Company’s total revenue during
the fourth quarter. The Company’s commercial customer base is
diverse and includes markets such as maritime, aviation, oil and
gas, mining, recreation, forestry, construction, transportation and
emergency services. These customers rely on Iridium’s
products and services as critical to their daily operations and
integral to their communications and business
infrastructure.
- Commercial service revenue was $62.2 million, up 1% from last
year’s comparable period principally based on increased M2M
subscribers.
- Commercial voice and data subscribers rose modestly from the
year-ago period to 353,000 customers. Commercial voice and
data average revenue per user (“ARPU”) was $41 during the fourth
quarter, compared to $42 in last year’s comparable period.
The decline in voice and data ARPU was primarily due to continued
declines in airtime usage. Commercial M2M data subscribers grew 15%
from the year-ago period to 413,000 customers. Commercial M2M
data ARPU remained steady at $14 in the fourth quarter compared to
last year’s comparable period.
- Iridium’s commercial business ended the quarter with 766,000
billable subscribers, which compares to 710,000 for the prior-year
quarter and is up from 756,000 for the quarter ended September 30,
2016. M2M data subscribers represented 54% of billable
commercial subscribers at the end of the quarter, an increase from
51% at the end of the prior-year period.
Service – Government
Iridium’s voice and data solutions improve situational awareness
for military personnel and track critical assets in tough
environments around the globe, providing a unique value proposition
that is not easily duplicated. The Company operates through
two Defense Information Systems Agency (“DISA”) contracts, which
include a $400 million, five-year, fixed-price agreement for
satellite communications services and a $38 million multi-year
contract to support and maintain the Department of Defense’s
(“DoD”) dedicated gateway.
- Government service revenue was $22.0 million, a 4% increase
from the prior-year period, driven by the Company’s airtime
services contract with DISA.
- Iridium’s government business ended the quarter with 84,000
subscribers, which compares to 72,000 for the prior-year quarter
and is up from 82,000 for the quarter ended September 30,
2016. Government voice and data subscribers increased 10%
from the year-ago period to 44,000 as of December 31, 2016.
M2M data subscribers increased 25% year-over-year and represented
48% of government subscribers, an increase from 44% at the end of
the prior-year period.
Equipment
- Equipment revenue was $16.4 million during the fourth quarter,
down 4% from the prior-year period.
- The Company expects lower equipment sales in 2017 due in part
to the continued strength in the U.S. dollar.
Engineering & Support
- Engineering and support revenue was $6.9 million during the
fourth quarter, unchanged from the prior-year
quarter.
Capital expenditures were $173.9 million for the fourth quarter
and primarily related to spending for the Company’s next-generation
satellite constellation, Iridium NEXT. The Company ended the
fourth quarter with a cash and marketable securities balance of
$410.5 million and gross debt of $1.78 billion. Net debt was
$1.26 billion, calculated as $1.78 billion of gross debt, less
$0.41 billion of cash and marketable securities, as well as $0.11
billion in restricted cash.
2017 Outlook
The Company issued its full-year 2017 outlook for total service
revenue growth and OEBITDA. The Company expects:
- Total service revenue growth between 3% and 5% for the
full-year 2017.
- Full-year 2017 OEBITDA between $255 million and $265
million. OEBITDA for 2016 was $254.2 million.
|
2017 Outlook (February 2017) |
Total Service
Revenue Growth |
3% to 5% |
Operational EBITDA (OEBITDA) |
$255 million to $265 million |
Long-Range Outlook
The Company affirmed its long-range outlook for total service
revenue growth, OEBITDA margin, cash taxes, peak net leverage and
2019 net leverage. Given our expected 2018 Iridium NEXT
system completion, the Company continues to expect:
- Total service revenue between $440 million and $465 million for
the full-year 2019.
- OEBITDA margin of approximately 60% in 2019.
- Negligible cash taxes through approximately 2020.
- Peak net leverage of 6.0x to 6.5x OEBITDA in 2017.
- Net leverage below 4x OEBITDA in 2019.
|
Long-Range Outlook(October
2016) |
Long-Range Outlook(February
2017) |
Total Service Revenue |
$440 million to $465 million for the full-year 2019 |
Affirmed |
Operational EBITDA (OEBITDA)
Margin |
Approximately 60% in 2019 |
Affirmed |
Cash Taxes |
Negligible cash taxes from 2017 to approximately 2020 |
Affirmed |
Peak Net Leverage |
6.0x - 6.5x OEBITDA in 2017 |
Affirmed |
Net Leverage |
Below 4x OEBITDA in 2019 |
Affirmed |
Non-GAAP Financial Measures &
Definitions
(1) In addition to disclosing financial results that are
determined in accordance with U.S. GAAP, the Company provides
Operational EBITDA and Operational EBITDA margin, which are
non-GAAP financial measures, as supplemental measures to help
investors evaluate the Company’s fundamental operational
performance. In addition, in the fourth quarter of 2015 the
Company took a non-cash goodwill impairment charge, which resulted
in a net loss for the quarter, and the Company decided to report,
as a supplemental measure, net income adjusted to eliminate the
goodwill impairment charge. Operational EBITDA represents
earnings before interest, income taxes, depreciation and
amortization, Iridium NEXT revenue and expenses (for periods prior
to the deployment of Iridium NEXT only), loss from investment in
Aireon, share-based compensation expenses, and the impact of
purchase accounting. Iridium NEXT revenue and expenses are
expected to be excluded from Operational EBITDA into 2017.
During 2017, Iridium NEXT revenues are expected to exceed recurring
Iridium NEXT expenses (recurring Iridium NEXT expenses are not part
of the approximately $3 billion construction cost of Iridium NEXT
(the “Construction Costs”)). Accordingly, the Company expects
that during 2017, Iridium NEXT revenues and these recurring
expenses will no longer be excluded in calculating Operational
EBITDA. U.S. GAAP requires that certain of the Construction
Costs be expensed. These certain Construction Costs, which in
2017 and later will principally consist of in-orbit insurance, will
continue to be excluded from the calculation of Operational EBITDA
through 2018. The Company also presents Operational EBITDA
expressed as a percentage of GAAP revenue, or Operational EBITDA
margin. Operational EBITDA, along with its related measure,
Operational EBITDA margin, does not represent, and should not be
considered, an alternative to U.S. GAAP measurements such as net
income or loss, and the Company’s calculations thereof may not be
comparable to similarly titled measures reported by other
companies. By eliminating interest, income taxes,
depreciation and amortization, Iridium NEXT revenue and expenses
(for periods prior to the deployment of Iridium NEXT only), loss
from investment in Aireon, share-based compensation expenses, and
the impact of purchase accounting, the Company believes the result
is a useful measure across time in evaluating its fundamental core
operating performance. Management also uses Operational
EBITDA to manage the business, including in preparing its annual
operating budget, debt covenant compliance, financial projections
and compensation plans. The Company believes that Operational
EBITDA is also useful to investors because similar measures are
frequently used by securities analysts, investors and other
interested parties in their evaluation of companies in similar
industries. However, there is no standardized measurement of
Operational EBITDA, and Operational EBITDA as the Company presents
it may not be comparable with similarly titled non-GAAP financial
measures used by other companies. As indicated, Operational
EBITDA does not include interest expense on borrowed money, the
payment of income taxes, amortization of the Company’s
definite-lived intangible assets, or depreciation expense on the
Company’s capital assets, which are necessary elements of the
Company’s operations. It also excludes expenses in connection
with the development, deployment and financing of Iridium NEXT and
the loss from investment in Aireon. Since Operational EBITDA
does not account for these and other expenses, its utility as a
measure of the Company’s operating performance has material
limitations. Due to these limitations, the Company’s
management does not view Operational EBITDA in isolation, but also
uses other measurements, such as net income, revenues and operating
profit, to measure operating performance. Please refer to the
schedule below for a reconciliation of consolidated GAAP net income
to Operational EBITDA and Iridium’s Investor Relations webpage at
www.iridium.com for a discussion and reconciliation of this and
other non-GAAP financial measures.
|
Iridium Communications Inc. |
|
Supplemental Reconciliation of GAAP Net Income to
Operational EBITDA |
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
GAAP net income
(loss) |
$ |
24,103 |
|
|
$ |
(69,431 |
) |
|
$ |
111,032 |
|
|
$ |
7,123 |
|
Impairment of
goodwill |
|
- |
|
|
|
87,039 |
|
|
|
- |
|
|
|
87,039 |
|
Adjusted net
income |
|
24,103 |
|
|
|
17,608 |
|
|
|
111,032 |
|
|
|
94,162 |
|
|
|
|
|
|
|
|
|
Interest expense |
|
129 |
|
|
|
515 |
|
|
|
1,159 |
|
|
|
2,416 |
|
Interest income |
|
(805 |
) |
|
|
(1,292 |
) |
|
|
(4,093 |
) |
|
|
(5,485 |
) |
Income taxes |
|
17,846 |
|
|
|
20,640 |
|
|
|
67,133 |
|
|
|
65,992 |
|
Depreciation and
amortization |
|
11,806 |
|
|
|
12,727 |
|
|
|
49,394 |
|
|
|
51,834 |
|
Iridium NEXT expenses,
net |
|
4,614 |
|
|
|
4,323 |
|
|
|
16,732 |
|
|
|
17,296 |
|
Share-based
compensation |
|
3,806 |
|
|
|
2,387 |
|
|
|
13,689 |
|
|
|
8,602 |
|
Non-cash purchase
accounting |
|
(204 |
) |
|
|
(128 |
) |
|
|
(825 |
) |
|
|
(775 |
) |
Operational EBITDA |
$ |
61,295 |
|
|
$ |
56,780 |
|
|
$ |
254,221 |
|
|
$ |
234,042 |
|
|
|
|
|
|
|
|
|
Conference Call Information
As previously announced, the Company will host a conference call
to discuss its results at 8:30 a.m. ET on Thursday, February 23,
2017. Callers should dial (877) 334-1964 (U.S. only) or (631)
291-4574 (from outside the U.S.) to access the call. The
conference call ID is 48576241. The conference call will also
be simultaneously webcast on Iridium’s Investor Relations webpage
at www.iridium.com. An archive of the webcast will be
available following the live conference call.
About Iridium Communications
Inc.
Iridium® is the only mobile voice and data satellite
communications network that spans the entire globe. Iridium
enables connections between people, organizations and assets to and
from anywhere, in real time. Together with its ecosystem of
partner companies, Iridium delivers an innovative and rich
portfolio of reliable solutions for markets that require truly
global communications. The company has a major development
program underway for its next-generation network – Iridium
NEXT. Iridium Communications Inc. is headquartered in McLean,
Va., U.S.A., and its common stock trades on the NASDAQ Global
Select Market under the ticker symbol IRDM. For more
information about Iridium products, services and partner solutions,
visit www.iridium.com. IRDM-F
Forward-Looking Statements Statements in this
press release that are not purely historical facts may constitute
forward-looking statements as defined in the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include
statements regarding Iridium’s expectations with respect to total
service revenue growth and OEBITDA for 2017; service revenue,
OEBITDA margin, cash taxes and leverage over the longer-term; the
continued deployment and expected timing for launch and completion
of Iridium NEXT; the anticipated market for IoT solutions;
anticipated equipment revenue; and expected revenue from Iridium’s
contracts with the U.S. Department of Defense.
Forward-looking statements can be identified by the words
“anticipates,” “may,” “can,” “believes,” “expects,” “projects,”
“intends,” “likely,” “will,” “to be” and other expressions that are
predictions or indicate future events, trends or prospects. These
forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results,
performance or achievements of Iridium to differ materially from
any future results, performance or achievements expressed or
implied by such forward-looking statements. These risks and
uncertainties include, but are not limited to, uncertainties
regarding customer demand for Iridium’s products and services,
including demand from the U.S. Government; Iridium’s ability to
maintain the health, capacity and content of its current satellite
constellation; the development and launch of and transition to
Iridium NEXT, and the development of and market for Iridium’s
products and services, as well as general industry and economic
conditions, and competitive, legal, governmental and technological
factors. Other factors that could cause actual results to differ
materially from those indicated by the forward-looking statements
include those factors listed under the caption “Risk Factors” in
the Company’s Form 10-K for the year ended December 31, 2016, filed
with the Securities and Exchange Commission (“SEC”) on February 23,
2017, as well as other filings Iridium makes with the SEC from time
to time. There is no assurance that Iridium’s expectations
will be realized. If one or more of these risks or uncertainties
materialize, or if Iridium’s underlying assumptions prove
incorrect, actual results may vary materially from those expected,
estimated or projected. Iridium’s forward-looking statements are
based on information available to it as of the date of this press
release and speak only as of the date of this press release, and
Iridium undertakes no obligation to update forward-looking
statements.
Iridium
Communications Inc. |
|
|
|
|
Consolidated Statements of Operations |
|
|
|
|
(in
thousands) |
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
2016 |
|
2015 |
|
Revenue |
|
|
|
|
Service
revenue |
|
|
|
|
Commercial |
$ |
62,197 |
|
|
$ |
61,285 |
|
|
Government |
|
22,000 |
|
|
|
21,097 |
|
|
Total
service revenue |
|
84,197 |
|
|
|
82,382 |
|
|
Subscriber equipment |
|
16,389 |
|
|
|
17,127 |
|
|
Engineering and support service |
|
6,863 |
|
|
|
6,909 |
|
|
Total
revenue |
|
107,449 |
|
|
|
106,418 |
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
Cost of
services (exclusive of depreciation and amortization) |
|
16,671 |
|
|
|
17,114 |
|
|
Cost of
subscriber equipment sales |
|
10,488 |
|
|
|
9,320 |
|
|
Research
and development |
|
4,469 |
|
|
|
4,116 |
|
|
Selling,
general and administrative |
|
22,419 |
|
|
|
24,645 |
|
|
Depreciation and amortization |
|
11,806 |
|
|
|
12,727 |
|
|
Impairment of goodwill |
|
- |
|
|
|
87,039 |
|
|
Total
operating expenses |
|
65,853 |
|
|
|
154,961 |
|
|
|
|
|
|
|
Operating income
(expense) |
|
41,596 |
|
|
|
(48,543 |
) |
|
|
|
|
|
|
Other income
(expense) |
|
|
|
|
Interest
income, net |
|
676 |
|
|
|
777 |
|
|
Undrawn
credit facility fees |
|
(170 |
) |
|
|
(668 |
) |
|
Other
expense, net |
|
(153 |
) |
|
|
(357 |
) |
|
Total
other income (expense) |
|
353 |
|
|
|
(248 |
) |
|
|
|
|
|
|
Income
(loss) before income taxes |
|
41,949 |
|
|
|
(48,791 |
) |
|
Provision
for income taxes |
|
(17,846 |
) |
|
|
(20,640 |
) |
|
Net income (loss) |
|
24,103 |
|
|
|
(69,431 |
) |
|
Series A
Preferred Stock dividends |
|
1,750 |
|
|
|
1,750 |
|
|
Series B
Preferred Stock dividends |
|
2,109 |
|
|
|
2,109 |
|
|
Net income (loss)
attributable to common stockholders |
$ |
20,244 |
|
|
$ |
(73,290 |
) |
|
|
|
|
|
|
Operational EBITDA |
$ |
61,295 |
|
|
$ |
56,780 |
|
|
|
|
|
|
|
Iridium
Communications Inc. |
|
|
|
Consolidated Statements of Operations |
|
|
|
(in
thousands) |
|
|
|
|
|
|
Year Ended December 31, |
|
2016 |
|
2015 |
Revenue |
|
|
|
Service
revenue |
|
|
|
Commercial |
$ |
246,822 |
|
|
$ |
241,925 |
|
Government |
|
88,000 |
|
|
|
75,097 |
|
Total
service revenue |
|
334,822 |
|
|
|
317,022 |
|
Subscriber equipment |
|
74,211 |
|
|
|
73,615 |
|
Engineering and support service |
|
24,607 |
|
|
|
20,741 |
|
Total
revenue |
|
433,640 |
|
|
|
411,378 |
|
|
|
|
|
Operating
expenses |
|
|
|
Cost of
services (exclusive of depreciation and amortization) |
|
64,958 |
|
|
|
60,306 |
|
Cost of
subscriber equipment sales |
|
44,286 |
|
|
|
40,807 |
|
Research
and development |
|
16,079 |
|
|
|
16,144 |
|
Selling,
general and administrative |
|
82,552 |
|
|
|
81,445 |
|
Depreciation and amortization |
|
49,394 |
|
|
|
51,834 |
|
Impairment of goodwill |
|
- |
|
|
|
87,039 |
|
Total
operating expenses |
|
257,269 |
|
|
|
337,575 |
|
|
|
|
|
Operating income |
|
176,371 |
|
|
|
73,803 |
|
|
|
|
|
Other income
(expense) |
|
|
|
Interest
income, net |
|
2,934 |
|
|
|
3,069 |
|
Undrawn
credit facility fees |
|
(1,346 |
) |
|
|
(3,289 |
) |
Other
income (expense), net |
|
206 |
|
|
|
(468 |
) |
Total
other income (expense) |
|
1,794 |
|
|
|
(688 |
) |
|
|
|
|
Income
before income taxes |
|
178,165 |
|
|
|
73,115 |
|
Provision
for income taxes |
|
(67,133 |
) |
|
|
(65,992 |
) |
Net income |
|
111,032 |
|
|
|
7,123 |
|
Series A
Preferred Stock dividends |
|
7,000 |
|
|
|
7,000 |
|
Series B
Preferred Stock dividends |
|
8,436 |
|
|
|
8,436 |
|
Net income (loss)
attributable to common stockholders |
$ |
95,596 |
|
|
$ |
(8,313 |
) |
|
|
|
|
Operational EBITDA |
$ |
254,221 |
|
|
$ |
234,042 |
|
|
|
|
|
Iridium Communications
Inc. |
|
|
|
|
|
|
|
|
|
|
|
Summary Revenue and
OEBITDA Highlights |
|
|
|
|
|
|
|
|
|
|
|
(in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
% Change |
|
Year Ended December 31, |
|
% Change |
|
2016 |
|
2015 |
|
|
|
2016 |
|
2015 |
|
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
Service
revenue(1) |
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
Voice and
M2M data service |
|
|
|
|
|
|
|
|
|
|
|
Voice and
data |
$ |
44,862 |
|
|
$ |
46,010 |
|
|
-2 |
% |
|
$ |
180,489 |
|
$ |
180,657 |
|
0 |
% |
M2M
data(2) |
|
17,335 |
|
|
|
15,275 |
|
|
13 |
% |
|
|
66,333 |
|
|
61,268 |
|
8 |
% |
Total
commercial voice and M2M data service |
|
62,197 |
|
|
|
61,285 |
|
|
1 |
% |
|
|
246,822 |
|
|
241,925 |
|
2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Government service revenue(3) |
|
22,000 |
|
|
|
21,097 |
|
|
4 |
% |
|
|
88,000 |
|
|
75,097 |
|
17 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Total
service revenue |
|
84,197 |
|
|
|
82,382 |
|
|
2 |
% |
|
|
334,822 |
|
|
317,022 |
|
6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Subscriber equipment |
|
16,389 |
|
|
|
17,127 |
|
|
-4 |
% |
|
|
74,211 |
|
|
73,615 |
|
1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Engineering and support(4) |
|
|
|
|
|
|
|
|
|
|
|
Government |
|
6,486 |
|
|
|
5,678 |
|
|
14 |
% |
|
|
22,362 |
|
|
18,779 |
|
19 |
% |
Commercial |
|
377 |
|
|
|
1,232 |
|
|
-69 |
% |
|
|
2,245 |
|
|
1,963 |
|
14 |
% |
Total
engineering and support |
|
6,863 |
|
|
|
6,910 |
|
|
-1 |
% |
|
|
24,607 |
|
|
20,742 |
|
19 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Total
Revenue |
$ |
107,449 |
|
|
$ |
106,419 |
|
|
1 |
% |
|
$ |
433,640 |
|
$ |
411,379 |
|
5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operational
EBITDA |
|
|
|
|
|
|
|
|
|
|
|
Operational EBITDA |
$ |
61,295 |
|
|
$ |
56,780 |
|
|
8 |
% |
|
$ |
254,221 |
|
$ |
234,042 |
|
9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures (5) |
$ |
173,896 |
|
|
$ |
243,013 |
|
|
|
|
$ |
405,687 |
|
$ |
494,810 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt
(6) |
$ |
1,254,294 |
|
|
$ |
1,041,828 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash,
cash equivalents, and marketable securities |
$ |
410,495 |
|
|
$ |
388,994 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit
facility |
$ |
1,777,789 |
|
|
$ |
1,521,822 |
|
|
|
|
|
|
|
|
Deferred
financing costs |
|
(120,644 |
) |
|
|
(133,056 |
) |
|
|
|
|
|
|
|
Credit
facility, net |
$ |
1,657,145 |
|
|
$ |
1,388,766 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Service revenue consists of primarily subscription-based
services which often generate a long-term recurring revenue stream
from subscribers. |
|
|
|
|
|
|
|
|
|
|
|
|
(2) M2M data service provides a two-way short burst data
transmission between Iridium Communications Inc.'s network and a
telemetry unit, which may be located, for example, on a container
in transit or a buoy monitoring oceanographic conditions.
Additionally, M2M data service provides position, navigation and
timing technology through Iridium Communications Inc.'s one-way
satellite timing, location, and authentication services. |
|
|
|
|
|
|
|
|
|
|
|
|
(3) Government service revenue consists of voice and M2M data
subscription-based services provided to agencies of the U.S.
government through prime contracts or subcontracts. |
|
|
|
|
|
|
|
|
|
|
|
|
(4) Engineering and support includes maintenance services to
the U.S. government's dedicated gateway in Hawaii and engineering
services to assist customers in developing new technologies for use
on Iridium Communications Inc.'s satellite system. |
|
|
|
|
|
|
|
|
|
|
|
|
(5) Capital expenditures based on cash spent in the respective
period. |
|
|
|
|
|
|
|
|
|
|
|
|
(6) Net debt is calculated by taking the sum of the credit
facility, less cash and cash equivalents, marketable securities,
and the debt service reserve for the credit facility. |
|
|
|
|
|
|
|
|
|
|
|
|
Iridium Communications
Inc. |
|
|
|
|
|
|
|
|
|
|
|
Subscriber
Highlights |
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except
ARPU) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, |
|
% Change |
|
|
|
|
|
|
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
Billable
Subscribers (1) |
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
Voice and
M2M data service |
|
|
|
|
|
|
|
|
|
|
|
Voice and
data |
|
353 |
|
|
|
351 |
|
|
1 |
% |
|
|
|
|
|
|
M2M
data |
|
413 |
|
|
|
359 |
|
|
15 |
% |
|
|
|
|
|
|
Total
commercial voice and M2M data service |
|
766 |
|
|
|
710 |
|
|
8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Government |
|
|
|
|
|
|
|
|
|
|
|
Voice and
M2M data service |
|
|
|
|
|
|
|
|
|
|
|
Voice and
data |
|
44 |
|
|
|
40 |
|
|
10 |
% |
|
|
|
|
|
|
M2M
data |
|
40 |
|
|
|
32 |
|
|
25 |
% |
|
|
|
|
|
|
Total
government voice and M2M data service |
|
84 |
|
|
|
72 |
|
|
17 |
% |
|
|
|
|
|
|
Total
billable subscribers |
|
850 |
|
|
|
782 |
|
|
9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
% Change |
|
Year Ended December 31, |
|
% Change |
|
2016 |
|
2015 |
|
|
|
2016 |
|
2015 |
|
|
Net Subscriber
Additions |
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
Voice and
M2M data service |
|
|
|
|
|
|
|
|
|
|
|
Voice and
data |
|
(5 |
) |
|
|
(9 |
) |
|
44 |
% |
|
|
2 |
|
|
(3 |
) |
|
167 |
% |
M2M
data |
|
15 |
|
|
|
7 |
|
|
114 |
% |
|
|
54 |
|
|
34 |
|
|
59 |
% |
Total
commercial voice and M2M data service |
|
10 |
|
|
|
(2 |
) |
|
600 |
% |
|
|
56 |
|
|
31 |
|
|
81 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Government |
|
|
|
|
|
|
|
|
|
|
|
Voice and
M2M data service |
|
|
|
|
|
|
|
|
|
|
|
Voice and
data |
|
1 |
|
|
|
1 |
|
|
0 |
% |
|
|
4 |
|
|
5 |
|
|
-20 |
% |
M2M
data |
|
1 |
|
|
|
2 |
|
|
-50 |
% |
|
|
8 |
|
|
7 |
|
|
14 |
% |
Total
government voice and M2M data service |
|
2 |
|
|
|
3 |
|
|
-33 |
% |
|
|
12 |
|
|
12 |
|
|
0 |
% |
Total
billable subscribers |
|
12 |
|
|
|
1 |
|
|
1100 |
% |
|
|
68 |
|
|
43 |
|
|
58 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
% Change |
|
Year Ended December 31, |
|
% Change |
|
2016 |
|
2015 |
|
|
|
2016 |
|
2015 |
|
|
ARPU(2) |
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
Voice and
data |
$ |
41 |
|
|
$ |
42 |
|
|
-2 |
% |
|
$ |
42 |
|
$ |
42 |
|
|
0 |
% |
M2M
data |
$ |
14 |
|
|
$ |
14 |
|
|
0 |
% |
|
$ |
14 |
|
$ |
15 |
|
|
-7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Subscribers as of the end of the respective period. |
|
|
|
|
|
|
|
|
|
|
|
(2) ARPU is calculated by dividing the revenue in the
respective period by the average of billable subscribers at the
beginning of the period and billable subscribers at the end of the
period and then dividing the results by the months in the
period. Non-subscriber generated revenue is excluded from the
ARPU calculation. Historically, government service revenue was
driven by changes in subscriber count or ARPU, however under the
terms of the EMSS contract, government service revenue is a
fixed-price for unlimited subscribers. For this and future
comparative periods, ARPU will not be presented, as it is no longer
a relevant government service revenue metric. |
Investor Contact:
Kenneth Levy
Iridium Communications Inc.
+1 (703) 287-7570
ken.levy@iridium.com
Press Contact:
Diane Hockenberry
Iridium Communications Inc.
+1 (703) 287-7421
diane.hockenberry@iridium.com
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