DigitalGlobe (NYSE: DGI), a leading global provider of
commercial high-resolution earth imagery products and services,
today reported financial results for the second quarter ended June
30, 2009.
Second quarter 2009 revenue was $70.0 million, an increase of
$2.6 million compared to the same period last year. Second quarter
net income was $8.4 million or $0.19 per diluted share as compared
to net income $11.6 million or $0.26 per diluted share for the
second quarter 2008. Net income for the second quarter 2009
included a pre-tax charge of $7.7 million, or $0.17 per diluted
share, related to the early extinguishment of debt.
Second quarter 2009 Adjusted EBITDA, a non-GAAP financial
measure, was $42.4 million, compared to second quarter 2008
Adjusted EBITDA of $42.2 million. An explanation of Adjusted EBITDA
and a reconciliation to net income are set forth at the end of this
press release.
“I am pleased with our financial performance for the second
quarter, which marks our first quarter as a public company,” said
Jill Smith, Chairman, Chief Executive Officer, and President of
DigitalGlobe. “We also achieved key milestones in the quarter
including: extending our Service Level Agreement (SLA) with the
National Geospatial-Intelligence Agency (NGA); setting a
launch date for WorldView-2, our third high-resolution satellite;
and finalizing two additional international Direct Access Program
(DAP) contracts.”
Ms. Smith continued, “We believe the significant investments we
are making in our business today, along with the expanded imagery
capacity available from WorldView-2, position us for growth in 2010
and beyond.”
Business Highlights
- Raised net cash proceeds of
approximately $68.0 million in connection with the Company’s
initial public offering and senior secured notes offering.
- Extended the SLA with NGA,
providing NGA with continuity of access to WorldView-1 for $12.5
million per month through March 31, 2010 with an option to extend
through December 31, 2010.
- Set the launch date for
WorldView-2 on October 6, 2009 from Vandenberg Air Force Base.
- Awarded Rapid Delivery of
Geospatial Intelligence (RDOG) contract by NGA to provide near
real-time delivery of unclassified daily image collections.
- Finalized two international
direct access program (DAP) contracts bringing the current total to
four DAP customers under contract.
- Announced strategic sales
alliance with European Space Imaging and Space Imaging Middle East
(EUSI/SIME).
- Increased the ImageLibrary to
730 million square kilometers as of June 30, 2009.
Full Year 2009 Outlook
- Full year 2009 total revenue is
expected to be between $267 million and $277 million.
- Full year 2009 diluted earnings
per share are expected to be between $0.80 and $0.90.
- Full year 2009 Adjusted EBITDA
is expected to be between $155 million and $160 million.
- Capital expenditures for 2009
are expected to be between $170 million and $180 million, comprised
of approximately $160.0 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 second quarter 2009
financial results.
The conference call dial-in numbers are as follows:US/Canada
dial-in: (866) 921-3936International dial-in: (706)
679-9623Passcode: 1948-0662
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) 642-1687International dial-in: (706)
645-9291Passcode: 1948-0662
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 730 million 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 launch or 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.
DigitalGlobe, Inc.
Condensed Consolidated Statements
of Operations
(in millions, except per share
data)
(unaudited)
For the three months ended
June 30,
For the six months ended
June 30,
2008 2009 2008 2009 Revenue $ 67.4 $ 70.0 $ 136.2 $
137.2 Costs and expenses: Cost of revenue, excluding depreciation
and amortization 7.5 8.0 14.2 14.4 Selling, general and
administrative 18.3 21.5 36.7 44.1 Depreciation and amortization
18.8 18.9 37.6
37.6 Income from operations 22.8 21.6 47.7 41.1 Loss from
early extinguishment of debt - 7.7 - 7.7 Loss (gain) on derivative
instruments - - - 1.8 Interest income (expense), net (1.1 )
0.1 (2.5 ) 0.1 Income before
income taxes 21.7 14.0 45.2 31.7 Income tax expense (10.1 )
(5.6 ) (19.5 ) (12.7 ) Net income $ 11.6
$ 8.4 $ 25.7 $ 19.0 Earnings per share:
Basic earnings per share $ 0.27 $ 0.19 $ 0.59
$ 0.43 Diluted earnings per share $ 0.26 $ 0.19
$ 0.58 $ 0.43 Weighted average common shares
outstanding: Basic 43,434,781 44,163,507
43,427,520 44,199,522 Diluted
44,189,262 44,695,213 44,147,340
44,714,326
DigitalGlobe, Inc.
Condensed Consolidated Balance
Sheets
(in millions, except per share
data)
(unaudited)
December 31,2008
June 30,2009
ASSETS CURRENT ASSETS: Cash and cash
equivalents $ 60.8 $ 132.7 Restricted cash 2.5 4.2 Accounts
receivable, net of allowance for doubtful accounts of $0.9 and
$1.8, respectively 44.3 52.6 Accounts receivable from related party
2.5 - Aerial image library 4.9 4.9 Prepaid WorldView-1 insurance
2.4 1.5 Other prepaid and current assets 3.4 7.0 Deferred taxes
24.9 15.9 Total current assets 145.7
218.8 Property and equipment, net of accumulated depreciation of
$288.6 and $325.2, respectively 792.9 827.0 Goodwill 8.7 8.7
Intangibles, net of accumulated amortization of $5.4 and $6.4,
respectively 3.6 2.7 Long-term deferred contract costs 5.7 28.3
Long-term deferred contract costs from related party 15.9 - Other
assets, net 7.7 10.1 Total assets $
980.2 $ 1,095.6
LIABILITIES AND STOCKHOLDERS'
EQUITY CURRENT LIABILITIES: Accounts payable 0.7 7.7
Accounts payable to related party 1.8 - Accrued interest 3.5 6.5
Other accrued liabilities 20.1 19.6 Other accrued liabilities to
related party 2.7 0.3 Current portion of deferred revenue 28.1 31.8
8.5% Cumulative mandatorily redeemable preferred stock-Series-C;
$.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 June 30, 2009
0.5 - Total current liabilities $ 57.4
$ 65.9 Deferred revenue 214.9 231.9 Deferred revenue related party
24.7 - Deferred lease incentive 6.3 5.9 Long-term debt 230.0 342.2
Long-term debt and accrued interest to related parties 44.6 -
Long-term deferred tax liability - 3.5
Total liabilities $ 577.9 $ 649.4
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 June 30, 2009 - - Common
stock; $.001 par value; 250,000,000 shares authorized; 43,468,941
shares issued and outstanding at December 31, 2008 and 44,891,183
shares issued and outstanding at June 30, 2009 0.2 0.2 Treasury
stock, at cost; 21,555 shares at December 31, 2008 and 43,723
shares at June 30, 2009 (0.2 ) (0.7 ) Additional paid-in capital
467.2 491.1 Accumulated other comprehensive (loss) (1.5 ) -
Accumulated deficit (63.4 ) (44.4 ) Total
stockholders' equity 402.3 446.2 Total
liabilities and stockholders' equity $ 980.2 $ 1,095.6
DigitalGlobe, Inc.
Condensed Consolidated Statements
of Cash Flows
(in millions, except per share data)
(unaudited)
For the Six Months Ended
June 30,
2008 2009
CASH FLOWS FROM OPERATING ACTIVITIES: Net
income $ 25.7 $ 19.0 Adjustments to reconcile net income to net
cash provided by operating activities: Depreciation and
amortization expense 37.6 37.6 Non-cash recognition of deferred
revenue (12.8 ) (13.3 ) Non-cash amortization 1.9 2.5 Non-cash
stock compensation expense 1.8 4.2 Amortization of debt issuance
costs 0.9 - Write off of debt financing fees - 5.3 Deferred income
taxes 17.1 11.6 Changes in: Accounts receivable, net (1.7 ) (5.5 )
Accounts receivable from related party 0.2 (0.2 ) Aerial image
library 0.3 (2.5 ) Other assets 3.2 (2.2 ) Accounts payable (0.5 )
1.1 Accounts payable and accrued liabilities to related parties
(1.6 ) 3.3 Accrued liabilities 3.9 (2.6 ) Deferred contract costs
from related party (5.7 ) (7.7 ) Deferred revenue (0.4 ) 7.2
Deferred revenue related party 2.4 2.1
Net cash flows provided by operating activities 72.3
59.9
CASH FLOWS USED IN INVESTING ACTIVITIES:
Construction in progress additions (81.5 ) (61.2 ) Other property,
equipment and intangible additions (3.3 ) (4.6 ) Increase in
restricted cash (0.1 ) (1.7 ) Settlements of derivative instruments
(0.3 ) (2.8 ) Net cash flows used in investing
activities (85.2 ) (70.3 )
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 (0.9 ) 21.7 Repayment of notes - (270.0 )
Proceeds from exercise of stock options 0.9 0.1 Repurchase of
common stock - (0.4 ) Net cash flows provided
by financing activities 38.5 82.3 Net
increase in cash and cash equivalents 25.6 71.9 Cash and cash
equivalents, beginning of period 22.9 60.8
Cash and cash equivalents, end of period $ 48.5 $
132.7
SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid
for interest, net of amounts capitalized $ 2.3 $ - Cash paid for
income taxes 0.6 2.3
NON-CASH INVESTING AND FINANCING
ACTIVITIES: Non-cash items capitalized in construction in
progress 0.3 (4.1 ) Changes to non-cash property and equipment
accruals, including interest (12.2 ) (0.7 )
Non-GAAP Financial Measures
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.
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 satellite.
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.
DigitalGlobe, Inc.
Reconciliation of Second Quarter
GAAP Net Income to Adjusted EBITDA
(in millions)
(unaudited) Three months endedJune 30, Six months
endedJune 30, 2008 2009 2008 2009 Net income $ 11.6
8.4 $ 25.7 $ 19.0 Depreciation and amortization 18.8 18.9 37.6 37.6
Interest (income) expense, net 1.1 (0.1 ) 2.5 (0.1 ) Loss (gain) on
derivative instrument - - - 1.8 Loss from extinguishment of debt -
7.7 - 7.7 Income tax expense 10.1 5.6 19.5 12.7 Non-cash stock
compensation expense 0.6 1.9 1.7
4.2 Adjusted EBITDA $ 42.2 $ 42.4 $ 87.0 $ 82.9
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