DigitalGlobe (NYSE:DGI), a leading global provider of commercial
high-resolution earth imagery products and services, today reported
financial results for the fourth quarter and year ended December
31, 2009.
Fourth quarter 2009 revenue was $72.9 million, an increase
of 1.0% compared to the same period last year. Fourth quarter net
income was $13.8 million or $0.30 per diluted share as
compared to net income of $13.8 million or $0.31 per diluted
share for the fourth quarter 2008. Fourth quarter 2009 Adjusted
EBITDA, a non-GAAP financial measure, was $42.7 million,
compared to fourth quarter 2008 Adjusted EBITDA of
$43.7 million.
For 2009, the company reported record revenue of
$281.9 million, an increase of 2.4% compared to 2008. Net
income for 2009 was $47.4 million or $1.06 per diluted share
as compared to net income of $53.8 million or $1.22 per
diluted share for 2008. Adjusted EBITDA for 2009 was
$169.4 million compared to 2008 Adjusted EBITDA of
$174.8 million. The definition of Adjusted EBITDA and
reconciliation to net income are set forth in this press
release.
“I am very pleased with DigitalGlobe’s performance in the fourth
quarter. Not only did we deliver record revenue, but we also
executed on a number of key milestones, concluding an extraordinary
year,” said Jill Smith, Chairman, and Chief Executive Officer. “We
delivered growth in all our target business segments, and continued
to add significant new capabilities, including WorldView-2, with
its unique 8-band imagery and tremendous collection capacity, and
expansion of our web services and cloud computing offering. We are
confident that the superior collection capability of our
constellation and ability to deliver geointelligence to customers
with the speed and accuracy that they demand is strengthening
DigitalGlobe’s position as the industry leader.”
Ms. Smith continued, “We enter 2010 with strong momentum in all
our key markets. We look forward to expanding our relationship with
NGA under the EnhancedView contract, expected to be awarded later
this year, and to strengthening our international defense and
intelligence sector as operations are initiated with our Direct
Access Program customers over the course of the year. This,
together with promising opportunities in the commercial sector,
further increases our optimism about DigitalGlobe’s growth
outlook.”
Business Highlights
- WorldView-2, the company’s
latest high-resolution satellite, achieved full operational
capability on January 4, 2010. WorldView-2 effectively doubles the
collection capacity of DigitalGlobe’s constellation to over 500
million square kilometers a year, and offers exciting new
capabilities, including unique 8-band multispectral imagery. The
company estimates the useful life for WorldView-2 will be
approximately 11 years.
- First Direct Access Program
(DAP) customer initiated service for direct tasking and downlink of
high-resolution satellite imagery from DigitalGlobe’s constellation
during the fourth quarter 2009 and a second customer initiated
service in the first quarter 2010. All current DAP customers are
expected to be operational by mid-2010.
- Exited 2009 with a higher second
half revenue run-rate than the first half of 2009 for our
commercial business, reflecting continued progress in developing
and expanding major account relationships.
- Modified the option portion of
the current Service Level Agreement (SLA) with the National
Geospatial-Intelligence Agency, or NGA, providing continued access
to WV-1 until the EnhancedView procurement process is concluded.
The modified option gives NGA the option to extend the current SLA
for three months on the same terms, from April 1, 2010 to June 30,
2010 with six additional options, each for a one-month period,
through December 31, 2010.
- Increased ImageLibrary size to
over 900 million square kilometers as of December 31,
2009.
Full Year 2010 Outlook
- Full year 2010 total revenue is
expected to be between $330 million and
$360 million.
- Full year 2010 diluted earnings
per share are expected to be between $0.25 and $0.55.
- Full year 2010 Adjusted EBITDA
is expected to be between $185 million and
$210 million.
- Capital expenditures for 2010
are expected to be between $30 million and
$35 million.
Conference Call Information
DigitalGlobe’s management will host a conference call today at
5:00p.m. ET/ 3:00p.m. MT to discuss its fourth quarter 2009
financial results and 2010 financial outlook.
The conference call dial-in numbers are as follows:US/Canada
dial-in: 866.921.3936International dial-in: 706.679.9623Passcode:
54283392
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: 54283392
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,
intelligence, and homeland security applications, 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 900 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 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 Annual Report on Form 10-K.
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, expense, net income
taxes and loss from early extinguishment of debt because these
items are associated with our capitalization and tax structures.
Adjusted EBITDA 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 non-cash stock
compensation expense because these are non-cash expenses 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.
Consolidated Statements of
Operations
(in millions, except share and per
share data)
Three Months EndedDecember 31, Year EndedDecember 31,
2008 2009
2008 2009
Historical
results of operations: (unaudited) Defense and
Intelligence revenue $ 55.9 $ 57.5 $ 222.4 $ 231.0
Commercial revenue 16.3 15.4
52.8 50.9 Total revenue 72.2 72.9 275.2 281.9
Cost of revenue excluding
depreciation and amortization
8.6 8.9 28.5 31.1 Selling, general and administrative 21.6 23.0
76.1 88.6 Depreciation and amortization 19.3
18.2 75.7 74.4 Income from
operations 22.7 22.8 94.9 87.8 Loss from early extinguishment of
debt - - - (7.7 ) Loss on derivative instruments - - - (1.8 )
Interest income (expense), net 0.2 -
(3.0 ) 0.1 Income before income taxes 22.9
22.8 91.9 78.4 Income tax expense (9.1 ) (9.0 )
(38.1 ) (31.0 ) Net income $ 13.8 $ 13.8
$ 53.8 $ 47.4 Earnings per Share: Basic
earnings per share $ 0.32 $ 0.32 $ 1.24 $ 1.07 Diluted earnings per
share $ 0.31 $ 0.30 $ 1.22 $ 1.06 Weighted average common shares
outstanding Basic 43,434,251 43,219,134 43,513,506 44,234,019
Diluted 43,979,426 45,599,550 44,100,898 44,859,992
DigitalGlobe, Inc.
Unaudited Reconciliation of
GAAP Net Income to Adjusted EBITDA
(in millions) Three Months EndedDecember 31,
Year EndedDecember 31, 2008 2009 2008 2009 Net income
$ 13.8 $ 13.8 $ 53.8 $ 47.4 Depreciation and amortization 19.3 18.2
75.7 74.4 Loss on derivative instrument - - - 1.8 Loss from early
extinguishment of debt - - - 7.7 Interest (income), expense net
(0.2 ) - 3.0 (0.1 ) Income tax expense 9.1 9.0 38.1 31.0 Non-cash
stock compensation expense 1.7 1.7 4.2
7.2 Adjusted EBITDA $ 43.7 $ 42.7 $ 174.8 $
169.4
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.
Consolidated Balance
Sheets
(in millions, except per share data) As of December
31, 2008 2009
ASSETS CURRENT ASSETS: Cash and
cash equivalents $ 60.8 $ 97.0 Restricted cash 2.5 7.3 Accounts
receivable, net of allowance for doubtful accounts of $0.9 and
$1.2, respectively 44.3 49.7 Accounts receivable from related party
2.5 - Aerial image library 4.9 - Prepaid and current assets 5.8
12.0 Income tax receivable - 3.9 Deferred taxes 24.9
1.7 Total current assets 145.7 171.6 Property and
equipment, net of accumulated depreciation of $288.6 and $361.1,
respectively 792.9 891.0 Goodwill 8.7 8.7 Intangibles, net of
accumulated amortization of $5.4 and $7.2, respectively 3.6 1.8
Aerial image library - 5.4 Long-term restricted cash - 16.7
Long-term deferred contract costs 5.7 36.2 Long-term deferred
contract costs from related party 15.9 - Other assets, net
7.7 9.1 Total assets $ 980.2 $ 1,140.5
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 0.7 $ 4.3 Accounts payable to related party 1.8
- Accrued interest 3.5 6.2 Other accrued liabilities 20.6 17.9
Other accrued liabilities to related party 2.7 - Current portion of
deferred revenue 28.1 32.8 Total
current liabilities 57.4 61.2 Deferred revenue 214.9 239.6 Deferred
revenue related party 24.7 - Deferred lease incentive 6.3 5.4
Long-term debt 230.0 343.5 Long-term debt and accrued interest to
related parties 44.6 - Long-term deferred tax liability -
11.3 Total liabilities $ 577.9 $ 661.0
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value;
24,000,000 shares authorized; no shares issued andoutstanding at
December 31, 2008 and December 31, 2009
- - Common stock; $0.001 par value; 250,000,000 shares authorized;
43,468,941 shares issued and outstanding at December 31, 2008 and
45,122,593 shares issued and outstanding at December 31, 2009 0.2
0.2 Treasury stock, at cost; 21,555 shares at December 31, 2008 and
44,039 December 31, 2009 (0.2 ) (0.7 ) Additional paid-in capital
467.2 496.0 Accumulated other comprehensive loss (1.5 ) -
Accumulated deficit (63.4 ) (16.0 ) Total
stockholders' equity 402.3 479.5 Total
liabilities and stockholders' equity $ 980.2 $ 1,140.5
DigitalGlobe, Inc.
Consolidated Statements of Cash
Flows
(in millions) For the Year Ended December 31, 2008
2009
CASH FLOWS FROM OPERATING ACTIVITIES: Net income
$ 53.8 $ 47.4 Adjustments to reconcile net income to net cash
provided by operating activities: Depreciation and amortization
expense 75.7 74.4 Non-cash recognition of deferred revenue (25.5 )
(26.6 ) Non-cash amortization 1.5 5.3 Non-cash stock compensation
expense 4.2 7.2 Amortization of debt issuance costs 0.3 - Write off
of debt financing fees - 5.3 Deferred income taxes 34.7 33.6
Changes in working capital, net of investing activities: Accounts
receivable, net (3.2 ) (2.6 ) Accounts receivable from related
party 3.0 (0.3 ) Income tax receivable - (3.9 ) Aerial image
library (2.6 ) (6.1 ) Prepaid and other assets 1.9 (6.3 ) Accounts
payable (1.5 ) 1.5 Accounts payable and accrued liabilities to
related parties (1.1 ) 3.5 Accrued liabilities 8.1 (5.0 ) Deferred
contract costs from related party (10.3 ) (15.3 ) Deferred revenue
(1.9 ) 29.1 Deferred revenue related party 6.5 2.1 Deferred lease
incentive 0.8 - Net cash flows provided
by operating activities 144.4 143.3
CASH FLOWS FROM INVESTING ACTIVITIES: Construction in
progress additions (131.8 ) (155.9 ) Other property, equipment and
intangible additions (10.2 ) (10.9 ) Increase in restricted cash
(0.1 ) (21.5 ) Settlements from derivative instrument (1.4 )
(2.8 ) Net cash flows used in investing activities
(143.5 ) (191.1 )
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 (2.7 ) 21.7 Repayment of notes - (270.0 ) Repurchase
of common stock - (0.5 ) Proceeds from exercise of stock options
1.2 1.9 Net cash flows provided by
financing activities 37.0 84.0 Net
increase in cash and cash equivalents 37.9 36.2 Cash and cash
equivalents, beginning of period 22.9 60.8
Cash and cash equivalents, end of period $ 60.8 $
97.0
SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid
for income taxes $ 2.2 $ 2.4
NON-CASH INVESTING AND FINANCING
ACTIVITIES: Non-cash items capitalized in construction in
progress $ - $ 6.8 Changes to non-cash property and equipment
accruals, including interest $ 10.1 $ 2.9
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