Extends QuickBird Useful Life; WorldView-2 Commissioning On Schedule
Longmont, Colorado, November 9, 2009 – 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 $71.8 million, an increase of 8% compared to the same period last year. Third quarter net income was $14.6 million or $0.32 per diluted share as compared to net income of $14.3 million or $0.32 per diluted share for the third quarter 2008.
Third quarter 2009 Adjusted EBITDA, a non-GAAP financial measure, was $43.8 million, compared to third quarter 2008 Adjusted EBITDA of $44.1 million. 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.”
• 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 September 30, 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.
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 815 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.
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 s
uch 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.