GeoEye Reports Third Quarter 2012 Earnings Results PR Newswire HERNDON, Va., Nov. 6, 2012 HERNDON, Va., Nov. 6, 2012 /PRNewswire/ -- GeoEye, Inc. (NASDAQ: GEOY), a leading source of geospatial information and insight, announced today results for its fiscal third quarter ended Sept. 30, 2012. (Logo: http://photos.prnewswire.com/prnh/20080625/LAW528LOGO) "Third quarter revenue and operating results were in line with our expectations. As expected, on Oct. 31, the National Geospatial-Intelligence Agency (NGA) notified us that they have decided to cancel our Service Level Agreement (SLA) part of the EnhancedView contract. Effective Dec. 1, 2012, we will no longer be providing imagery to the NGA," said Matt O'Connell, GeoEye's chief executive officer and president. "We will continue to provide other services to the NGA under EnhancedView, including the Web delivery platform, secure operations and value-added production services," O'Connell continued. "We continue to move forward with our combination with DigitalGlobe. We expect to close the transaction late this year or in the first quarter of 2013." THIRD QUARTER RESULTS Total revenues were $87.1 million for the third quarter of 2012, a $1.3 million increase from the third quarter of 2011. Net income available to common stockholders for the third quarter of 2012 was $7.6 million, or $0.33 per fully diluted share, compared to $11.7 million, or $0.51 per fully diluted share, for the third quarter of 2011. When adjusted for transaction costs related to the combination with DigitalGlobe, net income available to common stockholders for the three months ended Sept. 30, 2012, was $12.0 million, or $0.53 per fully diluted share. Operating profit was $15.2 million for the third quarter of 2012, which included $8.3 million of transaction-related costs. Operating margin was 17.4 percent for the third quarter of 2012, compared to 27.7 percent in the third quarter of 2011. Adjusted EBITDA (a non-GAAP measurement defined as net income before interest, taxes, depreciation, amortization, non-cash recognition of stock compensation expense and other items including transaction related costs) was $43.4 million for the third quarter of 2012, compared to $43.7 million in the same period in 2011. The company ended the third quarter of 2012 with unrestricted cash, cash equivalents and short-term investments of $229.4 million; total assets of approximately $1.5 billion; stockholders' equity of $550.8 million and long-term debt of $513.4 million. THIRD QUARTER 2012 OPERATING HIGHLIGHTS Revenue Mix oImagery revenues in the third quarter of 2012 were $59.7 million, or 68.6 percent of total revenues. Production and other services revenues were $21.3 million, or 24.5 percent of total revenues. The NextView cost share accounted for revenues of $6.0 million, or 6.9 percent of total revenues. oThe company recognized $37.5 million of imagery and other revenue under the EnhancedView SLA during the third quarter. U.S. government revenues were $58.9 million, or 68 percent of total revenues in the quarter. Geographic Information oDomestic revenues were $66.1 million for the third quarter of 2012, or 75.8 percent of total revenues for the period. International revenues were $21.0 million for the third quarter of 2012, or 24.2 percent of total revenues for the period. GeoEye-2 Capital Expenditures oDuring the quarter, the company invested $55.3 million for the continued development and construction of the GeoEye-2 satellite, including $13.4 million of capitalized interest. To date, the company has invested $773.6 million in the GeoEye-2 satellite program, including $103.1 million of capitalized interest. NINE MONTH RESULTS Total revenues for the nine months ended Sept. 30, 2012, were $264.8 million, a 2.0 percent increase from $259.6 million in the nine months ended Sept. 30, 2011. The company's Adjusted EBITDA for the nine-month period ended Sept. 30, 2012, was $134.3 million, an increase of 2.2 percent from the same period in 2011. Net income available to common stockholders for the nine months ended Sept. 30, 2012, was $32.5 million, or $1.43 per fully diluted share, as compared to net income available to common stockholders of $32.8 million, or $1.44 per fully diluted share, in the same period in 2011. When adjusted for transaction related and other costs of $10.9 million, net income available to common stockholders for the nine months ended Sept. 30, 2012, was $38.3 million, or $1.68 per fully diluted share. FISCAL YEAR 2012 FINANCIAL OUTLOOK Given the execution of a definitive merger agreement with DigitalGlobe in July 2012, and the nature of the ongoing business transaction, the company has suspended its full year 2012 guidance. CONFERENCE CALL Due to the pending merger of GeoEye, Inc. with DigitalGlobe, Inc., GeoEye will not host a conference call to discuss financial results for the third quarter of 2012. Selected financial results for the company are as follows (dollars in thousands, except earnings per share): CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Three Months Ended September 30, 2012 2011 Change (unaudited) Revenues $ 87,109 $ 85,769 $ 1,340 Operating expenses: Direct costs of revenue (exclusive of depreciation and 31,227 28,508 2,719 amortization) Depreciation and amortization 17,860 17,986 (126) Selling, general and 22,822 15,516 7,306 administrative Total operating expenses 71,909 62,010 9,899 Income from operations 15,200 23,759 (8,559) Interest income (expense), net 22 (1,122) 1,144 Income before provision for 15,222 22,637 - (7,415) income taxes Provision for income taxes (5,666) (8,549) 2,883 Net income 9,556 14,088 - (4,532) Preferred stock dividends (1,007) (1,008) 1 8,549 13,080 (4,531) Income allocated to (912) (1,416) 504 participating securities Net income available to common $ 7,637 $ 11,664 $ (4,027) stockholders Earnings per share Basic $ 0.34 $ $ (0.19) 0.53 Diluted $ 0.33 $ $ (0.18) 0.51 Weighted average shares basic 22,519 22,147 Weighted average shares diluted 22,845 22,789 Nine Months Ended September 30, 2012 2011 Change (unaudited) Revenues $ 264,786 $ 259,601 $ 5,185 Operating expenses: Direct costs of revenue (exclusive of depreciation and 91,937 91,246 691 amortization) Depreciation and amortization 53,355 52,204 1,151 Selling, general and 56,469 44,606 11,863 administrative Total operating expenses 201,761 188,056 13,705 Income from operations 63,025 71,545 (8,520) Interest income (expense), net 1,382 (8,249) 9,631 Income before provision for 64,407 63,296 - 1,111 income taxes Provision for income taxes (25,004) (23,552) (1,452) Net income 39,403 39,744 - (341) Preferred stock dividends (3,002) (2,992) (10) 36,401 36,752 (351) Income allocated to (3,902) (3,984) 82 participating securities Net income available to common $ 32,499 $ 32,768 $ (269) stockholders Earnings per share Basic $ 1.45 $ $ (0.03) 1.48 Diluted $ 1.43 $ $ (0.01) 1.44 Weighted average shares basic 22,392 22,107 Weighted average shares diluted 22,799 22,767 CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) September 30, December 31, 2012 2011 Change (unaudited) ASSETS Current assets: Cash and cash equivalents $ 220,860 $ 188,738 $ 32,122 Short-term investments 8,500 9,220 (720) Accounts receivable - trade and unbilled receivables, 44,973 39,917 5,056 net Income tax receivable 2,748 19,645 (16,897) Restricted cash 3,952 4,207 (255) Current deferred tax assets 2,148 2,148 - Prepaid expenses and other 11,360 14,805 (3,445) current assets Total current assets 294,541 278,680 15,861 Property, plant and 56,857 48,065 8,792 equipment, net Satellites and related 1,070,795 913,454 157,341 ground systems, net Goodwill 67,945 68,130 (185) Intangible assets, net 8,130 10,526 (2,396) Non-current restricted cash 3,915 6,875 (2,960) Other non-current assets 11,051 8,855 2,196 Total assets $ 1,513,234 $ 1,334,585 $ 178,649 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued $ 63,240 $ $ 4,730 expenses 58,510 Current portion of deferred 67,322 53,433 13,889 revenue Total current liabilities 130,562 111,943 18,619 Long-term debt 513,379 511,019 2,360 Long-term deferred revenue, 220,869 131,968 88,901 net of current portion Deferred tax liabilities 89,748 64,694 25,054 Other non-current 7,879 7,674 205 liabilities Total liabilities 962,437 827,298 135,139 Commitments and - - - contingencies Stockholders' equity: Series A convertible 1 1 - preferred stock Series B junior participating preferred - - - stock Common stock 226 222 4 Additional paid-in capital 386,259 379,154 7,105 Retained earnings 164,311 127,910 36,401 Total stockholders' equity 550,797 507,287 43,510 Total liabilities and $ 1,513,234 $ 1,334,585 $ 178,649 stockholders' equity CONSOLIDATED STATEMENTS OF CASH FLOWS INFORMATION (in thousands) Nine Months Ended September 30, 2012 2011 Change (unaudited) Net cash provided by operating $ 238,110 $ 133,702 $ 104,408 activities Net cash used in investing (204,352) (205,765) 1,413 activities Net cash used in financing (1,636) (1,842) 206 activities Net increase (decrease) in cash 32,122 (73,905) 106,027 and cash equivalents Cash and cash equivalents, 188,738 283,233 (94,495) beginning of period Cash and cash equivalents, end of $ 220,860 $ 209,328 $ 11,532 period ADJUSTED EBITDA (in thousands) Three Months Ended Nine Months Ended September September 30, 30, 2012 2011 2012 2011 Net income $ 9,556 $ 14,088 $ 39,403 $ 39,744 Adjustments: Interest (income) (22) 1,122 (1,382) 8,249 expense, net Provision for 5,666 8,549 25,004 23,552 income taxes Depreciation and 17,860 17,986 53,355 52,204 amortization Transaction costs 8,339 - 10,715 - Non-cash stock-based 2,043 1,928 7,219 7,665 compensation expense Adjusted EBITDA $ 43,442 $ 43,673 $ 134,314 $ 131,414 Adjusted EBITDA is a non-GAAP financial measure that represents net income before depreciation and amortization expenses, net interest income or expense, provision for income taxes, non-cash stock-based compensation expense and other items including transaction related costs. We believe that Adjusted EBITDA provides useful information to investors because it is an indicator of the strength and performance of our ongoing operations. However, Adjusted EBITDA is not a recognized term under financial performance under GAAP, and our calculation of Adjusted EBITDA may not be comparable to the calculation of similarly titled measures of other companies. ADJUSTED NET INCOME AVAILABLE TO COMMON STOCKHOLDERS AND ADJUSTED DILUTED EPS (in thousands, except per share amounts) Three Three Nine Months Nine Months Months Months Ended Ended Ended Ended 9/30/12 9/30/11 9/30/12 9/30/11 Net income available to common $ 7,637 $ 11,664 $ 32,499 $ 32,768 stockholders Adjustments: Transaction costs 8,339 10,715 Adjustment to normalize provision (3,416) (4,254) for income taxes Impact of adjustments on income allocated (525) (693) to participating securities Adjusted net income available to common $ 12,035 $ 11,664 $ 38,267 $ 32,768 stockholders Weighted average shares - fully 22,845 22,789 22,799 22,767 diluted Adjusted diluted EPS $ 0.53 $ 0.51 $ 1.68 $ 1.44 Adjusted Net Income Available to Common Stockholders is a non-GAAP financial measure that represents net income available to common stockholders before other items including transaction related costs, net of tax. Adjusted Diluted EPS is a non-GAAP financial measure that represents fully diluted earnings per share before other items, net of tax. We believe that Adjusted Net Income Available to Common Stockholders and Adjusted Diluted EPS provide useful information to investors because they allow investors to evaluate our performance for different periods on a more comparable basis by excluding items that are not related to the ongoing operations of our business. However, Adjusted Net Income Available to Common Stockholders and Adjusted Diluted EPS are not recognized terms under financial performance under GAAP, and our calculation of Adjusted Net Income Available to Common Stockholders and Adjusted Diluted EPS may not be comparable to the calculation of similarly titled measures of other companies. About GeoEye GeoEye is a leading source of geospatial information and insight for decision makers and analysts, who need a clear understanding of our changing world to protect lives, manage risk and optimize resources. Each day, organizations in defense and intelligence, public safety, critical infrastructure, energy and online media rely on GeoEye's imagery, tools and expertise to support important missions around the globe. Widely recognized as a pioneer in high-resolution satellite imagery, GeoEye has evolved into a complete provider of geospatial intelligence solutions. GeoEye's ability to collect, process and analyze massive amounts of geospatial data allows our customers to quickly see precise changes on the ground and anticipate where events may occur in the future. GeoEye is a public company listed on NASDAQ as GEOY and is headquartered in Herndon, Virginia with more than 700 employees worldwide. Learn more at www.geoeye.com. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 This release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Without limitation, the words "anticipates," "believes," "estimates," "expects," "intends," "plans," "will" and similar expressions are intended to identify forward-looking statements. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future, including statements relating to growth, expected levels of expenditures and statements expressing general optimism about future operating results, are forward-looking statements. Similarly, statements that describe our business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. All such forward-looking statements and those presented elsewhere by our management from time to time are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements. These risks and uncertainties include, but are not limited to, those described in "Risk Factors" included in our Annual Report on Form 10-K for the year ended December 31, 2011, which we filed with the Securities and Exchange Commission ("SEC") on March 13, 2012, as updated in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2012, and June 30, 2012, which we filed with the SEC on May 4, 2012, and August 7, 2012, respectively. Copies of all SEC filings may be obtained from the SEC's EDGAR Web site, http://www.sec.gov/ or by contacting: William L. Warren, Executive Vice President, General Counsel and Secretary, at 703-480-5672. SOURCE GeoEye, Inc. Website: http://www.geoeye.com Contact: Investor Relations, Randy Scherago, GeoEye, +1-703-480-6325, email@example.com; Media Contact, Caitlin Carroll, Gibraltar Associates, +1-202-258-9118, firstname.lastname@example.org
GeoEye Reports Third Quarter 2012 Earnings Results
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