GeoEye Reports Third Quarter 2012 Earnings Results

              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,
scherago.randy@geoeye.com; Media Contact, Caitlin Carroll, Gibraltar
Associates, +1-202-258-9118, ccarroll@gibraltar-llc.com
 
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