Iridium Announces First-Quarter 2013 Results; Company Affirms 2013 Outlook

Iridium Announces First-Quarter 2013 Results; Company Affirms 2013 Outlook

MCLEAN, Va., May 2, 2013 (GLOBE NEWSWIRE) -- Iridium Communications Inc.
(Nasdaq:IRDM) ("Iridium") today reported financial results for the first
quarter of 2013 and affirmed its outlook for the full-year 2013. Net income
was $14.9 million, or $0.17 per diluted share, for the first quarter of 2013,
as compared to $12.4 million, or $0.16 per diluted share, for the first
quarter of 2012. Operational EBITDA ("OEBITDA")^(1) for the first quarter was
$46.8 million, as compared to $43.9 million for the prior-year period,
representing year-over-year growth of 7 percent and an OEBITDA margin^(1) of
53 percent. OEBITDA benefited from growth in commercial service revenue and
lower operating costs.

Iridium reported first-quarter total revenue of $89.2 million, which consisted
of $68.8 million of service revenue and $20.4 million of equipment,
engineering and support revenue. Total revenue declined 5 percent versus the
comparable period of 2012, while service revenue grew 3 percent from the
year-ago period. Total revenue declined largely due to 20 percent lower
equipment revenue resulting from fewer overall unit sales. Service revenue,
which represents primarily recurring revenue from Iridium's growing subscriber
base, was 77 percent of total revenue for the first quarter of 2013 as
compared to 72 percent in the year-ago period.

The Company ended the quarter with 621,000 total billable subscribers, which
compares to 544,000 for the year-ago period and is up from 611,000 for the
quarter ended December 31, 2012. Total billable subscribers grew 14 percent
year-over-year, driven by strength in machine-to-machine ("M2M") and
commercial voice customers.

"We affirmed our 2013 financial outlook across the board today, while
continuing to make strong progress in key strategic areas for our business,"
said Matt Desch, CEO, Iridium. "Our satellite network continues to perform
well, and the Iridium NEXT build remains on budget and on schedule. Our global
aviation monitoring venture, Aireon, has also taken a big step forward,
recently announcing its first long-term commercial data service contract with
NAV CANADA, the world's largest provider of air traffic services for oceanic
flights. This transformational new business is really beginning to take shape,
as Iridium is now targeting nearly $500 million in revenue from the Aireon
opportunity."

Desch continued, "We're also pleased to have recently closed on a large,
multi-year agreement with Caterpillar, the world's leading heavy equipment
manufacturer, for satellite M2M services. This agreement strengthens our
leadership position in our fastest-growing business line, which now accounts
for 41% of our customer base and 18% of our total service revenue. Finally, we
remain on track for a contract renewal with the Department of Defense during
the third quarter of 2013, as we expect they'll continue to rely on our robust
product portfolio for global, secure, low-latency communications." 

Iridium Business Highlights

Service – Commercial

Commercial service remained the largest part of Iridium's business,
representing 60 percent of the Company's total revenue during the first
quarter.The Company's commercial customer base is diverse and includes
markets such as maritime, aviation, oil and gas, mining, recreation, forestry,
construction, transportation and emergency services.These customers rely on
Iridium's products and services as critical to their daily operations and
integral to their communications and business infrastructure. 

  oCommercial service revenue was $53.7 million, a 5 percent increase from
    last year's comparable period, primarily supported by a gain in M2M data
    customers.
  oCommercial voice and data subscribers increased 6 percent from the
    year-ago period to 332,000 customers.Commercial voice and data average
    revenue per user ("ARPU") was $43 during the first quarter, a 4 percent
    year-over-year decrease.Voice and data ARPU declined primarily due to
    lower voice and circuit switched data customer usage.Commercial M2M data
    subscribers grew 30 percent from the year-ago period to 238,000
    customers.Commercial M2M data ARPU was $16 during the first quarter,
    versus $18 in last year's comparable period. 
  oIridium's commercial business ended the quarter with 570,000 billable
    subscribers, which compares to 496,000 for the prior-year quarter and is
    up from 560,000 for the quarter ended December 31, 2012.M2M data
    subscribers represented 42 percent of billable commercial subscribers, an
    increase from 37 percent at the end of the prior-year period.

Service – Government

Iridium's voice and data solutions improve situational awareness for military
personnel and track critical assets in tough environments around the globe,
providing a unique value proposition that is not easily duplicated.The
Company has a strategic relationship with its U.S. Government customer
supported by differentiated and robust product offerings. 

  *Government service revenue was $15.1 million, a 4 percent decrease from
    the prior-year period, driven by a 10 percent decline in traditional voice
    subscribers, partially offset by 11 percent and 42 percent growth,
    respectively, in Netted Iridium^® and M2M data customers.
  *Government voice and data ARPU was $136 during the first quarter, a 1
    percent year-over-year decrease.Voice and data ARPU declined due to a
    higher mix of lower-priced Netted Iridium subscribers.Government M2M data
    ARPU was $19 during the first quarter, up from $18 during last year's
    comparable period.
  *Iridium's government business ended the quarter with 51,000 billable
    subscribers, which compares to 48,000 for the prior-year quarter and is
    unchanged from the quarter ended December 31, 2012.Government voice and
    data subscribers decreased 6 percent year-over-year due to reduced
    government spending and deployed troop levels.M2M data subscribers
    increased 42 percent year-over-year and represented 33 percent of billable
    government subscribers, an increase from 25 percent at the end of the
    prior-year period.

Equipment

  *Equipment revenue was $17.3 million during the first quarter, a 20 percent
    year-over-year decrease.Revenue declined from the year-ago quarter
    primarily due to lower overall unit sales.
  *The Company continues to believe that its equipment business will make
    roughly the same contribution to consolidated operating results in 2013 as
    it did in 2012 due to a strong committed order book.

Engineering & Support

  *Engineering and support revenue was $3.1 million during the first quarter,
    down 40 percent from the prior-year period, primarily resulting from a
    decline in scope of work for ongoing government projects.

Capital expenditures were $19.2 million for the first quarter and primarily
related to spending for the Company's next-generation satellite constellation,
Iridium NEXT, and upgraded ground network infrastructure at its commercial
gateway.The Company ended the first quarter with a cash and marketable
securities balance of $271.9 million and gross debt of $751.8 million.Net
debt was $412.1 million.

2013 Outlook

The Company affirmed its full-year 2013 outlook for total billable subscriber
growth, total service revenue growth and OEBITDA.The Company continues to
expect:

  *Total billable subscriber growth between 15 percent and 20 percent for the
    full-year 2013
  *Total service revenue growth between 8 percent and 10 percent for the
    full-year 2013
  *Full-year 2013 OEBITDA to be between $215 million and $225
    million.OEBITDA for 2012 was $205.8 million.

                                2013 Outlook                2013 Outlook
                                (February 2013)              (May 2013)
Total Billable Subscriber Growth 15% to 20%                   Affirmed
Total Service Revenue Growth     8% to 10%                    Affirmed
Operational EBITDA (OEBITDA)     $215 million to $225 million Affirmed

Non-GAAP Financial Measures & Definitions

(1) In addition to disclosing financial results that are determined in
accordance with U.S. GAAP, the Company discloses Operational EBITDA and
Operational EBITDA margin, which are non-GAAP financial measures, as
supplemental measures to help investors evaluate the Company's fundamental
operational performance.Operational EBITDA represents earnings before
interest, income taxes, depreciation and amortization, Iridium NEXT revenue
and expenses (for periods prior to the deployment of Iridium NEXT),
stock-based compensation expenses, and the impact of purchase accounting.The
Company also presents Operational EBITDA expressed as a percentage of revenue,
or Operational EBITDA margin. Operational EBITDA, along with its related
measure, Operational EBITDA margin, does not represent, and should not be
considered, an alternative to U.S. GAAP measurements such as net income or
loss, and the Company's calculations thereof may not be comparable to
similarly titled measures reported by other companies.By eliminating
interest, income taxes, depreciation and amortization, Iridium NEXT revenue
and expenses (for periods prior to the deployment of Iridium NEXT only),
stock-based compensation expenses, and the impact of purchase accounting, the
Company believes the result is a useful measure across time in evaluating its
fundamental core operating performance.Management also uses Operational
EBITDA to manage the business, including in preparing its annual operating
budget, debt covenant compliance, financial projections and compensation
plans.The Company believes that Operational EBITDA is also useful to
investors because similar measures are frequently used by securities analysts,
investors and other interested parties in their evaluation of companies in
similar industries.However, there is no standardized measurement of
Operational EBITDA, and Operational EBITDA as the Company presents it may not
be comparable with similarly titled non-GAAP financial measures used by other
companies.As indicated, Operational EBITDA does not include interest expense
on borrowed money, the payment of income taxes, amortization of the Company's
definite-lived intangible assets, or depreciation expense on the Company's
capital assets, which are necessary elements of the Company's operations.It
also excludes expenses in connection with the development, deployment and
financing of Iridium NEXT.Since Operational EBITDA does not account for these
and other expenses, its utility as a measure of the Company's operating
performance has material limitations.Due to these limitations, the Company's
management does not view Operational EBITDA in isolation and also uses other
measurements, such as net income, revenues and operating profit, to measure
operating performance.Please refer to the schedule below for a reconciliation
of consolidated GAAP net income to Operational EBITDA and Iridium's Investor
Relations webpage at www.iridium.com for a discussion and reconciliation of
this and other non-GAAP financial measures.

Supplemental Reconciliation of GAAP Net Income to Operational EBITDA
                              
                              Iridium Communications Inc.
                              For the Three Months Ended March 31,
                              2013                2012
                              (In thousands)
GAAP net income                $14,934             $12,418
Interest expense               65                  85
Interest income                (702)               (153)
Income taxes                   7,549               (949)
Depreciation and amortization  18,231              24,204
Iridium NEXT expenses, net     5,060               6,729
Share-based compensation       1,904               1,668
Non-cash purchase accounting   (194)               (137)
Operational EBITDA             $46,847             $43,865

Conference Call Information

As previously announced, the Company will host a conference call to discuss
its results at 8:30 a.m. ET on Thursday, May 2, 2013.Callers should dial
(877) 334-1964 (U.S. only) or (631) 291-4574 (from outside the U.S.) to access
the call.The conference call will also be simultaneously webcast on Iridium's
Investor Relations webpage at www.iridium.com.A replay of the conference call
will be available beginning Thursday, May 2, 2013 through Thursday, May 9,
2013 at Iridium's Investor Relations webpage.Callers can also dial (855)
859-2056 (U.S. only) or (404) 537-3406, Access Code 22209188, for an audio
replay of the conference call.

About Iridium Communications Inc.

Iridium^® is the only mobile voice and data satellite communications network
that spans the entire globe.Iridium enables connections between people,
organizations and assets to and from anywhere, in real time.Together with its
ever-expanding ecosystem of partner companies, Iridium delivers an innovative
and rich portfolio of reliable solutions for markets that require truly global
communications.The company has a major development program underway for its
next-generation network – Iridium NEXT.Iridium Communications Inc. is
headquartered in McLean, Va., U.S.A., and its common stock trades on the
NASDAQ Global Select Market under the ticker symbol IRDM.For more information
about Iridium products, services and partner solutions, visit
www.iridium.com.IRDM-F

Forward-Looking Statements

Statements in this press release that are not purely historical facts may
constitute forward-looking statements as defined in the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include statements
regarding Iridium's expectations with respect to total billable subscriber
growth, total service revenue growth and OEBITDA for the full-year 2013; the
development of and timing for launch of Iridium NEXT; anticipated equipment
revenue; anticipated revenues from Aireon, and expectations for contract
renewal with the U.S. Department of Defense. Forward-looking statements can be
identified by the words "anticipates," "may," "can," "believes," "expects,"
"projects," "intends," "likely," "will," "to be" and other expressions that
are predictions or indicate future events, trends or prospects. These
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements
of Iridium to differ materially from any future results, performance or
achievements expressed or implied by such forward-looking statements. These
risks and uncertainties include, but are not limited to, uncertainties
regarding increases in customer demand for Iridium's products and services,
including demand from the U.S. Government, Iridium's ability to maintain the
health, capacity and content of its satellite constellation, and the
development of and transition to Iridium NEXT, including expanded capacity and
features, and the development of and market for Aireon's global aviation
monitoring service, as well as general industry and economic conditions, and
competitive, legal, governmental and technological factors. Other factors that
could cause actual results to differ materially from those indicated by the
forward-looking statements include those factors listed under the caption
"Risk Factors" in the Company's Form 10-K filed with the Securities and
Exchange Commission ("the SEC") for the year ended December 31, 2012, filed
with the SEC on March 5, 2013, as well as other filings Iridium makes with the
SEC from time to time.There is no assurance that Iridium's expectations will
be realized. If one or more of these risks or uncertainties materialize, or if
Iridium's underlying assumptions prove incorrect, actual results may vary
materially from those expected, estimated or projected. Iridium's
forward-looking statements speak only as of the date of this press release,
and Iridium undertakes no obligation to update forward-looking statements.

Iridium Communications Inc.
Consolidated Statements of Operations
(In thousands)
                                              
                     Three Months Ended March   Non-Cash Purchase Accounting
                    31,                        for the Three Months Ended
                                                March 31, ^ (1)
                    2013          2012         2013           2012
                                                           
Revenue:                                                    
Service revenue                                             
Commercial           $53,700     $51,104    $(56)        $(123)
Government           15,087       15,744      --           --
Total service        68,787       66,848      (56)          (123)
revenue
Subscriber equipment 17,331       21,540      --           
Engineering and      3,071        5,086       --           --
support service
Total revenue        89,189       93,474      (56)          (123)
                                                           
Operating expenses:                                         
Cost of services
(exclusive of        14,476       18,003      (259)         (259)
depreciation and
amortization)
Cost of subscriber   11,120       13,342      --           --
equipment sales
Research and         1,659        5,689       --           --
development
Selling, general and 18,365       18,148      9             --
administrative
Depreciation and     18,231       24,204      12,371        19,572
amortization
Total operating      63,851       79,386      12,121        19,313
expenses
                                                           
Operating profit     25,338       14,088      (12,177)      (19,436)
(loss)
                                                           
Other (expense)                                             
income:
Interest income      637          68          --           --
(expense), net
Undrawn credit       (2,096)      (2,779)     --           --
facility fees
Other (expense)      (1,396)      92          --           --
income, net
Total other expense  (2,855)      (2,619)     --           --
                                                           
Earnings (loss)      22,483       11,469      (12,177)      (19,436)
before income taxes
Benefit from
(provision for)      (7,549)      949         4,088         7,116
income taxes
Net income (loss)    14,934       12,418      (8,089)       (12,320)
Series A Preferred   1,750        --         --           --
Stock dividends
Net income
attributable to      $13,184     $12,418    $(8,089)     $(12,320)
common stockholders
                                                           
Operational EBITDA   $46,847     $43,865                  
                                                           
(1) The impact of purchase accounting on the carrying value of inventory,
favorable lease assets, property and equipment, intangible assets and accruals
of Iridium Communications Inc., was an increase of approximately $19.8
million, $0.2 million, $348.2 million, $95.5 million and $29.0 million,
respectively, compared to Iridium Holdings LLC's balance sheet as of September
29, 2009. Similarly, Iridium Holdings LLC's deferred revenue decreased by $7.4
million. As a result of the effect of the purchase accounting, the decrease in
the carrying value of deferred revenue caused a decrease in revenue, which we
expect will continue into future periods. In addition, the increase in
accruals had the effect of reducing cost of services (exclusive of
depreciation and amortization), which we expect will continue into future
periods. The increase in property and equipment and intangible assets had the
effect of increasing depreciation and amortization expense, which we expect
will continue into future periods. The increase in favorable lease assets and
related amortization thereof had the effect of increasing selling, general and
administration expense, which we expect will continue into future periods.


Iridium Communications Inc.
Summary Revenue and OEBITDA Highlights
                                                                          
                             Three Months Ended March 31,       % Change
                             2013              2012             
                             (In thousands)                     
Revenue                                                       
Service revenue^(1)                                            
Commercial                                                     
Voice and M2M data service                                     
Voice and data                $42,445         $41,880        1%
M2M data^(2)                  11,255           9,224           22%
Total commercial voice and    53,700           51,104          5%
M2M data service
                                                              
Government^(3)                                                 
Voice and M2M data service                                     
Voice and data                14,204           15,116          -6%
M2M data                      883              628             41%
Total government voice and    15,087           15,744          -4%
M2M data service
Total service revenue         68,787           66,848          3%
                                                              
Subscriber equipment          17,331           21,540          -20%
                                                              
Engineering and support^(4)                                    
Government                   2,590            4,820           -46%
Commercial                    481              266             81%
Total engineering and support 3,071            5,086           -40%
                                                              
Total Revenue                 $89,189         $93,474        -5%
                                                              
                                                              
Operational EBITDA                                             
Operational EBITDA            $46,847         $43,865        7%
                                                              
Other                                                          
Capital expenditures ^(5)     $19,244         $34,791        
                                                              
Net debt ^(6)                 $412,139        $253,502       
                                                              
(1) Service revenue consists of primarily subscription-based services which
often generate a long-term recurring revenue stream from subscribers.
(2) M2M data service provides a two-way short burst data transmission
between Iridium Communications Inc.'s network and a telemetry unit, which
may be located, for example, on a container in transit or a buoy monitoring
oceanographic conditions.
(3) Government service revenue consists of voice and M2M data
subscription-based services provided to agencies of the U.S. government
through prime contracts or subcontracts.
(4) Engineering and support includes maintenance services to the U.S.
government's dedicated gateway in Hawaii and engineering services to assist
customers in developing new technologies for use on Iridium Communications
Inc.'s satellite system.
(5) Capital expenditures based on cash spent in the respective period.
(6) Net debt is calculated by taking the sum of the short term and long term
debt less cash and cash equivalents, marketable securities, and the debt
service reserve for the credit facility.


Iridium Communications Inc.
Subscriber Highlights
                                                               
                                                                          
Billable Subscribers ^(1)      As of March 31,                    % Change
                              2013              2012             
                              (In thousands, except ARPU)        
Commercial                                                      
Voice and M2M data service                                      
Voice and data                 332              313             6%
M2M data                       238              183             30%
Total commercial voice and M2M 570              496             15%
data service
                                                               
Government                                                      
Voice and M2M data service                                      
Voice and data                 34               36              -6%
M2M data                       17               12              42%
Total government voice and M2M 51               48              6%
data service
Total billable subscribers     621              544             14%
                                                               
                                                               
                                                                          
                              Three Months Ended March 31,       % Change
                              2013              2012             
                              (In thousands, except ARPU)        
Net Subscriber Additions                                        
Commercial                                                      
Voice and M2M data service                                      
Voice and data                 --              6               -100%
M2M data                       10               15              -33%
Total commercial voice and M2M 10               21              -52%
data service
                                                               
Government                                                      
Voice and M2M data service                                      
Voice and data                 (2)              (1)             100%
M2M data                       2                1               100%
Total government voice and M2M --              --             0%
data service
Total billable subscribers     10               21              -52%
                                                               
                                                                          
ARPU^(2)                      Three Months Ended March 31,       
Commercial                     2013              2012             
Voice and data                 $43             $45            -4%
M2M data                       $16             $18            -11%
Government                                                      
Voice and data                 $136            $138           -1%
M2M data                       $19             $18            6%
                                                               
(1) Subscribers as of the end of the respective period.
(2) ARPU is calculated by dividing the revenue in the respective period by
the average of billable subscribers at the beginning of the period and
billable subscribers at the end of the period and then dividing the results
by the months in the period.

CONTACT: Investor Contact:
         Steve Kunszabo
         Iridium Communications Inc.
         +1 (703) 287-7570
         steve.kunszabo@iridium.com
        
         Press Contact:
         Diane Hockenberry
         Iridium Communications Inc.
         +1 (703) 287-7421
         diane.hockenberry@iridium.com

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