DigitalGlobe Reports First Quarter 2010 Results
Friday, May 7, 2010
Posted by: Su Hawk
DigitalGlobe Reports First Quarter 2010 Results
Longmont, Colorado, May 4, 2010 – DigitalGlobe (NYSE: DGI), a leading global provider of commercial high-resolution earth imagery products and services, today reported financial results for the first quarter ended March 31, 2010.
First quarter 2010 revenue was $77.1 million, an increase of 14.7% compared with the same period last year. First quarter 2010 net income was $1.5 million, or $0.03 per diluted share, compared with net income of $10.6 million, or $0.24 per diluted share, for the same period last year. First quarter 2010 Adjusted EBITDA, a non-GAAP financial measure, was $43.6 million, compared with first quarter 2009 Adjusted EBITDA of $40.5 million.
"We are pleased with our first quarter results. Our double-digit top-line growth was driven by strength across both the defense and intelligence and the commercial segments. The addition of WorldView-2 to our constellation has effectively doubled our collection and refresh capabilities, enabling us to reliably meet the growing demands for rapid, large scale collection across all markets,” said Jill Smith, Chairman and Chief Executive Officer. "Additionally, the unique multi-spectral capabilities of WorldView-2 and our expanding web services and cloud offerings mean that we can move beyond imagery to deliver information and insight products that help solve our customers’ problems. As a result, we remain confident in our growth outlook for 2010 and beyond.”
First Quarter Business Highlights
• Defense and Intelligence segment revenue was $62.6 million, up 9%, driven primarily by the company’s Direct Access Program (DAP). The company brought a second DAP customer into operation in the quarter, and a third in April. The company expects its fourth DAP customer to be operational by the third quarter of 2010.
• Commercial segment revenue was $14.5 million, up 46%, driven by strength in consumer and international civil government, and a rebound in indirect sales through resellers.
• The company effectively doubled its collection and refresh capabilities with the addition of WorldView-2 to the constellation and added unique 8-band multi-spectral capabilities.
• The ImageLibrary surpassed 1 billion square kilometers, more than one-third of which is less than one year old.
• The company expanded its web services and cloud computing offerings with the launch of its European node to support customers in the region. The company expects to launch an Asian node later this year.
Full-Year 2010 Outlook
The company reaffirmed its 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 p.m. EDT to discuss first quarter 2010 results.
The conference call dial-in numbers are as follows:
U.S./Canada dial-in: 866-921-3936
International dial-in: 706-679-9623
A replay of the call will be available through June 3, 2010 at the following numbers:
US/Canada dial-in: 800-642-1687
International dial-in: 706-645-9291
DigitalGlobe will also sponsor a live and archived webcast of the conference call on its website, www.digitalglobe.com. Supplemental earnings materials are also available at this website.
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 1 billion 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 in nature.
We believe that the elimination of certain non-cash and non-operating 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 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.