Published: August 01, 2011
GeoEye Reports Second Quarter 2011 Earnings Results
HERNDON, Va., Aug. 1, 2011 /PRNewswire/ -- GeoEye, Inc. (NASDAQ: GEOY), a leading source of geospatial information and insight, announced today results for its fiscal second quarter ended June 30, 2011.
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"During the quarter, GeoEye continued to produce solid revenue growth and operating results that were in line with our expectations," said Matt O'Connell, GeoEye's chief executive officer and president. "We have continued to focus on the successful execution of our multi-billion-dollar EnhancedView award; the integration of our GeoEye Analytics business; and the development of new government, international and commercial customers. We are very pleased with the way we have positioned the Company for second-half growth and with the revenue visibility that we have into the remainder of the year."
SECOND QUARTER RESULTS
Total revenues were $87.2 million for the second quarter of 2011, a 7.7 percent increase from the second quarter of 2010. The net income available to common stockholders for the second quarter of 2011 was $11.1 million, or $0.49 per fully diluted share, compared to $12.1 million, or $0.55 per fully diluted share, for the second quarter of 2010. Adjusted net income available to common shareholders (a non-GAAP measurement that excludes the impact of non-operating charges, gains and one-time charges and tax benefits) for the second quarter of 2011 was also $11.1 million, or $0.49 per diluted share, as compared to $10.1 million, or $0.46 per diluted share, in the same period in 2010.
Operating profit was $23.6 million for the second quarter of 2011. Operating margin was 27.1 percent for the second quarter of 2011, compared to 30.0 percent in the second quarter of 2010. 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) was approximately $44.0 million for the second quarter of 2011, compared to $42.3 million in the same period in 2010.
The Company ended the second quarter of 2011 with unrestricted cash, cash equivalents and short-term investments of $251.1 million; total assets of approximately $1.3 billion; stockholders' equity of $472.7 million and long-term debt of $509.6 million.
SECOND QUARTER 2011 OPERATING HIGHLIGHTS
Revenue Mix
-- Imagery revenues in the second quarter of 2011 were $61.6 million, or
70.6 percent of total revenues. Production and other services revenues
were $19.6 million, or 22.5 percent of total revenues. The NextView cost
share accounted for revenues of $6.0 million, or 6.9 percent of total
revenues.
-- We recognized $36.6 million of imagery and other revenue under the
EnhancedView Service Level Agreement during the second quarter. U.S.
government revenues were $56.9 million, or 65.0 percent of total
revenues in the quarter.
Geographic Information
-- Domestic revenues were $68.3 million for the second quarter of 2011, or
78.4 percent of total revenues for the period. International revenues
were $18.9 million for the second quarter of 2011, or 21.6 percent of
total revenues for the period.
-- Domestic revenues increased 10.0 percent for the second quarter of 2011,
compared to the same period in 2010. International revenues were flat
for the second quarter of 2011, compared to the same period in 2010.
GeoEye Capital Expenditures and GeoEye-2 Construction
-- During the quarter, the Company invested $66.0 million for the continued
development and construction of the GeoEye-2 satellite. To date, the
Company has invested $455.3 million in the GeoEye-2 satellite program.
SIX MONTH RESULTS
Total revenues for the six months ended June 30, 2011, were $173.8 million, a 7.7 percent increase from $161.4 million in the six months ended June 30, 2010. The Company's Adjusted EBITDA for the six-month period ended June 30, 2011, was $87.7 million, an increase of 2.2 percent from the same period in 2010. The net income available to common stockholders for the six months ended June 30, 2011, was $21.1 million, or $0.93 per fully diluted share, as compared to net income available to common stockholders of $12.9 million, or $0.59 per fully diluted share, in the same period in 2010.
FISCAL YEAR 2011 FINANCIAL OUTLOOK
For the full year, the Company is revising its previous guidance as to revenue, Adjusted EBITDA and earnings per share. Our new expectations for 2011 are for revenues to range from $365 million to $375 million, Adjusted EBITDA to range from $182.0 million to $188.0 million and earnings per share of $2.00 to $2.25.
These estimates represent management's current expectations about the Company's future financial performance, based on information available at this time.
CONFERENCE CALL INFORMATION
GeoEye, Inc. (NASDAQ: GEOY) will host a conference call for investors and analysts to discuss financial results for the second quarter, which ended June 30, 2011.
When: Tuesday, August 2, 2011, at 8:30 a.m. Eastern Daylight Time
To Participate:
To participate in the call via phone, domestic callers may dial toll-free at (877) 776-4039. International callers may dial (631) 291-4808 approximately 10 minutes prior to the start time. Callers may identify themselves to the operator as GeoEye conference call participants or by using the conference ID: 76488572. Questions will be accepted from phone participants during the live call after prepared remarks and as time permits.
The conference call will also be webcast on the "Investor Relations" section of the Company's corporate Web site, www.geoeye.com. To directly access the live webcast go to: http://www.geoeye.com/CorpSite/corporate/investor-relations/Default.aspx and click on the "August 2, 2011 Investor Update Webcast" link. Please allow 15 minutes before the scheduled start time to register, download and install any necessary audio software.
Replay:
An audio replay of the second quarter conference call will be available through midnight August 16, 2011, by dialing 1-800-642-1687 and typing in the conference ID number: 76488572.
An archived webcast of the conference call will be available at the same URL address approximately two hours after the conclusion of the call.
Selected financial results for the Company are as follows (dollars in thousands, except earnings per share):
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended
June 30,
------------------
2011 2010 Change
---- ---- ------
(unaudited)
Revenues $87,206 $80,961 $6,245
Operating expenses:
Direct costs of revenue (exclusive of
depreciation and amortization) 31,426 26,702 4,724
Depreciation and amortization 17,492 16,200 1,292
Selling, general and administrative 14,696 13,783 913
------ ------ ---
Total operating expenses 63,614 56,685 6,929
------ ------ -----
Income from operations 23,592 24,276 (684)
Interest expense, net (2,604) (7,752) 5,148
Other non-operating income - 2,055 (2,055)
Income before provision for income
taxes 20,988 18,579 2,409
Provision for income taxes (7,579) (6,430) (1,149)
Net income 13,409 12,149 1,260
Preferred stock dividends (998) - (998)
---- --- ----
12,411 12,149 262
Income allocated to participating
securities (1,344) - (1,344)
------ --- ------
Net income available to common
stockholders $11,067 $12,149 $(1,082)
======= ======= =======
Earnings per share
Basic $0.50 $0.56 $(0.06)
===== ===== ======
Diluted $0.49 $0.55 $(0.06)
===== ===== ======
Weighted average shares basic 22,130 21,760
====== ======
Weighted average shares diluted 22,756 22,063
====== ======
Six Months Ended
June 30,
-----------------
2011 2010 Change
---- ---- ------
(unaudited)
Revenues $173,832 $161,350 $12,482
Operating expenses:
Direct costs of revenue (exclusive of
depreciation and amortization) 62,738 51,183 11,555
Depreciation and amortization 34,218 32,222 1,996
Selling, general and administrative 29,090 27,165 1,925
------ ------ -----
Total operating expenses 126,046 110,570 15,476
------- ------- ------
Income from operations 47,786 50,780 (2,994)
Interest expense, net (7,127) (15,995) 8,868
Other non-operating expense - (8,419) 8,419
Loss from early extinguishment of debt - (37) 37
Income before provision for income
taxes 40,659 26,329 14,330
Provision for income taxes (15,003) (13,406) (1,597)
Net income 25,656 12,923 12,733
Preferred stock dividends (1,984) - (1,984)
------ --- ------
23,672 12,923 10,749
Income allocated to participating
securities (2,569) - (2,569)
------ --- ------
Net income available to common
stockholders $21,103 $12,923 $8,180
======= ======= ======
Earnings per share
Basic $0.96 $0.60 $0.36
===== ===== =====
Diluted $0.93 $0.59 $0.34
===== ===== =====
Weighted average shares basic 22,087 21,416
====== ======
Weighted average shares diluted 22,760 21,950
====== ======
CONSOLIDATED BALANCE SHEETS
(in thousands)
December
June 30, 31,
2011 2010 Change
---- ---- ------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $236,631 $283,233 $(46,602)
Short-term investments 14,446 50,124 (35,678)
Accounts receivable -trade
and unbilled receivables,
net 35,434 42,868 (7,434)
Income tax receivable 20,357 34,385 (14,028)
Restricted cash 4,207 3,952 255
Prepaid expenses and other
current assets 15,077 16,183 (1,106)
Total current assets 326,152 430,745 (104,593)
Property, plant and
equipment, net 49,858 35,924 13,934
Satellites and related ground
systems, net 817,761 697,126 120,635
Goodwill 71,228 71,568 (340)
Intangible assets, net 13,145 14,943 (1,798)
Non-current restricted cash 8,849 10,822 (1,973)
Other non-current assets 8,871 7,957 914
Total assets $1,295,864 $1,269,085 $26,779
========== ========== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
expenses $64,231 $70,936 $(6,705)
Current portion of deferred
revenue 51,714 50,533 1,181
Current deferred tax
liabilities 6,656 6,656 -
Total current liabilities 122,601 128,125 (5,524)
Long-term debt 509,551 508,160 1,391
Long-term deferred revenue,
net of current portion 146,843 161,673 (14,830)
Non-current income tax
reserve 626 626 -
Deferred tax liabilities 36,918 21,336 15,582
Other non-current liabilities 6,651 5,922 729
Total liabilities 823,190 825,842 (2,652)
------- ------- ------
Commitments and contingencies - - -
Stockholders' equity:
Series A convertible
preferred stock 1 1 -
Series B junior participating
preferred stock - -
Common stock 222 221 1
Additional paid-in capital 373,481 367,723 5,758
Retained earnings 98,970 75,298 23,672
Total stockholders' equity 472,674 443,243 29,431
------- ------- ------
Total liabilities and
stockholders' equity $1,295,864 $1,269,085 $26,779
========== ========== =======
CONSOLIDATED STATEMENTS OF CASH FLOWS INFORMATION
(in thousands)
Six Months Ended
June 30,
----------------
2011 2010 Change
---- ---- ------
(unaudited)
Net cash provided by operating
activities $85,272 $46,331 $38,941
Net cash used in investing
activities (130,620) (84,589) (46,031)
Net cash (used in) provided by
financing activities (1,254) 14,198 (15,452)
Net decrease in cash and cash
equivalents (46,602) (24,060) (22,542)
Cash and cash equivalents, beginning
of period 283,233 208,872 74,361
Cash and cash equivalents, end of
period $236,631 $184,812 $51,819
======== ======== =======
ADJUSTED EBITDA
(in thousands)
Six Months Ended June
Three Months Ended 30,
------------------ ----------------------
2011 2010 2011 2010
---- ---- ---- ----
Net income $13,409 $12,149 $25,656 $12,923
Adjustments:
Interest expense, net 2,604 7,752 7,127 15,995
Loss from early
extinguishment of debt - - - 37
Provision for income
taxes 7,579 6,430 15,003 13,406
Depreciation and
amortization 17,492 16,200 34,218 32,222
Non-cash stock-based
compensation expense 2,892 1,848 5,737 2,841
Non-cash change in fair
value of financial
instrument - (2,055) - 8,419
Adjusted EBITDA $43,976 $42,324 $87,741 $85,843
======= ======= ======= =======
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. 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 Six Months Six Months
Months Months Ended Ended
------ ------ ---------- ----------
Ended Ended
6/30/11 6/30/10 6/30/11 6/30/10
-------- -------- ------- -------
Net income available to common
stockholders $11,067 $12,149 $21,103 $12,923
Adjustments:
Non-cash change in fair value of
financial instrument - (2,055) - 8,419
Adjusted net income available to
common stockholders $11,067 $10,094 $21,103 $21,342
======= ======= ======= =======
Adjusted fully diluted shares 22,756 22,063 22,760 21,950
Adjusted diluted EPS $0.49 $0.46 $0.93 $0.97
===== ===== ===== =====
Adjusted Net Income Available to Common Stockholders is a non-GAAP
financial measure that represents net income available to common
stockholders before other items, 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. In August 2010, GeoEye was named one of Fortune Magazine's "100 Fastest-Growing Companies" in the United States. 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 fiscal year ended Dec. 31, 2010, which we filed with the Securities and Exchange Commission ("SEC") on March 15, 2011, and our Quarterly Report on Form 10-Q for the period ended March 31, 2011, which we filed with the SEC on May 10, 2011. 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.
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