GeoEye Reports Second Quarter 2012 Earnings Results -- Conference Call Scheduled for Tuesday, August 7, 2012, 8:30 a.m. EDT --

HERNDON, Va., Aug. 6, 2012 /PRNewswire/ -- GeoEye, Inc. (NASDAQ: GEOY), a leading source of geospatial information and insight, announced today results for its fiscal second quarter ended June 30, 2012.

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"Second quarter revenue and operating results were in line with our expectations," said Matt O'Connell, GeoEye's chief executive officer and president. "Revenues in our international business grew 8.9% as compared to the same quarter last year, while our domestic business was down slightly. Growth in our Production and other services business unit was another highlight in the quarter. And on July 23, we were pleased to announce our agreement to combine with DigitalGlobe. The combination of the two companies will create a global leader in earth imagery and geospatial analysis."

SECOND QUARTER RESULTS

Total revenues were $88.4 million for the second quarter of 2012, a $1.2 million increase from the second quarter of 2011. Net income available to common stockholders for the second quarter of 2012 was $11.7 million, or $0.51 per fully diluted share, compared to $11.1 million, or $0.49 per fully diluted share, for the second quarter of 2011. When adjusted for $2.4 million of transaction and other costs associated with the process of combining with DigitalGlobe and the divestiture of MJ Harden, net income available to common stockholders for the second quarter of 2012 was $13.0 million, or $0.57 per fully diluted share.

Operating profit was $22.1 million for the second quarter of 2012, which included $2.4 million of transaction and other costs. Operating margin was 25.0 percent for the second quarter of 2012, compared to 27.1 percent in the second 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 $44.7 million for the second quarter of 2012, compared to $44.0 million in the same period in 2011.

The company ended the second quarter of 2012 with unrestricted cash, cash equivalents and short-term investments of $239.5 million; total assets of approximately $1.5 billion; stockholders' equity of $539.0 million and long-term debt of $512.6 million.

SECOND QUARTER 2012 OPERATING HIGHLIGHTS

Revenue Mix

  • Imagery revenues in the second quarter of 2012 were $59.7 million, or 67.5 percent of total revenues. Production and other services revenues were $22.7 million, or 25.6 percent of total revenues. The NextView cost share accounted for revenues of $6.0 million, or 6.8 percent of total revenues.
  • The company recognized $37.8 million of imagery and other revenue under the EnhancedView Service Level Agreement during the second quarter. U.S. government revenues were $60.5 million, or 68.5 percent of total revenues in the quarter.

Geographic Information

  • Domestic revenues were $67.9 million for the second quarter of 2012, or 76.8 percent of total revenues for the period. International revenues were $20.5 million for the second quarter of 2012, or 23.2 percent of total revenues for the period.
  • Domestic revenues decreased 0.7 percent for the second quarter of 2012, compared to the same period in 2011. International revenues increased 8.9 percent for the second quarter of 2012, compared to the same period in 2011.

GeoEye-2 Capital Expenditures

  • During the quarter, the company invested $79.2 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 $718.3 million in the GeoEye-2 satellite program, including $89.7 million of capitalized interest.

SIX MONTH RESULTS

Total revenues for the six months ended June 30, 2012, were $177.7 million, a 2.2 percent increase from $173.8 million in the six months ended June 30, 2011. The company's Adjusted EBITDA for the six-month period ended June 30, 2012, was $90.9 million, an increase of 3.6 percent from the same period in 2011. Net income available to common stockholders for the six months ended June 30, 2012, was $24.9 million, or $1.09 per fully diluted share, as compared to net income available to common stockholders of $21.1 million, or $0.93 per fully diluted share, in the same period in 2011. When adjusted for transaction and other costs, net income available to common stockholders for the six months ended June 30, 2012 was $26.1 million, or $1.15 per fully diluted share.

FISCAL YEAR 2012 FINANCIAL OUTLOOK

Given the execution of a definitive agreement to combine with DigitalGlobe, the company is suspending its full year 2012 guidance.

For the third quarter 2012, Management expects revenues to be in the range of $86 million to $93 million.

This estimate represents 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, 2012.

When: Tuesday, August 7, 2012, 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: 107458. 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 7, 2012 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 14, 2012, by dialing (855) 859-2056 and typing in the conference ID number: 107458.

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):

 

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)










Three Months Ended June 30,





2012


2011


Change



(unaudited)



Revenues 

$            88,394


$            87,206


$              1,188

Operating expenses:







Direct costs of revenue (exclusive of depreciation and amortization)

30,294


31,426


(1,132)


Depreciation and amortization

17,756


17,492


264


Selling, general and administrative 

18,219


14,696


3,523


Total operating expenses

66,269


63,614


2,655

Income from operations

22,125


23,592


(1,467)

Interest income (expense), net

1,307


(2,604)


3,911

Income before provision for income taxes

23,432


20,988


2,444

Provision for income taxes

(9,341)


(7,579)


(1,762)

Net income

14,091


13,409


682

Preferred stock dividends

(998)


(998)


-



13,093


12,411


682

Income allocated to participating securities

(1,402)


(1,344)


(58)

Net income available to common stockholders

$          11,691


$          11,067


$                624








Earnings per share







Basic

$                0.52


$                0.50


$                0.02


Diluted

$                0.51


$                0.49


$                0.02

Weighted average shares basic

22,420


22,130



Weighted average shares diluted

22,758


22,756












Six Months Ended June 30,





2012


2011


Change



(unaudited)



Revenues 

$          177,677


$          173,832


$              3,845

Operating expenses:







Direct costs of revenue (exclusive of depreciation and amortization)

60,710


62,738


(2,028)


Depreciation and amortization

35,495


34,218


1,277


Selling, general and administrative 

33,647


29,090


4,557


Total operating expenses

129,852


126,046


3,806

Income from operations

47,825


47,786


39

Interest income (expense), net

1,360


(7,127)


8,487

Income before provision for income taxes

49,185


40,659


8,526

Provision for income taxes

(19,338)


(15,003)


(4,335)

Net income

29,847


25,656


4,191

Preferred stock dividends

(1,995)


(1,984)


(11)



27,852


23,672


4,180

Income allocated to participating securities

(2,993)


(2,569)


(424)

Net income available to common stockholders

$          24,859


$          21,103


$             3,756








Earnings per share







Basic

$                1.11


$                0.96


$                0.15


Diluted

$                1.09


$                0.93


$                0.16

Weighted average shares basic

22,328


22,087



Weighted average shares diluted

22,774


22,760










 

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)








June 30,


December 31, 




2012


2011


Change


(unaudited)





ASSETS

Current assets:






Cash and cash equivalents

$           230,889


$           188,738


$             42,151

Short-term investments

8,600


9,220


(620)

Accounts receivable - trade and unbilled receivables, net

45,248


39,917


5,331

Income tax receivable

2,685


19,645


(16,960)

Restricted cash

3,952


4,207


(255)

Current deferred tax assets

2,148


2,148


-

Prepaid expenses and other current assets

15,241


14,805


436

Total current assets

308,763


278,680


30,083

Property, plant and equipment, net

52,359


48,065


4,294

Satellites and related ground systems, net

1,028,425


913,454


114,971

Goodwill

67,945


68,130


(185)

Intangible assets, net

8,929


10,526


(1,597)

Non-current restricted cash

4,902


6,875


(1,973)

Other non-current assets

8,377


8,855


(478)

Total assets

$        1,479,700


$        1,334,585


$           145,115







LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:






Accounts payable and accrued expenses

$             49,624


$             58,510


$             (8,886)

Current portion of deferred revenue

58,902


53,433


5,469

Total current liabilities

108,526


111,943


(3,417)

Long-term debt

512,571


511,019


1,552

Long-term deferred revenue, net of current portion

228,306


131,968


96,338

Deferred tax liabilities

83,289


64,694


18,595

Other non-current liabilities

8,047


7,674


373

Total liabilities

940,739


827,298


113,441

Commitments and contingencies 

-


-


-

Stockholders' equity:






Series A convertible preferred stock

1


1


-

Series B junior participating preferred stock

-


-


-

Common stock

225


222


3

Additional paid-in capital

382,973


379,154


3,819

Retained earnings

155,762


127,910


27,852

Total stockholders' equity

538,961


507,287


31,674

Total liabilities and stockholders' equity

$        1,479,700


$        1,334,585


$           145,115







 

 

 

CONSOLIDATED STATEMENTS OF CASH FLOWS INFORMATION

(in thousands)








Six Months Ended June 30,




2012


2011


Change


(unaudited)



Net cash provided by operating activities

$        200,456


$          85,272


$        115,184

Net cash used in investing activities

(156,577)


(130,620)


(25,957)

Net cash used in financing activities

(1,728)


(1,254)


(474)

Net increase (decrease) in cash and cash equivalents

42,151


(46,602)


88,753

Cash and cash equivalents, beginning of period

188,738


283,233


(94,495)

Cash and cash equivalents, end of period

$        230,889


$        236,631


$           (5,742)







 

 

 

ADJUSTED EBITDA

(in thousands)










Three Months Ended


Six Months Ended June 30,


2012


2011


2012


2011

Net income

$        14,091


$        13,409


$        29,847


$        25,656

Adjustments:








Interest (income) expense, net

(1,307)


2,604


(1,360)


7,127

Provision for income taxes

9,341


7,579


19,338


15,003

Depreciation and amortization

17,756


17,492


35,495


34,218

Transaction costs

2,376


-


2,376


-

Non-cash stock-based compensation expense

2,435


2,892


5,176


5,737

Adjusted EBITDA

$        44,692


$        43,976


$        90,872


$        87,741









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 Months Ended 6/30/12


Three Months Ended 6/30/11


Six Months Ended 6/30/12


Six Months Ended 6/30/11













Net income available to common stockholders

$          11,691


$          11,067


$          24,859


$          21,103

Adjustments:








Transaction costs

2,376




2,376



Adjustment to normalize provision for income taxes

(947)




(934)



Impact of adjustments on income allocated to participating securities

(153)




(155)



Adjusted net income available to common stockholders

$          12,967


$          11,067


$          26,146


$          21,103

























Weighted average shares - fully diluted

22,758


22,756


22,774


22,760

Adjusted diluted EPS

$                0.57


$                0.49


$                1.15


$                0.93









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 740 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, 2011, which we filed with the Securities and Exchange Commission ("SEC") on March 13, 2012. 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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