• Third Quarter non-IFRS revenue of $15.5 million increased by 68% over the prior year (IFRS revenue of $20.7 million in Q3 increased by 37%)
• Non-IFRS adjusted EBITDA of $4.7 million in the third quarter increased by 211% over the prior year
• Year-to-date Non-IFRS revenue is $38 millon, compared with $17 million for the same period last year, an increase of 118% (IFRS revenue of $55 million year-to-date, compared to $23 million in 2015)
• Reaffirming our full-year guidance for 2016 of non-IFRS revenue of between $55 and $60 million and non-IFRS adjusted EBITDA of between $4.2 and $6.2 million

VANCOUVER, Nov. 10, 2016 /CNW/ - UrtheCast Corp. (TSX: UR) ("UrtheCast" or the "Company") today announces financial results for the three and nine months ended on September 30, 2016.

Strong Growth in Revenue and Adjusted EBITDA

The Company is pleased to report Q3 non-IFRS revenues of $15.5 million, a 68% increase over Q3 2015 non-IFRS revenue of $9.3 million. IFRS revenue for the quarter was $20.7 million, a 37% increase over the $15.0 million reported in the same period last year. Similarly, the Company's non-IFRS adjusted EBITDA was positive $4.7 million in the quarter compared to a loss of $4.3 million in the same quarter of 2015, amounting to a $9 million improvement for Q3 in year over year adjusted EBITDA.  At September 30, 2016, the Company had total cash balances of $21.0 million and working capital of $22.4 million.

Revenues in Earth Observation Growing by 129% Quarter over Quarter

Revenues in the Company's earth observation (EO) business in the quarter grew by 129% compared with Q2 2016, growing from $3.1 million to $7.1 million (non-IFRS reporting).

Growing Opportunities in Engineering Business

The Company continues to pursue opportunities for our technology and engineering business.  Though not limited to our Synthetic Aperture Radar (SAR) technology, it is our SAR IP in particular which is creating a lot of new commercial opportunities, both in Canada and internationally. The Company has now filed 5 patents relating to the OptiSAR technology, some of which have now reached the publication stage. 

Non-Cash Impairment on ISS Cameras

During the quarter, the Company recorded a non-cash asset impairment charge of $7.8 million for the ISS cameras due to a slow revenue ramp, ongoing operational and geopolitical challenges, and our ISS partner informing us of their intention to renegotiate a new agreement with UrtheCast going forward from January 1, 2017. The Company is now in active discussions to monetize our ISS cameras through alternative means, including licensing arrangements.

"We are very pleased to see our Earth Observation revenues growing so robustly, from $1.3 million in Q1 to $7.1 million in Q3," explained Wade Larson, CEO and co-founder.  "The continuous growth of both our earth observation and engineering services businesses gives us the confidence and financial strength to pursue our goals for UrtheDaily and OptiSAR.  The non-cash write-down we've taken on our ISS cameras will not have not a measurable impact on our business because of the proactive steps we took in not only buying Deimos Imaging but, since the acquisition, in consolidating and growing the our sales forces, distribution channels, and global market presence for our Deimos satellites." 

Business Highlights

Earth Observation Update

• The ramp-up in EO revenues in 2016, from $1.3 million in Q1 to $3.1 million in Q2 and $7.1 million in Q3, allows us to reaffirm our guidance for 2016.
• In parallel, UrtheCast has been expanding its EO portfolio to include imagery from other satellite imagery providers, including those of the PanGeo Alliance, of which we are a founding member. The capability of UrtheCast to offer an integrated virtual-constellation service, which goes much beyond a simple reseller offer, is allowing us to access new markets and customers with a value proposition which is highly demanded.
• The sales ramp for high-resolution imagery data (Deimos-2) is mainly in Europe, Latin America and Asia across a number of market verticals, where our sales network has been working for a longer period. Deimos-2's exceptionally fast turnaround times and our flexibility in adapting to customers' service needs are the key differentiating factors of our product offering.
• Sales of medium-resolution imagery (Deimos-1) are still growing, with legacy customers maintaining or increasing their orders and new customers signing for services in new geographies. This growth can be achieved despite the competition of free data (mainly US Landsat-8 and EU Sentinel-2), thanks to the unique service level of the UrtheCast product, which is also tailored to enable sustainable geo-analytics services.

UrtheDaily Update

• The Company is actively negotiating contracts with multiple partners to bring to market the UrtheDaily constellation, which has been designed to be the world's first Earth Observation system planned, from the ground-up, to truly power machine-learning and artificial intelligence-ready geoanalytics applications on a global scale. Customers' urgency for the UrtheDaily service is being created in part by the impending end-of-life of incumbent satellite systems.
• The Company met with several key stakeholders within the supply chain for the procurement of the satellites, further refining the design, cost and timing of delivery and launch.

OptiSAR Progress

• The Company is in full contract negotiations with three prospective OptiSAR customers to convert existing Memoranda of Understanding, representing in total US$490 million of customer commitments for the constellation. If successful, this will allow us to begin building the first series of satelittes.
• The Company is witnessing increasing financial support and user interest from the Government of Canada in OptiSAR, the world's most advanced SAR technology. The company is pursuing this because the Canadian Government is looking at a follow-on mission to the three-satellite RCM program (RADARSAT Constellation Mission).
• UrtheCast's Request for Proposal ("RFP") to U.S. companies interested in a long-term strategic partnership to serve the United States Government has closed and the Company is reviewing the responses submitted. At this time, the Company is inviting down-selected U.S. bidders for partnership discussions.

Reaffirming 2016 Guidance

This continued significant year over year growth allows us to reaffirm our full year 2016 guidance to achieve non-IFRS revenue between $55 million and $60 million (representing an IFRS revenue range of $78 million to $83 million) and non-IFRS adjusted EBITDA guidance between $4.2 million and $6.2 million in fiscal 2016.