- exactEarth has entered into an agreement to be acquired by Spire Global for $204.2 million in cash and equity

- Consideration of $3.90 per share represents a premium of 171% to exactEarth’s 10-day VWAP of $1.4417 per share

CAMBRIDGE, Ontario, Sept. 14, 2021 (GLOBE NEWSWIRE) -- exactEarth Ltd. (“exactEarth” or “the Company”), a leading provider of Satellite-AIS data services, announces its financial results for the three- and nine-month periods ended July 31, 2021. All financial figures are in Canadian dollars unless otherwise stated.

Q3 and Year-to-Date Fiscal 2021 Highlights:

• Revenue was $6.0 million, up 26% compared to $4.8 million in Q3 2020; revenue Year-to-Date (“YTD”) was $17.3 million, up 30% compared to $13.3 million in the same period last year.
• Subscription Services¹ revenue was $5.3 million, up 18% compared to $4.5 million in Q3 2020; Subscription Services revenue YTD was $15.3 million, up 26% compared to $12.2 million in the same period last year.
• Adjusted EBITDA² was a gain of $661 thousand compared to a loss of ($130) thousand in Q3 2020; Adjusted EBITDA YTD was a gain of $2.4 million compared to a loss of ($429) thousand in the same period last year.
• Cash generated from operations was $395 thousand compared to $134 thousand in Q3 2020; Cash generated from operations YTD was $70 thousand compared to cash used in operations of ($3.0) million in the same period last year.
• Cash, cash equivalents and short-term investments were $7.0 million at the end of Q3 2021 compared to $7.5 million at the end of Fiscal 2020.

“Q3 was another strong quarter and a continuation of the positive momentum we have generated since last year,” said Peter Mabson, CEO at exactEarth. “We continue to execute on our objectives to drive top-line and Adjusted EBITDA growth, and to build a strong base of recurring revenue from which to grow from.”

Proposed Acquisition by Spire Global
On September 13, 2021, the Company entered into a definitive arrangement agreement with Spire Global Inc. (“Spire”) under which Spire will acquire 100% of the Company’s common shares for $204.2 million in cash and equity (the “Transaction”). Pursuant to the transaction, holders of exactEarth common shares will receive $2.50 in cash and 0.1 shares of Spire for each exactEarth common share held. Spire shares are listed for trading on the New York Stock Exchange (“NYSE”) under the ticker symbol SPIR. Based on the 10-day volume weighted average price (“VWAP”) of Spire’s shares on the NYSE on September 13, 2021, the total consideration per share is $3.90 and represents a premium of 171% to the Company’s 10-day VWAP of $1.4417.

The Transaction is subject to shareholder, applicable regulatory approvals and customary closing conditions. The Company’s Board of Directors unanimously approved the Transaction and will recommend that the shareholders of the Company accept this transaction. The directors, officers and certain shareholders of exactEarth, collectively holding approximately 60% of its outstanding common shares, have entered into voting support agreements under which they have agreed to support and vote in favor of the Transaction. The Transaction is expected to close in the fourth quarter of calendar 2021 or the first quarter of calendar 2022. Additional details on the transaction can be found in a joint press release issued earlier today by Spire and exactEarth.

Mr. Mabson added: “We will continue to provide world leading services to our existing customers and by joining forces with the Spire team we will be able to bring a new level of enhanced service performance and capabilities to the global maritime market. We believe this transaction provides significant value for our shareholders and reflects positively on the execution by our team to build a leader in the Satellite-AIS industry.”

Q3 and Year-to-Date Fiscal 2021 Financial Review
Total revenue in the three- and nine-month periods ended July 31, 2021 (“Q3 2021” and “YTD 2021”) was $6.0 million and $17.3 million, which were increases of 26% and 30% compared to the respective periods in the prior year.

Subscription Services revenue was $5.3 million (87% of total revenue) in Q3 2021 and $15.3 million (89% of total revenue) in the YTD 2021 period. These were increases of 18% and 26% compared to the respective periods in the prior year.

Data Products revenue and Other Products & Services revenue combined in Q3 2021 was $762 thousand and $1.9 million for the YTD 2021 period, compared to $324 thousand and $1.1 million in the respective prior year periods. Data Products revenue and Other Products & Services revenue is typically generated from on-demand customer requests and/or projects, including the sale of historical datasets, which results in variability in quarter-to-quarter revenue levels from these segments.

Revenue growth for Q3 2021 and for the YTD 2021 period was driven by customer growth in both the commercial and government market segments. Commercial market revenue was up 27% in Q3 2021 and 35% for the YTD 2021 period. Government market revenue was up 22% in Q3 2021 and up 9% for the YTD 2021 period. Reported revenue growth numbers would have been higher had it not been for the strengthening of the Canadian dollar, as the majority of the Company’s contracts are transacted in U.S. dollars.

Order Bookings backlog at July 31, 2021 was $25.4 million compared to $30.8 million at the end of Q3 2020. Order Bookings backlog can fluctuate depending on the timing of the signing of new sales agreements. The strengthening of the Canadian dollar has had the effect of reducing the YTD 2021 backlog number by more than $1.0 million. Revenue of $5.0 million from the current revenue backlog is forecasted to be earned in the remainder of Fiscal 2021.

Gross margin for Q3 2021 and the YTD 2021 period was 52% and 51%, compared to 37% and 40% in the respective periods of the prior year. Gross margin improved year-over-year due primarily to revenue growth. Cost of revenue, excluding a favourable one-time $648 thousand net adjustment recognized in Q1 2020 related to the completion of the amended L3Harris agreement, was lower for both periods in 2021.

Selling, general and administrative (“SG&A”) expense for Q3 2021 and the YTD 2021 period was $3.0 million and $7.7 million, compared to $1.6 million and $6.0 million in the respective periods of the prior year. The Q3 2021 increase was primarily due to investment in sales and marketing resources, bad debt expense related to one customer, management incentive compensation and strategic initiative expenses. The YTD 2021 increase in SG&A includes the aforementioned factors as well as an increase in the value of directors’ fees paid in DSUs arising from the appreciating stock price and strategic initiative expenses.

Product development and research and development (“R&D”) expense for Q3 2021 and for the YTD 2021 period was $258 thousand and $781 thousand, compared to $116 thousand and $628 thousand in the respective periods of the prior year. The year-over-year increases primarily reflect the Company’s ongoing development of web-based functionality and new analytics-based product offerings.

Adjusted EBITDA gains for Q3 2021 and the YTD 2021 period were $661 thousand and $2.4 million, compared to losses of ($130) thousand and ($429) thousand in the respective periods of the prior year. Adjusted EBITDA improved year-over-year primarily due to higher revenue and increased gross margin, offset in part due to higher operating expenses.

Net loss for Q3 2021 was ($249) thousand, or ($0.00) per basic and diluted share, compared to a net loss of ($941) thousand, or ($0.04) per basic and diluted share, in Q3 2020. Net loss for the YTD 2021 period was ($1.5) million, or ($0.03) per basic and diluted share, compared to a net loss of ($4.5) million, or ($0.20) per basic and diluted share in the same period last year. Net loss improved year-over-year due to higher revenue and higher gross margin, offset in part due to higher operating expenses.