"Third quarter revenue and operating results were in line with our expectations. As expected, on Oct. 31, the National Geospatial-Intelligence Agency (NGA) notified us that they have decided to cancel our Service Level Agreement (SLA) part of the EnhancedView contract. Effective Dec. 1, 2012, we will no longer be providing imagery to the NGA," said Matt O'Connell, GeoEye's chief executive officer and president.
"We will continue to provide other services to the NGA under EnhancedView, including the Web delivery platform, secure operations and value-added production services," O'Connell continued. "We continue to move forward with our combination with DigitalGlobe. We expect to close the transaction late this year or in the first quarter of 2013."
THIRD QUARTER RESULTS
Total revenues were $87.1 million for the third quarter of 2012, a $1.3 million increase from the third quarter of 2011. Net income available to common stockholders for the third quarter of 2012 was $7.6 million, or $0.33 per fully diluted share, compared to $11.7 million, or $0.51 per fully diluted share, for the third quarter of 2011. When adjusted for transaction costs related to the combination with DigitalGlobe, net income available to common stockholders for the three months ended Sept. 30, 2012, was $12.0 million, or $0.53 per fully diluted share.
Operating profit was $15.2 million for the third quarter of 2012, which included $8.3 million of transaction-related costs. Operating margin was 17.4 percent for the third quarter of 2012, compared to 27.7 percent in the third 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 $43.4 million for the third quarter of 2012, compared to $43.7 million in the same period in 2011.
The company ended the third quarter of 2012 with unrestricted cash, cash equivalents and short-term investments of $229.4 million; total assets of approximately $1.5 billion; stockholders' equity of $550.8 million and long-term debt of $513.4 million.
THIRD QUARTER 2012 OPERATING HIGHLIGHTS
Revenue Mix
- Imagery revenues in the third quarter of 2012 were $59.7 million, or 68.6 percent of total revenues. Production and other services revenues were $21.3 million, or 24.5 percent of total revenues. The NextView cost share accounted for revenues of $6.0 million, or 6.9 percent of total revenues.
- The company recognized $37.5 million of imagery and other revenue under the EnhancedView SLA during the third quarter. U.S. government revenues were $58.9 million, or 68 percent of total revenues in the quarter.
Geographic Information
- Domestic revenues were $66.1 million for the third quarter of 2012, or 75.8 percent of total revenues for the period. International revenues were $21.0 million for the third quarter of 2012, or 24.2 percent of total revenues for the period.
GeoEye-2 Capital Expenditures
- During the quarter, the company invested $55.3 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 $773.6 million in the GeoEye-2 satellite program, including $103.1 million of capitalized interest.
NINE MONTH RESULTS
Total revenues for the nine months ended Sept. 30, 2012, were $264.8 million, a 2.0 percent increase from $259.6 million in the nine months ended Sept. 30, 2011. The company's Adjusted EBITDA for the nine-month period ended Sept. 30, 2012, was $134.3 million, an increase of 2.2 percent from the same period in 2011. Net income available to common stockholders for the nine months ended Sept. 30, 2012, was $32.5 million, or $1.43 per fully diluted share, as compared to net income available to common stockholders of $32.8 million, or $1.44 per fully diluted share, in the same period in 2011. When adjusted for transaction related and other costs of $10.9 million, net income available to common stockholders for the nine months ended Sept. 30, 2012, was $38.3 million, or $1.68 per fully diluted share.
FISCAL YEAR 2012 FINANCIAL OUTLOOK
Given the execution of a definitive merger agreement with DigitalGlobe in July 2012, and the nature of the ongoing business transaction, the company has suspended its full year 2012 guidance.
CONFERENCE CALL
Due to the pending merger of GeoEye, Inc. with DigitalGlobe, Inc., GeoEye will not host a conference call to discuss financial results for the third quarter of 2012.
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
|
|
| ||
|
|
|
2012 |
|
2011 |
|
Change |
|
|
|
(unaudited) |
|
| ||
|
Revenues |
$ 87,109 |
|
$ 85,769 |
|
$ 1,340 | |
|
Operating expenses: |
|
|
|
|
| |
|
|
Direct costs of revenue (exclusive of depreciation and amortization) |
31,227 |
|
28,508 |
|
2,719 |
|
|
Depreciation and amortization |
17,860 |
|
17,986 |
|
(126) |
|
|
Selling, general and administrative |
22,822 |
|
15,516 |
|
7,306 |
|
|
Total operating expenses |
71,909 |
|
62,010 |
|
9,899 |
|
Income from operations |
15,200 |
|
23,759 |
|
(8,559) | |
|
Interest income (expense), net |
22 |
|
(1,122) |
|
1,144 | |
|
Income before provision for income taxes |
15,222 |
|
22,637 |
- |
(7,415) | |
|
Provision for income taxes |
(5,666) |
|
(8,549) |
|
2,883 | |
|
Net income |
9,556 |
|
14,088 |
- |
(4,532) | |
|
Preferred stock dividends |
(1,007) |
|
(1,008) |
|
1 | |
|
|
|
8,549 |
|
13,080 |
|
(4,531) |
|
Income allocated to participating securities |
(912) |
|
(1,416) |
|
504 | |
|
Net income available to common stockholders |
$ 7,637 |
|
$ 11,664 |
|
$ (4,027) | |
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
| |
|
|
Basic |
$ 0.34 |
|
$ 0.53 |
|
$ (0.19) |
|
|
Diluted |
$ 0.33 |
|
$ 0.51 |
|
$ (0.18) |
|
Weighted average shares basic |
22,519 |
|
22,147 |
|
| |
|
Weighted average shares diluted |
22,845 |
|
22,789 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
| ||
|
|
|
2012 |
|
2011 |
|
Change |
|
|
|
(unaudited) |
|
| ||
|
Revenues |
$ 264,786 |
|
$ 259,601 |
|
$ 5,185 | |
|
Operating expenses: |
|
|
|
|
| |
|
|
Direct costs of revenue (exclusive of depreciation and amortization) |
91,937 |
|
91,246 |
|
691 |
|
|
Depreciation and amortization |
53,355 |
|
52,204 |
|
1,151 |
|
|
Selling, general and administrative |
56,469 |
|
44,606 |
|
11,863 |
|
|
Total operating expenses |
201,761 |
|
188,056 |
|
13,705 |
|
Income from operations |
63,025 |
|
71,545 |
|
(8,520) | |
|
Interest income (expense), net |
1,382 |
|
(8,249) |
|
9,631 | |
|
Income before provision for income taxes |
64,407 |
|
63,296 |
- |
1,111 | |
|
Provision for income taxes |
(25,004) |
|
(23,552) |
|
(1,452) | |
|
Net income |
39,403 |
|
39,744 |
- |
(341) | |
|
Preferred stock dividends |
(3,002) |
|
(2,992) |
|
(10) | |
|
|
|
36,401 |
|
36,752 |
|
(351) |
|
Income allocated to participating securities |
(3,902) |
|
(3,984) |
|
82 | |
|
Net income available to common stockholders |
$ 32,499 |
|
$ 32,768 |
|
$ (269) | |
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
| |
|
|
Basic |
$ 1.45 |
|
$ 1.48 |
|
$ (0.03) |
|
|
Diluted |
$ 1.43 |
|
$ 1.44 |
|
$ (0.01) |
|
Weighted average shares basic |
22,392 |
|
22,107 |
|
| |
|
Weighted average shares diluted |
22,799 |
|
22,767 |
|
| |
