Adjusted EBITDA further adjusts EBITDA to exclude restructuring costs, acquisition costs and integration costs as these are non-core items. Restructuring costs are costs incurred to realize efficiencies from the GeoEye acquisition, such as reducing excess workforce, consolidating facilities and systems, and relocating ground terminals. Acquisition costs are costs incurred to effect the acquisition, such as advisory, legal, accounting, consulting and other professional fees. Integration costs consist primarily of professional fees incurred to assist us with system and process improvements associated with integrating operations. Adjusted EBITDA margin is calculated by divided Adjusted EBITDA by U.S. GAAP net revenue.
We use EBITDA and Adjusted EBITDA in conjunction with traditional U.S. GAAP operating performance measures as part of our overall assessment of our performance and we do not place undue reliance on measures as our only measures of operating performance. EBITDA and Adjusted EBITDA should not be considered as substitutes for other measures of financial performance reported in accordance with U.S. GAAP.
DigitalGlobe, Inc.
Unaudited Condensed Consolidated Statements of Operations
For the three months ended
September 30,
----------------------------
(in millions, except per share data) 2013 2012
---------------------------------------------- ------------- -------------
Revenue $ 164.8 $ 107.2
Costs and expenses:
Cost of revenue, excluding depreciation and
amortization 46.7 21.5
Selling, general and administrative 60.6 40.1
Depreciation and amortization 59.4 28.9
Restructuring charges 3.1 -
------------- -------------
(Loss) income from operations (5.0) 16.7
Loss from early extinguishment of debt - -
Other income (expense), net 0.1 (0.7)
Interest expense, net (0.7) (1.9)
------------- -------------
(Loss) income before income taxes (5.6) 14.1
Income tax benefit (expense) 3.8 (5.6)
------------- -------------
Net (loss) income (1.8) 8.5
Preferred stock dividends (1.0) --
------------- -------------
Net (loss) income less preferred stock
dividends (2.8) 8.5
Income allocated to participating securities -- --
------------- -------------
Net (loss) income available to common
stockholders $ (2.8) $ 8.5
============= =============
(Loss) earnings per share:
Basic (loss) earnings per share $ (0.04) $ 0.18
============= =============
Diluted (loss) earnings per share $ (0.04) $ 0.18
============= =============
Weighted average common shares outstanding:
Basic 74.5 46.2
============= =============
Diluted 74.5 46.5
============= =============
DigitalGlobe, Inc.
Reconciliation Net Income (Loss) EBITDA and Adjusted EBITDA
For the three months ended
September 30,
----------------------------
(in millions) 2013 2012
------------- -------------
Net (loss) income $ (1.8) $ 8.5
Depreciation and amortization 59.4 28.9
Interest expense, net 0.7 1.9
Income tax expense (benefit) (3.8) 5.6
------------- -------------
EBITDA 54.5 44.9
Loss from early extinguishment of debt -- --
Restructuring charges (1) 3.1 --
Acquisition costs (1) -- 7.5
Integration costs (1) 8.0 --
------------- -------------
Adjusted EBITDA $ 65.6 $ 52.4
============= =============
(1) Restructuring, acquisition and integration costs consist of charges
related to the combination with GeoEye.
DigitalGlobe, Inc.
Unaudited Condensed Consolidated Balance Sheets
September 30, December 31,
(in millions, except par value) 2013 2012
-------------------------------------------- -------------- --------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 256.0 $ 246.2
Restricted cash 16.6 3.8
Accounts receivable, net of allowance for
doubtful accounts of $3.2 and $2.9,
respectively 90.3 67.0
Prepaid and current assets 27.6 18.6
Deferred taxes 70.7 43.9
-------------- --------------
Total current assets 461.2 379.5
Property and equipment, net of accumulated
depreciation of $831.2 and $676.2,
respectively 2,162.2 1,115.2
Goodwill 453.1 8.7
Intangible assets, net of accumulated
amortization of $6.1 and $0, respectively 38.5 -
Aerial image library, net of accumulated
amortization of $39.3 and $33.4,
respectively 11.0 16.4
Long-term restricted cash 6.7 8.3
Long-term deferred contract costs 46.8 37.3
Other assets 41.0 12.1
-------------- --------------
Total assets $ 3,220.5 $ 1,577.5
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 16.3 $ 10.2
Current portion of long-term debt 5.5 5.0
Other accrued liabilities 74.3 56.3
Current portion of deferred revenue 101.2 42.9
-------------- --------------
Total current liabilities 197.3 114.4
Deferred revenue 375.9 386.8
Long-term debt, net of discount 1,138.4 478.6
Long-term deferred tax liability, net 142.4 55.6
Other liabilities 2.3 2.7
-------------- --------------
Total liabilities $ 1,856.3 $ 1,038.1
-------------- --------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $0.001 par value; 24.0
shares authorized; no shares issued and
outstanding at September 30, 2013 and
December 31, 2012 - -
Series A convertible preferred stock, $0.001
par value, 0.08 shares authorized; 0.08
issued and outstanding at September 30,
2013; and no shares authorized, issued and
outstanding at December 31, 2012 - -
Common stock; $0.001 par value; 250.0 shares
authorized; 75.4 shares issued and 75.2
shares outstanding at September 30, 2013;
and 47.2 shares issued and 47.1 outstanding
at December 31, 2012 0.2 0.2
Treasury stock, at cost; 0.2 shares at
September 30, 2013 and 0.1 shares at
December 31, 2012 (3.2) (2.0)
Additional paid-in capital 1,453.2 543.8
Accumulated deficit (86.0) (2.6)
-------------- --------------
Total stockholders' equity 1,364.2 539.4
-------------- --------------
Total liabilities and stockholders' equity $ 3,220.5 $ 1,577.5
============== ==============
DigitalGlobe, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
For the nine months ended
September 30,
----------------------------
(in millions) 2013 2012
---------------------------------------------- ------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (83.4) $ 21.9
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization expense 165.7 86.5
Amortization of aerial image library,
deferred contract costs and lease incentive 12.6 15.1
Non-cash stock compensation expense 19.9 7.2
Amortization of debt issuance costs and
accretion of debt discount 3.6 2.8
Deferred income taxes (38.1) 15.0
Write-off of debt issuance costs and debt
discounts 12.8 -
Other (0.3) 1.1
Changes in working capital, net of assets
acquired and liabilities assumed in business
combinations:
Accounts receivable, net 15.8 (9.1)
Other current and non-current assets 3.1 (9.5)
Accounts payable (3.4) (3.1)
Accrued liabilities (37.4) (0.5)
Deferred revenue 35.3 63.2
Deferred contract costs (16.5) (0.5)
Payment of 2011 Senior Secured debt discount (13.8) -
------------- -------------
Net cash flows provided by operating
activities 75.9 190.1
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Construction in progress additions (198.9) (152.8)
Acquisition of businesses, net of cash
acquired (524.0) -
Other property and equipment additions (12.7) (7.8)
Investment in joint venture - (0.3)
Decrease in restricted cash 4.7 6.9
------------- -------------
Net cash flows used in investing activities (730.9) (154.0)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt 1,150.0 -
Repayment of debt (483.9) (3.8)
Preferred stock dividend payment (2.0) -
Proceeds from exercise of stock options 36.9 2.5
Tax benefit from the exercise of stock
options - 0.5
Payment of debt issuance costs (36.2) -
------------- -------------
Net cash flows provided by (used in) financing
activities 664.8 (0.8)
------------- -------------
Net increase in cash and cash equivalents 9.8 35.3
Cash and cash equivalents, beginning of period 246.2 198.5
------------- -------------
Cash and cash equivalents, end of period $ 256.0 $ 233.8
============= =============
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest, net of capitalized
amounts of $32.6 and $17.3, respectively $ - $ 4.8
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Changes to non-cash property, equipment and
construction in progress accruals, including
interest (5.0) 10.1
Issuance of shares of common and convertible
preferred stock for acquisition of business 837.8 -
Stock-based compensation awards issued in
acquisition of business, net of income taxes 13.4 -
Non-cash preferred stock dividend accrual (1.0) -
