With our collection sources and comprehensive ImageLibrary (containing more than 815 million square kilometers of earth imagery and imagery products) we offer a range of on- and off-line products and services designed to enable customers to easily access and integrate our imagery into their business operations and applications.
DigitalGlobe is a registered trademark of DigitalGlobe.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This presentation and other of our reports, filings, and public announcements may contain or incorporate forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements relate to future events or our future financial performance. We generally identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar words, although not all forward-looking statements contain these words.
Any forward-looking statements are based upon our historical performance and on our current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us that the future plans, estimates or expectations will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions. A number of important factors could cause our actual results or performance to differ materially from those indicated by such forward looking statements, including: the loss or reduction of any of our primary contracts; the failure of our WorldView-2 satellite to commission successfully or as scheduled; the loss or impairment of our satellites; loss or damage to the content contained in our ImageLibrary; interruption or failure of our ground system and other infrastructure, decrease in demand for our imagery products and services; increased competition that may reduce our market share or cause us to lower our prices; our failure to obtain or maintain required regulatory approvals and licenses; changes in U.S. foreign law or regulation that may limit our ability to distribute our imagery products and services; the costs associated with being a public company; and other important factors, all as described more fully in our filings with the Securities and Exchange Commission, including our Prospectus filed with the Commission on May 14, 2009.
We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. Readers are cautioned not to place undue reliance on any of these forward looking statements.
Non-GAAP Financial Measures
Adjusted EBITDA is a key measure used in internal operating reports by management and the board of directors to evaluate the performance of our operations and is also used by analysts, investment banks and lenders for the same purpose. Adjusted EBITDA is a measure of our current period operating performance, excluding charges for capital, depreciation related to prior period capital expenditures and items which are considered non-core or non-recurring in nature.
We believe that the elimination of certain non-cash, non-operating or non-recurring items enables a more consistent measurement of period to period performance of our operations, as well as a comparison of our operating performance to companies in our industry. We believe this measure is particularly important in a capital intensive industry such as ours, in which our current period depreciation is not a good indication of our current or future period capital expenditures. The cost to construct and launch a satellite and build the related ground infrastructure may vary greatly from one satellite to another, depending on the satellite’s size, type and capabilities. For example, our QuickBird satellite, which we are currently depreciating, cost significantly less than our WorldView-1 or WorldView-2 satellites. Current depreciation expense is not indicative of the revenue generating potential of the satellites.
Adjusted EBITDA excludes interest income, interest expense, income taxes and loss on early extinguishment of debt because these items are associated with our capitalization and tax structures. Adjusted EBITDA also excludes depreciation and amortization expense because these non-cash expenses reflect the impact of prior capital expenditure decisions which are not indicative of future capital expenditure requirements. Adjusted EBITDA excludes other income (expense), net, and loss on derivative instrument because these items are not related to our primary operations.
We use Adjusted EBITDA in conjunction with traditional GAAP operating performance measures as part of our overall assessment of our performance and we do not place undue reliance on this measure as our only measure of operating performance. Adjusted EBITDA should not be considered a substitute for other measures of financial performance reported in accordance with GAAP.
FINANCIAL TABLES TO FOLLOW
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DigitalGlobe, Inc. Unaudited Condensed Consolidated Statements of Operations (in millions, except per share data) |
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For the three months ended
September 30, |
For the nine months ended
September 30, |
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| 2008 | 2009 | 2008 | 2009 | |||||||||||||
| Revenue | $ | 66.8 | $ | 71.8 | $ | 203.0 | $ | 209.0 | ||||||||
| Costs and expenses: | ||||||||||||||||
| Cost of revenue, excluding depreciation and amortization | 5.7 | 7.8 | 19.9 | 22.2 | ||||||||||||
| Selling, general and administrative | 17.8 | 21.5 | 54.5 | 65.6 | ||||||||||||
| Depreciation and amortization | 18.8 | 18.6 | 56.4 | 56.2 | ||||||||||||
| Income from operations | 24.5 | 23.9 | 72.2 | 65.0 | ||||||||||||
| Loss from early extinguishment of debt | - | - | - | (7.7 | ) | |||||||||||
| Loss on derivative instruments | - | - | - | (1.8 | ) | |||||||||||
| Interest income (expense), net | (0.7 | ) | - | (3.2 | ) | 0.1 | ||||||||||
| Income before income taxes | 23.8 | 23.9 | 69.0 | 55.6 | ||||||||||||
| Income tax expense | (9.5 | ) | (9.3 | ) | (29.0 | ) | (22.0 | ) | ||||||||
| Net income | $ | 14.3 | $ | 14.6 | $ | 40.0 | $ | 33.6 | ||||||||
| Earnings per share: | ||||||||||||||||
| Basic earnings per share | $ | 0.33 | $ | 0.33 | $ | 0.92 | $ | 0.76 | ||||||||
| Diluted earnings per share | $ | 0.32 | $ | 0.32 | $ | 0.91 | $ | 0.75 | ||||||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic | 43,459,653 | 44,679,714 | 43,438,310 | 44,152,352 | ||||||||||||
| Diluted | 44,346,877 | 45,397,989 | 44,095,320 | 44,740,004 | ||||||||||||
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DigitalGlobe, Inc. Unaudited Reconciliation of Third Quarter GAAP Net Income to Adjusted EBITDA (in millions) |
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Three months ended
September 30, |
Nine months ended
September 30, |
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| 2008 | 2009 | 2008 | 2009 | ||||||||||
| Net income | $ | 14.3 | $ | 14.6 | $ | 40.0 | $ | 33.6 | |||||
| Depreciation and amortization | 18.8 | 18.6 | 56.4 | 56.2 | |||||||||
| Interest (income), expense net | 0.7 | - | 3.2 | (0.1 | ) | ||||||||
| Loss on derivative instrument | - | - | - | 1.8 | |||||||||
| Loss from early extinguishment of debt | - | - | - | 7.7 | |||||||||
| Income tax expense | 9.5 | 9.3 | 29.0 | 22.0 | |||||||||
| Non-cash stock compensation expense | 0.8 | 1.3 | 2.5 | 5.5 | |||||||||
| Adjusted EBITDA | $ | 44.1 | $ | 43.8 | $ | 131.1 | $ | 126.7 | |||||
