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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Iridium Communications - Warrants 02/14/2013 (MM) | NASDAQ:IRDMW | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 0.08 | 0 | 00:00:00 |
From Jan 2020 to Jan 2025
Iridium reported second-quarter total revenue of $97.3 million, which consisted of $68.5 million of service revenue and $28.8 million of equipment, engineering and support revenue. Total revenue grew 1 percent versus the comparable period of 2011, while service revenue increased 5 percent from the year-ago period. Service revenue, which represents primarily recurring revenue from Iridium's growing subscriber base, was 70 percent of total revenue for the second quarter of 2012 as compared to 68 percent in the year-ago period.
The Company ended the quarter with 576,000 total billable subscribers, which compares to 478,000 for the year-ago period and 544,000 for the quarter ended March 31, 2012. Total billable subscribers grew 21 percent year-over-year, driven by strength in machine-to-machine ("M2M") and commercial voice customers.
"Iridium remains on a solid, long-term growth trajectory, with good progress in several key areas of our commercial business being partially offset by what we believe is short-term weakness in traditional government voice subscribers," said Matt Desch, CEO, Iridium. "Our M2M, maritime broadband and aviation markets continue to grow revenue and subscribers in the double-digits on a year-over-year basis, built on the foundation of a superior network, innovative partner channel and favorable competitive dynamics. In addition, we expect our global aviation monitoring venture, Aireon, to be a meaningful new source of high-margin revenue once Iridium NEXT is launched."
Desch continued, "In our government business, Netted IridiumSM and M2M services continue to grow at a healthy clip, while our service revenue in the high-ARPU traditional handset segment continues to be impacted by reduced government spending and troop levels. Taking a longer-term view, our strategic relationship with the U.S. Department of Defense remains strong and they continue to spend with us on developing new products and a multi-year modernization plan for their dedicated gateway."
Iridium Business Highlights
Service – Commercial
Commercial service remained the largest part of Iridium's business, representing 54 percent of the Company's total revenue during the second quarter. The Company's commercial customer base is diverse and includes markets such as maritime, aviation, oil and gas, mining, recreation, forestry, construction, transportation and emergency services. These customers rely on Iridium's products and services as critical to their daily operations and integral to their communications and business infrastructure.
Service – Government
Iridium's voice and data solutions improve situational awareness for military personnel and track critical assets in tough environments around the globe, providing a unique value proposition that is not easily duplicated.
Equipment
Engineering & Support
Capital expenditures were $151.9 million for the second quarter and primarily related to spending for the Company's next-generation satellite constellation, Iridium NEXT, and upgraded ground network infrastructure at its commercial gateway. The Company ended the second quarter with a cash and cash equivalents balance of $166.7 million and gross debt of $568.0 million. Net debt was $360.7 million.
2012 Outlook
The Company affirmed its full-year 2012 outlook for total billable subscriber growth and updated its projections for service revenue and OEBITDA. The Company now expects:
2012 Outlook (May 2012) | 2012 Outlook (August 2012) | |
Total Billable Subscriber Growth | 20% to 25% | Affirmed |
Total Service Revenue Growth | 8% to 11% | Approximately 6% |
Operational EBITDA (OEBITDA) | $210 million to $220 million | $205 million to $210 million |
Long-Range Outlook
The Company affirmed its long-range outlook for OEBITDA margin, cash taxes, net leverage and rate of deleveraging and updated its projections for service revenue. The Company now expects:
Prior Long-Range Outlook (March 2012) | Revised Long-Range Outlook (August 2012) | |
Average Service Revenue Growth | 9% to 13% per year between 2011 and 2015 | 8% to 12% per year between 2013 and 2015 |
Operational EBITDA (OEBITDA) Margin | Approximately 60% in 2015 | Affirmed |
Cash Taxes | Negligible cash taxes from 2011 to approximately 2020 | Negligible cash taxes from 2013 to approximately 2020 |
Net Leverage | Approximately 3x at year-end 2012; 4x-5x at year-end 2015 | Affirmed |
Rate of Deleveraging | 0.5 to 1.0 multiple of OEBITDA per year beginning in 2016 | Affirmed |
Non-GAAP Financial Measures & Definitions
Supplemental Reconciliation of GAAP Net Income to Operational EBITDA | ||||
Iridium Communications Inc. | ||||
For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||
2012 | 2011 | 2012 | 2011 | |
(In thousands) | ||||
GAAP net income | $ 17,663 | $ 11,683 | $ 30,081 | $ 19,982 |
Interest expense | 6 | (5) | 91 | 6 |
Interest income | (127) | (257) | (280) | (553) |
Income taxes | 8,119 | 6,154 | 7,170 | 10,065 |
Depreciation and amortization | 18,368 | 23,664 | 42,572 | 46,995 |
Iridium NEXT expenses, net | 6,047 | 5,620 | 12,775 | 11,849 |
Share-based compensation | 1,993 | 1,508 | 3,661 | 2,842 |
Transaction expenses | -- | -- | -- | 233 |
Non-cash purchase accounting | (54) | 73 | (190) | 96 |
Operational EBITDA | $52,015 | $48,440 | $95,880 | $91,515 |
Conference Call Information
As previously announced, the Company will host a conference call to discuss its results at 8:30 a.m. ET on Thursday, August 2, 2012. Callers should dial (877) 334-1964 (U.S. only) or (631) 291-4574 (from outside the U.S.) to access the call. The conference call will also be simultaneously webcast on Iridium's Investor Relations webpage at www.iridium.com. A replay of the conference call will be available beginning Thursday, August 2, 2012 through Thursday, August 9, 2012 at Iridium's Investor Relations webpage. Callers can also dial (855) 859-2056 (U.S. only) or (404) 537-3406, Access Code 84322580, for an audio replay of the conference call.
About Iridium Communications Inc.
Iridium is the only mobile voice and data satellite communications network that spans the entire globe. Iridium enables connections between people, organizations and assets to and from anywhere, in real time. Together with its ever-expanding ecosystem of partner companies, Iridium delivers an innovative and rich portfolio of reliable solutions for markets that require truly global communications. The company has a major development program underway for its next-generation network – Iridium NEXT. Iridium Communications Inc. is headquartered in McLean, Va., U.S.A., and its common stock trades on the NASDAQ Global Select Market under the ticker symbol IRDM. For more information about Iridium products, services and partner solutions, visit www.iridium.com. IRDM-F
The Iridium Communications Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=10426
Forward-Looking Statements
Statements in this press release that are not purely historical facts may constitute forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding the development of Iridium NEXT; development of its global aviation monitoring venture, Aireon; the development of its product portfolio; anticipated growth in subscribers, data services and total service revenue; anticipated equipment revenue; anticipated growth in Operational EBITDA and OEBITDA margin; anticipated debt levels and anticipated cash taxes. Other forward-looking statements can be identified by the words "anticipates," "may," "can," "believes," "expects," "projects," "intends," "likely," "will," "to be" and other expressions that are predictions or indicate future events, trends or prospects. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Iridium to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, uncertainties regarding increases in customer demand for Iridium's products and services, Iridium's ability to maintain the health, capacity and content of its satellite constellation, and the development of and transition to Iridium NEXT, including expanded capacity and features, and the development of and market for hosted payloads, as well as general industry and economic conditions, and competitive, legal, governmental and technological factors. Other factors that could cause actual results to differ materially from those indicated by the forward-looking statements include those factors listed under the caption "Risk Factors" in the Company's Form 10-K for the year ended December 31, 2011, filed with the Securities and Exchange Commission (the "SEC") on March 6, 2012 and Form 10-Q for the period ended June 30, 2012, filed with the SEC on August 2, 2012. There is no assurance that Iridium's expectations will be realized. If one or more of these risks or uncertainties materialize, or if Iridium's underlying assumptions prove incorrect, actual results may vary materially from those expected, estimated or projected. Iridium's forward-looking statements speak only as of the date of this press release, and Iridium undertakes no obligation to update forward-looking statements.
Iridium Communications Inc. | ||||
Consolidated Statements of Operations | ||||
(In thousands) | ||||
Three Months Ended June 30, | Non-Cash Purchase Accounting for the Three Months Ended June 30, (1) | |||
2012 | 2011 | 2012 | 2011 | |
Revenue: | ||||
Service revenue | ||||
Commercial | $ 52,913 | $ 49,037 | $ (104) | $ (333) |
Government | 15,572 | 16,119 | -- | -- |
Total service revenue | 68,485 | 65,156 | (104) | (333) |
Subscriber equipment | 23,914 | 21,913 | -- | |
Engineering and support service | 4,922 | 8,834 | -- | -- |
Total revenue | 97,321 | 95,903 | (104) | (333) |
Operating expenses: | ||||
Cost of services (exclusive of depreciation and amortization) | 15,988 | 19,758 | (260) | (260) |
Cost of subscriber equipment sales | 13,292 | 12,062 | -- | -- |
Research and development | 3,429 | 3,379 | -- | -- |
Selling, general and administrative | 17,970 | 16,297 | 102 | -- |
Depreciation and amortization | 18,368 | 23,664 | 19,615 | 19,437 |
Total operating expenses | 69,047 | 75,160 | 19,457 | 19,177 |
Operating profit (loss) | 28,274 | 20,743 | (19,561) | (19,510) |
Other (expense) income: | ||||
Interest income, net | 121 | 262 | -- | -- |
Undrawn credit facility fees | (2,582) | (3,204) | -- | -- |
Other (expense) income, net | (31) | 36 | -- | -- |
Total other expense | (2,492) | (2,906) | -- | -- |
Earnings (loss) before provision (benefit) for taxes | 25,782 | 17,837 | (19,561) | (19,510) |
Benefit from (provision for) income taxes | (8,119) | (6,154) | 7,034 | 7,545 |
Net income (loss) | $ 17,663 | $ 11,683 | $ (12,527) | $ (11,965) |
Operational EBITDA | $ 52,015 | $ 48,440 | $ -- | $ -- |
(1) The impact of purchase accounting on the carrying value of inventory, favorable lease assets, property and equipment, intangible assets and accruals of Iridium Communications Inc., was an increase of approximately $19.8 million, $0.2 million, $348.2 million, $95.5 million and $29.0 million, respectively, compared to Iridium Holdings LLC's balance sheet as of September 29, 2009. Similarly, Iridium Holdings LLC's deferred revenue decreased by $7.4 million. As a result of the effect of the purchase accounting, the decrease in the carrying value of deferred revenue caused a decrease in revenue, which we expect will continue through 2012. In addition, the increase in accruals had the effect of reducing cost of services (exclusive of depreciation and amortization), which we expect will continue into future periods. The increase in property and equipment and intangible assets had the effect of increasing depreciation and amortization expense, which we expect will continue into future periods. The increase in favorable lease assets and related amortization thereof had the effect of increasing selling, general and administrative expense, which we expect will continue into future periods. |
Iridium Communications Inc. | ||||
Consolidated Statements of Operations | ||||
(In thousands) | ||||
Six Months Ended June 30, | Non-Cash Purchase Accounting for the Six Months Ended June 30, (1) | |||
2012 | 2011 | 2012 | 2011 | |
Revenue: | ||||
Service revenue | ||||
Commercial | $ 104,017 | $ 94,332 | $ (227) | $ (615) |
Government | 31,316 | 31,994 | -- | -- |
Total service revenue | 135,333 | 126,326 | (227) | (615) |
Subscriber equipment | 45,454 | 46,323 | -- | |
Engineering and support service | 10,008 | 14,557 | -- | -- |
Total revenue | 190,795 | 187,206 | (227) | (615) |
Operating expenses: | ||||
Cost of services (exclusive of depreciation and amortization) | 33,991 | 36,697 | (519) | (519) |
Cost of subscriber equipment sales | 26,634 | 25,107 | -- | -- |
Research and development | 9,118 | 7,647 | -- | -- |
Selling, general and administrative | 36,118 | 33,716 | 102 | -- |
Depreciation and amortization | 42,572 | 46,995 | 39,187 | 38,770 |
Total operating expenses | 148,433 | 150,162 | 38,770 | 38,251 |
Operating profit (loss) | 42,362 | 37,044 | (38,997) | (38,866) |
Other (expense) income: | ||||
Interest income, net | 189 | 547 | -- | -- |
Undrawn credit facility fees | (5,361) | (7,503) | -- | -- |
Other (expense) income, net | 61 | (41) | -- | -- |
Total other expense | (5,111) | (6,997) | -- | -- |
Earnings (loss) before provision (benefit) for taxes | 37,251 | 30,047 | (38,997) | (38,866) |
Benefit from (provision for) income taxes | (7,170) | (10,065) | 14,023 | 15,029 |
Net income (loss) | $ 30,081 | $ 19,982 | $ (24,974) | $ (23,837) |
Operational EBITDA | $ 95,880 | $ 91,515 | $ -- | $ -- |
(1) The impact of purchase accounting on the carrying value of inventory, favorable lease assets, property and equipment, intangible assets and accruals of Iridium Communications Inc., was an increase of approximately $19.8 million, $0.2 million, $348.2 million, $95.5 million and $29.0 million, respectively, compared to Iridium Holdings LLC's balance sheet as of September 29, 2009. Similarly, Iridium Holdings LLC's deferred revenue decreased by $7.4 million. As a result of the effect of the purchase accounting, the decrease in the carrying value of deferred revenue caused a decrease in revenue, which we expect will continue through 2012. In addition, the increase in accruals had the effect of reducing cost of services (exclusive of depreciation and amortization), which we expect will continue into future periods. The increase in property and equipment and intangible assets had the effect of increasing depreciation and amortization expense, which we expect will continue into future periods. The increase in favorable lease assets and related amortization thereof had the effect of increasing selling, general and administrative expense, which we expect will continue into future periods. |
Iridium Communications Inc. | ||||||
Summary Revenue and OEBITDA Highlights | ||||||
Three Months Ended June 30, | % Change | Six Months Ended June 30, | % Change | |||
2012 | 2011 | 2012 | 2011 | |||
(In thousands) | (In thousands) | |||||
Revenue | ||||||
Service revenue(1) | ||||||
Commercial | ||||||
Voice and M2M data service | ||||||
Voice | $ 42,743 | $ 41,908 | 2% | $ 84,623 | $ 80,831 | 5% |
M2M data(2) | 10,170 | 7,129 | 43% | 19,394 | 13,501 | 44% |
Total commercial voice and M2M data service | 52,913 | 49,037 | 8% | 104,017 | 94,332 | 10% |
Government(3) | ||||||
Voice and M2M data service | ||||||
Voice | 14,855 | 15,513 | -4% | 29,971 | 30,855 | -3% |
M2M data | 717 | 606 | 18% | 1,345 | 1,139 | 18% |
Total government voice and M2M data service | 15,572 | 16,119 | -3% | 31,316 | 31,994 | -2% |
Total service revenue | 68,485 | 65,156 | 5% | 135,333 | 126,326 | 7% |
Subscriber equipment | 23,914 | 21,913 | 9% | 45,454 | 46,323 | -2% |
Engineering and support services(4) | ||||||
Government | 4,675 | 8,539 | -45% | 9,495 | 14,026 | -32% |
Commercial | 247 | 295 | -16% | 513 | 531 | -3% |
Total engineering and support services | 4,922 | 8,834 | -44% | 10,008 | 14,557 | -31% |
Total Revenue | $ 97,321 | $ 95,903 | 1% | $ 190,795 | $ 187,206 | 2% |
Operational EBITDA | ||||||
Operational EBITDA | $ 52,015 | $ 48,440 | 7% | $ 95,880 | $ 91,515 | 5% |
Other | ||||||
Capital expenditures (5) | $ 151,913 | $ 114,648 | $ 186,704 | $ 170,871 | ||
Net debt (6) | $ 360,662 | $ 147,857 | ||||
(1) Service revenue consists of primarily subscription-based services which often generate a long-term recurring revenue stream from subscribers. | ||||||
(2) M2M data service provides a two-way short burst data transmission between Iridium Communications Inc.'s network and a telemetry unit, which may be located, for example, on a container in transit or a buoy monitoring oceanographic conditions. | ||||||
(3) Government service revenue consists of voice and M2M data subscription-based services provided to agencies of the U.S. government through prime contracts or subcontracts. | ||||||
(4) Engineering and support includes maintenance services to the U.S. government's dedicated gateway in Hawaii and engineering services to assist customers in developing new technologies for use on Iridium Communications Inc.'s satellite system. | ||||||
(5) Capital expenditures based on cash spent in the respective period. | ||||||
(6) Net debt is calculated by taking the sum of the short term and long term debt less cash and cash equivalents and the debt service reserve for the credit facility. |
Iridium Communications Inc. | ||||||
Subscriber Highlights | ||||||
Billable Subscribers (1) | As of June 30, | % Change | ||||
2012 | 2011 | |||||
(In thousands, except ARPU) | ||||||
Commercial | ||||||
Voice and M2M data service | ||||||
Voice | 326 | 295 | 11% | |||
M2M data | 202 | 136 | 49% | |||
Total commercial voice and M2M data service | 528 | 431 | 23% | |||
Government | ||||||
Voice and M2M data service | ||||||
Voice | 36 | 37 | -3% | |||
M2M data | 12 | 10 | 20% | |||
Total government voice and M2M data service | 48 | 47 | 2% | |||
Total billable subscribers | 576 | 478 | 21% | |||
Three Months Ended June 30, | % Change | Six Months Ended June 30, | % Change | |||
2012 | 2011 | 2012 | 2011 | |||
(In thousands, except ARPU) | (In thousands, except ARPU) | |||||
Net Subscriber Additions | ||||||
Commercial | ||||||
Voice and M2M data service | ||||||
Voice | 13 | 17 | -24% | 19 | 23 | -17% |
M2M data | 19 | 13 | 46% | 34 | 24 | 42% |
Total commercial voice and M2M data service | 32 | 30 | 7% | 53 | 47 | 13% |
Government | ||||||
Voice and M2M data service | ||||||
Voice | -- | -- | 0% | (1) | 1 | -200% |
M2M data | -- | 1 | -100% | 1 | 3 | -67% |
Total government voice and M2M data service | -- | 1 | -100% | -- | 4 | -100% |
Total billable subscribers | 32 | 31 | 3% | 53 | 51 | 4% |
ARPU(2) | Three Months Ended June 30, | Six Months Ended June 30, | ||||
Commercial | 2012 | 2011 | 2012 | 2011 | ||
Voice | $ 45 | $ 49 | -8% | $ 45 | $ 48 | -6% |
M2M data | $ 18 | $ 18 | 0% | $ 17 | $ 18 | -6% |
Government | ||||||
Voice | $ 138 | $ 140 | -1% | $ 137 | $ 140 | -2% |
M2M data | $ 19 | $ 22 | -14% | $ 19 | $ 22 | -14% |
(1) Subscribers as of the end of the respective period. | ||||||
(2) ARPU is calculated by dividing the revenue in the respective period by the average of billable subscribers at the beginning of the period and billable subscribers at the end of the period and then dividing the results by the months in the period. |
CONTACT: Investor Contact: Steve Kunszabo Iridium Communications Inc. +1 (703) 287-7570 steve.kunszabo@iridium.com Press Contact: Ashley Eames Iridium Communications Inc. +1 (703) 287-7476 ashley.eames@iridium.com
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