"We are delighted to have been notified yesterday of full funding for our share of EnhancedView," said Jeffrey R. Tarr, President and Chief Executive Officer. "We see this as unequivocal validation of our strategy to deliver superior value to taxpayers and that performance matters to our largest customer. We remain fully committed to meeting and exceeding their demanding requirements as we collectively continue to support warfighters, coalition partners and first responders."
First quarter 2012 revenue was $87.0 million, up 12% compared with the same period last year. Net income in the first quarter was $3.8 million, or $0.08 per share, compared with a net loss of $(1.3) million, or $(0.03) per share in first quarter 2011.
First quarter 2012 EBITDA was $39.2 million, up 14% compared with first quarter 2011 EBITDA of $34.3 million. Adjusted EBITDA for the quarter was $53.3 million, compared with Adjusted EBITDA of $54.8 million reported in first quarter 2011. Adjusted EBITDA includes the impact of deferrals related to EnhancedView and excludes amortized revenue related to NextView.
"This quarter's results reflect an excellent start to the year, and were better than our prior expectation," said Tarr. "Once again we grew revenue at a double-digit rate across a broad set of customers while effectively managing costs. We won significant new contracts and began delivering service on others that were signed in prior quarters. We also drove strong growth in our 12-month backlog giving us confidence in our future performance."
First Quarter Business Highlights
- Defense & Intelligence segment revenue grew 10% to $68.4 million compared with first quarter 2011. Performance was driven by increased revenue related to the EnhancedView SLA and growth of 31% from international governments through the company's Direct Access Program (DAP), which contributed $12.8 million in the quarter.
- The company up-sized an existing DAP contract, and shortly after the first quarter end, activated its fifth DAP customer, which it expects to contribute to second quarter revenue.
- The company met all of the performance requirements under its EnhancedView contract, resulting in no holdback for the fourth consecutive quarter.
- Commercial segment revenue grew 22% to $18.6 million in the quarter compared with the prior-year period. Growth was driven in part by location-based services customers, including Microsoft, which signed a multi-year agreement that took effect in fourth quarter 2011, as well as a new customer, which began receiving service in the first quarter as part of a multi-year agreement signed in mid-2011.
- The company signed three multi-year, multi-million dollar location-based services contracts in the quarter: two with China's largest Internet portals, Baidu and Tencent, and a third with Yandex, the largest Internet portal in Russia. The company will serve these new customers through partnerships in these countries.
- In the quarter, the company established a new relationship with FactSet, which will market DigitalGlobe imagery and analysis reports on a platform that serves its 40,000-plus users, most of whom are institutional capital markets professionals.
- The company's 12-month backlog increased to $337.7 million, up 34% year over year, indicative of both broad-based growth and of the company's success in shifting its revenue mix to a more visible recurring model.
For the full year, the company expects to report GAAP revenue growth of approximately 14% compared with 2011, an increase from its previous expectation of approximately 10% growth. The company expects to achieve a full-year EBITDA margin of approximately 46% (up from approximately 43%) and an Adjusted EBITDA margin of approximately 52% (up from approximately 50%). Also for the full year, the Company continues to expect capital expenditures of approximately $200 million.
Important factors, including those discussed in the company's filings with the Securities and Exchange Commission, could cause actual results to differ from the company's expectations and those differences may be material.
Conference Call Information
DigitalGlobe's management will host a conference call today at 5 p.m. EDT to discuss first quarter 2012 results.
The conference call dial-in numbers are as follows:
U.S./Canada dial-in: (866) 921-3936
International dial-in: (706) 679-9623
A replay of the call will be available through June 1, 2012 at the following numbers:
U.S./Canada dial-in: (855) 859-2056
International dial-in: (404) 537-3406
DigitalGlobe will also sponsor a live and archived webcast of the conference call on the Investor Relations portion of its website. Click here to directly access the live webcast.
Supplemental earnings materials are available on the company's website at www.digitalglobe.com.
DigitalGlobe is a leading global provider of commercial high-resolution earth imagery products and services. Sourced from our own advanced satellite constellation, our imagery solutions support a wide variety of uses within defense and intelligence, civil agencies, mapping and analysis, environmental monitoring, oil and gas exploration, infrastructure management, Internet portals and navigation technology. With our collection sources and comprehensive ImageLibrary (containing more than one billion 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. For more information, visit www.digitalglobe.com.
DigitalGlobe is a registered trademark of DigitalGlobe.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained herein 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, reduction or change in terms of any of our primary contracts; the availability of government funding for our products and services both domestically and internationally; changes in government and customer priorities and requirements (including cost-cutting initiatives, the potential deferral of awards, terminations or reduction of expenditures to respond to the priorities of congress and the administration, or budgetary cuts resulting from congressional committee recommendations or automatic sequestration under the Budget Control Act of 2011); the loss or impairment of our satellites; delays in the construction and launch of WorldView-3; delays in implementation of planned ground system and infrastructure enhancements; 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 Annual Report on Form 10-K.
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
EBITDA and Adjusted EBITDA are not recognized terms under generally accepted accounting principles, or GAAP, in the United States and may not be defined similarly by other companies. EBITDA and Adjusted EBITDA should not be considered alternatives to net income, as indications of financial performance, or as alternatives to cash flow from operations as measures of liquidity. There are limitations to using non-GAAP financial measures, including the difficulty associated with comparing companies in different industries that use similar performance measures whose calculations may differ from ours.