DigitalGlobe Reports First Quarter 2017 Results

Revenue up 19.6% to $209.7 Million
Net Loss of $2.2 Million and Adjusted EBITDA of $95.5 Million
Reiterates 2017 Full Year Guidance

Due to the Company’s pending combination with MacDonald, Dettwiler and Associates Ltd. (“MDA”), the Company will not conduct an earnings call but has provided supplementary information on the Company’s Investor Relations Website

WESTMINSTER, Colo. — (BUSINESS WIRE) — May 2, 2017DigitalGlobe, Inc. (NYSE: DGI), a leading global provider of commercial high-resolution earth observation and advanced geospatial solutions, today reported financial results for the first quarter ended March 31, 2017.

Fourth Quarter Financial Summary:

  • Grew total revenue 19.6% driven by our acquisition of The Radiant Group and strong performance in both U.S. government and diversified commercial.
  • Grew U.S. government revenue $28.0 million, or 25.4%, primarily as a result of contracts obtained in our acquisition of The Radiant Group.
  • Grew diversified commercial revenue $6.3 million, or 9.7%, as demand for capacity on WorldView-4 fueled an 8.7% increase in DAP revenue, and demand for our Global Basemap product suite contributed to 10.7% growth in our other diversified commercial business.
  • Net loss of $2.2 million, or ($0.05) per diluted share, as compared to $8.6 million, or $0.11 per diluted share in the prior year, was primarily due to merger costs, lower capitalized interest and incremental depreciation as a result of placing Worldview-4 in service.
  • Net income margin declined to (1.0%).
  • Adjusted EBITDA was $95.5 million.
  • Adjusted EBITDA margin declined to 45.5%, primarily due to the growth in lower margin services business and increased costs for operating WorldView-4.
  • Net cash flows from operations decreased 35.0% to $38.7 million on increased costs for WorldView-4, merger costs and higher incentive based compensation payments due to better than expected 2016 performance.
  • Free cash flow decreased to $17.8 million from $20.9 million.

Recent Highlights:

  • The Company continues to expect the merger with MDA to close in the second half of 2017.
  • WorldView-4 began providing direct access capacity to certain international defense and intelligence customers in February.
  • Completed the redemption of the Company’s remaining outstanding 5.25% senior notes due February 1, 2021 for a total redemption price of $36.1 million, inclusive of accrued interest and related premiums.

“We delivered a strong start to 2017 with solid revenue growth across all of our major customer groups," said Jeffrey R. Tarr, DigitalGlobe CEO. “We achieved our highest revenue quarter to date in our Direct Access Program and delivered double digit growth in our Commercial business. We will continue to focus on the execution of our strategy while satisfying all closing conditions for our upcoming combination with MDA.”

2017 Revenue and Adjusted EBITDA Outlook remains unchanged:

  • Revenue in a range of $840 million to $865 million.
  • Adjusted EBITDA in a range of $380 million to $395 million, with full year contribution from Radiant reducing overall EBITDA margins by approximately 700 basis points.
  • Capital expenditures of approximately $100 million.(1)

___________________________________
(1) Excludes capitalized interest and tenant improvements

We have not provided a reconciliation of our Adjusted EBITDA outlook to forward-looking net income, the comparable U.S. GAAP financial measure, because it is difficult to reasonably provide a forward-looking estimate of the reconciling items between such non-U.S. GAAP forward-looking measure and the comparable forward-looking U.S. GAAP measure. Certain factors that are materially significant to our ability to estimate these items are out of our control and/or cannot be reasonably predicted. The nature of the assets under construction, timing of capital expenditures and uncertainty of timing of placing assets in service impact certain components of net income and our ability to reasonably predict net income. These items include income tax expense, interest expense and depreciation. Accordingly, a reconciliation to the comparable forward-looking U.S. GAAP measure is not available within a reasonable range of predictability.

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