GeoEye Reports Fourth Quarter and Year-End 2008 Operating Results

DULLES, Va., April 2 /PRNewswire/ -- DULLES, Va., April 2 /PRNewswire-FirstCall/ -- GeoEye, Inc. (NASDAQ: GEOY) today reported its revenues of $40.7 million for the fourth quarter of 2008 and $146.7 million for the year ended December 31, 2008. Revenues for the quarter were down $2.9 million, or seven percent, compared to $43.6 million for the fourth quarter 2007 and down $36.3 million, or 20 percent, compared to $183.0 million for the full year 2007. The decreases for the quarter and year are primarily due to a shortfall in imagery orders from the National Geospatial-Intelligence Agency and other customers due to the delay of the launch and checkout of the Company's GeoEye-1 satellite. The fourth quarter decrease was partially offset by increased revenue from the sale of ground station upgrades of $7.2 million. The Company's GeoEye-1 satellite completed its checkout and was certified by the National Geospatial-Intelligence Agency on February 20, 2009.

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"Last year was obviously disappointing," said the Company's Chief Executive Officer, Matt O'Connell. "We're gratified that GeoEye-1 was certified by our biggest customer, the National Geospatial-Intelligence Agency, in February so that we can finally begin operations under our Service Level Agreement with them and begin serving our international and commercial customers."

Earnings from operations were $3.7 million for the fourth quarter 2008 and $22.8 million for the full year 2008. Earnings from operations for the quarter were down $12.3 million, or 77 percent compared to $16.0 million for the fourth quarter 2007. For the full year 2008, earnings from operations were down $56.4 million, or 71 percent, compared to $79.2 million in 2007. The declines for the quarter and the year were due primarily to the previously discussed revenue shortfall, an increase in direct costs and increased SG&A due to additional staff to support the ramp-up of GeoEye-1 as well as increased professional fees as a result of restatements of our financial statements during 2008. In addition, we recognized $3.3 million losses due to inventory impairment and satellite impairment settlement.

Our net loss for the fourth quarter of 2008 was $3.6 million compared to net earnings of $7.0 million for the corresponding period in 2007. Net earnings for 2008 were $26.6 million, compared to $28.5 million for 2007. Net earnings for 2008 include a net $25.5-million income-tax benefit resulting from the reversal of charges recorded in 2007. This change results from the reversal of the accrued tax penalties and interest for the cost-share payments under the NextView program with the National Geospatial-Intelligence Agency.

Our cash and short-term investments balance was $110.5 million at December 31, 2008, as compared to $234.3 million at December 31, 2007. The decrease from the 2007 cash balance primarily reflects payments made to complete our GeoEye-1 program and income taxes paid related to the GeoEye-1 cost-share payments.

Selected year-end financial results for the Company are as follows (dollars in thousands, except earnings per share):


                                                    Fourth Quarter
                                         2008           2007        Variance
                                                    (As restated)
    Revenues                           $40,688        $43,552       $(2,864)
    Direct expenses                     21,690         19,512         2,178
    Depreciation and amortization        2,667          2,850          (183)
    SG&A and other                      12,680          5,215         7,465
    Earnings from operations             3,651         15,975       (12,324)
    Net (loss) earnings                $(3,639)        $6,971      $(10,610)
    Earnings per share - basic          $(0.20)         $0.41        $(0.61)
    Earnings per share - diluted        $(0.20)         $0.42        $(0.62)


                                              Year Ended December 31,
                                         2008          2007         Variance
                                                   (As restated)
    Revenues                          $146,659       $183,023      $(36,364)
    Direct expenses                     76,241         64,628        11,613
    Depreciation and amortization       11,357         16,474        (5,117)
    SG&A and other                      36,261         22,737        13,524
    Earnings from operations            22,800         79,184       (56,384)
    Net (loss) earnings                $26,615        $28,470       $(1,855)
    Earnings per share - basic           $1.48          $1.62        $(0.14)
    Earnings per share - diluted         $1.36          $1.44        $(0.08)


                                                                            Year  Ended  December  31,
                                                                                  2008                    2007                Variance
                                                                                                      (As  restated)
        Cash  and  cash  equivalents                  $106,733              $226,761          $(120,028)
        Other  Current  Assets                                85,131                  61,438                23,693
        Satellites  and  PP&E                                510,893                419,837                91,056
        Other  Non-Current  Assets                        91,848                145,054              (53,206)
                Total  Assets                                    $794,605              $853,090            $(58,485)
        Total  Current  Liabilities                    115,986                126,151              (10,165)
        Long-Term  Portion  of  Deferred
          Revenue                                                      199,317                193,860                (5,457)
        Long-Term  Debt  and  Other                      248,898                339,870              (90,972)
        Stockholder's  Equity                              230,404                193,209                37,195
                Total  Liabilities  and  Equity    $794,605              $853,090            $(58,485)


                                                                                  2008                      2007                Variance
                                                                                                      (As  restated)
        Net  cash  (used  in)  provided  by
          operating  activities                            $(1,872)              $70,933            $(72,805)
        Net  cash  used  in  investing
          activities                                              (124,187)              (32,441)            (91,746)
        Net  cash  provided  by  (used  in)
          financing  activities                                6,031                  (6,107)              12,138
        Net  (decrease)  increase  in  cash
          and  cash  equivalents                          (120,028)                32,385            (152,413)
        Cash  and  cash  equivalents,
          beginning  of  period                              226,761                194,376                32,385
        Cash  and  cash  equivalents,  end
          of  period                                                $106,733              $226,761          $(120,028)

 


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