GeoEye Reports First Quarter 2011 Earnings Results

-- Conference Call Scheduled for Tuesday, May 10, 2011, 8:30 a.m. EDT --

HERNDON, Va., May 9, 2011 — (PRNewswire) — GeoEye, Inc. (NASDAQ: GEOY), a leading source of geospatial information and insight, announced today results for its fiscal first quarter ended March 31, 2011.

(Logo:   http://photos.prnewswire.com/prnh/20080625/LAW528LOGO)

“During the quarter, GeoEye achieved revenue growth and operating results that were in line with our expectations,” said Matt O’Connell, GeoEye’s chief executive officer and president. “We have continued our focus on the successful execution of our multi-billion-dollar EnhancedView award; the commercial deployment of our Web dissemination services platform, EyeQ™; and the integration of our GeoEye Analytics business. We are very pleased with the competitive position we have in our government, commercial and international markets and with the revenue visibility that we have into the remainder of the year.”

FIRST QUARTER RESULTS

Total revenues were $86.6 million for the first quarter of 2011, a 7.8 percent increase from the first quarter of 2010. The net income available to common stockholders for the first quarter of 2011 was $10.0 million, or $0.44 per fully diluted share, compared to net income of $0.8 million, or $0.04 per fully diluted share, for the first quarter of 2010. Adjusted net income available to common shareholders (a non-GAAP measurement that excludes the impact of non-operating charges, gains and one-time charges and tax benefits) for the first quarter of 2011 was also $10.0 million, or $0.44 per diluted share, as compared to $11.2 million, or $0.52 per diluted share, in the same period in 2010.  

Operating profit was $24.2 million for the first quarter of 2011. Operating margin was 27.9 percent for the first quarter of 2011, compared to 33.0 percent in the first quarter of 2010. Adjusted EBITDA (a non-GAAP measurement defined as net income before interest, taxes, depreciation, amortization, non-cash recognition of stock compensation expense and other items) was approximately $43.8 million for the first quarter of 2011, compared to $43.5 million in the same period in 2010.

The Company ended the first quarter of 2011 with unrestricted cash, cash equivalents and short-term investments of $280.1 million; total assets of approximately $1.3 billion; stockholders’ equity of $457.2 million and long-term debt of $508.8 million.

FIRST QUARTER 2011 OPERATING HIGHLIGHTS

Revenue Mix

  • Imagery revenues in the first quarter of 2011 were $59.0 million, or 68.1 percent of total revenues. Production and other services revenues were $21.6 million, or 24.9 percent of total revenues. The NextView cost share accounted for revenues of $6.0 million, or 7 percent of total revenues.

Geographic Information

  • Domestic revenues were $67.1 million for the first quarter of 2011, or 77.4 percent of total revenues for the period. International revenues were $19.6 million for the first quarter of 2011, or 22.6 percent of total revenues for the period.
  • Domestic revenues increased 12.2 percent for the first quarter of 2011, compared to the same period in 2010. International revenues decreased 5.1 percent for the first quarter of 2011, compared to the same period in 2010.

GeoEye Capital Expenditures and GeoEye-2 construction

  • During the quarter, the Company invested $79.4 million for the continued development and construction of the GeoEye-2 satellite. To date, the Company has invested $389.3 million in the GeoEye-2 satellite program.

FISCAL YEAR 2011 FINANCIAL OUTLOOK

For the full year, the Company is raising the lower end of its previous guidance as to revenue, adjusted EBITDA and earnings per share. Our new expectations for 2011 are for revenues to range from $365 to $380 million, adjusted EBITDA to range from $175 to $185 million and earnings per share of $1.75 to $2.00.

These estimates represent management's current expectations about the Company's future financial performance, based on information available at this time.

CONFERENCE CALL INFORMATION

GeoEye, Inc. (NASDAQ: GEOY) will host a conference call for investors and analysts to discuss financial results for the first quarter, which ended March 31, 2011.

When: May 10, 2011, at 8:30 a.m. Eastern Daylight Time

To Participate: To participate in the call via phone, domestic callers may dial toll-free 1-877-776-4039 approximately 10 minutes prior to the start time. International callers may dial 1-631-291-4808. Callers may identify themselves to the operator as GeoEye conference call participants or by using the conference ID number: 55951526. Questions will be accepted from phone participants during the live call after prepared remarks and as time permits.

The conference call will also be webcast on the "Investor Relations" section of the Company's corporate Web site, www.geoeye.com. To directly access the live webcast go to: http://www.geoeye.com/CorpSite/corporate/investor-relations/Default.aspx and click on the "May 10, 2011 Investor Update Webcast" link. Please allow 15 minutes before the scheduled start time to register, download and install any necessary audio software.

Replay: An audio replay of the first quarter conference call will be available through midnight May 17, 2011, by dialing (800) 642-1687 and typing in the conference ID number: 55951526.

An archived webcast of the conference call will be available at the same URL address approximately two hours after the conclusion of the call.

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

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)










Three Months Ended March 31,





2011


2010


Change



(unaudited)



Revenues

$ 86,626


$ 80,389


$ 6,237

Operating expenses:







Direct costs of revenue (exclusive of depreciation and amortization)

31,312


24,481


6,831


Depreciation and amortization

16,726


16,022


704


Selling, general and administrative

14,394


13,382


1,012


Total operating expenses

62,432


53,885


8,547

Income from operations

24,194


26,504


(2,310)

Interest expense, net

(4,523)


(8,243)


3,720

Other non-operating expense

-


(10,474)


10,474

Loss from early extinguishment of debt

-


(37)


37

Income before provision for income taxes

19,671


7,750


11,921

Provision for income taxes

(7,424)


(6,976)


(448)

Net income

12,247


774


11,473

Preferred stock dividends

(986)


-


(986)



11,261


774


10,487

Income allocated to participating securities

(1,224)


-


(1,224)

Net income available to common stockholders

$ 10,037


$      774


$ 9,263








Earnings per share







Basic

$     0.46


$     0.04


$   0.42


Diluted

$     0.44


$     0.04


$   0.40

Weighted average shares basic

22,043


21,068



Weighted average shares diluted

22,757


21,687





CONSOLIDATED BALANCE SHEETS

(in thousands)








March 31,


December 31,




2011


2010


Change


(unaudited)





ASSETS

Current assets:






Cash and cash equivalents

$    245,040


$        283,233


$ (38,193)

Short-term investments

35,088


50,124


(15,036)

Accounts receivable - trade and unbilled receivables, net

33,736


42,868


(9,132)

Income tax receivable

33,347


34,385


(1,038)

Restricted cash

4,207


3,952


255

Prepaid expenses and other current assets

17,705


16,183


1,522

Total current assets

369,123


430,745


(61,622)

Property, plant and equipment, net

49,936


35,924


14,012

Satellites and related ground systems, net

763,469


697,126


66,343

Goodwill

71,228


71,568


(340)

Intangible assets, net

14,012


14,943


(931)

Non-current restricted cash

9,835


10,822


(987)

Other non-current assets

7,571


7,957


(386)

Total assets

$ 1,285,174


$     1,269,085


$  16,089







LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:






Accounts payable and accrued expenses

$      72,834


$          70,936


$    1,898

Current portion of deferred revenue

49,684


50,533


(849)

Current deferred tax liabilities

6,656


6,656


-

Total current liabilities

129,174


128,125


1,049

Long-term debt

508,846


508,160


686

Long-term deferred revenue, net of current portion

154,266


161,673


(7,407)

Non-current income tax reserve

626


626


-

Deferred tax liabilities

28,760


21,336


7,424

Other non-current liabilities

6,291


5,922


369

Total liabilities

827,963


825,842


2,121

Commitments and contingencies

-


-


-

Stockholders’ equity:






Series A convertible preferred stock

1


1


-

Common stock

222


221


1

Additional paid-in capital

370,429


367,723


2,706

Retained earnings

86,559


75,298


11,261

Total stockholders’ equity

457,211


443,243


13,968

Total liabilities and stockholders’ equity

$ 1,285,174


$     1,269,085


$  16,089



CONSOLIDATED STATEMENTS OF CASH FLOWS INFORMATION

(in thousands)








Three Months Ended March 31,




2011


2010


Change


(unaudited)



Net cash provided by operating activities

$   37,322


$   29,440


$   7,882

Net cash used in investing activities

(75,260)


(26,743)


(48,517)

Net cash (used in) provided by financing activities

(255)


15,940


(16,195)

Net (decrease) increase in cash and cash equivalents

(38,193)


18,637


(56,830)

Cash and cash equivalents, beginning of period

283,233


208,872


74,361

Cash and cash equivalents, end of period

$ 245,040


$ 227,509


$ 17,531



ADJUSTED EBITDA

(in thousands)






Three Months Ended March 31,


2011


2010

Net income

$ 12,247


$      774

Adjustments:




Interest expense, net

4,523


8,243

Loss from early extinguishment of debt

-


37

Provision for income taxes

7,424


6,976

Depreciation and amortization

16,726


16,022

Non-cash stock-based compensation expense

2,845


993

Non-cash change in fair value of financial instrument

-


10,474

Adjusted EBITDA

$ 43,765


$ 43,519





Adjusted EBITDA is a non-GAAP financial measure that represents net income before depreciation and amortization expenses, net interest income or expense, provision for income taxes, non-cash stock-based compensation expense and other items.  We believe that Adjusted EBITDA provides useful information to investors because it is an indicator of the strength and performance of our ongoing operations.  However, Adjusted EBITDA is not a recognized term under financial performance under GAAP, and our calculation of Adjusted EBITDA may not be comparable to the calculation of similarly titled measures of other companies.  



ADJUSTED NET INCOME AVAILABLE TO COMMON STOCKHOLDERS AND ADJUSTED DILUTED EPS

(in thousands, except per share amounts)




Three Months Ended March 31,


2011


2010





Net income available to common stockholders

$ 10,037


$      774

Adjustments:




Non-cash change in fair value of financial instrument

-


10,474





Adjusted net income available to common stockholders

$ 10,037


$ 11,248









Adjusted fully diluted shares

22,757


21,687

Adjusted diluted EPS

$     0.44


$     0.52





Adjusted Net Income Available to Common Stockholders is a non-GAAP financial measure that represents net income available to common stockholders before other items, net of tax.  Adjusted Diluted EPS is a non-GAAP financial measure that represents fully diluted earnings per share before other items, net of tax.  We believe that Adjusted Net Income Available to Common Stockholders and Adjusted Diluted EPS provide useful information to investors because they allow investors to evaluate our performance for different p eriods on a more comparable basis by excluding items that are not related to the ongoing operations of our business.  However, Adjusted Net Income Available to Common Stockholders and Adjusted Diluted EPS are not recognized terms under financial performance under GAAP, and our calculation of Adjusted Net Income Available to Common Stockholders and Adjusted Diluted EPS may not be comparable to the calculation of similarly titled measures of other companies.




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