UrtheCast Reports Second Quarter 2017 Financial Results

VANCOUVER, Aug. 14, 2017 — (PRNewswire) — UrtheCast Corp. (TSX: UR) ("UrtheCast" or the "Company") today announces financial results for the three and six months ended June 30, 2017.

(in millions of Canadian dollars)

Q2 2017

Q2 2016

YTD 2017

YTD 2016

Revenue excluding non-cash revenue (1)

$

11.9

$

15.9

$

21.3

$

22.7

Revenue    

11.9

21.0

21.3

33.1

Operating costs

16.4

22.4

32.0

46.4

Net loss

(3.9)

(0.3)

(9.0)

(11.4)

Adjusted EBITDA(1)

0.9

5.0

(0.4)

(1.0)


 1 Non-IFRS earnings measure. See reconciliation to Revenue and Net Loss later in this press release

 

Excluding the non-cash revenue related to the ISS cameras of $5.1 million recorded in the second quarter of 2016, revenues decreased by $4.0 million in the second quarter of 2017. While EO imagery sales increased by $0.2 million compared to the prior year, engineering services revenue was $4.2 million lower, primarily due to an adjustment in the second quarter of 2016 to record $8.0 million of engineering services revenue from a contract amendment, which included some services performed in the first quarter of 2016.

Operating costs of $16.4 million in the second quarter were $6.0 million lower than the prior year. When excluding the $5.1 million of depreciation and non-cash costs related to the ISS cameras, operating costs were $0.9 million lower than the same period last year, mainly due to lower salary and benefit expenses resulting from the consolidation of certain software development activities and lower cloud storage costs.

The net loss of $3.9 million in the second quarter of 2017 increased by $3.6 million when compared to the prior year, primarily due to the lower engineering services revenues, which was also the main factor in the $4.1 million decrease in Adjusted EBITDA compared to the prior year.

Business Highlights

Earth Observation ("EO")

  • EO revenues of $3.3 million grew by 5%, compared to $3.1 million in the same period in 2016 (excluding non-cash revenues) and were 104% higher than in the first quarter of this year.

Government Funding

  • As previously announced, during the first quarter of 2017 the Company was awarded approximately $17.6 million in funding from Innovation, Science and Economic Development Canada's Industrial Technologies Office as part of its Strategic Aerospace & Defense Initiative program to support the development of the OptiSAR Constellation. The agreement is structured as a repayable contribution that management anticipates will be disbursed in quarterly installments, on a cost-reimbursement basis, over the next four years and repaid by the Company in annual installments over 15 years. Subsequent to the quarter end, the Company submitted its first claims for reimbursement of eligible costs of $5,178 for the period from April 2016 to June 2017.

  • During the first quarter of 2017, the Company was also awarded three non-repayable grants from the Government of Canada's Defense Innovation Research Program to reimburse up to approximately $2.2 million of eligible OptiSAR development costs. The Company has submitted claims of $0.6 million with respect to eligible costs incurred in the second quarter ($0.9 million for the six months ending June 30, 2017).

Financing and Liquidity

  • As previously announced, the Company obtained a new C$10 million revolving demand credit facility from the Royal Bank of Canada (RBC) in the first quarter of 2017, which was originally intended to be used to finance up to 90% of bank-approved accounts receivable. The agreement was amended during the second quarter to enable the Company to have unrestricted access to the facility by providing security in the amount of $10 million through a combination of bank-approved accounts receivable and cash. The interest rate on this facility is RBC's prime rate plus 2% and borrowings are repayable on demand. At June 30, 2017, $3 million had been drawn under this facility.

  • In April 2017 , the Company obtained an additional credit facility to finance up to 1 million Euros of trade accounts receivables. At June 30, 2017 , $0.3 million (or 0.2 million Euros ) had been drawn under this facility.


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