February 26, 2009
Iridium Satellite Reports Record 2008 Results
- Total Subscribers Approximately 320,000; Up 37% for 2008 over 2007
- Revenue Up 14% From Fourth Quarter 2007; Up 23% for 2008
- Operational EBITDA Up 33% From Fourth Quarter 2007; Up 42% for 2008
- Net Income Down 83% From Fourth Quarter 2007; Up 23% for 2008
- Iridium Network Proves Resilient in Wake of Satellite Collision
- GHQ Transaction Process Continuing
Iridium's 2008 record revenues of
Revenue in the fourth quarter of 2008 was
"Iridium's fourth quarter results were extremely strong, notwithstanding the challenging macroeconomic environment," said
As previously reported, Iridium introduced its new global handset in
The company continued to experience strong growth in the maritime market with its existing offerings and also commenced service for its first Iridium OpenPort(TM) units, the company's new, enhanced bandwidth satellite communications service for the maritime market. "Iridium OpenPort is an excellent alternative to incumbent, higher priced services offered by our competitors," said Thoma. "Iridium designed OpenPort to provide our maritime customers with data services at a market-redefining price point. It is the right solution for maritime customers managing through this difficult economy." OpenPort bundles data with multiple lines for voice calling, an industry first.
Contributing to Iridium's opportunity for future growth are new regulatory mandates in the maritime, aviation and other industries, designed to enhance the safety of vessels, aircraft and personnel traversing and working in remote or isolated parts of the world. For example, the Maritime Safety Committee (MSC) recently issued a new regulation under the International Convention for the Safety of Lives at Sea (SOLAS), published by the International Maritime Organization (IMO). It requires every ship meeting certain specifications to have a Long Range Identification and Tracking (LRIT) device. As Iridium is the only communications service in the world to operate reliably north and south of 70 degrees latitude, the company is well positioned to meet this mandate of maritime customers. "Currently, we have certified the LRIT devices of three Iridium partner companies and more are in the certification process. We continue to work with these partners as the flag countries responsible for capturing and responding to tracking and distress signals complete the build-out of the systems required to ensure LRIT compliance," said Thoma.
Iridium also continued to see growth in the business and general aviation markets during the year, and the company made substantial progress in 2008 toward its goal of certification to provide Iridium-based safety services to the aviation industry.
Iridium sells its products and services through an ecosystem of partners, such as service providers and value-added manufacturers, resellers and developers. In 2008, Iridium expanded this global network by more than 40 to now more than 181 partner companies that serve businesses and individuals in a broad array of industries. Through this network, Iridium also sells handsets and mobile communications solutions to businesses, government and individuals.
The company also continued its strong relationship with its U.S. government customers. In
"Last year, Iridium was pleased to be able to continue its service to the Department of Defense by providing reliable, secure mobile communications to our warfighters and by supporting enhancements which bring new capabilities. DoD was our first customer and remains our largest single customer, and we are proud that our warfighters value the capabilities that Iridium brings them," said Lt. Gen.
Iridium announced on
Also continuing on schedule is the company's progress toward its deployment in 2014 of Iridium NEXT, the company's next generation satellite constellation. "We are very pleased with our working relationships with the two companies, Lockheed Martin and Thales Alenia Space, that are competing to be the prime contractor for Iridium NEXT, and we expect to complete our selection during the second quarter," said
As previously announced on
"We continue to focus on delivering the best mobile satellite services to our customers," Desch concluded. "More than ever during these difficult economic times, we are redoubling our focus on ensuring that our services are meeting the core, critical communications needs of our customers." Desch added, "The transaction with GHQ continues to move forward and we are looking forward to its close in the coming months."
Non-GAAP Financial Measures
In addition to disclosing financial results that are determined in accordance with US GAAP, Iridium discloses operational EBITDA, which is a non-GAAP financial measure and management believes it is the most comparable measure to GAAP net income. Operational EBITDA represents earnings before interest; income taxes; depreciation and amortization; Iridium NEXT (second-generation system development) revenue and expenses; and expenses associated with the proposed transaction with GHQ. Operational EBITDA does not represent and should not be considered an alternative to GAAP measurements, such as net income, and the company's calculations thereof may not be comparable to similarly entitled measures reported by other companies. Management uses operational EBITDA to manage the company's business including preparation of its annual operating budget, financial projections and compensation plans.
The company uses operational EBITDA as a supplemental measure for operating performance because, by eliminating interest, taxes, depreciation and amortization, transaction expenses and Iridium NEXT revenue and expenses, the company believes it is a useful measure across time in evaluating the company's performance. The company believes that operational EBITDA is also useful to investors because like measures are frequently used by securities analysts, investors and other interested parties in their evaluation of companies in similar industries. As indicated, operational EBITDA does not include interest expense on borrowed money or depreciation expense on our capital assets or the payment of income taxes, which are necessary elements of the company's operations. Because operational EBITDA does not account for these expenses, its utility as a measure of the company's operating performance has material limitations. Because of these limitations, the company's management does not view operational EBITDA in isolation and also uses other measurements, such as net income, revenues and operating profit, to measure operating performance. Iridium's calculations of operational EBITDA may also differ from the calculation of operational EBITDA or like measures by its competitors and other companies and, as such, their utility as comparative measures is limited. Included in this release is a reconciliation of net income (loss) to operational EBITDA.
This press release contains, and Iridium's management may make, certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "anticipates", "may", "can", "believes", "expects", "projects", "intends", "likely", "will", "to be" and other expressions that are predictions of or indicate future events, trends or prospects identify forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Iridium to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, uncertainties regarding the timing of the proposed transaction with GHQ, whether the transaction will be approved by GHQ's stockholders, whether the closing conditions will be satisfied (including receipt of regulatory approvals), as well as industry and economic conditions, competitive, legal, governmental and technological factors. There is no assurance that Iridium's expectations will be realized. If one or more of these risks or uncertainties materialize, or if Iridium's underlying assumptions prove incorrect, actual results may vary materially from those expected, estimated or projected.
Iridium's forward-looking statements speak only as of the date of this press release or as of the date they are made, and, except as required by law, Iridium undertakes no obligation to update forward-looking statements.
About Iridium Satellite
Iridium Satellite LLC (www.iridium.com) is the only mobile satellite service (MSS) company offering coverage over the entire globe. The Iridium constellation of low-earth orbiting (LEO), cross-linked satellites provides critical voice and data services for areas not served by terrestrial communication networks. Iridium's subscriber growth has been driven by increasing demand for reliable, global communications. Iridium serves commercial markets through a worldwide network of hundreds of distributors, and provides services to the U.S. Department of Defense, and other U.S. and international government agencies. The company's customers represent a broad spectrum of industry, including maritime, aeronautical, government/defense, public safety, utilities, oil/gas, mining, forestry, heavy equipment and transportation. Iridium has launched a major development program for its next-generation satellite constellation, Iridium NEXT, which will result in continued and new Iridium MSS offerings. The company is headquartered in
Conference Call Information
Iridium and GHL Acquisition Corp. will host a conference call for analysts, investors and other interested parties on
To participate, please call the toll-free number 866-393-0612 (U.S. callers only) or, from outside the U.S., 706-902-1870. The passcode for the live call is 87413760. For those unable to participate in the live call, a replay of the call will be available for 30 days toll-free at 800-642-1687 (U.S. callers only), or at 706-645-9291 (callers outside the U.S.). The passcode for the replay is 87413760. To help ensure the conference begins in a timely manner, please dial in five minutes prior to the scheduled start time.
Consolidated Historical Financial Data Three Months Twelve Months Ended Ended December 31, December 31, ----------------------------- ------------- -------------- Statement of Operations Data: 2007 2008 2007 2008 ----------------------------- ---- ---- ---- ---- Total revenue 67,293 76,753 260,901 320,944 Total operating expenses 53,489 67,688 197,727 245,825 Operating profit 13,804 9,065 63,174 75,119 Total other income / expense (4,626) (7,521) (19,401) (21,240) Net income 9,178 1,544 43,773 53,879 Twelve Months Ended December 31, ------------------- ------------- Balance Sheet Data: 2007 2008 ------------------- ---- ---- Total current assets 80,342 99,955 Total assets 167,581 189,169 Total members' deficit (78,447) (62,230) Reconciliation of Net Income to Operational EBITDA Three Months Twelve Months Ended Ended December 31, December 31, ------------- -------------- 2007 2008 2007 2008 ---- ---- ---- ---- Net income $9,178 $1,544 $43,773 $53,879 Interest expense 5,250 6,769 21,770 21,094 Interest income (581) (329) (2,192) (1,345) Depreciation and amortization 3,782 3,576 11,380 12,535 Non-recurring transaction expenses - 5,583 - 7,959 Iridium NEXT expenses 1,102 7,847 1,777 14,112 ----- ----- ----- ------ Operational EBITDA $18,731 $24,990 $76,508 $108,234
(1) Operational EBITDA is defined below under "Non-GAAP Financial Measures" and is an indicator used by Iridium management to evaluate the company's performance.
SOURCE Iridium Satellite LLC