BETHESDA, Md., Aug. 10 /PRNewswire-FirstCall/ -- -- Subscribers Up
23.9% from Prior Year Quarter to 347,000 -- Subscriber Growth of
71.4% in Emerging Machine-to-Machine Market -- Revenue Up 1.2% from
Prior Year Quarter: -- Commercial Service Revenues Up 21.6% --
Government Service Revenues Up 15.2% -- Equipment Sales Declined
25.7% -- Operational EBITDA(1) Up 31.5% from Prior Year Quarter --
Net Income Up 52.9% from Prior Year Quarter -- Full Year 2009
Operational EBITDA Guidance Lifted to $123-130 Million Iridium
Satellite LLC ("Iridium"), the only provider of truly global mobile
satellite services ("MSS"), today reported consolidated financial
results for the three months ended June 30, 2009. The company
reported growth in subscribers, revenue, Operational EBITDA and net
income for the second quarter 2009 compared to the second quarter
2008. In addition, the company is on track to complete its planned
transaction to combine with GHL Acquisition Corp. ("GHL
Acquisition") (NYX: GHQ, GHQ.U and GHQ.WS), which will take Iridium
public. Operating Highlights and Transaction Update The following
consolidated financial results for the second quarter 2009 continue
to demonstrate the company's strength despite the global economic
downturn. Subscribers were up 23.9% to 347,000 at the close of the
second quarter of 2009 from 280,000 at the close of the second
quarter of 2008. Commercial service revenue increased 21.6% to
$39.9 million in the second quarter of 2009 compared to $32.8
million during the same quarter in 2008. Government service revenue
increased 15.2% to $18.2 million in the second quarter of 2009
compared to $15.8 million in the same quarter of 2008. Subscriber
equipment revenue for the quarter declined 25.7% to $24.6 million
compared to $33.1 million in the second quarter of 2008. Overall
revenue increased 1.2% to $82.7 million in the second quarter of
2009 from $81.7 million in the previous year's second quarter.
Operational EBITDA increased 31.5% to $36.7 million in the second
quarter of 2009 from $27.9 million in the second quarter of 2008.
Finally, net income increased 52.9% to $28.6 million in the second
quarter 2009 from $18.7 million in the second quarter of 2008. New
products, such as the Iridium OpenPort high-speed maritime
communications system and the Iridium 9555 satellite phone,
contributed to the company's gains in the second quarter of 2009.
"Our growth in Operational EBITDA is a result of increased
commercial service and government service revenues, and more than
offsets a decline in equipment revenue," said Matt Desch, CEO of
Iridium. "Iridium is the only truly global MSS that works
everywhere. Our products and services are reliable, cost effective
and essential to both commercial and government users. And, we have
built a large and growing subscriber base that has continued to
generate strong recurring revenue even in a weak economy. From a
strategic perspective, we are nearing the completion of our
combination with GHL Acquisition, which will take us public.
Completing the GHL Acquisition transaction will be valuable as we
move forward with the development and launch of our NEXT
constellation, which promises even broader applications and
services to our growing user base." The company expects further
growth through the remainder of 2009 on the strength of its growing
subscriber base. As such, Iridium now expects 2009 Operational
EBITDA of between $123 million and $130 million, up 14% to 20% over
2008, on low single-digit revenue growth. "Iridium's second quarter
results are impressive," said Scott L. Bok, CEO of GHL Acquisition.
"The company's continued growth - even in a weak global economy -
is further confirmation of the strength of this company and the
attractiveness of its value potential for GHL Acquisition and its
sponsor, Greenhill. We continue to be enthusiastic about Iridium's
strong prospects for the future." Highlights - Commercial In
Iridium's rapidly emerging Machine-to-Machine ("M2M") business,
short-burst data ("SBD") subscribers grew 71.4% in the second
quarter of 2009 compared to the second quarter of 2008, and Iridium
experienced 60.0% growth in SBD service revenue during the second
quarter of 2009 over the same quarter in the prior year. The
breadth of Iridium's data communications applications mirrors the
expansion in the company's target vertical markets. "There are a
growing number of applications being developed in the M2M market,
and we are only in the early stages of developing the full
potential of this service," said Greg Ewert, executive vice
president of global distribution channels for Iridium. "We are
pleased by the many opportunities presented to us through new
applications, such as asset tracking, that continue to add
quantifiable value and represent cost-saving solutions to a wide
array of industries." Subscriber equipment sales remained slow in
the quarter due to the weak economic environment. However,
year-over-year comparisons of equipment revenue are affected by
$1.4 million of equipment amortization relating to sales of
equipment in prior years that are included in the second quarter of
2008. Without the impact of the amortization, overall revenue would
have increased 3.0% versus 1.2%, and equipment revenue would have
declined by 22.4% versus 25.7%. "Despite the economy, sales of the
Iridium 9555 and Iridium OpenPort increased in the second quarter,"
said Don Thoma, executive vice president of marketing for Iridium.
"In fact, we shipped our 1,000th Iridium OpenPort unit in the
quarter and realized strong revenue growth over the first quarter
of 2009 with this ground-breaking product. With its attractive
hardware package, ease of installation and low service costs,
Iridium OpenPort has provided a cost-effective alternative to the
status quo. This has resulted in strong usage driven by a variety
of value-added applications, delivered by our service partners, for
ships' business and crew welfare programs where there are higher
bandwidth communications needs." On the regulatory front,
initiatives ensuring the safety of people and assets continue to
fuel growth and generate revenues. Safety regulations related to
air traffic safety and maritime vessel tracking for homeland
security require organizations to outfit boats, aircraft, assets
and personnel with satellite-based devices that track and report
factors such as location, speed, temperature and status. In the
maritime market, for example, Iridium is the key provider for
Vessel Monitoring Systems ("VMS") for fisheries to meet regulatory
requirements not only globally but in very northern and southern
latitudes where no other MSS is available. In addition, Iridium is
the only option for vessels' Long-Range Identification and Tracking
("LRIT") communications needs in those regions. Likewise, Iridium
continues to make progress in aviation as it seeks certification
for provision of air safety services. Supported by air carriers
seeking reliable communications for their Polar routes, Iridium
recently gained DO 262 and DO 270 approval, clearing the way for a
flight certification program with the U.S. Federal Aviation
Administration ("FAA") and Continental Airlines. Highlights -
Government Iridium service revenue from its contracts with the U.S.
Department of Defense ("DoD") grew 15.2% for the second quarter of
2009 compared to the second quarter of 2008. As previously
announced, the U.S. Navy demonstrated its commitment to Iridium by
awarding the company a contract to fund the development and
delivery of the Distributed Tactical Communications System ("DTCS")
- an extension of "Netted Iridium," the push-to-talk platform. DTCS
will provide over-the-horizon, on-the-move, beyond-line-of-sight
netted voice and data communications over the Iridium network for
U.S. and allied forces' soldiers. In addition, the DTCS program
includes the development of several new, ruggedized Iridium
tactical radios to support the military's communications needs.
"This contract is an indicator of the U.S. Government's commitment
to expanding its reliance on the Iridium network and its unique
capabilities," said Lt. Gen. John Campbell (USAF, Ret.), executive
vice president of government programs for Iridium. "DTCS provides
an enhanced two-way, push-to-talk, over-the-horizon, on-the-move,
beyond-line-of-sight capability, free of deployed ground
infrastructure, for our soldiers anywhere their missions take them.
Iridium and the DoD have been working collaboratively on this
program for several years, and we are pleased to be able to partner
with the Navy to put more advanced and further-reaching
communications capabilities into soldiers' hands." Iridium also
announced, in conjunction with Boeing, that the companies achieved
two major milestones to further develop and demonstrate capability
enhancements to the High Integrity Global Positioning System
program (also known as "iGPS") for the U.S. Naval Research
Laboratory. "iGPS is a quick and cost-effective way for the DoD to
enhance the existing GPS system, providing users improved
capability in restrictive environments and under conditions which
would degrade unaided performance," Campbell said. The first iGPS
milestone provided appropriately equipped personnel the ability to
lock on and maintain a GPS signal even when operating in difficult
environments. The second milestone involved a live demonstration of
the ability of a user to acquire a GPS signal while moving in a
vehicle despite substantial jamming. Both iGPS and DTCS are
technologies being developed with the DoD that Iridium believes
have promising longer term commercial applications. Update on
Iridium NEXT Progress continues on the design of Iridium NEXT, the
company's next-generation satellite network, with initial NEXT
satellite launches planned for 2014. Iridium is working with its
two prime contractor candidates, Lockheed Martin and Thales Alenia
Space, to refine design proposals with final selection planned
toward the end of the year. The company also continues to work with
prospective hosted payload customers, since NEXT will provide a
significant and cost-effective means for organizations to operate
important payloads and sensors in space without the need for them
to build or enhance their own satellite networks. Through Iridium
NEXT, the company plans to seamlessly replace its current
constellation with new satellites, ensuring backward compatibility
for Iridium's customers and partners' products and services, while
offering enhanced services, higher data speeds and flexible
communications capabilities. (1)Non-GAAP Financial Measures In
addition to disclosing financial results that are determined in
accordance with U.S. 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 GHL Acquisition. Additionally, Operational EBITDA
does not include the impact of purchase accounting and other
transaction-related adjustments that will be reflected in the
post-transaction performance. 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. Conference Call Information Iridium
and GHL Acquisition will host a conference call for analysts,
investors and other interested parties on August 11, 2009 at 8:30
a.m. Eastern Time (ET) to discuss this earnings release. To
participate, please call the toll-free number 866-481-9047 (U.S.
callers only) or, from outside the U.S., 706-902-1870. The passcode
for the live call is 23639627. 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
23639627. To help ensure the conference begins in a timely manner,
please dial in five minutes prior to the scheduled start time.
Forward-Looking Statements 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 GHL
Acquisition, whether the transaction will be approved by GHL
Acquisition's stockholders, whether the closing conditions will be
satisfied (including receipt of regulatory approvals), as well as
industry and economic conditions, and 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 LLC Iridium Satellite LLC
(http://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 Bethesda, Md., U.S. and is currently privately
held. Consolidated Historical Financial Data Three Months Ended
June 30, Statement of Operations Data: 2008 2009 Total revenue
$81,679 $82,705 Total operating expenses (58,786) (50,042)
Operating profit $22,893 $32,663 Total other income / expense
(4,218) (4,063) Net income $18,675 $28,600 As of December 31, June
30, Balance Sheet Data: 2008 2009 Total current assets 101,355
114,424 Total assets 190,569 199,484 Total members' deficit
(62,230) (21,605) Three Months Ended June 30, 2008 2009 Net income
$18,675 $28,600 Interest expense 4,590 4,597 Interest income (283)
(132) Depreciation and amortization 2,893 3,574 Non-recurring
transaction expenses 320 1,275 Iridium NEXT expenses 1,698 (1,216)
Operational EBITDA $27,893 $36,698 DATASOURCE: Iridium Satellite
LLC CONTACT: Liz DeCastro of Iridium Satellite LLC,
+1-301-571-6257, Web Site: http://www.iridium.com/
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