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IRIDIUM Announces Third-Quarter Results

 

November 9, 2010

 

Iridium Communications Inc. reported strong financial results for the third quarter of 2010 and updated its outlook for the full-year 2010. Iridium’s third-quarter 2010 financial results reflect Iridium Communications Inc. (“the Company”) as compared to Iridium Holdings LLC (“predecessor”) for the comparable period in 2009. Net income was $10.7 million for the third quarter of 2010, as compared to net income of $15.0 million for the comparable period of 2009. Net income for the third quarter of 2010 includes $12.3 million of non-cash expenses for purchase accounting adjustments, net of tax, related to GHL Acquisition Corp.’s acquisition of the predecessor, while the comparable period in 2009 had no purchase accounting adjustments. Operational EBITDA (“OEBITDA”) for the third quarter was $47.1 million, as compared to $38.5 million for the prior-year period, representing year-over-year growth of 22 percent and an OEBITDA margin of 49 percent. OEBITDA benefited from solid growth in commercial service, government service and equipment revenue.

 

Iridium reported third-quarter total revenue of $94.5 million, which included $62.7 million of service revenue and $31.8 million of equipment and engineering and support revenue. Total revenue grew 12 percent versus the comparable period of 2009, while service revenue increased 10 percent from the year-ago period. Service revenue, which represents recurring revenue from Iridium’s growing subscriber base, was 66 percent of total revenue for the third quarter of 2010.

 

The Company ended the quarter with 413,000 total billable subscribers, which compares to 339,000 for the year-ago period and 383,000 for the previous quarter ended June 30, 2010. Total billable subscribers grew 22 percent year-over-year, driven by ongoing strength in machine-to-machine (“M2M”) data, handheld voice and Netted Iridium customers.

 

Capital expenditures were $86.1 million and $134.3 million for the three and nine-month periods ended September 30, 2010, respectively, and primarily related to spending for the Company’s next-generation satellite constellation, Iridium NEXT, and upgraded ground network infrastructure at its commercial gateway.

 

“We continue to reach significant operational and financial milestones at Iridium with each passing day,” said Matt Desch, Iridium’s chief executive officer. “We recently closed our $1.8 billion Coface facility and are forging ahead with Iridium NEXT. Iridium NEXT has moved to the full-scale development phase and we’re working with Thales Alenia Space, SpaceX and all of our technical partners to meet the design and development timelines. Now that we’ve closed on our financing, we’re also accelerating our effort with potential hosted payload customers and continue to make good progress in this area.” 

 

Desch continued, “Strong subscriber and recurring service revenue growth continues to be driven by our leadership in the handheld voice market, an expanding M2M business and new products like Iridium OpenPort.”