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Iridium Announces Third-Quarter Results and Delivers Record Total Revenue And Operational EBITDA; Company Raises 2011 Outlook

 

November 8, 2011

 

Iridium Communications Inc. reported strong financial results for the third quarter of 2011 and raised its outlook for the full-year 2011. Net income was $11.3 million, or $0.15 per diluted share, for the third quarter of 2011, as compared to $10.7 million, or $0.14 per diluted share for the third quarter of 2010. Operational EBITDA (“OEBITDA”) for the third quarter was $54.6 million, as compared to $47.1 million for the prior-year period, representing year-over-year growth of 16 percent and an OEBITDA margin of 53 percent. OEBITDA for the first nine months of 2011 was $146.1 million, as compared to $116.9 million for the prior-year nine-month period, representing year-over-year growth of 25 percent. OEBITDA benefited from solid growth in commercial service and government service revenue.

 

Iridium reported record third-quarter total revenue of $102.1 million, which consisted of $69.4 million of service revenue and $32.8 million of equipment, engineering and support revenue. Total revenue grew 8 percent versus the comparable period of 2010, while service revenue increased 11 percent from the year-ago period. Service revenue, which represents primarily recurring revenue from Iridium’s growing subscriber base, was 68 percent of total revenue for the third quarter of 2011.

 

The Company ended the quarter with 508,000 total billable subscribers, which compares to 413,000 for the year-ago period and 478,000 for the quarter ended June 30, 2011. Total billable subscribers grew 23 percent year-over-year, driven by strength across all primary product lines.

 

Capital expenditures were $69.5 million for the third quarter and primarily related to spending for the Company’s next-generation satellite constellation, Iridium NEXT, and upgraded ground network infrastructure at its commercial gateway. The Company ended the third quarter with a cash and cash equivalents balance of $124.8 million and gross debt of $325.3 million. Net debt was $173.5 million.

 

“Once again, we delivered record results despite a tough economy, demonstrating the value of our services and the strength of our business model,” said Matt Desch, CEO, Iridium. “These financial results not only highlight a revenue profile that increasingly benefits from fast-growing data services, but our continued leadership in the commercial voice market with net additions growing 25 percent year-over-year. With the recent launch of Iridium ForceSM, our vision for delivering personal mobile satellite communications, we continue to separate ourselves from the pack.”

 

Desch continued, “With a fundamental goal of providing global connectivity, our competitive position is as good as it’s ever been with a multi-device strategy that includes a new handset, Wi-Fi hotspot accessory and location-based data services offerings. Our partners are energized because we’re building upon an already robust product portfolio, and we’re eager to expand the addressable market for voice and data services and to capture new service revenue streams. It’s a fundamental difference in how we attack the market and gain market share.”