Exhibit 99.1
Press
Contact:
Liz
DeCastro
Iridium
Satellite LLC
+ 1 (301)
571-6257
liz.decastro@iridium.com
IRIDIUM
REPORTS FIRST QUARTER 2009 RESULTS
-Total
Subscribers Up 31.2% from Prior Year Quarter to 328,000
-Total
Revenue Up 2.0% from Prior Year Quarter:
Commercial
Service Revenues Up 26.9%; Equipment Sales Declined 34.3%
-Operational
EBITDA Up 4.9% from Prior Year Quarter
-Net
Income Declined 41.9% from Prior Year Quarter, Primarily on Iridium NEXT
Costs
-Full
Year 2009 Guidance on Subscribers, Revenue and Operational EBITDA
Reaffirmed
-Steps
Implemented to Advance the Pending GHL Acquisition Transaction
BETHESDA,
Md. – June 2, 2009 – Iridium Satellite LLC, the only provider of truly global
mobile satellite communications services, today reported consolidated financial
results for the three months ended March 31, 2009.
Operating
Highlights
Subscribers
in the first quarter 2009 were up 31.2% to 328,000 from 250,000 in the first
quarter of 2008. While subscriber equipment revenue declined 34.3% to $20.5
million in the first quarter of 2009 compared to $31.2 million in the first
quarter of 2008, commercial service revenue increased 26.9% in the first quarter
of 2009 to $36.8 million, compared to $29.0 million in the first quarter of
2008, such that overall revenue increased 2.0% to $75.8 million in the first
quarter of 2009 from $74.3 million for the first quarter of 2008. Operational
EBITDA1
increased 4.9% to $27.6 million in the first quarter of 2009 from $26.3 million
in the first quarter of 2008. Net income declined 41.9% to $9.7 million in the
first quarter of 2009 from $16.7 million in the first quarter of 2008, primarily
due to increased expenses related to Iridium NEXT, the company’s next-generation
satellite program.
“Iridium
continued to grow, although the pace slowed given the current economic climate,”
said Matt Desch, chief executive officer, Iridium. “Our growth in the quarter
was driven by high-margin commercial service revenues, which are stable and
recurring. At the same
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time, our
subscriber equipment sales slowed, although equipment sales remained profitable
for the company.
“Iridium
remains unique for our truly global coverage, with a diversity of applications
that are prized by our customers and delivered by a vast ecosystem of service
providers. Iridium provides critical services in the maritime, government,
aviation and industrial sectors that operate in remote locations, in the air and
at sea, where there is often no communication alternative. Communicating to and
from remote locations is not a luxury for our customers, and this is evident in
Iridium’s continued service revenue and subscriber growth,” said
Desch.
On the
decline in equipment sales, year-over-year comparisons of revenue are affected
by $2 million of equipment amortization relating to sales of equipment in prior
years that are included in the first quarter of 2008. Without the impact of the
amortization, overall revenue would have increased 4.8% versus 2.0% and
equipment revenue would have declined by 29.8% versus 34.3%.
Desch
commented, “In addition to the impact of phasing out equipment amortization, we
believe the general economic climate is affecting equipment sales, as is the
transition of newly introduced products into the distribution channel as our
partners move existing inventory to make way for new product.
“Iridium
continued its growth and remained profitable during a tough first quarter in the
global economy,” Desch concluded. “And we expect to continue to grow through the
remainder of 2009, on the strength of our service revenues and as our new
products gain traction in the market. We expect Operational EBITDA to grow in
the range of 11% to 20% to produce between $120 and $130 million on low
single-digit revenue growth during 2009.”
Transaction
Highlights
As previously announced, on April 28,
2009, Iridium and GHL Acquisition Corp. (AMEX:GHQ), or GHL Acquisition, amended
the transaction proposed by the two companies on September 23, 2008. The
amendment revised the total consideration payable to Iridium owners to reflect
changes in equity market valuations since the parties entered the original
transaction agreement. The companies anticipate that the deal will close in the
coming months, pending the completion of regulatory approvals and approval by
GHL Acquisition shareholders.
In
connection with the transaction, GHL Acquisition has retained Deutsche Bank as a
financial advisor.
Separately,
Banc of America Securities LLC (BofA), together with its affiliates, agreed to
sell all of the approximately 3.7 million GHL Acquisition warrants that it owns
to GHL
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Acquisition
for an aggregate consideration of approximately $1.8 million, subject to the
closing of the transaction between GHL Acquisition and Iridium. GHL Acquisition
may, subject to market conditions, engage in various open-market and privately
negotiated transactions in its common stock and warrants, such as this
transaction with BofA.
GHL
Acquisition further announced that BofA has agreed to reduce the amount of its
deferred underwriting compensation by approximately $8.2 million.
Growth
Highlights
Iridium reported growth over the prior
year quarter in commercial service revenue and subscribers, as well as growth in
government services revenue.
Commercial
Combined
commercial voice and data traffic in the markets that Iridium serves, including
maritime, aviation and land mobile, grew 11.5% for the first quarter of 2009
compared to the same period in 2008. This included growth in voice traffic of
7.1% and growth in data traffic of 23.2% during the quarter, as compared to the
same quarter in 2008.
“Despite
the economy, ships are sailing and Iridium is one of the most cost-effective
communications options available to them – especially in industries such as
fishing,” said Don Thoma, executive vice president, marketing, Iridium.
“Maritime continues to represent great opportunity for Iridium, and crew calling
remains a bright spot with particularly strong growth for first quarter 2009
over the first quarter of last year. Recently introduced products like Go-Chat
pre-paid calling cards for crew usage, coupled with targeted promotions, are
helping to drive usage in this important customer base.”
“We are
also encouraged by what we are hearing from the market as we have begun the roll
out of Iridium OpenPort®, our
innovative global marine satellite communication system,” added Thoma. “Iridium
OpenPort has generated positive feedback from the hundreds of units that are now
deployed. Iridium OpenPort is a more attractive alternative in terms of
hardware, installation and service costs and is extremely timely in the current
economic climate.”
Commenting
on the aviation industry, Thoma said, “Iridium also continued to make progress
in this growing market. Despite widely reported softening in usage in the
business jets market, Iridium strength in aviation during the first quarter was
driven by usage by petroleum service helicopters, air transport, medevacs and
other specialized aviation installations.”
In
addition to strong commercial voice and data growth, Iridium’s
machine-to-machine (M2M) short-burst data subscribers nearly doubled in the
first quarter of 2009 in comparison to the first quarter 2008, and Iridium
experienced 72.7% growth in service revenue over the prior
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year
quarter. Iridium’s benefit to our customer’s bottom line is particularly evident
in the growing diversity of Iridium-based M2M applications in the
market.
“Iridium
is now moving more than one million data messages per day through its network,”
said Greg Ewert, executive vice president, global distribution channels,
Iridium. “Applications such as asset monitoring add quantifiable value and
represent cost-saving solutions to a wide array of diverse
industries.”
Government
Iridium
service revenue from its contracts with the U.S. Department of Defense (DoD)
grew 31.2% for the first quarter of 2009 compared to the first quarter of 2008,
including from Iridium’s Enhanced Mobile Satellite Services (EMSS) contract with
the Defense Information Services Agency and the company’s contract for support
of the DoD’s dedicated Iridium gateway.
“Iridium’s
innovative technology advancements continue to make our government customers
safer and more mission effective,” said retired USAF Lt. Gen. John Campbell,
executive vice president, government programs, Iridium. “Iridium helps meet the
communications needs of government agencies around the world, and we continue to
experience growing demand for services as the DoD uses Iridium M2M services to
track assets deployed in or moved among various theaters.” Several Iridium
Value-Added Resellers, such as NAL Research and Impeva Labs, have ongoing
programs to assist in the tracking of military assets in transit.
The U.S.
government also continues to invest in new Iridium applications such as Netted
Iridium, the company’s push-to-talk capability, which is under development.
Netted Iridium is being used today on a test basis by soldiers in-theater for
improved “over-the-horizon” tactical communications capability, and Iridium
anticipates being able to supply production units under contract by the end of
next quarter.
Update
on Iridium NEXT
Planning
for Iridium’s next-generation satellite network, Iridium NEXT, is on track, and
the company plans to begin deployment of the new constellation in 2014. In the
coming months, the company expects to conclude the competitive selection of
either Lockheed Martin or Thales Alenia Space to be the Iridium NEXT prime
contractor. Iridium NEXT will be designed to seamlessly replace the current
constellation with new satellites, providing enhanced capabilities, higher data
speeds and greater bandwidth while maintaining Iridium’s unique attributes of
low-latency, global coverage. It also will offer the potential for new data
services and applications
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and the
unprecedented opportunity to affordably host secondary payloads on Iridium’s
global constellation.
1Non-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
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Iridium
and GHL Acquisition will host a conference call for analysts, investors and
other interested parties on June 3, 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 12985109. 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 12985109. 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
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
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demand
for reliable, global communications. Iridium serves commercial markets through a
worldwide network of hundreds of distributors, and provides services to the U.S.
DoD, 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. and is currently privately held.
# #
#
Consolidated
Historical Financial Data
|
Three
Months Ended
|
||||||||
|
March
31,
|
||||||||
|
Statement
of Operations Data:
|
2008
|
2009
|
||||||
|
Total
revenue
|
74,300 | 75,789 | ||||||
|
Total
operating expenses
|
(52,838 | ) | (61,364 | ) | ||||
|
Operating
profit
|
21,462 | 14,425 | ||||||
|
Total
other income / expense
|
(4,740 | ) | (4,707 | ) | ||||
|
Net
income
|
16,722 | 9,718 | ||||||
|
As
of
|
||||||||
|
December 31,
|
March 31,
|
|||||||
|
Balance
Sheet Data:
|
2008
|
2009
|
||||||
|
Total
current assets
|
101,355 | 115,589 | ||||||
|
Total
assets
|
190,569 | 203,037 | ||||||
|
Total
members' deficit
|
(62,230 | ) | (51,467 | ) | ||||
|
Reconciliation
of Net Income to Operational EBITDA
|
|
Three
Months Ended
|
||||||||
|
March
31,
|
||||||||
|
2008
|
2009
|
|||||||
|
Net
income
|
$ | 16,722 | $ | 9,718 | ||||
|
Interest
expense
|
5,169 | 4,622 | ||||||
|
Interest
income
|
(435 | ) | 17 | |||||
|
Depreciation
and amortization
|
2,968 | 3,675 | ||||||
|
Non-recurring
transaction expenses
|
236 | 697 | ||||||
|
Iridium
NEXT expenses
|
1,663 | 8,841 | ||||||
|
Operational
EBITDA
|
$ | 26,323 | $ | 27,570 | ||||