EBITDA excludes interest income, interest expense and income taxes because these items are associated with our capitalization and tax structures. EBITDA also excludes depreciation and amortization expense because these non-cash expenses reflect the impact of prior capital expenditure decisions which are not indicative of future capital expenditure requirements.
Adjusted EBITDA further adjusts EBITDA to exclude restructuring costs, acquisition costs, integration costs and the gain from our joint venture as these are non-core items. Restructuring costs are costs incurred to realize efficiencies from the GeoEye acquisition, such as reducing excess workforce, consolidating facilities and systems, and relocating ground terminals. Acquisition costs are costs incurred to effect the acquisition, such as advisory, legal, accounting, consulting and other professional fees. Integration costs consist primarily of professional fees incurred to assist us with system and process improvements associated with integrating operations. Adjusted EBITDA margin is calculated by divided Adjusted EBITDA by U.S. GAAP net revenue.
We use EBITDA and Adjusted EBITDA in conjunction with traditional U.S. GAAP operating performance measures as part of our overall assessment of our performance and we do not place undue reliance on measures as our only measures of operating performance. EBITDA and Adjusted EBITDA should not be considered as substitutes for other measures of financial performance reported in accordance with U.S. GAAP.
FINANCIAL TABLES TO FOLLOW
DigitalGlobe, Inc.
Unaudited Condensed Consolidated Statements of Operations
For the three months ended
June 30,
(in millions, except per share data) 2013 2012
------------- -------------
Revenue $ 150.6 $ 101.8
Costs and expenses:
Cost of revenue, excluding depreciation and
amortization 47.3 20.0
Selling, general and administrative 64.5 33.5
Depreciation and amortization 59.0 28.5
Restructuring charges 13.6 -
------------- -------------
(Loss) income from operations (33.8) 19.8
Loss from early extinguishment of debt - -
Other income (expense), net 0.1 (0.4)
Interest expense, net (1.4) (2.6)
------------- -------------
(Loss) income before income taxes (35.1) 16.8
Income tax benefit (expense) 14.1 (7.2)
------------- -------------
Net (loss) income (21.0) 9.6
Preferred stock dividends (1.0) -
------------- -------------
Net (loss) income less preferred stock
dividends (22.0) 9.6
Income allocated to participating securities - -
------------- -------------
Net (loss) income available to common
stockholders $ (22.0) $ 9.6
============= =============
(Loss) earnings per share:
Basic (loss) earnings per share $ (0.30) $ 0.21
============= =============
Diluted (loss) earnings per share $ (0.30) $ 0.21
============= =============
Weighted average common shares outstanding:
Basic 74.0 46.0
============= =============
Diluted 74.0 46.2
============= =============
DigitalGlobe, Inc.
Reconciliation Net Income (Loss) EBITDA and Adjusted EBITDA
For the three months ended
June 30,
(in millions) 2013 2012
------------- --------------
Net (loss) income $ (21.0) $ 9.6
Depreciation and amortization 59.0 28.5
Interest (income) expense, net 1.4 2.6
Income tax expense (benefit) (14.1) 7.2
------------- --------------
EBITDA 25.3 47.9
Loss from early extinguishment of debt - -
Restructuring charges (1) 13.6 -
Acquisition costs (1) (0.2) -
Integration costs (1) 7.2 -
Other (gains) losses (2) (0.2) -
------------- --------------
Adjusted EBITDA $ 45.7 $ 47.9
============= ==============
1. Restructuring, acquisition and integration costs consist of non-recurring
charges related to the combination with GeoEye.
2. Other (gains) losses consist of a gain from our investment in a joint
venture.
DigitalGlobe, Inc.
Unaudited Condensed Consolidated Balance Sheets
June 30, December 31,
(in millions, except par value) 2013 2012
------------- -------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 241.4 $ 246.2
Restricted cash 17.6 3.8
Accounts receivable, net of allowance for
doubtful accounts of $2.1 and $2.9,
respectively 101.4 67.0
Prepaid and current assets 28.5 18.6
Deferred taxes 70.6 43.9
------------- -------------
Total current assets 459.5 379.5
Property and equipment, net of accumulated
depreciation of $774.1 and $676.2,
respectively 2,160.1 1,115.2
Goodwill 450.8 8.7
Intangible assets, net of accumulated
amortization of $3.8 and $0, respectively 40.8 -
Aerial image library, net of accumulated
amortization of $37.4 and $33.4, respectively 12.9 16.4
Long-term restricted cash 7.7 8.3
Long-term deferred contract costs 48.1 37.3
Other assets 42.7 12.1
------------- -------------
Total assets $ 3,222.6 $ 1,577.5
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 17.9 $ 10.2
Current portion of long-term debt 5.5 5.0
Other accrued liabilities 93.4 56.3
Current portion of deferred revenue 68.6 42.9
------------- -------------
Total current liabilities 185.4 114.4
Deferred revenue 393.9 386.8
Long-term debt, net of discount 1,139.6 478.6
Long-term deferred tax liability, net 147.1 55.6
Other liabilities 2.6 2.7
------------- -------------
Total liabilities 1,868.6 $ 1,038.1
------------- -------------
COMMITMENTS AND CONTINGENCIES (Note 15)
STOCKHOLDERS' EQUITY:
Preferred stock, $0.001 par value; 24.0 shares
authorized; no shares issued and outstanding
at June 30, 2013 and December 31, 2012 - -
Series A convertible preferred stock, $0.001
par value, 0.08 shares authorized; 0.08 issued
and outstanding at June 30, 2013; and no
shares authorized, issued and outstanding at
December 31, 2012 - -
Common stock; $0.001 par value; 250.0 shares
authorized; 75.1 shares issued and 74.9 shares
outstanding at June 30, 2013; and 47.2 shares
issued and 47.1 outstanding at December 31,
2012 0.2 0.2
Treasury stock, at cost; 0.2 shares at June 30,
2013 and 0.1 shares at December 31, 2012 (3.2) (2.0)
Additional paid-in capital 1,441.2 543.8
Accumulated deficit (84.2) (2.6)
------------- -------------
Total stockholders' equity 1,354.0 539.4
------------- -------------
Total liabilities and stockholders' equity $ 3,222.6 $ 1,577.5
============= =============
DigitalGlobe, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
For the six months ended
June 30,
(in millions) 2013 2012
--------------- ---------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (81.6) $ 13.4
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Depreciation and amortization expense 105.8 57.6
Amortization of aerial image library,
deferred contract costs and lease
incentive 8.1 10.5
Non-cash stock compensation expense 16.0 4.7
Amortization of debt issuance costs and
accretion of debt discount 3.1 1.9
Deferred income taxes (33.9) 10.1
Write-off of debt issuance costs and debt
discounts 12.8 -
Changes in working capital, net of assets
acquired and liabilities assumed in
business combinations:
Accounts receivable, net 4.6 3.2
Other current and non-current assets 1.3 (8.3)
Accounts payable (1.7) 5.7
Accrued liabilities (31.5) (13.5)
Deferred revenue 19.5 31.0
Deferred contract costs (7.1) (0.5)
Payment of 2011 Senior Secured debt
discount (13.8) -
--------------- ---------------
Net cash flows provided by operating
activities 1.6 115.8
--------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Construction in progress additions (135.0) (96.5)
Acquisition of businesses, net of cash
acquired (524.0) -
Other property and equipment additions (9.0) (4.8)
Increase in restricted cash 2.7 1.9
--------------- ---------------
Net cash flows used in investing activities (665.3) (99.4)
--------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt 1,150.0 -
Repayment of debt (482.6) (2.5)
Preferred stock dividend payment (1.0) -
Proceeds from exercise of stock options 28.7 -
Payment of debt issuance costs (36.2) -
--------------- ---------------
Net cash flows provided by (used in)
financing activities 658.9 (2.5)
--------------- ---------------
Net (decrease) increase in cash and cash
equivalents (4.8) 13.9
Cash and cash equivalents, beginning of
period 246.2 198.5
--------------- ---------------
Cash and cash equivalents, end of period $ 241.4 $ 212.4
=============== ===============
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest, net of capitalized
amounts of $24.6 and $10.9, respectively $ 11.4 $ 15.0
NON-CASH INVESTING AND FINANCING
ACTIVITIES:
Changes to non-cash construction in
progress accruals, including interest (13.3) (12.8)
Changes to non-cash deferred contract cost
accruals 9.0 -
Issuance of shares of common and
convertible preferred stock for
acquisition of business 836.5 -
Stock-based compensation awards issued in
acquisition of business, net of income
taxes 13.4 -
Non-cash dividend accrual 1.0 -
