GeoEye Reports Strong Fourth Quarter and Fiscal 2009 Results
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GeoEye Reports Strong Fourth Quarter and Fiscal 2009 Results

DULLES, Va., March 10 — (PRNewswire) — GeoEye, Inc. (Nasdaq: GEOY), a premier provider of satellite, aerial and geospatial information, announced today results for its fourth quarter and fiscal year ended Dec. 31, 2009.

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"We're very pleased with our fiscal 2009 financial and operating results. We experienced strong year-over-year revenue growth, cash flow growth and solid operating performance in our business," said Matt O'Connell, chief executive officer and president. "Our team is very focused on continuing to deliver high-quality imagery and business solutions to our government and commercial customers, expanding our offerings and adding new customers."

FOURTH QUARTER RESULTS

Total revenues were $73.2 million for the fourth quarter of 2009, an 80.0 percent increase from $40.7 million for the fourth quarter of 2008. Net income for the fourth quarter of 2009 was $11.7 million, or $0.55 per fully diluted share, compared to a net loss of $3.6 million, or a loss of $0.20 per fully diluted share, for the fourth quarter of 2008. The 2009 fourth quarter earnings included a $27.1 million non-recurring pre-tax loss from the early extinguishment of debt and a tax benefit of $27.7 million. This tax benefit primarily results from the restoration of prior period net operating losses and the loss from the early extinguishment of debt.

Revenues related to contracts with the U.S. Government, the Company's largest customer, were $52.2 million for the fourth quarter of 2009, representing 71.3 percent of total revenues for the period. Domestic revenues were $57.4 million for the fourth quarter of 2009, which were 78.4 percent of total revenues for the period. These revenues included $37.8 million in revenues from our Service Level Agreement (SLA) with the National Geospatial-Intelligence Agency (NGA). International revenues were $15.8 million for the fourth quarter of 2009, which were 21.6 percent of total revenues for the period.

Operating income for the fourth quarter of 2009 was $19.4 million. Operating margin was 26.4 percent for the fourth quarter of 2009 compared to 9.0 percent in the same period in 2008.  Adjusted EBITDA, a non-GAAP measurement defined as net income (loss) before interest, taxes, depreciation, amortization, non-cash stock-based compensation expense and other non-cash, one-time items, increased approximately $27.4 million to approximately $36.7 million for the fourth quarter of 2009 from $9.3 million the same period in 2008. Adjusted EBITDA margin was 50.0 percent for the fourth quarter of 2009 compared to 22.8 percent for the same period in 2008.

The Company ended the fourth quarter of 2009 with cash and cash equivalents of $208.9 million, restricted cash of $65.9 million, a current income tax receivable of $40.2 million, total assets of $947.2 million, debt of $381.1 million and stockholders' equity of $280.0 million.

FULL YEAR RESULTS

Total revenues for the calendar year ended Dec. 31, 2009 were $271.1 million, an 84.9 percent increase from $146.7 million in the calendar year ended Dec. 31, 2008. The Company's adjusted EBITDA for the calendar year ended Dec. 31, 2009 was $132.2 million, an increase of approximately 232.9 percent from the same period in 2008. Net income for the calendar year ended Dec. 31, 2009 was $32.1 million, or $1.55 per fully diluted share, as compared to net income of $26.6 million, or $1.36 per fully diluted share, in the same period of 2008. The 2009 net income included $27.1 million non-recurring loss from the early extinguishment of debt in the fourth quarter and approximately $29.5 million of tax benefits primarily associated with restoring net operating losses and the loss from the early extinguishment of debt.

RECENT DEVELOPMENTS

The Company generated strong revenues from our NGA contract during fiscal 2009, which was attributable to the Company's GeoEye-1 Earth-imaging satellite. The Company also received an extension to its existing SLA with the NGA through June 30, 2010, with six one-month options that could extend the agreement through December 2010.

In addition, the Company is currently participating in the NGA's EnhancedView request-for-proposal (RFP) contracting process. This program will allow the U.S. Government to continue to receive a supply of unclassified, highly accurate satellite imagery from commercial satellite imagery providers and contemplates the construction of additional satellites. The Company filed its response, as required by the RFP process, on March 8, 2010. The Company expects the NGA to make an EnhancedView award in the June timeframe.

During the RFP process, the U.S. Government added a requirement that bidders who want the U.S. Government to provide a cost share under the program have to provide a letter of credit in an amount equal to the cost share. As a result, in order to provide the collateral necessary to support the letter of credit, on March 4, 2010 GeoEye entered into a binding commitment letter with Cerberus Capital Management L.P. ("Cerberus") to issue preferred stock and senior unsecured notes to Cerberus, the proceeds of which will be used for the development and launch of GeoEye-2. The commitment is subject to the Company winning an EnhancedView award to build a new satellite and requires Cerberus to purchase $115 million in preferred stock and provide debt financing of up to $100 million, with the debt financing drawable at the Company's option.  If the Company is awarded the EnhancedView Imagery Acquisition Contract without the letter of credit requirement, the Company will no longer be obligated to issue 115,000 shares of preferred stock to Cerberus, but Cerberus will have the option to purchase $80 million in preferred stock.  The Company was advised in this process by Convergence Advisors LLC.

"The Cerberus commitment gives the Company a fully financed proposal, including the full funding of the letter of credit as required by the RFP, which the Company believes enhances our ability to win an EnhancedView contract," said O'Connell. "After our due diligence of Cerberus and other potential financial partners, the Board of Directors concluded that the Cerberus team was the best fit for the Company and would be strongly committed to the long-term growth of GeoEye."

The Company also successfully completed a $400 million notes offering that closed in October 2009. This notes offering enabled the Company to refinance its high-yield debt and to lower its interest rates by over 200 basis points.

FISCAL YEAR 2010 FINANCIAL OUTLOOK

GeoEye currently expects fiscal 2010 revenue to range from $300 million to $320 million, with adjusted EBITDA in the range of $145 million to $160 million.  The Company projects pro forma fully diluted earnings per share in the range of $1.40 to $1.70 per share. This projection includes additional shares of approximately 3.9 million preferred shares projected to be issued to Cerberus in June 2010.  These estimates represent management's current expectations about the Company's future financial performance, based on information available at this time.

CONFERENCE CALL INFORMATION

GeoEye Inc. (NASDAQ: GEOY), will host a conference call for investors and analysts to discuss financial results for the fourth quarter and year ended Dec. 31, 2009.

When: March 11, 2010 at 8:30 a.m. Eastern Time

To Participate:  Callers wishing to participate on the conference call may dial 1-631-291-4808 at least 10 minutes prior to the start time. Domestic callers who wish to listen may dial toll-free at 1-877-776-4039. The conference ID number is 56140897. Participants are encouraged to listen via webcast, which will be broadcast live at www.geoeye.com, under Investor Relations.

Replay:  A replay of the teleconference will be available starting at 10:30 a.m. ET, March 11, 2010, and will run until midnight EDT on Friday, March 19. To access the replay, please dial (800) 642-1687. The conference ID number for the replay is 56140897.  

Selected financial results for the Company are as follows (dollars in thousands, except earnings per share):

    
    
                      CONSOLIDATED STATEMENTS OF OPERATIONS                  
                     (in thousands, except per share amounts)                
                                                                             
                                                   Three Months Ended        
                                                   -------------------       
                                               12/31/09   12/31/08    Change 
                                               --------   --------    ------ 
                                                    (unaudited)              
    Revenues                                     $73,249   $40,688   $32,561 
                                                                             
    Operating expenses:                                                      
      Direct costs of revenue (exclusive of                                  
       depreciation and amortization)             24,458    20,451     4,007 
      Depreciation and amortization               16,423     2,667    13,756 
      Selling, general and administrative         13,014    11,765     1,249 
      Inventory impairment and satellite                                     
       impairment settlement                           -     2,155    (2,155)
                                                     ---     -----    ------ 
      Total operating expenses                    53,895    37,038    16,857 
                                                  ------    ------    ------ 
    Income from operations                        19,354     3,650    15,704 
    Interest expense, net                          8,181     2,911     5,270 
    Other non-operating expense                        -     1,000    (1,000)
    Loss from early extinguishment of debt        27,127         -    27,127 
                                                  ------       ---    ------ 
    Loss before income taxes                     (15,954)     (261)  (15,693)
    (Benefit) provision for income taxes         (27,673)    3,378   (31,051)
                                                 -------     -----   ------- 
    Net income (loss)                            $11,719   $(3,639)  $15,358 
                                                 =======   =======   ======= 
    Earnings (loss) per share basic                $0.60    $(0.20)    $0.80 
                                                   =====    ======     ===== 
    Earnings (loss) per share diluted              $0.55    $(0.20)    $0.75 
                                                   =====    ======     ===== 
    Weighted average shares diluted               21,139    18,228     2,911 
                                                  ======    ======     ===== 
                                                                             
                                                                             
                                                        Year Ended           
                                                        ----------           
                                               12/31/09   12/31/08   Change  
                                               --------   --------   ------  
                                             (unaudited)                    
    Revenues                                    $271,102  $146,659  $124,443 
                                                                             
    Operating expenses:                                                      
      Direct costs of revenue (exclusive of                                  
       depreciation and amortization)             94,693    72,216    22,477 
      Depreciation and amortization               57,166    11,357    45,809 
      Selling, general and administrative         46,608    36,990     9,618 
      Inventory impairment and satellite                                     
       impairment settlement                           -     3,296    (3,296)
                                                     ---     -----    ------ 
      Total operating expenses                   198,467   123,859    74,608 
                                                 -------   -------    ------ 
    Income from operations                        72,635    22,800    49,835 
    Interest expense, net                         31,020    11,452    19,568 
    Other non-operating expense                        -     1,000    (1,000)
    Loss from early extinguishment of debt        27,127         -    27,127 
                                                  ------       ---    ------ 
    Income before income taxes                    14,488    10,348     4,140 
    Benefit for income taxes                     (17,573)  (16,267)   (1,306)
                                                 -------   -------    ------ 
    Net income                                   $32,061   $26,615    $5,446 
                                                 =======   =======    ====== 
    Earnings per share basic                       $1.71     $1.48     $0.23 
                                                   =====     =====     ===== 
    Earnings per share diluted                     $1.55     $1.36     $0.19 
                                                   =====     =====     ===== 
    Weighted average shares diluted               20,685    19,558     1,127 
                                                  ======    ======     ===== 
    
    
    
                                  ADJUSTED EBITDA                             
                                  (in thousands)                              
                                                                              
                                       Three Months Ended      Year Ended     
                                       ------------------      ----------     
                                       12/31/09  12/31/08  12/31/09  12/31/08 
                                       --------  --------  --------  -------- 
    Net income (loss)                   $11,719   $(3,639)  $32,061   $26,615 
    Adjustments:                                                              
        Interest expense, net             8,181     2,911    31,020    11,452 
        (Benefit) provision for                                               
         income taxes                   (27,673)    3,378   (17,573)  (16,267)
        Depreciation and amortization    16,423     2,667    57,166    11,357 
        Non-cash stock-based                                                  
         compensation expense               876       795     2,371     3,396 
        Loss from early                                                       
         extinguishment of debt          27,127         -    27,127         - 
        Non-cash loss on inventory and                                        
         investment impairments               -     3,154         -     3,154 
                                            ---     -----       ---     ----- 
    Adjusted EBITDA                     $36,653    $9,266  $132,172   $39,707 
                                        =======    ======  ========   ======= 
                                                                              
    
    Adjusted EBITDA is a non-GAAP financial measure that represents net income
    (loss) before net interest income or expense, income tax expense
    (benefit), depreciation and amortization expenses, loss from early
    extinguishment of debt, non-cash loss on inventory and investment
    impairments and non-cash stock-based compensation expense.  We believe
    that Adjusted EBITDA provides useful information to investors because it
    is an indicator of the strength and performance of our ongoing operations.
    However, Adjusted EBITDA is not a recognized term under financial
    performance under GAAP, and our calculation of Adjusted EBITDA may not be
    comparable to the calculation of similarly titled measures of other
    companies. 
    
    
    
                          CONSOLIDATED BALANCE SHEETS                      
                                 (in thousands)                            
                                                                           
                                         December 31,  December 31,     
                                             2009         2008      Change 
                                             ----         ----      ------ 
                                         (unaudited)                       
                        ASSETS                                             
    Current assets:                                                        
      Cash and cash equivalents             $208,872     $106,733 $102,139 
      Short-term investments                       -        3,813   (3,813)
      Accounts receivable - trade and                                      
       unbilled receivables (net of                                        
       allowances: 2009 - $923; 2008 -                                     
       $738)                                  32,578       26,851    5,727 
      Income tax receivable                   40,237       20,142   20,095 
      Restricted cash                         52,268            -   52,268 
      Other current assets                    16,836       34,325  (17,489)
                                              ------       ------  ------- 
        Total current assets                 350,791      191,864  158,927 
    Property, plant and                                                    
     equipment, net                           25,381       22,748    2,633 
    Satellites and related ground                                          
     systems, net                            505,035      488,145   16,890 
    Goodwill                                  34,264       34,264        - 
    Intangible assets, net                    11,685       14,335   (2,650)
    Non-current restricted cash               13,653            -   13,653 
    Other non-current assets                   6,398       12,978   (6,580)
    Deferred tax assets                            -       30,271  (30,271)
                                                 ---       ------  ------- 
        Total assets                        $947,207     $794,605 $152,602 
                                            ========     ======== ======== 
                                                                           
                  LIABILITIES AND STOCKHOLDERS' EQUITY                     
    Current liabilities:                                                   
      Accounts payable and accrued                                         
       expenses                              $33,997      $69,763 $(35,766)
      Current portion of deferred revenue     52,221       40,629   11,592 
      Current deferred tax liabilities         4,744        5,594     (850)
      Current portion of long-term debt          497            -      497 
                                                 ---          ---      --- 
        Total current liabilities             91,459      115,986  (24,527)
    Long-term debt                           380,594      247,502  133,092 
    Long-term deferred revenue, net                                        
     of current portion                      192,313      199,317   (7,004)
    Non-current income tax                                                 
     reserve and deferred tax liabilities      2,326        1,396      930 
    Other non-current liabilities                560            -      560 
                                                 ---          ---      --- 
        Total liabilities                    667,252      564,201  103,051 
                                             -------      -------  ------- 
    Commitments and contingencies                                          
    Stockholders' equity:                                                  
      Common stock                               199          184       15 
      Additional paid-in capital             227,988      210,513   17,475 
      Retained earnings                       51,768       19,707   32,061 
                                              ------       ------   ------ 
        Total stockholders' equity           279,955      230,404   49,551 
                                             -------      -------   ------ 
        Total liabilities and                                              
         stockholders' equity               $947,207     $794,605 $152,602 
                                            ========     ======== ======== 
    
    
    
                        STATEMENT OF CASH FLOWS INFORMATION                   
                                  (in thousands)                              
                                                                              
                                                    Year Ended                
                                                    ----------                
                                                12/31/09   12/31/08   Change  
                                                --------   --------   ------  
                                               (unaudited)                    
    Net cash provided by (used in) operating                                  
     activities                                  $100,207   $(1,872) $102,079 
    Net cash used in investing activities        (123,034) (124,187)    1,153 
    Net cash provided by financing activities     124,966     6,031   118,935 
                                                  -------     -----   ------- 
    Net increase (decrease) in cash and cash                                  
     equivalents                                  102,139  (120,028)  222,167 
    Cash and cash equivalents, beginning of                                   
     year                                         106,733   226,761  (120,028)
                                                  -------   -------  -------- 
    Cash and cash equivalents, end of year       $208,872  $106,733  $102,139 
                                                 ========  ========  ======== 

ABOUT GEOEYE

GeoEye, Inc. is an international information services company serving government and commercial markets. The Company is recognized as one of the geospatial industry's imagery experts, delivering exceptional quality imagery products, services and solutions to customers around the world. Headquartered in Dulles, Virginia, the Company has 534 employees, as of December 31, 2009, dedicated to developing best-in-class geospatial information products and services. GeoEye is a public company listed on the NASDAQ stock exchange under the symbol GEOY. The Company provides support to academic institutions and non-governmental organizations through the GeoEye Foundation ( http://www.geoeyefoundation.org). Additional information about GeoEye is available at www.geoeye.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Without limitation, the words "anticipates," "believes," "estimates," "expects," "intends," "plans," "will" and similar expressions are intended to identify forward-looking statements. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future, including statements relating to growth, expected levels of expenditures and statements expressing general optimism about future operating results, are forward-looking statements. Similarly, statements that describe our business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. All such forward-looking statements and those presented elsewhere by our management from time to time are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements. These risks and uncertainties include, but are not limited to, those described in "Risk Factors" included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008, which we filed with the Securities and Exchange Commission ("SEC") on April 2, 2009, and our Quarterly Reports on Form 10-Q for the period ended March 31, 2009, June 30, 2009 and Sept. 30, 2009, which we filed with the SEC on May 12, 2009, Aug. 10, 2009 and Nov. 9, 2009, respectively. Copies of all SEC filings may be obtained from the SEC's EDGAR web site, http://www.sec.gov/, or by contacting: William L. Warren, Senior Vice President, General Counsel and Secretary, at 703-480-5672.

SOURCE GeoEye, Inc.

Contact:
GeoEye, Inc.
Investors, Randy Scherago
Phone: +1-703-480-7529
Email Contact
Media, Mark Brender
Phone: +1-703-629-5368
Email Contact both of GeoEye, Inc.
Web: http://www.geoeye.com