Fourth quarter 2013 revenue was $169.7 million, a 35% increase compared with the same period last year. Net income for the fourth quarter was $15.1 million, with net income available to common shareholders of $13.6 million, or $0.18 per diluted share. Fourth quarter 2013 EBITDA was $73.5 million, driving an EBITDA margin of 43%. Excluding $9.2 million of restructuring and integration costs related to the combination with GeoEye yields Adjusted EBITDA of $82.7 million, a margin of 49%.
Full year 2013 revenue was $612.7 million, a 45% increase compared with 2012. The company reported a net loss of $(68.3) million, and a net loss available to common shareholders of $(71.9) million, or $(1.00) per diluted share. Fourth quarter and full-year 2013 results reflect fully diluted share counts of 76.0 million and 71.8 million, respectively. Full-year EBITDA was $122.4 million, yielding an EBITDA margin of 20%. Excluding $89.9 million of restructuring and integration costs related to the combination with GeoEye and a $17.8 million loss from early extinguishment of debt yields Adjusted EBITDA of $230.1 million, with an associated margin of 38%.
On February 14, 2014, DigitalGlobe acquired Spatial Energy, a leading source for digital imagery and geospatial solutions to the global oil and gas industry, serving 12 of the top 20 oil and gas companies around the world. See related press release titled, "DigitalGlobe Acquires Spatial Energy" for more detail.
"We made great strides in 2013, in what was a transformative year for our company. We brought together two industry leaders, driving strong growth in our U.S. Government business, removing more than $100 million in annualized operating expense, and in the process, positioning DigitalGlobe for long-term profitable growth and free cash flow generation," said Jeffrey R. Tarr, CEO. "In 2014 we will complete our integration efforts, launch WorldView-3, the world's most advanced commercial earth observation satellite, bring to market new Geospatial Big Data and analytic capabilities and take important steps to create value for our customers around the world."
Recent Business Highlights
- Fourth quarter 2013 revenue from the U. S. Government grew 29% to $97.1 million compared with fourth quarter 2012, including a 178% increase in value-added services to $33.9 million.
- Diversified Commercial revenue grew 45% to $72.6 million in the quarter compared with fourth quarter 2012. Growth was driven primarily by Direct Access revenue of $28.5 million in the quarter, up 113% year over year.
- The company renewed and upsized a Direct Access customer relationship that will include access to multiple satellites within the DigitalGlobe's five-satellite constellation.
- Among international civil governments, the company won a multi-year, multi-million dollar competitive procurement from a European space agency which provides delivery of DigitalGlobe's highest-resolution tasked imagery for use by emergency responders.
- DigitalGlobe also established a new relationship with an Australian civil government to provide archive imagery of airports throughout Papua New Guinea.
- In February, DigitalGlobe signed a new multi-year imagery agreement with Google to provide high-resolution satellite imagery in support of Google Maps, Google Earth and other Google products and services.
- Also among its Location Based Services base of customers, the company renewed a relationship to provide archived imagery to a top ten global internet portal based outside the United States.
- Within its Industry Verticals base of customers, DigitalGlobe established relationships with major international oil concerns in Norway, Indonesia, Kazakhstan and Argentina to provide tasked and archived imagery.
- Domestically, the company added a new customer who will leverage DigitalGlobe's Global Basemap to develop environmental property reports for builders and a second that will use the product offering to track retail store locations.
For 2014, the company expects to report revenue in a range of $630 million to $660 million. The company expects to achieve a full-year Adjusted EBITDA margin of approximately 43%, which excludes the impact of approximately $35 million of integrations-related expenses, with a fourth quarter 2014 Adjusted EBITDA margin of at least 50%. The company also now expects to achieve $120 million in operating expense savings related to its combination with GeoEye, an increase of $20 million from its previous projection. The company also expects 2014 capital expenditures of approximately $170 million, including spending to complete and launch the WorldView-3 satellite, and to complete, but not launch, the GeoEye-2 satellite.
Conference Call Information
DigitalGlobe's management will host a conference call today, February 26, 2014 at 11 a.m. ET to discuss its 2013 fourth quarter and full-year financial and operating results.
The conference call dial-in numbers are as follows:
U.S./Canada dial-in: (855) 212-2368
International dial-in: (315) 625-6886
A replay of the call will be available through March 27, 2014 at the following numbers:
U.S./Canada dial-in: (855) 859-2056
International dial-in: (404) 537-3406
DigitalGlobe will also sponsor a live and archived webcast of the conference call on the Investor Relations portion of its website. Click here to directly access the live webcast.
Supplemental earnings materials, including management scripts, are available on the Investor Relations section of the company's website at www.digitalglobe.com.
DigitalGlobe is a leading provider of commercial high-resolution earth observation and advanced geospatial solutions that help decision makers better understand our changing planet in order to save lives, resources and time. Sourced from the world's leading constellation, our imagery solutions deliver unmatched coverage and capacity to meet our customers' most demanding mission requirements. Each day customers in defense and intelligence, public safety, civil agencies, map making and analysis, environmental monitoring, oil and gas exploration, infrastructure management, navigation technology, and providers of location-based services depend on DigitalGlobe data, information, technology and expertise to gain actionable insight.
In January 2013, DigitalGlobe and GeoEye combined to become one DigitalGlobe, creating a company capable of providing greater value to customers through an integrated constellation and a broader set of products and services. For more information on the combination and its benefits, visit www.digitalglobe.com/combination.
DigitalGlobe is a registered trademark of DigitalGlobe.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained herein and in other of our reports, filings, and public announcements may contain or incorporate forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements relate to future events or future financial performance. We generally identify forward-looking statements by terminology such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," "continue" or "looks forward to" or the negative of these terms or other similar words, although not all forward-looking statements contain these words.
Any forward-looking statements are based upon our historical performance and on our current plans, estimates and expectations. The inclusion of this forward-looking information should not be regarded as a representation by us that the future plans, estimates or expectations will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions. A number of important factors could cause our actual results or performance to differ materially from those indicated by such forward looking statements, including: the loss, reduction or change in terms of any of our primary contracts; the availability of government funding for our products and services both domestically and internationally; changes in government and customer priorities and requirements (including cost-cutting initiatives, the potential deferral of awards, terminations or reduction of expenditures to respond to the priorities of congress and the administration, or budgetary cuts resulting from congressional committee recommendations or automatic sequestration under the Budget Control Act of 2011); the risk that the anticipated benefits and synergies from the strategic combination of the Company and GeoEye, Inc. cannot be fully realized or may take longer to realize than expected; the outcome of pending or threatened litigation; the loss or impairment of any of our satellites; delays in the construction and launch of any of our satellites; delays in implementation of planned ground system and infrastructure enhancements; loss or damage to the content contained in our imagery archives; interruption or failure of our ground system and other infrastructure, decrease in demand for our imagery products and services; increased competition that may reduce our market share or cause us to lower our prices; our failure to obtain or maintain required regulatory approvals and licenses; changes in U.S. foreign law or regulation that may limit our ability to distribute our imagery products and services; the costs associated with being a public Company; and other important factors, all as described more fully in our filings with the Securities and Exchange Commission ("SEC"), including this Annual Report on Form 10 K.