Iridium Affirms 2014 and Long-Range Outlook
McLean, Va., July 31, 2014-- Iridium Communications Inc. today reported financial results for the second quarter of 2014 and affirmed its full-year 2014 and long-range outlook. Net income was US$ 15.0 million, or $0.14 per diluted share, for the second quarter of 2014, as compared to US$ 15.4 million, or $0.18 per diluted share, for the second quarter of 2013. Operational EBITDA ("OEBITDA") for the second quarter was US$ 54.7 million, as compared to $51.1 million for the prior-year period, representing a year-over-year increase of 7 percent and an OEBITDA margin of 53 percent. OEBITDA grew largely due to higher service revenue.
Iridium reported second-quarter total revenue of US$ 102.5 million, which consisted of US$ 76.2 million of service revenue and US$ 26.3 million of equipment, engineering and support revenue. Total revenue increased 8 percent versus the comparable period of 2013, while service revenue grew 7 percent from the year-ago period. Service revenue, which represents primarily recurring revenue from Iridium's growing subscriber base, was 74 percent of total revenue for the second quarter of 2014.
The company ended the quarter with 705,000 total billable subscribers, which compares to 647,000 for the year-ago period and is up from 674,000 for the quarter ended March 31, 2014. Total billable subscribers grew 9 percent year-over-year, driven by strength in machine-to-machine ("M2M") and commercial voice customers.
"This was another good quarter across the board," said Matt Desch, CEO, Iridium. "It comes on top of achieving our most significant financial objective for 2014 with our credit facility amendment and related capital raise. We again have a strong funding profile during the peak spending years for our Iridium NEXT program, and the needed flexibility to execute our operating plan with less than a year to go before our first scheduled launch in 2015. I thank our lenders and shareholders for supporting a successful transaction and look forward to the transformational change we expect in our cash flow profile."
Desch continued, "We've made progress in key strategic areas, with both the Iridium NEXT build and our Aireon joint venture having reached important milestones. For example, our first test call using Iridium NEXT hardware was successfully conducted earlier this month, while the highly sophisticated main mission antennas ("MMAs") were completed for the first five satellites, allowing our prime contractor, Thales Alenia Space, to move forward with high-volume production for all 81 space vehicles. Our primary launch services provider, SpaceX, also successfully completed dispenser qualification testing for the Iridium NEXT constellation, marking an important step in ensuring that the new satellites are safely delivered into low-earth orbit. As for Aireon, I'm pleased that it met the requirements for additional investments from NAV CANADA and its European partners, respectively. With milestones complete for nearly $200 million of its $270 million total funding commitment from its other investors, Aireon is demonstrating continued momentum in deploying the world's first near real-time global aircraft surveillance system."
Desch concluded, "From an operating standpoint, we affirmed our 2014 and long-range outlook for all key metrics today. Total service revenue grew 7 percent versus last year, with our M2M business line leading the way posting 17 percent year-over-year growth. Iridium GO!™ is now shipping, and we're pleased with the volume of initial orders. We're also seeing renewed growth with Iridium OpenPort®, which is an important barometer of our prospects in the aviation and maritime markets."
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