- Non-IFRS revenue of $49.9 million
in fiscal 2016 increased by 95% over the prior year (IFRS revenue
of $111.3 million in 2016 increased
by 205%)
- Non-IFRS adjusted EBITDA of $5.6
million in fiscal 2016 was an improvement of $18.6M over the prior year
- Non-IFRS revenue of $11.7 million
in the fourth quarter increased by 45% over the prior year (IFRS
revenue of $57.5 million in Q4
increased by 333%)
- Non-IFRS adjusted EBITDA of $1.9
million in the fourth quarter was an improvement of
$9.6 million over the prior year
VANCOUVER, March 28, 2017 /PRNewswire/ - UrtheCast Corp.
(TSX:UR) ("UrtheCast" or the "Company") today announces financial
results for the three and twelve months ended on December 31, 2016.
Strong Growth in Revenue and Adjusted EBITDA
Year-Over-Year
The Company is pleased to report fiscal 2016 non-IFRS revenues
of $49.9 million, a 95% increase over
fiscal 2015 non-IFRS revenue of $25.5
million. IFRS revenue for the year was $112.3 million as compared to $36.5 million reported in the prior year.
Similarly, the Company's non-IFRS adjusted EBITDA was positive
$5.6 million in the year compared to
a loss of $12.9 million in the same
period in 2015, amounting to an $18.6
million dollar improvement year-over-year to adjusted
EBITDA. At December 31, 2016, the
Company had total cash balances of $15.6
million and working capital of $18.9
million.
CFO Transition and Guidance
As announced on February 21, 2017,
Mr. Sai Chu will be appointed Chief Financial Officer effective
March 29, 2017. At this time,
UrtheCast re-affirms its preliminary view for 2017 of growing
non-IFRS revenues and expanding adjusted EBITDA margins over 2016
with similar seasonality to that of 2016.
Revenues in Earth Observation Growing by 115%
Year-Over-Year
Revenues in the Company's Earth observation (EO) business in the
2016 fiscal year grew by 115% compared with fiscal 2015, growing
from $7.1 million to $15.2 million (non-IFRS reporting). This
triple-digit growth in the EO business is primarily due to the
continued acceptance of the high-resolution imagery offering from
the Deimos-2 satellite.
Impairment Charge for ISS Cameras
During the quarter, the Company recorded an additional non-cash
asset impairment charge of $3.1
million for the Company's two EO cameras aboard the
International Space Station (ISS). This resulted in a total
non-cash impairment charge in fiscal 2016 of $10.9 million.
As the Company was unsuccessful in negotiating a new agreement
with its ISS partner following the termination of the original
agreement effective December 31,
2016, the deferred revenue liability associated with the ISS
cameras was written off at December 31,
2016. This non-cash write-off was recognized as revenue of
$40.6 million in the fourth quarter
of 2016. This was offset by an acceleration of depreciation on the
barter assets to reflect the reduced useful life. Following the
termination of the agreement with the Company's ISS partner on
December 31, 2016, the Company's
financial statements will no longer require barter accounting for
this partnership.
The Company continues to seek to monetize the ISS cameras
through alternative means, including licensing arrangements or an
asset sale.
Business Highlights
Earth Observation Update
- For the 2016 fiscal year, EO revenues grew by 115% compared
with fiscal 2015, growing from $7.1
million to $15.2 million.
- The Company hired Jamie Ritchie
to lead the Company's EO sales and business development team under
Fabrizio Pirondini, CEO of Deimos
Imaging. Mr. Ritchie has been working in the EO field for over 15
years, with experience in business development, marketing and
product management, including leading imagery at Esri Inc. and
acting as Head of Product Portfolio and Marketing at Airbus Defence
& Space, Geo-Intelligence.
- Elecnor Deimos Space, a subsidiary of Elecnor, S.A., signed a
multi-year agreement with the Ukrainian Space Agency to provide a
Direct Receiving Station (DRS) for Deimos-2 data. Once the DRS is
completed, Elecnor Deimos Space is expected to award a contract to
Deimos Imaging to supply Deimos-2 imagery.
UrtheDaily Update
- The Company entered into a long-term agreement with GEOSYS, a
subsidiary of Land O' Lakes, Inc., to deliver geospatial data from
the planned UrtheDaily Constellation. Pursuant to the terms of the
agreement, GEOSYS will become an anchor customer for the UrtheDaily
Constellation. The agreement, for an undisclosed purchase price and
term, represents the Company's largest data-buy contract to date.
This agreement will provide GEOSYS with sufficient capacity to
receive imagery of the Earth's entire landmass (excluding
Antarctica) throughout the
contract term and payments will begin when UrtheCast begins
delivering UrtheDaily Constellation data to GEOSYS. The agreement
is subject to the Company arranging for the financing for the build
and launch of the first portion of the satellites in the UrtheDaily
Constellation and other customary covenants for agreements of this
nature.
OptiSAR Progress
- The Company announced that it had entered into a binding
agreement with a confidential government customer for the sale and
shared operation of the first two satellites in the Company's
planned OptiSAR Constellation for a purchase price of approximately
US$180 million. This agreement
represents the first successful conversion of the three previously
announced Memoranda of Understanding (MOUs) for the purchase of the
OptiSAR Constellation satellites into binding contracts. The
agreement is subject to a number of closing conditions, including
UrtheCast obtaining the necessary customer commitments to allow for
the build, launch and financing of the first eight satellites in
the OptiSAR Constellation, the customer obtaining funding on or
before December 31, 2017, the parties
reaching mutual agreement on the detailed procedures for the shared
operation and tasking of the two satellites, and other customary
covenants and regulatory approvals for agreements of this nature.
Provided these closing conditions are satisfied or waived, the
purchase price is expected to be paid upon achievement of certain
build-phase milestones, concurrent with the start of the
build-phase for the first eight satellites.
- The Company is also continuing its negotiations to convert
other MOUs and customer discussions into binding, definitive
agreements. The Company expects that each agreement will have
unique pricing depending on the imaging and commercial rights,
ground segment features, and the operating, maintenance and
training services to be provided to each customer.
- The Company entered into a contribution agreement whereby the
Company will receive approximately $17.6
million in funding, on an expense reimbursement basis, from
Innovation, Science and Economic Development Canada's Industrial
Technologies Office as part of its Strategic Aerospace &
Defense Initiative program to support the development of the
OptiSAR Constellation. The agreement is structured as a repayable
contribution that management anticipates will be disbursed in
quarterly installments over the next four years and repaid by the
Company in annual installments over 15 years, beginning in
2023.
Financing and Liquidity
- The Company closed a public offering of 13,033,341 common
shares at a price of $1.50 per Common
Share, for aggregate gross proceeds of $19,550,012.
- The Company obtained a new $10,000,000 revolving demand credit facility from
the Royal Bank of Canada (RBC).
Borrowings under this facility will primarily be used to finance up
to 90% of the accounts receivable under the Company's US$65,000,000 engineering services contract and
may also be used to finance other contracts. The interest rate on
this facility is RBC's prime rate plus 2% and borrowings are
repayable when the related accounts receivable are collected from
the customer, or on demand.
"We're really pleased with the progress the Company is making
across the board", said Wade Larson,
UrtheCast's President and CEO. "Growing EO revenue, a strengthened
balance sheet, programmatic and technological progress on our
development programs, significant customer signings on both OptiSAR
and UrtheDaily, and an improved outlook going forward on both
top-line revenue and adjusted EBITDA."
SELECTED FINANCIAL INFORMATION
The following table provides selected financial information of
the Company, which was derived from, and should be read in
conjunction with, the consolidated financial statements for the
year ended December 31, 2016.
|
Three Months Ended
December 31,
|
Year Ended
December 31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenue
|
$
|
57,476
|
$
|
13,267
|
$
|
111,252
|
$
|
36,519
|
Other operating
income
|
|
229
|
|
139
|
|
985
|
|
4,615
|
|
|
57,705
|
|
13,406
|
|
112,237
|
|
41,134
|
Operating
costs
|
|
|
|
|
|
|
|
|
Direct costs,
selling, general and
|
|
|
|
|
|
|
|
|
|
administrative
expenses
|
|
13,126
|
|
14,505
|
|
56,021
|
|
35,239
|
Research
expenditures
|
|
842
|
|
5,351
|
|
4,915
|
|
15,668
|
Depreciation and
amortization
|
|
46,851
|
|
7,407
|
|
66,128
|
|
13,410
|
Asset
impairment
|
|
3,085
|
|
2,505
|
|
10,865
|
|
2,505
|
Share-based
payments
|
|
702
|
|
1,015
|
|
2,594
|
|
3,312
|
|
|
64,606
|
|
30,783
|
|
140,523
|
|
70,134
|
Operating
loss
|
|
(6,901)
|
|
(17,377)
|
|
(28,286)
|
|
(29,000)
|
Acquisition
costs
|
|
-
|
|
-
|
|
-
|
|
(5,325)
|
Net finance
costs
|
|
(353)
|
|
(344)
|
|
(1,989)
|
|
(620)
|
Loss on derivative
financial instruments
|
|
(803)
|
|
-
|
|
(1,578)
|
|
-
|
Foreign exchange
(loss) gain
|
|
506
|
|
(540)
|
|
400
|
|
(606)
|
Loss before income
taxes
|
|
(7,551)
|
|
(18,261)
|
|
(31,453)
|
|
(35,551)
|
Income tax recovery
(expense)
|
|
(766)
|
|
734
|
|
2,141
|
|
651
|
Net
loss
|
|
(8,317)
|
|
(17,527)
|
|
(29,312)
|
|
(34,900)
|
Other comprehensive
income (loss)
|
|
(2,455)
|
|
964
|
|
(4,486)
|
|
7,163
|
Comprehensive
loss
|
$
|
(10,772)
|
$
|
(16,563)
|
$
|
(33,798)
|
$
|
(27,737)
|
Net loss per share
– basic and diluted
|
$
|
(0.08)
|
$
|
(0.17)
|
$
|
(0.28)
|
$
|
(0.41)
|
|
Three Months ended
December 31,
|
Year ended December
31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
NON-IFRS
REVENUE:
|
|
|
|
|
|
|
|
|
Revenue per income
statement
|
$
|
57,476
|
$
|
13,267
|
$
|
111,252
|
$
|
36,519
|
Non-cash
revenue
|
|
(45,803)
|
|
(5,221)
|
|
(61,344)
|
|
(10,974)
|
NON-IFRS
REVENUE
|
|
11,673
|
|
8,046
|
$
|
49,908
|
$
|
25,545
|
|
|
|
|
|
|
|
|
|
ADJUSTED
EBITDA:
|
|
|
|
|
|
|
|
|
Net
loss
|
$
|
(8,317)
|
$
|
(17,527)
|
$
|
(29,312)
|
$
|
(34,900)
|
Add back
(subtract):
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
46,851
|
|
7,407
|
|
66,128
|
|
13,410
|
Net finance
costs
|
|
353
|
|
344
|
|
1,989
|
|
620
|
Income tax
recovery
|
|
766
|
|
(734)
|
|
(2,141)
|
|
(651)
|
EBITDA
|
|
39,653
|
|
(10,510)
|
|
36,664
|
|
(21,521)
|
Non-cash
revenue
|
|
(45,803)
|
|
(5,221)
|
|
(61,344)
|
|
(10,974)
|
Non-cash operating
costs
|
|
3,944
|
|
3,952
|
|
15,680
|
|
7,828
|
Asset
impairment
|
|
3,085
|
|
2,505
|
|
10,865
|
|
2,505
|
Share-based payments
expense
|
|
702
|
|
1,015
|
|
2,594
|
|
3,312
|
Deimos acquisition
costs
|
|
-
|
|
-
|
|
-
|
|
5,325
|
Loss on derivative
financial instruments
|
|
803
|
|
-
|
|
1,578
|
|
-
|
Foreign exchange
losses (gains)
|
|
(506)
|
|
540
|
|
(400)
|
|
606
|
ADJUSTED
EBITDA
|
$
|
1,878
|
$
|
(7,719)
|
$
|
5,637
|
$
|
(12,919)
|
As previously announced, UrtheCast will host a conference call
regarding its 2016 fourth quarter and fiscal year financial results
at 4:30 p.m. ET (1:30 p.m. PT) on March 28,
2017. The live conference call will be available by calling
toll-free at 1-800-806-5484, or by toll call at +1-416-340-2217.
The participant pass code is 1329750.
An archived version of the conference call will be made
available on the Company's investor website
(investors.urthecast.com) following the live conference call.
ABOUT URTHECAST CORP.
UrtheCast Corp. is a Vancouver-based technology company that serves
the rapidly evolving geospatial and geoanalytics markets with a
wide range of information-rich products and services. The Company
operates Earth Observation (EO) sensors in space, including two
satellites, Deimos-1 and Deimos-2, to produce imagery data that is
displayed on UrtheCast's cloud-based web platform and sold to
partners and customers. Through its subsidiary Deimos Imaging,
UrtheCast processes and distributes imagery data and value-added
products on behalf of the PanGeo Alliance, a network of eight
satellite operators with a combined 15 medium- and high-resolution
EO sensors. UrtheCast is also developing and expects to launch two
EO satellite constellations: the world's first fully-integrated
constellation of sixteen multispectral optical and SAR satellites,
called OptiSAR™, and an eight-satellite constellation designed to
capture high-quality, medium-resolution optical imagery of the
Earth's entire landmass (excluding Antarctica) every day, called UrtheDaily™.
Together, the Company believes these constellations will
revolutionize monitoring of our planet with medium- and
high-resolution, high-coverage and high-revisit imagery in all
weather conditions. Common shares of UrtheCast trade on the Toronto
Stock Exchange as ticker 'UR'.
Non-IFRS Financial Measures
The Company prepares its financial statements in accordance
with International Financial Reporting Standards ("IFRS"), as
issued by the International Accounting Standards Board. This
release includes certain non-IFRS financial measures, such as
non-IFRS revenues, EBITDA and adjusted EBITDA. The Company uses
these non-IFRS financial measures as supplemental indicators of its
operating performance and financial position. These measures do not
have any standardized meanings prescribed by IFRS and therefore are
unlikely to be comparable to the calculation of similar measures
used by other companies, and should not be viewed as alternatives
to measures of financial performance calculated in accordance with
IFRS or considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. These non-IFRS
financial measures should be read in conjunction with the Company's
financial statements and accompanying MD&A.
Forward Looking Information
This release contains certain information which, as
presented, constitutes "forward-looking information" or
"forward-oriented financial information" within the meaning of
applicable Canadian securities laws. Forward-looking information
involves statements that relate to future events and often
addresses expected future business and financial performance,
containing words such as "anticipate", "believe", "plan",
"estimate", "expect" and "guidance", statements that an action or
event "may", "might", "could" or "will" be taken or occur, or other
similar expressions and includes, but is not limited to, statements
relating to: UrtheCast's expectations with respect its current
sensors and proposed OptiSAR™ and
UrtheDailyTM constellations; the
satisfaction of the financing and other conditions set out in the
binding agreement for the purchase of two OptiSAR satellites in
order to trigger payment obligations thereunder; its plans for and
timing of expansion of its product offering and value-added
services; its expectations regarding a contract awarded by Elecnor
Deimos Space; its future growth and operations plans; efforts to
monetize the cameras aboard the ISS through alternative means;; and
anticipated trends and challenges in its business and the markets
in which the Company operates. Such statements reflect UrtheCast's
current views with respect to future events. Such statements
are necessarily based upon a number of estimates and assumptions
that, while considered reasonable by UrtheCast, are inherently
subject to significant uncertainties and contingencies. Many
factors could cause UrtheCast's actual results, performance or
achievements to be materially different from any future results,
performance, or achievements that may be expressed or implied by
such forward-looking statements, including, among others: any
delays or failures in the design, development, construction, launch
and operational commissioning of the proposed OptiSAR™
or UrtheDailyTM
constellations; the Company being unable to adequately
finance the development, building, launch and commissioning of the
UrtheDaily Constellation or to convert the remaining MOUs and other
customer discussions in respect of the OptiSAR™ constellation
into binding, definitive agreements; the inability of the
confidential customer described in this press release to obtain
budgetary approval from government or to otherwise comply with its
obligations under the binding agreement for the purchase and
operation of two satellites; the decline of key relationships in,
or termination of, the PanGeo Alliance of EO satellite operators; a
decline in the relationship with Elecnor Deimos Space; failures
aboard the ISS or the Deimos-1 or Deimos-2 satellites; failure to
obtain, or loss of, regulatory approvals; as well as those factors
and assumptions discussed in UrtheCast's annual information form
dated March 28, 2017, (the "AIF"),
which is available under UrtheCast's SEDAR profile
at www.sedar.com. Forward-looking information is developed
based on assumptions about such risks, uncertainties and other
factors set out herein, in the AIF, and as disclosed from time to
time on UrtheCast's SEDAR profile. UrtheCast undertakes no
obligation to update forward-looking statements except as required
by Canadian securities laws. Readers are cautioned against
attributing undue certainty to forward-looking statements.
For more information, visit UrtheCast's website at
www.urthecast.com.
SOURCE UrtheCast Corp.