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UrtheCast Reports Fourth Quarter and Fiscal 2016 Financial Results
Thursday, March 30, 2017Company Profile | Follow Company
Summary Information below:
The Company reported 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.
The company also reported that Mr. Sai Chu will be appointed Chief Financial Officer effective March 29, 2017 and 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.
The comnpany reported that 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.
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
UrtheDaily Update
OptiSAR Progress
Financing and Liquidity
"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) |
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™ orUrtheDailyTM 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 datedMarch 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.
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