MCLEAN, Va., March 6, 2012 (GLOBE NEWSWIRE) -- Iridium Communications Inc. (Nasdaq:IRDM) ("Iridium") today reported solid financial results for the fourth quarter of 2011 and issued its outlook for the full-year 2012. Net income was $8.4 million, or $0.11 per diluted share, for the fourth quarter of 2011, as compared to $10.1 million, or $0.14 per diluted share, for the fourth quarter of 2010. Operational EBITDA ("OEBITDA")(1) for the fourth quarter was $44.3 million, as compared to $42.3 million for the prior-year period, representing year-over-year growth of 5 percent and an OEBITDA margin(1) of 47 percent. OEBITDA benefited from solid growth in commercial service and government service revenue.

Iridium reported fourth-quarter total revenue of $95.0 million, which consisted of $66.6 million of service revenue and $28.4 million of equipment, engineering and support revenue. Total revenue grew 8 percent versus the comparable period of 2010, while service revenue increased 11 percent from the year-ago period. Service revenue, which represents primarily recurring revenue from Iridium's growing subscriber base, was 70 percent of total revenue for the fourth quarter of 2011.

The Company ended the quarter with 523,000 total billable subscribers, which compares to 427,000 for the year-ago period and 508,000 for the quarter ended September 30, 2011. Total billable subscribers grew 22 percent year-over-year, driven by strength across all primary product lines.

Capital expenditures were $119.1 million for the fourth quarter and primarily related to spending for the Company's next-generation satellite constellation, Iridium NEXT, and upgraded ground network infrastructure at its commercial gateway. The Company ended the fourth quarter with a cash and cash equivalents balance of $136.4 million and gross debt of $417.1 million.  Net debt was $253.8 million.

"2011 was a record year for Iridium as we reached important milestones for subscriber, service revenue and cash flow growth," said Matt Desch, CEO, Iridium. "Our ongoing success is rooted in having a superior network, unmatched capabilities in the highest growth segments of our market and a sustainable set of product-related competitive advantages anchored by a motivated partner channel. 2012 is shaping up to be another year of growth as we expect to cross the $200 million Operational EBITDA threshold on our way to launching Iridium NEXT."

Desch continued, "We're obsessive innovators, and we'll continue to expand and improve our service portfolio in 2012 and beyond. With the recent launch of Iridium PilotTM, our second-generation maritime broadband platform, we're bringing enhanced voice and broadband data capabilities to our customers all over the world at a low cost. We'll also deliver a new, 70 percent smaller M2M device in the next few months, building on the success of a market that has grown subscribers at least 50 percent year-over-year for five consecutive quarters. Iridium remains healthy and strong, and we continue to make the right decisions to support recurring service revenue growth and operating cash flow expansion."  

Full-Year 2011 Iridium Business Highlights

For the full year, Iridium reported net income of $39.7 million, or $0.54 per diluted share, as compared to net income of $22.7 million, or $0.31 per diluted share, for 2010. The Company reported 2011 total revenue of $384.3 million, which included $262.3 million of service revenue and $122.0 million of equipment, engineering and support revenue. OEBITDA for 2011 was $190.4 million, as compared to $158.9 million for the prior-year, representing year-over-year growth of 20 percent and an OEBITDA margin of 49 percent. Capital expenditures were $359.4 million for the full-year 2011. 

Fourth-Quarter Iridium Business Highlights

Service — Commercial

Commercial service remained the largest part of Iridium's business, representing 53 percent of the Company's total revenue during the fourth quarter. The Company's commercial customer base is diverse and includes markets such as maritime, aviation, oil and gas, mining, recreation, forestry, construction, transportation and emergency services. These customers rely on Iridium's products and services as critical to their daily operations and integral to their communications and business infrastructure.  

• Commercial service revenue was $50.6 million, a 14 percent increase from last year's comparable period, primarily supported by gains in M2M data, handheld voice and Iridium OpenPort® high-speed maritime customers.
• Commercial voice average revenue per user ("ARPU") was $46 during the fourth quarter, a 2 percent year-over-year decrease. Voice ARPU declined primarily due to lower postpaid customer usage of L-Band transceivers, partially offset by growth in the higher ARPU Iridium OpenPort service. Commercial M2M data ARPU was $18 during the fourth quarter, unchanged from last year's comparable period.
• Iridium's commercial business ended the quarter with 475,000 billable subscribers, which compares to 384,000 for the prior-year quarter and to 459,000 for the quarter ended September 30, 2011. M2M data subscribers increased 50 percent year-over-year and represented 35 percent of billable commercial subscribers, an increase from 29 percent at the end of the prior-year period. Commercial voice subscribers increased 14 percent from the year-ago period.

Service — Government

Iridium has grown in the last several years from a niche supplier to an integral element in the U.S. Government communications infrastructure. Iridium's voice and data solutions improve situational awareness for military personnel and track critical assets in tough environments around the globe, providing a unique value proposition that is not easily duplicated.

• Government service revenue was $16.0 million, a 3 percent increase from the prior-year period, primarily driven by growth in Netted IridiumSM and M2M data subscribers.
• Government voice ARPU was $138 during the fourth quarter, a 2 percent year-over-year decrease. Voice ARPU declined as a result of growth in lower-priced Netted Iridium subscribers. Government M2M data ARPU was $19 during the fourth quarter, down 14 percent from last year's comparable period, as lower-ARPU tracking devices continued to become a bigger part of the government's M2M subscriber profile.
• Iridium's government business ended the quarter with 48,000 billable subscribers, which compares to 43,000 for the prior-year quarter and to 49,000 for the quarter ended September 30, 2011. Government voice subscribers decreased on a sequential basis primarily due to a reconciliation by the Defense Information Systems Agency of its active subscriber accounts. M2M data subscribers increased 57 percent year-over-year and represented 23 percent of billable government subscribers, an increase from 16 percent at the end of the prior-year period.

Equipment

• Equipment revenue was $22.5 million during the fourth quarter, a 7 percent year-over-year increase. Revenue increased primarily due to strong M2M and handset sales volumes. Iridium continues to see strong demand for its devices with overall unit sales growing 60 percent year-over-year.

Engineering & Support

• Engineering and support revenue was $5.9 million during the fourth quarter, a decline of 14 percent from the prior-year period, primarily resulting from a decrease in lower margin contract revenue on government projects.

Iridium NEXT and Hosted Payloads Update

• Iridium has completed the preliminary design review for its new satellite system, Iridium NEXT, the first major milestone in a five-year development schedule. The Company is still on track to begin deploying Iridium NEXT in early 2015.
• Iridium expects to announce the details of its primary hosted payload mission in the second quarter of 2012. The Company believes the most likely opportunity is the formation of a global aviation monitoring business, which would deploy a payload that monitors aircraft all over the world and then supplies that information in near real-time to Air Navigation Service Providers such as the Federal Aviation Administration, Nav Canada, NATS and others. Iridium believes that providing aircraft control surveillance over oceans and remote regions is a potentially transformational capability, allowing airlines to fly more optimal routes, save billions of dollars in fuel and reduce carbon emissions and improving air traffic safety in these regions.

2012 Outlook

The Company issued its full-year 2012 outlook for total billable subscriber growth, service revenue and OEBITDA. The Company expects: 

• Total billable subscriber growth between 20 percent and 25 percent for the full-year 2012
• Total service revenue growth between 8 percent and 11 percent for the full-year 2012
• Full-year 2012 OEBITDA to be between $210 million and $220 million. OEBITDA for 2011 was $190.4 million.

Long-Range Outlook

The Company affirmed its previously issued long-range outlook for service revenue, OEBITDA margin, cash taxes, net leverage and rate of deleveraging. The Company expects:

• Average service revenue growth between 9 percent and 13 percent per year between 2011 and 2015
• OEBITDA margin of approximately 60 percent in 2015
• Negligible cash taxes from 2011 to approximately 2020
• Net leverage (net debt:OEBITDA) of approximately 3x at year-end 2012, 4x-5x at year-end 2015
• Decrease net leverage by an average of 0.5 to 1.0 multiple of OEBITDA per year beginning in 2016

Non-GAAP Financial Measures & Definitions

(1)   In addition to disclosing financial results that are determined in accordance with U.S. GAAP, the Company discloses Operational EBITDA and Operational EBITDA margin, which are non-GAAP financial measures, as supplemental measures to help investors evaluate the Company's fundamental operational performance. Operational EBITDA represents earnings before interest, income taxes, depreciation and amortization, Iridium NEXT revenue and expenses (for periods prior to the deployment of Iridium NEXT), share-based compensation expenses, and the impact of purchase accounting. The Company also presents Operational EBITDA expressed as a percentage of adjusted revenue, or Operational EBITDA margin. Adjusted revenue excludes the impact of purchase accounting and Iridium NEXT revenue. Operational EBITDA does not represent, and should not be considered, an alternative to U.S. GAAP measurements such as net income or loss, and the Company's calculations thereof may not be comparable to similarly titled measures reported by other companies. By eliminating interest, income taxes, depreciation and amortization, Iridium NEXT revenue and expenses (for periods prior to the deployment of Iridium NEXT only), share-based compensation expenses, and the impact of purchase accounting, the Company believes the result is a useful measure across time in evaluating its fundamental core operating performance. Management also uses Operational EBITDA to manage the business, including in preparing its annual operating budget, debt covenant compliance, financial projections and compensation plans. The Company believes that Operational EBITDA is also useful to investors because similar measures are frequently used by securities analysts, investors and other interested parties in their evaluation of companies in similar industries. However, there is no standardized measurement of Operational EBITDA, and Operational EBITDA as the Company presents it may not be comparable with similarly titled non-GAAP financial measures used by other companies. As indicated, Operational EBITDA does not include interest expense on borrowed money or the payment of income taxes or depreciation expense on the Company's capital assets, which are necessary elements of the Company's operations. It also excludes expenses in connection with the development, deployment and financing of Iridium NEXT. Since Operational EBITDA does not account for these and other expenses, its utility as a measure of the Company's operating performance has material limitations. Due to these limitations, the Company's management does not view Operational EBITDA in isolation and also uses other measurements, such as net income, revenues and operating profit, to measure operating performance. Please refer to the schedule below for a reconciliation of Operational EBITDA to consolidated GAAP net income and Iridium's Investor Relations webpage at www.iridium.com for a discussion and reconciliation of this and other non-GAAP financial measures.

Conference Call Information

As previously announced, the Company will host a conference call to discuss results at 8:30 a.m. ET on Tuesday, March 6, 2012. Callers should dial (877) 334-1964 (U.S. only) or (631) 291-4574 (from outside the U.S.) to access the call. The conference call will also be simultaneously webcast on Iridium's Investor Relations webpage at www.iridium.com. A replay of the conference call will be available beginning Tuesday, March 6, 2012 through Tuesday, March 13, 2012 at Iridium's Investor Relations webpage. Callers can also dial (855) 859-2056 (U.S. only) or (404) 537-3406, Access Code 32117251, for an audio replay of the conference call.

About Iridium Communications Inc.

Iridium is the only mobile voice and data satellite communications network that spans the entire globe. Iridium enables connections between people, organizations and assets to and from anywhere, in real time. Together with its ever-expanding ecosystem of partner companies, Iridium delivers an innovative and rich portfolio of reliable solutions for markets that require truly global communications. The company has a major development program underway for its next-generation network — Iridium NEXT. Iridium Communications Inc. is headquartered in McLean, Va., U.S.A., and its common stock trades on the NASDAQ Global Select Market under the ticker symbol IRDM. For more information about Iridium products, services and partner solutions, visit www.iridium.com. IRDM-F

The Iridium Communications Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=10426

Forward-Looking Statements

Statements in this press release that are not purely historical facts may constitute forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding the development of Iridium NEXT; anticipated hosted payload arrangements; the development of the product portfolio and the size of the addressable market; anticipated growth in subscribers, data services and total service revenue; anticipated equipment revenue; anticipated growth in Operational EBITDA and OEBITDA margin; leveraging and deleveraging and anticipated cash taxes. Other forward-looking statements can be identified by the words "anticipates," "may," "can," "believes," "expects," "projects," "intends," "likely," "will," "to be" and other expressions that are predictions or indicate future events, trends or prospects. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Iridium to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, uncertainties regarding increases in customer demand for Iridium's products and services, Iridium's ability to maintain the health, capacity and content of its satellite constellation, and the development of and transition to Iridium NEXT, including expanded capacity and features, and the development of and market for hosted payloads, as well as general industry and economic conditions, and competitive, legal, governmental and technological factors. Other factors that could cause actual results to differ materially from those indicated by the forward-looking statements include those factors listed under the caption "Risk Factors" in the Company's Form 10-K for the year ended December 31, 2011, filed with the Securities and Exchange Commission ("SEC") on March 6, 2012. There is no assurance that Iridium's expectations will be realized. If one or more of these risks or uncertainties materialize, or if Iridium's underlying assumptions prove incorrect, actual results may vary materially from those expected, estimated or projected. Iridium's forward-looking statements speak only as of the date of this press release, and Iridium undertakes no obligation to update forward-looking statements.

CONTACT: Investor Contact:

         

         Steve Kunszabo

         Iridium Communications Inc.

         +1 (703) 287-7570

         steve.kunszabo@iridium.com



         Press Contact:



         Liz DeCastro

         Iridium Communications Inc.

         +1 (703) 287-7421

         liz.decastro@iridium.com