Digitalglobe Inc. (DGI, Financial) filed Quarterly Report for the period ended 2010-03-31.
Digitalglobe Inc. has a market cap of $1.24 billion; its shares were traded at around $27.3 with a P/E ratio of 23.1 and P/S ratio of 4.4. DGI is in the portfolios of Lee Ainslie of Maverick Capital, Jeremy Grantham of GMO LLC, Steven Cohen of SAC Capital Advisors.
For the three months ended March 31, 2009 and 2010, $52.4 million, or 91.4%, and $52.6 million, or 84.0%, respectively, of our defense and intelligence revenue was generated within the United States and Canada, and $4.9 million, or 8.6%, and $10.0 million, or 16.0%, respectively, was generated from international defense and intelligence customers. For the three months ended March 31, 2009 and 2010, our top five defense and intelligence customers accounted for 97.7% and 95.6%, respectively, of our defense and intelligence revenue. NGA was our only customer that accounted for more than 10% of our revenue in the three months ended March 31, 2009 and 2010. NGA accounted for approximately 77.4% and 66.2%, respectively, of our revenue for the three months ended March 31, 2009 and 2010, respectively.
For the three months ended March 31, 2009 and March 31, 2010, $4.8 million, or 48.1% and $5.3 million, or 36.6%, respectively, of our commercial revenue was generated in the Americas and $5.1 million or 51.9% and $9.2 million, or 63.4%, respectively, was generated outside of the Americas. For the three months ended March 31, 2009 and March 31, 2010, our top five commercial customers accounted for 48.8% and 44.4%, respectively, of our commercial revenue. None of these customers accounted for more than 10% of our revenue in three months ended March 31, 2009 and March 31, 2010. We believe that we will have additional opportunities in some of the countries with developing economies, such as China, India and Russia, and, as a result, we expect that long-term sales growth in our commercial segment will be higher outside of the Americas.
Increases in cost of revenue were realized due to a special project and our direct access programs. The $3.7 million increase is primarily attributable to (i) increased labor related costs of $1.5 million primarily driven by the expensing of employees who previously had been capitalized as a part of WorldView-2 development, but who have now been reallocated to other operating functions within the company and also headcount growth. (ii) $1.1 million of direct access costs related to amortization of the deferred contract costs related to the facilities and the costs associated with the first year of maintenance, and (iii) $1.0 million in third-party costs related to completing a project in March of 2010,
The increase of $2.2 million in selling, general and administrative costs was attributable to (i) $1.8 million from WorldView-2 insurance costs (ii) increased labor related costs of $1.2 million primarily driven by increased headcount within the company as compared to the first quarter of 2009, and (iii) $0.4 million of expenses related to the write off of an asset under construction. These cost increases were partially offset by $1.2 million of combined decreases in bad debt expense and third party consultant costs.
In the first three months of 2010, our operating cash flow reflected net income generated during the period of $1.5 million, adjusted for non-cash items such as depreciation and amortization expense of $29.1 million, an increase of $10.4 million from prior year. Operating cash flows increased to $44.1 million due to a decrease in accounts receivable balance and a net change from prior year of $10.2 million due to the timing of the receipt of payment from NGA in the current year.
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Digitalglobe Inc. has a market cap of $1.24 billion; its shares were traded at around $27.3 with a P/E ratio of 23.1 and P/S ratio of 4.4. DGI is in the portfolios of Lee Ainslie of Maverick Capital, Jeremy Grantham of GMO LLC, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:
In February 2007, the ClearView agreement was merged with the NextView agreement to include delivery of imagery from the QuickBird satellite, which, together with sales of images from WorldView-1 after its commissioning in November 2007, generated $73.2 million of revenue in 2007, $157.9 million of revenue in 2008 and $159.2 million of revenue in 2009. In January 2008, we amended the NextView agreement from image-based ordering to a service level agreement, or SLA, and increased the amount we are to receive under the NextView agreement from $265.0 million to $311.0 million. Under the SLA, we are obligated to make substantially all of the image tasking capacity of our WorldView-1 satellite available to NGA, as well as to meet certain service requirements related to the operational performance of our WorldView-1 satellite and related ground systems. In the event that we do not meet the service level requirements, NGA is granted an allowance of up to $0.8 million of the total $12.5 million monthly fee, which NGA can use to extend the SLA period or apply to any new agreement between the parties. Any revenue deferred related to this allowance will be recognized when earned in future periods. In 2009, we deferred $0.4 million of SLA revenue as a result of underperformance against the SLA performance requirements. However, our performance against these requirements has not had a significant adverse impact on our revenue from, or relationship with, NGA. Our commitment to provide a substantial portion of the WorldView-1 satellite imaging capacity to NGA under the NextView agreement limits our ability to provide tasking services from WorldView-1 to other customers, but does not materially limit our ability to sell collected imagery to other customers from our ImageLibrary. Our revenue from NGA under the NextView agreement is derived from sales of WorldView-1 imagery products under the SLA, as well as from non-SLA orders for imagery products and services. Historically, NGA has purchased more than the contracted amounts stipulated in the ClearView and NextView agreements.For the three months ended March 31, 2009 and 2010, $52.4 million, or 91.4%, and $52.6 million, or 84.0%, respectively, of our defense and intelligence revenue was generated within the United States and Canada, and $4.9 million, or 8.6%, and $10.0 million, or 16.0%, respectively, was generated from international defense and intelligence customers. For the three months ended March 31, 2009 and 2010, our top five defense and intelligence customers accounted for 97.7% and 95.6%, respectively, of our defense and intelligence revenue. NGA was our only customer that accounted for more than 10% of our revenue in the three months ended March 31, 2009 and 2010. NGA accounted for approximately 77.4% and 66.2%, respectively, of our revenue for the three months ended March 31, 2009 and 2010, respectively.
For the three months ended March 31, 2009 and March 31, 2010, $4.8 million, or 48.1% and $5.3 million, or 36.6%, respectively, of our commercial revenue was generated in the Americas and $5.1 million or 51.9% and $9.2 million, or 63.4%, respectively, was generated outside of the Americas. For the three months ended March 31, 2009 and March 31, 2010, our top five commercial customers accounted for 48.8% and 44.4%, respectively, of our commercial revenue. None of these customers accounted for more than 10% of our revenue in three months ended March 31, 2009 and March 31, 2010. We believe that we will have additional opportunities in some of the countries with developing economies, such as China, India and Russia, and, as a result, we expect that long-term sales growth in our commercial segment will be higher outside of the Americas.
Increases in cost of revenue were realized due to a special project and our direct access programs. The $3.7 million increase is primarily attributable to (i) increased labor related costs of $1.5 million primarily driven by the expensing of employees who previously had been capitalized as a part of WorldView-2 development, but who have now been reallocated to other operating functions within the company and also headcount growth. (ii) $1.1 million of direct access costs related to amortization of the deferred contract costs related to the facilities and the costs associated with the first year of maintenance, and (iii) $1.0 million in third-party costs related to completing a project in March of 2010,
The increase of $2.2 million in selling, general and administrative costs was attributable to (i) $1.8 million from WorldView-2 insurance costs (ii) increased labor related costs of $1.2 million primarily driven by increased headcount within the company as compared to the first quarter of 2009, and (iii) $0.4 million of expenses related to the write off of an asset under construction. These cost increases were partially offset by $1.2 million of combined decreases in bad debt expense and third party consultant costs.
In the first three months of 2010, our operating cash flow reflected net income generated during the period of $1.5 million, adjusted for non-cash items such as depreciation and amortization expense of $29.1 million, an increase of $10.4 million from prior year. Operating cash flows increased to $44.1 million due to a decrease in accounts receivable balance and a net change from prior year of $10.2 million due to the timing of the receipt of payment from NGA in the current year.
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