Record Q2 Revenues for GeoEye

"Operating margins and adjusted EBITDA margins have continued to be strong as well. Our pipeline of work with the U.S. Government and commercial customers remains robust, we are encouraged by our growth, and we continue to have excellent revenue visibility".

"The recent award we received from the National Geospatial-Intelligence Agency (NGA) under the EnhancedView program increases that visibility - we now have a sustaining relationship with the NGA for the next 10 years. We are focused on expanding our satellite constellation over the next few years by putting GeoEye-2 into service in 2013. We look forward to providing the NGA continued access to Earth imagery with unprecedented resolution and accuracy that delivers geospatial insight - anytime, anywhere. The additional capacity GeoEye-2 can provide will also benefit our commercial customers in the U.S. and overseas. We are also excited by the customer response to our innovative new Web services platform, EyeQ, which allows our customers to turn imagery into business solutions."

Total revenues were USD81.0 million for the second quarter of 2010, an 11.4% increase from USD72.7 million for the second quarter of 2009. Net income for the second quarter of 2010 was USD12.1 million, or USD0.55 per fully diluted share, compared to net income of USD9.6 million, or USD0.46 per fully diluted share, for the second quarter of 2009.

Net income for the second quarter of 2010 includes a non-cash credit of USD2.1 million related to fair value accounting for the Company's financing commitment with Cerberus Capital Management L.P. ("Cerberus"). This credit reduced the charge taken in the first quarter. There is no income tax charge or benefit related to this credit. Excluding this credit, net income for the second quarter of 2010 was USD10.1 million, or USD0.46 per fully diluted share.

Revenues related to contracts with the US Government, the Company's largest customer, were USD55.5 million for the second quarter of 2010, representing 68.5% of total revenues for the period. Domestic revenues were USD62.1 million for the second quarter of 2010, which were 76.7% of total revenues for the period. These revenues included USD37.5 million from our Service Level Agreement (SLA) with the National Geospatial-Intelligence Agency (NGA). International revenues were USD18.9 million for the second quarter of 2010, which were 23.3% of total revenues for the period.
Operating income for the second quarter of 2010 was USD24.3 million or 30.0% of revenues. Adjusted EBITDA, a non-GAAP measure that represents net income before net interest income or expense, income tax expense (benefit), depreciation and amortization expenses, non-cash stock-based compensation expense and other items, increased approximately USD2 million to USD42.3 million for the second quarter of 2010, from USD40.4 million for the same period in 2009. Adjusted EBITDA margin was 52.3% for the second quarter of 2010.

The Company ended the second quarter of 2010 with cash and cash equivalents of USD184.8 million, restricted cash of USD63.4 million, current income tax receivable of USD27.2 million, total assets of USD972.3 million, long-term debt of USD381.8 million and stockholders' equity of USD314.7 million.
On 6th August 2010 GeoEye was awarded a contract from the NGA under the EnhancedView program for increased satellite imaging capacity. This contract supports NGA by providing products and services that will help meet the increasing geospatial intelligence needs of the intelligence community and Department of Defense.

The contract replaces the Service Level Agreement currently in place with the NGA's NextView program. The period of performance for the contract is 10 years and runs from 1st September 2010 to 31st August 2011, with nine, one-year options. The EnhancedView Service Level Agreement commences 1st September 2010.

The EnhancedView contract supports the accelerated development of GeoEye's next-generation satellite, GeoEye-2. The Company expects GeoEye-2 to be operational and delivering imagery in early 2013. Under the award, the NGA will contribute up to USD336.9 million of the overall construction costs of GeoEye-2.

On 15th July 2010, the Company announced that the NGA exercised the second of its monthly options to extend its SLA with GeoEye. This option becomes effective 1st August 2010, and runs through 31st August 2010.

In the second quarter we recognised revenues of USD37.5 million from our SLA with the NGA, which represents 100% achievement during the quarter of the stringent metrics required under the SLA.
In March, the Company amended and expanded its contract with the NGA to provide Web mapping services under the NGA's Rapid Delivery of Online GEOINT (RDOG) program. This Web hosting and dissemination contract modification and expansion is in addition to on-going production work being performed under the RDOG contract originally awarded in June 2009.

During the quarter, the Company signed a multi-million dollar order with its Russian reseller, ScanEx Research and Development Center, for more than two million square kilometers of high-resolution satellite imagery to be tasked and downloaded from the IKONOS satellite.

During the quarter the Company continued development and construction of the GeoEye-2 imagery satellite. To date the Company has invested USD145 million in the GeoEye-2 satellite program.
GeoEye has revised its guidance upwards and now expects fiscal 2010 revenue to range from USD320 million to USD330 million, with adjusted EBITDA in the range of USD160 million to USD170 million. These estimates represent management's current expectations about the Company's future financial performance, based on information available at this time.