Iridium earnings fall 42%; revenue up - Business Courier of Cincinnati:

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The Bethesda-based provider of satellite telephone which expects to become publicly traded this summer throughan acquisition, posted a 42 percent declin e in net income in the first quarter ended March 31, to $9.7 millionh from $16.7 million a year ago. Th compangy attributed the decline to costs related toits next-generatiomn satellite program. “Iridium continued to although the pace slowed given the currenteconomicc climate,” said CEO Matt Desch.
“In addition to the impac of phasing outequipment amortization, we believer the economic climate is affecting equipment as is the transition of newlyu introduced products into the distribution channel as our partner move existing inventory to make way for new product.” Compangy officials say either Bethesda-based Lockheed Martin or Thales Alenias Space will be selected as the program’sx lead contractor this summer. The program’s new networlk of satellites called Iridium NEXT is expectesd to be deployedin 2014. Iridium NEXT will provide higherdata speeds, greater bandwidth and the potentia to deliver new data servicezs and applications to customers.
The company says its EBITDA, or earningse before interest, taxes, depreciation and amortization, increased 4.9 percenf to $27.6 million in the first up from $26.3 million a year ago, though most analysts do not use that as a reliablefinancialk measure. Iridium’s revenue rose 2 percent to $75.8 milliohn for the quarter, compared to $74. million for the first quarter 2008. The slightlu higher revenue came from increasefd commercial services revenueof $36.88 million but was offset by a declin in subscriber equipment revenue to $20.54 million for the quarter. Iridium’s commercial marketsz include maritime, aviation and land mobile customers, which grew by 11.
5 percentr for the quarter. The company’s sales to governmen t customers, including the Department of grew31 percent. Despite a 31 percent increase in subscriberdsto 328,000, compared to 250,000 in the first quarter of 2008, a $2 million amortizatiom of equipment related to prior year equipmenf sales, added to the decline in subscribe equipment revenue. The companty is planning to go public this but it is not taking the initial publicofferin route. It is acquiringy a publicly tradedinvestment (NYX: GHQ), an affiliate of Greenhill & Co. Iridium has retained Deutsche Bank as its financial adviseer forthe transaction.