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Iridium Announces Second-Quarter 2013 Results; Company Updates 2013 And Long-Range Outlook

Stocks in this article: IRDM

MCLEAN, Va., Aug. 1, 2013 (GLOBE NEWSWIRE) -- Iridium Communications Inc. (Nasdaq:IRDM) ("Iridium") today reported financial results for the second quarter of 2013 and updated its full-year 2013 and long-range financial outlook. Net income was $15.4 million, or $0.18 per diluted share, for the second quarter of 2013, as compared to $17.7 million, or $0.23 per diluted share, for the second quarter of 2012. Operational EBITDA ("OEBITDA") (1) for the second quarter was $51.1 million, as compared to $52.0 million for the prior-year period, representing a year-over-year decline of 2 percent and an OEBITDA margin (1) of 54 percent. OEBITDA fell largely due to a decrease in equipment revenue and a $1.9 million charge related to higher projected warranty costs.

Iridium reported second-quarter total revenue of $94.7 million, which consisted of $71.4 million of service revenue and $23.3 million of equipment, engineering and support revenue. Total revenue declined 3 percent versus the comparable period of 2012, while service revenue grew 4 percent from the year-ago period. Total revenue declined largely due to 17 percent lower equipment revenue resulting from fewer overall unit sales. Service revenue, which represents primarily recurring revenue from Iridium's growing subscriber base, was 75 percent of total revenue for the second quarter of 2013 as compared to 70 percent in the year-ago period.

The Company ended the quarter with 647,000 total billable subscribers, which compares to 576,000 for the year-ago period and is up from 621,000 for the quarter ended March 31, 2013. Total billable subscribers grew 12 percent year-over-year, driven by strength in machine-to-machine ("M2M") and commercial voice customers.

"We continue to face short-term challenges in a couple areas of our commercial business, which caused us to revise our 2013 and long-range financial outlook," said Matt Desch, CEO, Iridium. "In the maritime sector, despite solid new customer additions and a favorable competitive landscape, recently addressed product issues have led to higher churn and tempered our growth prospects. We're also absorbing lower overall subscriber growth and usage in our core handset offerings, in part from increased competition in the cost-sensitive segment of these markets."

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