These concerns are overblown for a number of reasons. GeoEye went through a recent accounting restatement that ended in the first quarter and significant professional service fees were associated with this. In fact, SG&A for the quarter was up $3 million to $10 million compared to a year earlier, but most of those costs are one-time.
Revenue should continue to ramp up to historical operating margins of 45%. The company should be growing its earnings and cash over the next 18 months. Management also discussed several new hires the company is making in different areas of the business in anticipation of future demand. In addition, any new satellite development costs will be shared with the government as has been the case over the last few years. In the last two months, GeoEye's stock price is up 34%. I suspect the stock will keep chugging as a much wider audience comes to understand the geospatial industry, thanks to the media attention focused on Thursday's DigitalGlobe IPO. Please note that due to factors including low market capitalization and/or insufficient public float, we consider GeoEye to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.