CAMBRIDGE, ON, Feb. 4, 2016 – exactEarth Ltd., the leading provider of Satellite AIS data services, today announced its financial results for the fourth quarter and year ended October 31, 2015 as well as the closing of the Spinout Transaction whereby exactEarth became a public company. All amounts are stated in Canadian dollars unless otherwise noted.
Summary of Results
| Three months ended October 31 |
Years ended October 31 |
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| In thousands of dollars, except % figures | 2015 | 2014 | 2015 | 2014 |
| Total revenue | 7,462 | 4,467 | 26,600 | 15,836 |
| Subscription services revenue* | 5,297 | 3,708 | 20,592 | 12,667 |
| Gross margin | 70.4% | 56.6% | 62.0% | 51.4% |
| Net income | 441 | (932) | (1,055) | (3,705) |
| EBITDA* | 2,012 | 509 | 5,609 | 1,697 |
| Adjusted EBITDA* | 3,396 | 737 | 9,033 | 1,811 |
| * Subscription revenue, EBITDA and Adjusted EBITDA are non-IFRS measures. Please see the definitions and reconciliation below. |
Fiscal 2015 Highlights
- Increased our base of active subscribers to more than 130 subscription customers, representing 40 countries on six continents.
- Announced a strategic partnership with Harris Corporation that will provide us with long-term access to 58 payloads on the Iridium NEXT constellation, enabling real-time global coverage and the opportunity to introduce a range of new services.
- Significantly strengthened our first-generation constellation with the integration of three additional AIS satellites and the launch of our first equatorial orbit satellite, exactView-9 which was brought into operational service subsequent to the quarter end on January 18th, 2016. Two additional satellites are expected to launch in the second half of fiscal year 2016 with the commissioning period bringing them into service for early 2017.
- Improved our infrastructure and service levels by doubling the size of our ground station network, bringing the total in service to 25.
- Successful product release and trials of our new small vessel solution through our strategic alliance with SRT plc.
- Subsequent to year-end, purchased a minority position in satellite “Internet of Things” technology company, Myriota Pty Ltd.
“We are pleased to report a strong finish to an outstanding year,” said Peter Mabson, President of exactEarth. “In 2015 we made important strategic advances highlighted by the long-term agreement we reached with Harris Corporation that will strengthen our offering and open up exciting new revenue opportunities. We also generated exceptional growth on the strength of a major contract with the Canadian Government, an increase in our subscriber base, and the initial revenues associated with the Harris partnership.”
Mr Mabson continued: “We view 2016 as a transition year for exactEarth. Our service level will likely plateau for most of this year, but is then expected to improve significantly through 2017 with the deployment of our remaining two first generation satellites and with the Iridium NEXT satellite deployments. As a newly independent and well-funded public company we also intend to move forward on growth initiatives targeted at addressing the maritime information and satellite-internet-of-things markets and we are looking to invest significant effort over the next few years to put capabilities in place that can drive growth in these areas. I am confident that these efforts will help lay the foundation for long-term growth.”
Financial Review
Total revenue was $26.6 million in the year ended October 31, 2015, an increase of $10.8 million from $15.8 million of revenue in the previous year. The revenue growth is the result of both our growing customer base and of service level and product improvements.
Subscription services revenue was $20.6 million in 2015, representing 77% of total revenues, and compares to $12.7 million in 2014. The primary driver of growth was a Canadian Government contract signed in September 2014 and covering a service period through to March 2016. The Company is currently engaged in a competitive bidding process to continue to provide AIS services to the Canadian Government. The Company is confident in its chances of winning the Canadian government contract renewal, but the scope and dollar value of the agreement remains unclear at this time.
Data Products revenue was $3.9 million in 2015, compared to $1.5 million the previous year. The 2015 results include a one-time $2.5 million USD purchase of historical data by Harris, an amount recognized in an even split between the third and fourth quarters.
Other Products & Services contributed $2.1 million of revenue in 2015, up from $1.7 million in 2014. This revenue tends to be unpredictable as it is generated from on-demand customer requests.
Gross profit was $16.5 million representing 62.0% of revenue in 2015, compared to $8.1 million or a 51.4% gross margin in 2014. The increase reflects the growing customer base, offsetting the increased operational costs of our expanded satellite constellation.
Total operating expenses were $15.9 million in 2015, an increase of $4.8 million from the previous year. The majority of the increase was attributable to selling, general and administrative expenses which grew by $3.5 million to $9.0 million. The increase in SG&A expense reflects the volume of new subscriptions and the Company’s investment as we execute on our strategic plan.
EBITDA was $5.6 million in 2015, an increase of $3.9 million from $1.7 million the previous year. Adjusted EBITDA of $9.0 million was up significantly from $1.8 million the previous year. The major adjustment in 2015 was $2.9 million of offering expenses associated with the initial public offering process initiated during the year. (Both EBITDA and Adjusted EBITDA are non-IFRS measures which are defined below.)
Net loss was $1.1 million in 2015, compared to a net loss of $3.7 million in 2014. The decrease is primarily attributed to increasing revenues year over year as the number of customers and product offerings increased, partially offset by increasing operating, development, selling and depreciation costs as ground stations were added, personnel increased and additional satellite assets were commissioned, along with increased costs of executing our strategic plan.
exactEarth generated $5.9 million of cash from operating activities in 2015 compared with $3.9 million generated in 2014. The Company ended the year with $2.4 million in cash, compared with $2.4 million at the end of fiscal 2014.
Spinout Transaction
exactEarth’s current majority shareholder, COM DEV International, today completed a Spinout Transaction under which COM DEV distributed its shareholdings in exactEarth to its own shareholders and exactEarth will become a publicly traded company. exactEarth shares are expected to start trading on the TSX on or about February 9th, 2016 under the symbol XCT.
Immediately prior to the completion of the Spinout Transaction, exactEarth’s existing shareholders converted all of exactEarth’s shareholder debt to equity, and invested an additional $20 million of cash in equity. As a result, exactEarth’s balance sheet will be significantly strengthened.
Following the completion of the Spinout Transaction, the Company has 21,605,506 shares outstanding. On a fully diluted basis, the Company will have approximately 23,070,749 shares outstanding. Hisdesat will be exactEarth’s largest shareholder holding approximately 27% of the outstanding Common Shares.
Conference Call
The management of exactEarth will host an investor conference call on Friday, February 5, 2016 at 8:30 a.m. to discuss these results in greater detail. All interested investors and analysts are invited to participate.
| Date: | Friday, February 5, 2016 at 8:30 a.m. E.S.T. |
| Dial-in: | (647) 427-7450 or 1-888-231-8191 |
| Webcast: | To access the live webcast, please go to or visit the exactEarth website for more details. |
| The webcast will be archived for 30 days. | |
| Replay: | The call recording will be available for 2 hours post call. |
About exactEarth Ltd.
exactEarth is a leading provider of global maritime vessel data for ship tracking and maritime situational awareness solutions. Since its establishment in 2009, exactEarth has pioneered a powerful new method of maritime surveillance called Satellite-AIS (“S-AIS”) and has delivered to its clients a view of maritime behaviours across all regions of the world’s oceans unrestricted by terrestrial limitations. exactEarth has deployed an operational data processing supply chain involving a constellation of satellites, receiving ground stations, patented decoding algorithms and advanced “big data” processing and distribution facilities. This ground-breaking system provides a comprehensive picture of the location of AIS equipped maritime vessels throughout the world and allows exactEarth to deliver data and information services characterized by high performance, reliability, security and simplicity to large international markets. For more information, visit exactearth.com.
