- Press Release
- August 6, 2022
UrtheCast Reports Second Quarter 2018 Financial Results
UrtheCast Corp. (TSX:UR) (“UrtheCast” or the “Company”) today announces financial results for the three and six months ended on June 30, 2018 and provides an update on its financial condition.
Revenue decreased by $8.5 million in the second quarter of 2018 compared to the same quarter last year. Revenue from engineering services decreased by $7.0 million in the second quarter of 2018 compared to the same quarter last year, primarily due to a change in the expected completion date of one of our engineering services contracts, which resulted in the remaining revenue being recognized over a longer period. Earth Observation (“EO”) imagery sales decreased by $1.5 million in the second quarter of 2018 compared to the same quarter last year, due to lower contract volume in the current year and a delay in securing a major contract award, which was announced subsequent to June 30, 2018 as described below in “Business Highlights”.
The net loss of $13.3 million and negative adjusted EBITDA of $7.4 million in the second quarter of 2018 were lower compared to the net loss of $3.9 million and adjusted EBITDA of $0.9 million in the same quarter last year, primarily due to the decrease in revenue.
Donald Osborne, CEO of UrtheCast, commented, “UrtheCast is at a major inflection point in the Company’s history, having recently achieved a significant milestone by securing financing for the groundbreaking UrtheDaily Constellation and undergoing a leadership transition. While our financial results for the second quarter reflect the extent of the changes that are currently underway, we are taking decisive action to strengthen the Company in a number of ways, including through the acquisition of Geosys, which expands our customer footprint and moves up the geoanalytics value chain. In this way, we believe that we can unlock the vast potential of UrtheCast’s deep industry experience and best-in-class technology portfolio to establish clear market leadership and create lasting value for our shareholders.”
- UrtheCast and Land O’Lakes, Inc. today announced that they have entered a binding term sheet for the purchase of Geosys Technology Holding LLC (“Geosys”), a wholly owned subsidiary of Land O’Lakes for an aggregate purchase price of US$20 million. This landmark deal brings unprecedented value to UrtheCast, ultimately enabling the Company to offer to its agribusiness customers a full solution of imagery data and geoanalytical solutions.
- Upon the first closing, UrtheCast will continue to provide Land O’Lakes with all the services currently provided by Geosys but with an expanded utilization of data once the UrtheDaily constellation is fully operational. Services would be provided by UrtheCast pursuant to a 13-year agreement with total potential fees payable over the term of the agreement in excess of US$100 million.
- The Geosys acquisition would bring UrtheCast’s total contracted revenue backlog to in excess of $275 million.
Unsecured Revolving Credit Facility
- The Company has reached an agreement in principle with 1112099 B.C. Ltd., the backstop party which entered into the conditional backstop agreement with the Company in connection with the private placement that closed on May 3, 2018, to extend to the Company an unsecured revolving credit facility of up to US$20 million. The revolving credit facility and the terms and conditions thereof remain subject to, among other things, the entering into of definitive documentation and the receipt of all necessary consents and approvals.
Major EO Contract Award
- On July 12, 2018 UrtheCast and its subsidiary, Deimos Imaging, announced that they have been awarded a multi-million Euro contract through a consortium led by Airbus Defence and Space to provide a very large set of EO products and services to the European Commission and the European Space Agency (the “ESA”).
- On May 18, 2018 the Company entered into a US$142 million senior secured credit facility (the “Credit Agreement”) to finance the construction, launch, and deployment of the six-satellite UrtheDaily Constellation, as well as related working capital and general corporate purposes. The loan will be available in two equal drawdown amounts, subject to the Company meeting certain conditions precedent.
- In May and June 2018, gross proceeds of approximately $21.7 million were released from escrow to the Company from the private placement that closed on May 3, 2018.
- On July 10, 2018 the Company entered into an Escrow Release and Amending Agreement to release the remaining $5 million principal amount of brokered private placement debentures held in escrow, as further detailed in the Management Discussion and Analysis for the three and six months ended June 30, 2018
Changes to the Board of Directors and Management
- On June 19, 2018 Don Osborne was appointed as Chief Executive Officer of UrtheCast and assumed his role on July 5, 2018. Mr. Osborne is a seasoned technology executive, having spent more than 30 years in the satellite, space and defence industries. Most recently, from 2009 to 2017 he was a senior executive at MDA, a Maxar Company, including as President of the MDA Information Systems Group where he was responsible for MDA’s Canadian businesses.
- On June 25, 2018 the Company announced the results of its Annual General and Special Meeting of Shareholders, including the election of all management nominees to the board of directors. The nominees included two long-serving directors, William M. Evans (director since June, 2013) and James Topham (director since May, 2015) along with two directors appointed on May 25, 2018, namely Mark J. Piegza and Adam M. Vore, and two other highly-qualified candidates, Andreas M. Georghiou and John (Jack) Shannon.
- On August 13, 2018, Don Osborne was appointed to UrtheCast’s board of directors.
We refer you to the Company’s condensed interim consolidated financial statements for the three and six months ended June 30, 2018 and the related Management’s Discussion & Analysis for further details relating to the Company’s liquidity position. The Company has taken steps subsequent to the quarter ended June 30, 2018 to ensure that it is able to continue as a going concern and that it has adequate liquidity in the near term.
UrtheCast Corp. is a Vancouver-based company that serves the rapidly growing and evolving geospatial and geo-analytics markets with a wide range of information-rich products and services. The Company currently owns and operates two Earth Observation (EO) satellites, Deimos-1 and Deimos-2. Together with its exclusive partnerships, spanning an additional 20 satellites, UrtheCast processes and distributes imagery data and value-added products on a global scale to partners and customers in multiple markets. UrtheCast is also launching UrtheDaily™, a satellite constellation that will be the most advanced change detection system in the world, designed to capture daily, scientific grade, high-quality, medium resolution optical imagery of the Earth’s entire landmass (excluding Antarctica). UrtheCast is also developing OptiSAR™, a constellation of SAR satellites which, together with UrtheDaily™, will form the world’s first fully-integrated optical and SAR constellation. Common shares of UrtheCast trade on the Toronto Stock Exchange as ticker “UR”.
For more information, visit UrtheCast’s website at www.urthecast.com.