Iridium earnings fall 42%; revenue up - Silicon Valley / San Jose Business Journal:

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The Bethesda-based provider of satellite telephone which expects to become publicly traded this summer througan acquisition, posted a 42 percent decline in net incomse in the first quarter ended March 31, to $9.7 millionh from $16.7 million a year ago. Th company attribute d the decline to costs related toits next-generation satellitre program. “Iridium continued to grow, althoughg the pace slowed given the current economic climate,” said CEO Matt Desch.
“In addition to the impactg of phasing out equipment we believe the economi climate is affecting equipment as is the transition of newly introducexd products into the distribution channel as our partnere move existing inventory to make way for new Company officials sayeither Bethesda-based Lockheec Martin or Thales Alenia Space will be selectedf as the program’s lead contractor this The program’s new network of satellites calledf Iridium NEXT is expected to be deployed in 2014.
Iridiujm NEXT will provide higherdata speeds, greatefr bandwidth and the potential to delived new data services and applications to The company says its EBITDA, or earnings before interest, taxes, depreciation and amortization, increased 4.9 percent to $27.6t million in the first quarter, up from $26.3 million a year ago, thouguh most analysts do not use that as a reliable financiap measure. Iridium’s revenue rose 2 percent to $75.8i million for the quarter, compared to $74.3 million for the firsgt quarter 2008. The slightly higher revenue came from increase commercial services revenueof $36.u million but was offset by a decline in subscriber equipment revenue to $20.
million for the quarter. Iridium’as commercial markets include aviation and landmobile customers, which grew by 11.5 percent for the The company’s sales to government customers, including the Departmeng of Defense, grew 31 percent. Despite a 31 percent increase in subscribersto 328,000, compared to 250,000 in the firsyt quarter of 2008, a $2 million amortization of equipmentt related to prior year equipment sales, added to the decline in subscribee equipment revenue. The company is planningf to go publicthis summer, but it is not takinv the initial public offering route. It is acquirinyg a publicly tradedinvestment (NYX: GHQ), an affiliate of Greenhill & Co.
Iridiunm has retained Deutsche Bank as its financial adviserf forthe transaction.