Second Quarter 2018 Earnings Call August 15, 2018
Forward-Looking Statements This presentation contains certain information which, as presented, constitutes "forward-looking information" or "forward-oriented financial information" within the meaning of applicable Canadian securities laws. Forward-looking information involves statements that relate to future events and often addresses expected future business and financial performance, containing words such as "anticipate", "believe", "plan", "estimate", "expect" and "guidance", statements that an action or event "may", "might", "could" or "will" be taken or occur, or other similar expressions and includes, but is not limited to, statements relating to: UrtheCast's expectations with respect to: UrtheCast's expected completion of the Geosys acquisition on terms set out in this press release, the definitive documentation related thereto, or at all; UrtheCast's expectations with respect to its ability to pay all installments making up the aggregate purchase price; UrtheCast's expectations with respect to the revenue to be generated by the service level agreement; Deimos Imaging's expected ability to deliver data produced by Deimos-2 to the consortium and fulfil its other obligations under the consortium agreement with Airbus Defence and Space; UrtheCast's expected completion of the UrtheDaily Financing and beginning of the UrtheDaily Constellation build phase; UrtheCast's expectations with respect to its ability to raise proceeds from a subordinated debt or equity offering, achieve the required leverage and contracted revenue ratios and otherwise satisfy the first drawdown conditions and the final drawdown conditions under the Credit Agreement in a timely manner; opportunities to renegotiate current and future customer contracts; and the Company's ability to continue as a going concern. Such statements reflect UrtheCast's current views with respect to future events. Such statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by UrtheCast, are inherently subject to significant uncertainties and contingencies. Many factors could cause UrtheCast's actual results, performance or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements, including, among others: UrtheCast's inability to enter into definitive documentation or satisfy any of the other conditions to the completion of the Geosys transaction; UrtheCast's inability to fund the installments for the purchase price of the Geosys transaction; Deimos Imaging or any other imaging provider supplying data to the consortium being unable to deliver imagery products meeting the minimum specifications required by the consortium agreement; interruptions to or failures of Deimos' infrastructure or the infrastructure of any other imaging provider supplying data to the consortium; Airbus Defence and Space's inability to satisfy its payment obligations under the consortium agreement; ESA's inability to satisfy its payments obligations under the head contract with Airbus Defence and Space; legal and regulatory changes; UrtheCast's inability to raise proceeds from a subordinated debt or equity offering, achieve the required leverage and contracted revenue ratios or otherwise satisfy the first drawdown conditions or the final drawdown conditions under the Credit Agreement in a timely manner or at all; and uncertainty about UrtheCast's ability to continue as a going concern; as well as those factors and assumptions discussed in UrtheCast's annual information form dated April 2, 2018 (the "AIF"), which is available under UrtheCast's SEDAR profile at www.sedar.com. UrtheCast undertakes no obligation to update forward-looking statements except as required by Canadian securities laws. Readers are cautioned against attributing undue certainty to forward-looking statements. 2
Recent Accomplishments Entered into binding agreement to purchase leading geoanalytics firm Geosys • Announced total revenue backlog in excess of C$275M • Reached agreement in principal for a US$20M unsecured revolving credit facility • Awarded major EO contract through Deimos Imaging subsidiary • Completed financing for transformational UrtheDaily Constellation • Strengthened top leadership with appointment of Don Osborne as CEO • 3
Key Initiatives Getting to First Draw on UrtheDaily Financing • EO market continues to expand at a rapid pace o Actively negotiating with several customers whose combined contract values exceeds first and second minimum draw o requirements as defined in loan agreement with senior secured lender Expansion into analytics • Data-rich satellite imagery increasingly integrated into critical systems across industries o Scientific-grade, high-resolution, multispectral imagery with global coverage and high revisit enables a vast array of o disruptive machine-learning and artificial intelligence applications Acquisition of Geosys moves UrtheCast up the value chain, expands capabilities and customer footprint o OptiSAR next-phase • Continuing to develop best-in-class Synthetic Aperture Radar service offering in conjunction with UrtheDaily o Operational improvements • Focused on creating long-term value for all stakeholders o Re-aligning the business to multi-year contracts and predictable revenues o Near-term goal to attain positive cash flow o 4
Q2 2018 Financial Results Operations Q2 Change EO sales decreased by $1.5M due to lower contract volume and a • 2018 2017 $ % Canadian dollars, thousands delay in securing a major contract award Revenue Engineering revenue decreased by $7.0M primarily due to a change • in the expected completion date of an engineering services contract Earth Observation $1,834 $3,284 ($1,450) (44%) Adjusted EBITDA decreased $8.3M due to the lower revenues • Engineering $1,543 $8,570 ($7,027) (82%) Financing Total Revenue $3,377 $11,854 ($8,477) (72%) • Submitted claims for grants and loans under various Canadian government programs totaling $1.1M Adjusted EBITDA 1 ($7,368) $909 ($8,276) (910%) • Gross proceeds of $21.7M released from escrow relating to private placement of subscription receipts that closed on May 3, 2018 Q2 Q4 Change Principal repayment of $1.9M made toward $10M revolving demand • credit facility with RBC Canadian dollars, thousands 2018 2017 $ % Principal repayment of €4.0M made with respect to €25.0M term • Cash and restricted loan with Banco Sabadell $19,704 $32,980 ($13,277) (40%) term deposits Liquidity Working capital $20,897 $19,744 $5,314 27% • Cash of $19.7M and $25.1M in net working capital 1 Non-IFRS Measure. See Notes to and Reconciliation of Non-IFRS Measures. 5
Revenue & Adjusted EBITDA 1 Non-IFRS Measure. See Notes to and Reconciliation of Non-IFRS Measures. 6
Q2 2018 Selected Financial Information Three months ended June 30, 2018 2017 Canadian dollars, thousands, except per share Revenue $3,377 $11,854 Other operating income $37 $61 Operating costs $15,593 $16,381 Operating loss ($12,179) ($4,466) Net loss ($13,253) ($5,207) Comprehensive loss ($14,608) ($1,442) Net loss per share – basic and diluted ($0.11) ($0.03) Adjusted EBITDA 1 ($7,368) $909 June 30, 2018 December 31, 2017 Canadian dollars, thousands Cash $23,206 $3,673 Restricted term deposits $16,031 $9,774 Working capital (current assets minus current liabilities) $20,897 $19,744 Total assets $175,141 $174,274 Total non-current financial liabilities $95,197 $72,081 Shareholders’ equity $79,944 $102,193 1 Non-IFRS Measure. See Notes to and Reconciliation of Non-IFRS Measures. 7
Notes to Non-IFRS Measures The Company prepares its financial statements in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board. This release includes certain non-IFRS financial measures, such as EBITDA and adjusted EBITDA. The Company uses these non-IFRS financial measures as supplemental indicators of its operating performance and financial position. These measures do not have any standardized meanings prescribed by IFRS and therefore are unlikely to be comparable to the calculation of similar measures used by other companies, and should not be viewed as alternatives to measures of financial performance calculated in accordance with IFRS or considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These non-IFRS financial measures should be read in conjunction with the Company's financial statements and accompanying MD&A. 8
Reconciliation of Non-IFRS Measures Three months ended June 30, 2018 2017 Canadian dollars, thousands Adjusted EBITDA: Net loss ($13,253) ($3,905) Add back (subtract): Depreciation and amortization $4,291 $4,188 Net finance costs $5,904 $436 Income tax recovery ($127) ($1,302) EBITDA ($3,185) ($583) Impairment of assets - $309 Share-based payments expense $520 $878 Gain on derivative financial instruments ($4,169) ($681) Foreign exchange (gain) loss ($534) $986 $909 Adjusted EBITDA ($7,368) 9
Contact Information: Head Office 33-1055 Canada Place Vancouver, BC V6C 0C3 Stock Symbol: TSX: UR CUSIP Number 91731 Investor Relations +1 (604) 669-1788 invest@urthecast.com Transfer Agent TMX Trust Company
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