Deliver Your News to the World

Loral Reports Second Quarter And First Half 2007 Financial Results


WEBWIRE

NEW YORK.-- Loral Space & Communications Inc. (NASDAQ: LORL)reported its financial results for the three and six months ended June 30, 2007.

ďThe satellite industry continues to demonstrate growth, both in demand for new technology on the manufacturing side and for additional and more advanced applications on the satellite services side,Ē said Michael Targoff, Loralís chief executive officer. "Within this environment, Loralís performance has been strengthening, with our satellite manufacturing business continuing to perform well, and our satellite services business reporting steady results on its well-utilized fleet.

ďThe Telesat Canada transaction is on-track with integration plans continuing to be refined. The financing for the transaction remains fully committed and we expect to close in the third quarter, once the required regulatory approvals, expected this summer, are received.Ē

Financial Results for the Periods Ending June 30, 2007

Total consolidated revenue for the second quarter of 2007 rose 17 percent to $226 million from $193 million in the same period last year. For the first half of 2007, Loralís revenue totaled $447 million, a 22 percent increase over the $365 million reported in the first six months of 2006.

Loralís second quarter Adjusted EBITDA (1) was $17 million. While this was even with last yearís second quarter, it includes the effect of increased expenditures on research and development of $3 million, litigation costs of $3 million, and a reduction of recurring annual revenue of $3 million as a result of the cancellation of the Connexion by Boeing contract in 2006. First half 2007 Adjusted EBITDA totaled $25 million, down from first half 2006 Adjusted EBITDA of $28 million, after the 2007 effect of a total of $17 million for the same items mentioned above.

Loralís operating loss for the second quarter was $15 million, compared to $0.5 million in the second quarter of 2006. For the first six months of 2007, Loral reported an operating loss of $27 million, versus $7 million for the same period in 2006. Second quarter and first half 2007 operating loss includes incremental non-cash stock-based compensation cost of $10 million as a result of shareholder approval of stock option plan amendments on May 22, 2007 plus the effect of the items that impacted Adjusted EBITDA, identified above.

Reflecting a mark-to-market non-cash, pre-tax gain of $62 million for the second quarter and $65 million for the first half of 2007 on foreign exchange contracts related to the Telesat transaction, Loral reported net income of $21 million in the second quarter and $4 million for the six months ending June 30, 2007. Loral reported a net loss of $11 million and $27 million for the second quarter and first six months of 2006, respectively. Net income for 2007 is before dividends and the impact of the beneficial conversion feature related to the issuance of Loralís preferred stock on February 27, 2007.

Loral reported basic and diluted earnings per share in the second quarter of $0.70 and $0.67, respectively. For the first six months of 2007, Loral reported a loss per share, both basic and diluted, of $1.46. Basic and diluted loss per share was $0.57 and $1.36 for the three and six months ended June 30, 2006, respectively.

As of June 30, 2007, Loral had $526 million in cash and short term investments. Loralís net funded backlog at the end of the quarter was $1.5 billion.

Business Unit Review

Satellite Manufacturing

SS/L second quarter 2007 revenues before eliminations rose to $210 million, a 29 percent improvement over $163 million reported in the second quarter of 2006. For the first half, revenues at SS/L totaled $411 million, an increase of 36 percent from the first six months of 2006. SS/Lís increase in revenue was driven primarily by performance on satellite construction contracts signed in 2006 and 2007.

SS/Lís Adjusted EBITDA before eliminations in the second quarter was $13 million, versus $12 million in the year-ago quarter. For the six months ending June 30, 2007, SS/L reported Adjusted EBITDA before eliminations of $20 million, compared to $18 million for the first six months of 2006. Adjusted EBITDA included increased spending on research and development of $3 million and $5 million for the second quarter and first six months of 2007, respectively.

During the second quarter, SS/L was awarded a new contract for the construction of NSS-12, a powerful new satellite for SES New Skies. Also in the quarter, the NASA Goddard Space Flight Centerís Rapid Spacecraft Development Office (RSDO) awarded SS/L a delivery order for a Landsat Data Continuity Mission (LDCM) Spacecraft Accommodation Study. Last week, SS/L announced that it had been awarded a contract from Sirius Satellite Radio for the construction of Sirius FM-6, a powerful new HIEO (highly inclined elliptical orbit) satellite for use in its satellite radio service. SS/L has built Siriusís entire fleet, consisting of three in-orbit satellites and one ground spare currently in storage. In addition, a fifth satellite for Sirius is currently under construction at SS/L. Over the next twelve months, Loral continues to see a robust market for additional satellite orders in the industry.

Backlog at SS/L at June 30, 2007 was $1.2 billion, including intercompany backlog of $84 million. At December 31, 2006, SS/Lís backlog totaled $1.1 billion, with intercompany backlog of $116 million. Intercompany backlog primarily consists of the Telstar 11N satellite being built for Loralís satellite services division, Loral Skynet.

Satellite Services

Loral Skynet experienced continued steady performance from its transponder leasing and network services businesses, adding new revenue to partially offset the effect of the Connexion by Boeing contract cancellation in the third quarter of 2006 and the planned exit from certain lower margin network services contracts in the fourth quarter of 2006.

In the second quarter of 2007, revenues before eliminations were $35 million, down from revenues of $38 million in the year-ago period. For the first half of the year, revenues before eliminations totaled $69 million, compared to $74 million for the same period in 2006.

In the second quarter, Adjusted EBITDA before eliminations was $14 million, even with the second quarter of 2006. For the first six months of 2007, Adjusted EBITDA totaled $26 million, compared to $27 million for the same period in 2006.

Utilization on Loral Skynetís satellite fleet at the end of the second quarter was 73 percent.

Satellite services backlog at June 30, 2007 was $373 million, including intercompany backlog of approximately $8 million. At December 31, 2006, satellite services backlog was $355 million, including intercompany backlog of $10 million.

Telesat Canada Update

On December 16, 2006, the joint venture company formed by Loral and its Canadian partner, PSP Investments, entered into a definitive agreement with BCE Inc. (TSX/NYSE: BCE) to acquire 100 percent of the stock of Telesat Canada from BCE for CAD 3.25 billion. Loral anticipates regulatory approval shortly and expects to close the transaction in the third quarter.

Telesat Canada reported second quarter 2007 operating revenue of CAD 161 million and operating income of $60 million. The companyís backlog at June 30, 2007 was CAD 4.9 billion. This backlog includes the benefit of two satellites under construction where all of the capacity has been leased for the entire life of the satellites.

A full discussion of Loralís results is contained in the companyís Form 10-Q, which, when filed, will be available on the companyís web site at www.loral.com or on the SECís EDGAR service at www.sec.gov.



WebWireID44602





This news content was configured by WebWire editorial staff. Linking is permitted.

News Release Distribution and Press Release Distribution Services Provided by WebWire.