UrtheCast Reports First Quarter 2015 Financial Results

Revenue of $3.3 Million; Working Capital Improved to $24M; Commissioning of HRC Progressing Well

VANCOUVER, May 12, 2015 /CNW/ - UrtheCast Corp. (TSX:UR) ("UrtheCast" or the "Company"), a technology company that is developing the world's first Ultra HD video platform of Earth from space, today announces financial results for the three months ended March 31, 2015. The Company reported comprehensive income of $264,000 in the quarter, compared to a loss of $3.9 million in the same quarter last year. The Company's working capital position increased from $21.8 million at December 31, 2014 to $24 million at March 31, 2015 — an improvement of $2.2 million, with a cash balance of $12.7 million.  Subsequent to the quarter end, the balance sheet was strengthened by the closing of an equity financing for gross proceeds $17.25 million through the issuance of 8,625,000 Common Shares at $2.00 per share.

Recent highlights include:

Initial Revenue Recognition

UrtheCast recognized $3.3 million in revenue in the first quarter of 2015, primarily from the previously-announced data and value-added engineering services contract.

Bi-Axial Pointing Platform ("BPP") & High Resolution Camera ("HRC")

Commissioning of the HRC is progressing well and UrtheCast continues to expect to reach initial operations this summer. The Company is now acquiring multiple videos per day, and is making good progress on the commissioning of the BPP and the ground-processing algorithms. While the test video UrtheCast previously disclosed had a Ground Sampling Distance ("GSD") of 1.5 m, the Company is pleased to report that it is currently processing videos at a GSD of 1.0 m.

HRC First Light Event Planned

UrtheCast has now scheduled a first light event for its high-resolution videos, to be held on June 16th. 

US$9 Million Contract to Provide Space Hardware and Engineering Services

UrtheCast announced the signing of a US$9 million contract for the provision of space hardware and engineering services. Work on the project began in April and it is anticipated that hardware will be delivered to the customer in 2017.

Business Interruption Insurance Payment

As previously announced, UrtheCast was awarded an insurance claim of up to $11.5 million, of which $2.25 million was accrued during the first quarter of 2015, which is in addition to the $7.75 million that was already received in Q4 of 2014. The remaining funds will be accrued at $750,000 per month up until May 2015, or whenever the HRC achieves Initial Operating Capability ("IOC").

MRC Update

UrtheCast is actively filling orders for Medium-Resolution Camera ("MRC") imagery. Customer feedback is positive and revenue visibility continues to grow.

Website Development

The web platform remains in a private beta phase.  As a part of the core of the UrtheCast vision, this platform will enable the democratization of Earth Observation data, and a public understanding of how the world changes over time. New features, including ordering and publishing services, are planned for launch in mid-2015, with continued, routine releases of new functionality and datasets thereafter.

"This was a great start to the year", explained Scott Larson, UrtheCast's Chief Executive Officer. "The technical progress that we've made, the revenue we've generated, our solid financial position, and our customers' interest in what we have to offer all point to 2015 being a good year for UrtheCast."

Results of Operations

					Three Months ended March 31,
						2015		2014
Revenue					$	3,257,974	$	-
Other operating income						2,680,250		-
						5,938,224		-
Operating costs
Direct costs, selling, general and administration						3,186,922		2,554,385
Research expenditures						1,930,164		491,549
Share-based payments						703,596		846,423
						5,820,682		3,892,357
Operating income (loss)						117,542		(3,892,357)
Net finance (costs) income						(70,452)		51,092
Foreign exchange gain (loss)						202,494		(27,695)
Net income (loss)						249,584		(3,868,960)
Other comprehensive income (loss)						13,984		(3,445)
Comprehensive income (loss)					$	263,568	$	(3,872,405)
Net income (loss) per share – basic and diluted					$	0.00	$	(0.06)

The Company recorded net income of $250,000 in the first quarter of 2015 and revenue from engineering and value-added services of $3.3 million. In addition, the Company recorded income of $2.25 million from its business interruption insurance policy and $430,000 from government grants associated with the development of its second-generation ("Gen-2") sensors. Operating costs increased by approximately $1.9 million in the first quarter, compared with the same period last year, primarily due to the additional staff and associated infrastructure around our second-generation sensor development, and for the web platform in preparation for its launch in mid-2015.

Cash Flow

					Three Months ended March 31,
						2015		2014
Cash inflows (outflows) from operating activities					$	2,808,215	$	(2,826,858)
Cash outflows from investing activities						(2,532,429)		(3,836,996)
Cash inflows from financing activities						618,756		1,570,043
Increase (decrease) in cash and cash equivalents during the period						894,542		(5,093,811)
Cash and cash equivalents at beginning of period						11,398,052		21,787,577
Effect of foreign exchange rate changes on cash and cash equivalents						388,183		4,461
Cash and cash equivalents at end of period					$	12,680,777	$	16,698,227

The cash balance at March 31, 2015 was $12.7 million, which includes the $6.3 million cash advance for the new hardware and engineering services contract. In April, the Company received net proceeds for $15.9 million from its equity financing. The Company also expects to receive a further payment under its business interruption insurance policy of up to $3.75 million, plus the possibility of an additional amount for the costs to implement the technical solution. These proceeds, in addition to the initial anticipated revenues from the MRC and HRC, are expected to fund the Company's current level of operations and capital commitments over the next twelve months.

The full financial statements and accompanying Management's Discussion & Analysis are available on UrtheCast's profile on the System for Electronic Document Analysis and Retrieval ("SEDAR") at its website www.sedar.com, and on UrtheCast's website at www.urthecast.com.

The Company will host a conference call regarding its corporate earnings for the three months ended March 31, 2015, at 5:00 p.m. ET (2:00 p.m. PT) on Tuesday, May 12, 2015. The live conference call will be available by calling toll-free at 866-696-5910, or by toll call at 416-340-2217. The participant pass code is 2427706.

An archived version of the conference call will be made available on the Company's investor webcast page, following the live conference call.

About UrtheCast Corp.

UrtheCast Corp. is a Vancouver-based technology company that is developing the world's first Ultra HD video feed of Earth, streamed from space in full color. Working with prominent aerospace partners from across the globe, UrtheCast has built, launched, installed, and will soon operate its Ultra HD video camera, Iris, on the ISS alongside its Medium Resolution Camera ("MRC") which reached Initial Operation Capability ("IOC") in 2014. Video and still image data captured by the cameras will be downlinked to ground stations across the planet and displayed on the UrtheCast web platform, or distributed directly to partners and customers. UrtheCast's cameras will provide Ultra HD video and still imagery of Earth that will allow for monitoring of the environment, humanitarian relief, social events, agricultural land, etc. Common shares of UrtheCast trade on the Toronto Stock Exchange as ticker 'UR'.

For more information visit UrtheCast's website at www.urthecast.com.

Forward Looking Information

This release contains certain information which, as presented, constitutes "forward-looking 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 "intend", statements that an action or event "may", "might", "could", "should", or "will" be taken or occur, or other similar expressions and includes, but is not limited to, statements about the commissioning of the cameras and the BPP, plans to operate camera components on, and stream video footage from, the ISS, proposed image and video product offerings, expectations regarding the commencement of commercial operations, expected partners and customers to distribute such products and expected costs and revenues. Forward-looking statements and information are subject to various known and unknown risks and uncertainties, many of which are beyond the ability of UrtheCast to control or predict, and which may cause UrtheCast's actual results, performance or achievements to be materially different from those expressed or implied thereby, including, but not limited to, damage which may have occurred to the cameras during launch or installation, unexpected changes in Russian or Canadian government policies, technology changes, reliance on key personnel, the potential for conflicts of interest among certain officers, directors or promoters with certain other projects, competition, risks related to the business activities of Longford Energy Inc. (now UrtheCast) prior to the reverse take-over transaction with Earth Video Camera Inc., as well as those factors discussed in the Company's annual information form dated March 20, 2015, (the "AIF") and the Company's short form base shelf prospectus dated April 7, 2014 and prospectus supplement dated April 10, 2015 (together, the "Prospectus") which are available under UrtheCast's SEDAR profile at www.sedar.com. Forward-looking information is developed based on assumptions about such risks, uncertainties and other factors set out herein, in the AIF and Prospectus, and as otherwise disclosed from time to time on UrtheCast's SEDAR profile.

Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and UrtheCast undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as may be required by applicable Canadian securities laws. Readers are cautioned against attributing undue certainty to forward-looking statements.

SOURCE UrtheCast Corp.

Issa Nakhleh, CFO, [email protected], [phone] Direct

Related Links

www.urthecast.com