GeoEye Remains Upbeat, Will Fund Operations Without NGA Money if Necessary
In a conference call with analysts on Monday afternoon, GeoEye CEO Matt O'Connell said that even without funding from the National Geospatial-Intelligence Agency (NGA) for fiscal year (FY) 2013 that his company could remain viable into 2014 with existing funds or those expected from operations.
He said that he has received a lot of positive signs from Congress that it is working to restore funds for the NGA. He believes that the NGA is being very cautious given the antideficiency rules in place. That is, the agency can't spend money it doesn't expect to receive in FY 2013 beginning September 1, 2012. Indeed, the Senate Armed Services Committee wants to add $125 million to the FY2013 budget to ensure that both GeoEye and DigitalGlobe remain fully funded.
O'Connell commented that he believes the NGA also wants to continue funding the next generation of GeoEye's satellites (GeoEye-2). He said that since the NGA approved $181 million to fund the launch that this signals NGA interest in receiving imagery from that satellite, despite that level of funding falling short of what's needed for completion of the satellite.
In the Q&A session, O'Connell was asked if any customers had indicated that they might step in to support imagery acquisition from GeoEye-2 and he simply answered, "Yes" to that question.
Asked to comment on consolidation of the industry, O'Connell said he was not going to discuss that today.
Analysts asked if the risk in funding would delay the launch or force other changes to the satellite's ability to collect imagery, O'Connell said that even boosting the altitude of the satellite to increase capacity so that GeoEye could sell to commercial clients would not be advisable. The GeoEye-2 satellite will be the "best in the skies for years."
Asked that given the risk to funding would GeoEye consider delaying the launch, O'Connell said, "I don't see any delay to launch … we're a short putt away."
Asked if the NGA will renegotiate some of this contract with GeoEye, O'Connell said that he believes that each side will be flexible but that NGA can't obligate funds that it does not have.
O'Connell finished the call by thanking the analysts during this crazy time in Washington and asked for their continued support.
