ExactEarth says sale, merger possible as options explored
CAMBRIDGE — ExactEarth is exploring options ranging from financing to a sale or merger of the company as it strives to maximize shareholder value.
The announcement came Thursday as the Cambridgebased company released its fourth-quarter and fiscal 2017 financial results that reflected an annual revenue decline of $6.1 million, and a net loss of $33.8 million for 2017. That loss includes a $26.9-million non-cash charge related to the impairment and writedown of certain assets, the company reported.
ExactEarth uses a network of satellites to collect and provide vessel data for ship tracking.
The company’s board of directors has established a special committee to explore and evaluate potential options, which could also include a sale of assets, it said in a news release.
During a conference call with analysts, chief executive officer Peter Mabson said the decision to form the committee “is viewed as a very appropriate step at this point.” Mabson stressed there’s no guarantee anything will change as a result of the review, and said there’s no firm timeline for the process.
Asked whether the review came about as result of an outside inquiry or a need for cash, Mabson said he couldn’t comment on any specifics.
The committee will include new board member William “Mac” Evans, former president of the Canadian Space Agency who negotiated Canada’s role in the International Space Station.
ExactEarth is in the midst of deploying its second-generation technology, which provides realtime data as opposed to information that was updated hourly. Eighteen of the new satellites are in operation; more than 60 are expected.
The system, in partnership with Harris Corp., represents the “gold standard” in vessel detection and monitoring, Mabson said.
Real-time data used by ExactEarth clients could heighten maritime security, enhance search and rescue capabilities and help better manage fisheries, he said. “This really is a substantive capability that we’re developing here.”
While Mabson acknowledged that client adoption of the new technology will take longer than the company previously expected, its view of its long-term potential hasn’t changed.
ExactEarth was a subsidiary of Com Dev International, the Cambridge manufacturer of space hardware that was purchased by Honeywell in 2016. Under the deal, ExactEarth was spun off as a standalone, publicly-traded company, while Com Dev was delisted from the Toronto Stock Exchange.
One of the key factors in the decline was a drop in revenue generated by a Government of Canada contract, the company said, accounting for $5.3 million of the year-over-year difference.