ORBIMAGE Announces Results For First Six Months Of 2005

The Notes were issued at a discount of two percent of total principal; consequently, ORBIMAGE Holdings received $245 million of cash proceeds at closing. Concurrently with the closing of the offering, ORBIMAGE Holdings entered into an escrow agreement with BONY as Trustee and Escrow Agent whereby ORBIMAGE Holdings deposited $126.8 million into an escrow account, to remain until such time as ORBIMAGE Inc. could issue a guarantee of the Notes. This amount was classified as restricted cash in the Company's balance sheet as of June 30, 2005. Approximately $8.7 million was used to pay certain transaction-related expenses. The remaining $109.5 million was contributed by ORBIMAGE Holdings to the capital of ORBIMAGE Inc. As a result of this capital contribution, on June 30, 2005, ORBIMAGE Inc. had "Unrestricted Cash" as defined in the indenture governing its existing Senior Subordinated Notes in an amount sufficient to require ORBIMAGE Inc. to redeem the Senior Subordinated Notes pursuant to the mandatory redemption provisions of that indenture. ORBIMAGE Inc. redeemed the Senior Subordinated Notes on July 6, 2005. Upon redemption of the Senior Subordinated Notes, ORBIMAGE Inc. provided its guarantee of the Notes, and the escrow was released to ORBIMAGE Holdings on July 11, 2005. The Notes will bear interest at a rate per annum, reset semi-annually, equal to the greater of six-month LIBOR or three percent, plus a margin of 9.5 percent. ORBIMAGE Holdings has entered into an interest rate swap arrangement pursuant to which it has fixed its effective interest rate under the Notes at 13.75 percent through July 1, 2008.



                            ORBIMAGE HOLDINGS INC.
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
          (Unaudited; in thousands, except share and per share data)

                                    Three Months Ended      Six Months Ended
                                         June 30,               June  30,
                                     2005       2004        2005       2004

    Revenues                       $ 8,501    $ 9,749    $ 17,160   $ 11,759

    Direct expenses                  9,258      9,528      18,158     15,835

    Gross profit (loss)               (757)       221        (998)    (4,076)

    Selling, general and
     administrative expenses         3,098      2,191       5,646      3,834

    Loss from operations            (3,855)    (1,970)     (6,644)    (7,910)

    Interest expense, net            1,591      2,458       3,685      4,907

    Loss from early
     extinguishment of debt              -          -         639          -

    Loss before benefit for
     income taxes                   (5,446)    (4,428)    (10,968)   (12,817)

    Benefit for income taxes             -          -           -          -

    Net loss                       $(5,446)   $(4,428)   $(10,968)  $(12,817)

    Loss per common share -
     basic and diluted             $ (0.32)   $ (0.70)   $  (0.73)  $  (2.02)

    Weighted average shares
     outstanding - basic and
     diluted                    17,272,528  6,335,243  15,116,985  6,334,118



                            ORBIMAGE HOLDINGS INC.
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                 (Unaudited; in thousands, except share data)


        ASSETS
                                             Pro Forma    June 30,   December
                                              June 30,      2005        31,
                                              2005 (a)                 2004
    Current assets:
          Cash and cash equivalents           $248,572    $185,380   $60,565
          Restricted cash                            -     126,836          -
          Receivables net of allowances of
           $131 and $126, respectively           5,603       5,603     12,148
          Other current assets                   4,549       4,549      2,612
               Total current assets            258,724     322,368     75,325

     Property,  plant  and  equipment,  at  cost,
          less  accumulated  depreciation  of  $5,714
          and  $3,751,  respectively                                      22,721            22,721          18,263
        Satellites  and  related  rights,  at  cost,
          less  accumulated  depreciation  and
          amortization  of  $27,859  and  $18,142,
          respectively                                                            176,846          176,846        116,640
        Goodwill                                                                        28,490            28,490          28,490
        Other  assets                                                                19,849            21,098          10,428

                    Total  assets                                                $506,630        $571,523      $249,146

                  LIABILITIES  AND  STOCKHOLDERS'  EQUITY

        Current  liabilities:
                    Accounts  payable  and  accrued
                      expenses                                                      $    5,536        $    5,536      $    3,970
                    Amounts  payable  to  subcontractors          32,119            32,119          47,545
                    Deferred  revenue                                              2,102              2,102            2,234
                    Other  current  liabilities                            1,102              1,102                    -
                              Total  current  liabilities                40,859            40,859          53,749

        Long-term  debt                                                          245,002          307,776          85,018
        Deferred  revenue,  net  of  current  portion        69,911            69,911          24,491
        Other  noncurrent  liabilities                                  6,910              6,910                    -

                    Total  liabilities                                        362,682          425,456        163,258

        Stockholders'  equity:
                    Common  stock,  par  value  $0.01;
                      25,000,000  shares  authorized;
                      17,432,033  shares  and  9,917,078
                      shares  issued  and  outstanding
                      as  of  June  30,  2005  and
                      December  31,  2004,  respectively                  174                  174                  99
                    Additional  paid-in-capital                      186,050          186,050        112,373
                    Unearned  compensation                                  (1,109)          (1,109)        (1,845)
                    Accumulated  deficit                                    (37,826)        (35,707)      (24,739)
                    Accumulated  other  comprehensive
                      loss                                                                  (3,341)          (3,341)                  -

                    Total  stockholders'  equity                      143,948          146,067          85,888

                    Total  liabilities  and  stockholders'
                      equity                                                          $506,630        $571,523      $249,146


        (a)  ORBIMAGE  Inc.,  a  wholly  owned  subsidiary  of  ORBIMAGE  Holdings  Inc.,
                redeemed  its  Senior  Subordinated  Notes  on  July  6,  2005  with  proceeds
                obtained  through  the  issuance  of  $250  million  of  Senior  Secured
                Floating  Rate  Notes  on  June  29,  2005.    Upon  redemption  of  the  Senior
                Subordinated  Notes  and  the  issuance  by  ORBIMAGE  Inc.  of  a  guarantee  of
                the  Notes,  $126.8  million  of  escrow  proceeds  were  released  to  ORBIMAGE
                Holdings  on  July  11,  2005.    The  unaudited  condensed  pro  forma  balance
                sheet  is  intended  to  illustrate  the  effect  of  the  repayment  of  the
                Senior  Subordinated  Notes  and  the  release  of  restricted  cash  from
                escrow  as  if  these  transactions  had  occurred  on  June  30,  2005.



                                                        ORBIMAGE  HOLDINGS  INC.
                              CONDENSED  CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
                                                    (Unaudited;  in  thousands)

                                                                                                        Six  Months  Ended  June  30,
                                                                                                                    2005                  2004

        Cash  flows  from  operating  activities:
                  Net  loss                                                                            $(10,968)        $(12,817)
                  Adjustments  to  reconcile  net  loss  to  net
                    cash  provided  by  (used  in)  operating
                    activities:
                                        Depreciation  and  amortization                11,951              10,189
                                        Interest  paid  in  kind                                          -                4,954
                                        Stock  compensation                                            736                    567
                                        Loss  on  early  extinguishment  of
                                          debt                                                                      639                        -
                  Changes  in  assets  and  liabilities:
                                        Decrease  (increase)  in
                                          receivables  and  other  current
                                          assets                                                              5,918              (8,707)
                                        Increase  in  other  assets                              (211)                      -
                                        Increase  (decrease)  in  accounts
                                          payable  and  accrued  expenses                  1,562              (1,597)
                                        Increase  in  deferred  revenue                  45,289                    659
                  Net  cash  provided  by  (used  in)  operating
                    activities                                                                          54,916              (6,752)

        Cash  flows  from  investing  activities:
                  Capital  expenditures                                                      (88,408)                (495)
                  Net  cash  used  in  investing  activities                    (88,408)                (495)

        Cash  flows  from  financing  activities:
                  Issuance  of  long-term  debt                                          245,000                        -
                  Restricted  cash  held  in  escrow                                (126,836)                      -
                  Extinguishment  of  long-term  debt                              (22,244)                      -
                  Long-term  debt  repayment  and  issuance  costs        (11,365)                      -
                  Issuance  of  common  stock                                                73,752                        -
                  Net  cash  provided  by  financing  activities            158,307                        -

        Net  increase  (decrease)  in  cash  and  cash
          equivalents                                                                                124,815              (7,247)

        Cash  and  cash  equivalents,  beginning  of  period              60,565              14,405
        Cash  and  cash  equivalents,  end  of  period                      $185,380            $  7,158

        Supplemental  cash  flow  information:
                  Interest  paid
                                                                                                              $    4,295            $          -

        Non-cash  items:
                  Capital  expenditures                                                    $(32,119)          $          -
                  Amounts  payable  to  subcontractors                              32,119                        -

        About  ORBIMAGE: 


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