Globalstar Announces First Quarter 2019 Results
Kagan continued, “Our strategy at
OPERATIONAL HIGHLIGHTS
Spectrum Update
The first Band 53 industrial user terminals were received from certain
of our partners, including
Financing Update
Together with our financial advisors, we are exploring various financing
alternatives to address our funding requirements for
FINANCIAL REVIEW
Revenue
Total revenue for the first quarter of 2019 increased
Success in the simplex (“Commercial IoT”) market contributed
Duplex service revenue decreased 2%, while SPOT service revenue
increased 1%, each due to lower average subscribers offset by higher
ARPU. Lower activations over the last twelve months, compared to the
prior year period, contributed to a 13% and 2% decline in average Duplex
and SPOT subscribers, respectively. Duplex and SPOT ARPU increased 13%
and 3%, respectively, due to the impact of price increases initiated
over the past several quarters as well as subscribers activating on rate
plans higher than our previous blended ARPU. Finally, a
Revenue generated from subscriber equipment sales for Duplex and SPOT
products was also generally flat quarter over quarter with Duplex down
Operating Loss
Operating loss increased
Net Income
Net income decreased
Adjusted EBITDA
Adjusted EBITDA decreased slightly to
CONFERENCE CALL
The Company will conduct an investor conference call on
Details are as follows: | ||||
Conference Call: |
8:30 a.m. ET |
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Audio Replay: |
A replay of the earnings call will be available for a limited time and can be heard after 11:00 a.m. ET on May 2, 2019. Dial: 1 (888) 843-7419 (US and Canada), 1 (630) 652-3042 (International) and pass code 4850 9813#. | |||
About
Note that all SPOT products described in this press release are the
products of
Safe Harbor Language for Globalstar Releases
This press release contains certain statements that are “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are based on
current expectations and assumptions that are subject to risks and
uncertainties which may cause actual results to differ materially from
the forward-looking statements. Forward-looking statements, such as the
statements regarding our expectations with respect to the pursuit of
terrestrial spectrum authorities globally, future increases in our
revenue and profitability and other statements contained in this release
regarding matters that are not historical facts, involve predictions.
Any forward-looking statements made in this press release are believed
to be accurate as of the date made and are not guarantees of future
performance. Actual results or developments may differ materially from
the expectations expressed or implied in the forward-looking statements,
and we undertake no obligation to update any such statements. Additional
information on factors that could influence our financial results is
included in our filings with the
GLOBALSTAR, INC. | |||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
(In thousands, except per share data) |
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(Unaudited) |
|||||||||||
Three Months Ended |
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2019 | 2018 | ||||||||||
Revenue: | |||||||||||
Service revenue | $ | 26,119 | $ | 26,010 | |||||||
Subscriber equipment sales | 3,959 | 2,739 | |||||||||
Total revenue | 30,078 | 28,749 | |||||||||
Operating expenses: | |||||||||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below) |
9,853 | 9,029 | |||||||||
Cost of subscriber equipment sales | 3,149 | 2,172 | |||||||||
Marketing, general and administrative | 11,606 | 11,275 | |||||||||
Depreciation, amortization, and accretion | 23,801 | 19,231 | |||||||||
Total operating expenses | 48,409 | 41,707 | |||||||||
Operating loss | (18,331 | ) | (12,958 | ) | |||||||
Other income (expense): | |||||||||||
Interest income and expense, net of amounts capitalized | (12,870 | ) | (7,353 | ) | |||||||
Derivative gain | 57,008 | 108,944 | |||||||||
Other | (9 | ) | (662 | ) | |||||||
Total other income (expense) | 44,129 | 100,929 | |||||||||
Income before income taxes | 25,798 | 87,971 | |||||||||
Income tax expense | 27 | 41 | |||||||||
Net income | $ | 25,771 | $ | 87,930 | |||||||
Net income per common share: | |||||||||||
Basic | $ | 0.02 | $ | 0.07 | |||||||
Diluted | 0.02 | 0.06 | |||||||||
Weighted-average shares outstanding: | |||||||||||
Basic | 1,448,318 | 1,262,336 | |||||||||
Diluted | 1,632,257 | 1,437,328 | |||||||||
GLOBALSTAR, INC. | |||||||||||
RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP ADJUSTED EBITDA | |||||||||||
(In thousands) |
|||||||||||
(Unaudited) |
|||||||||||
Three Months Ended | |||||||||||
March 31, | |||||||||||
2019 | 2018 | ||||||||||
Net income | $ | 25,771 | $ | 87,930 | |||||||
Interest income and expense, net | 12,870 | 7,353 | |||||||||
Derivative gain | (57,008 | ) | (108,944 | ) | |||||||
Income tax expense | 27 | 41 | |||||||||
Depreciation, amortization, and accretion | 23,801 | 19,231 | |||||||||
EBITDA | 5,461 | 5,611 | |||||||||
Non-cash compensation | 1,448 | 1,276 | |||||||||
Foreign exchange and other | (255 | ) | 595 | ||||||||
Bad debt reserve of aged IGO receivable | 593 | — | |||||||||
Adjusted EBITDA (1) | $ | 7,247 | $ | 7,482 | |||||||
(1) EBITDA represents earnings before interest, income taxes, depreciation, amortization, accretion and derivative (gains)/losses. Adjusted EBITDA excludes non-cash compensation expense, reduction in the value of assets, foreign exchange (gains)/losses and certain other non-recurring charges as applicable. Management uses Adjusted EBITDA in order to manage the Company's business and to compare its results more closely to the results of its peers. EBITDA and Adjusted EBITDA do not represent and should not be considered as alternatives to GAAP measurements, such as net income/(loss). These terms, as defined by us, may not be comparable to similarly titled measures used by other companies.
The Company uses Adjusted EBITDA as a supplemental measurement of its operating performance. The Company believes it best reflects changes across time in the Company's performance, including the effects of pricing, cost control and other operational decisions. The Company's management uses Adjusted EBITDA for planning purposes, including the preparation of its annual operating budget. The Company believes that Adjusted EBITDA also is useful to investors because it is frequently used by securities analysts, investors and other interested parties in their evaluation of companies in similar industries. As indicated, Adjusted EBITDA does not include interest expense on borrowed money or depreciation expense on our capital assets or the payment of income taxes, which are necessary elements of the Company's operations. Because Adjusted EBITDA does not account for these expenses, its utility as a measure of the Company's operating performance has material limitations. Because of these limitations, the Company's management does not view Adjusted EBITDA in isolation and also uses other measurements, such as revenue and operating profit, to measure operating performance.
GLOBALSTAR, INC. | |||||||||||||||||
SCHEDULE OF SELECTED OPERATING METRICS | |||||||||||||||||
(In thousands, except subscriber and ARPU data) |
|||||||||||||||||
(Unaudited) |
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Three Months Ended | |||||||||||||||||
March 31, | |||||||||||||||||
2019 | 2018 | ||||||||||||||||
Service | Equipment | Service | Equipment | ||||||||||||||
Revenue | |||||||||||||||||
Duplex | $ | 8,645 | $ | 251 | $ | 8,783 | $ | 431 | |||||||||
SPOT | 13,095 | 1,591 | 12,962 | 1,474 | |||||||||||||
Commercial IoT | 3,698 | 2,072 | 3,089 | 833 | |||||||||||||
IGO | 166 | — | 209 | — | |||||||||||||
Other | 515 | 45 | 967 | 1 | |||||||||||||
$ | 26,119 | $ | 3,959 | $ | 26,010 | $ | 2,739 | ||||||||||
Average Subscribers | |||||||||||||||||
Duplex | 59,978 | 69,033 | |||||||||||||||
SPOT | 288,840 | 293,561 | |||||||||||||||
Commercial IoT | 384,673 | 332,813 | |||||||||||||||
IGO | 27,017 | 31,200 | |||||||||||||||
ARPU (1) | |||||||||||||||||
Duplex | $ | 48.05 | $ | 42.41 | |||||||||||||
SPOT | 15.11 | 14.72 | |||||||||||||||
Commercial IoT | 3.20 | 3.09 | |||||||||||||||
IGO | 2.05 | 2.23 | |||||||||||||||
(1) Average monthly revenue per user (ARPU) measures service revenues per month divided by the average number of subscribers during that month. Average monthly revenue per user as so defined may not be similar to average monthly revenue per unit as defined by other companies in the Company's industry, is not a measurement under GAAP and should be considered in addition to, but not as a substitute for, the information contained in the Company's statement of operations. The Company believes that average monthly revenue per user provides useful information concerning the appeal of its rate plans and service offerings and its performance in attracting and retaining high value customers.
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Source:
Investor Contact Information:
Marcy O'Leary
[email protected]