Globalstar Announces Third Quarter 2024 Financial Results
"
Dr.
THIRD QUARTER FINANCIAL REVIEW
Revenue
Total revenue for the third quarter of 2024 was
Higher service revenue of
We also continue to make progress on other strategic initiatives, including XCOM RAN equipment shipments, recognition of fees associated with a proof of concept with a government services company and other engineering contract work.
For our subscriber driven service revenue, Commercial IoT service revenue increased 5% from the prior year's third quarter due primarily to a 7% increase in average number of subscribers. Service revenue associated with legacy Duplex and SPOT services was lower due to fewer subscribers.
Income from operations
Income from operations was
Higher cost of services resulted from network operating costs, primarily personnel costs and maintenance. These costs are necessary to support our new and upgraded global ground infrastructure. A significant portion of these costs are reimbursed to us, and this consideration is recognized as revenue when earned in the subsequent year. We currently do not expect the operating costs that support existing Phase 1 services to increase meaningfully beyond current levels. Cost of services also increased due to product development efforts as well as non-cash costs associated with the Support Services Agreement (the “SSA”) we entered into in
Stock-based compensation increased from the prior year's third quarter due primarily to restricted stock units ("RSUs") granted in connection with the XCOM License Agreement in
Net income (loss)
Net income was
Adjusted EBITDA
Adjusted EBITDA increased 34% to
YEAR TO DATE FINANCIAL REVIEW
Revenue
Total revenue was
Service revenue increased
Revenue generated from subscriber equipment sales decreased
Income from operations
Income from operations was
Net income (loss)
Net loss was
Adjusted EBITDA
Adjusted EBITDA increased 15% to
Liquidity
As of
Operating cash flows include cash receipts from our customers, primarily from the performance of wholesale capacity services, as well as from subscribers for the purchase of equipment and satellite voice and data services. We use cash in operating activities primarily for network costs, personnel costs, inventory purchases and other general corporate expenditures. Investing outflows largely relate to network upgrades for certain vendors, including milestone work under the satellite procurement agreement and the launch services agreement. Financing activities relate primarily to the 2021 and 2023 funding agreements with our largest customer.
FINANCIAL OUTLOOK
We are updating our previously issued financial outlook for full year 2024 with anticipated results below.
-
Total revenue between
$245 million and$250 million (prior anticipated range was$235 million to$250 million ) - Adjusted EBITDA margin of approximately 54% (prior anticipated margin was 53%)
CONFERENCE CALL INFORMATION
As previously announced, the Company will host a conference call to discuss its results at
Earnings Call: |
The earnings call will be available via webcast from the following link.
Webcast Link: https://edge.media-server.com/mmc/p/ssnimn99
To participate in the earnings call via teleconference or to participate in the live Q&A session, participants should register at the following link to receive an email containing the dial-in number and unique passcode.
Participant Teleconference Registration Link:
|
Audio Replay: |
For those unable to participate in the live call, a replay of the webcast will be available in the Investor Relations section of the Company's website.
|
About
Note that all SPOT products described in this press release are the products of
For more information, visit www.globalstar.com.
Safe Harbor Language for Globalstar Releases
Certain statements contained in this press release other than purely historical information, including, but not limited to, expectations regarding future revenue, financial performance, financial condition, liquidity, projections, estimates and guidance, statements relating to our business plans, objectives and expected operating results, our anticipated financial resources, our ability to integrate the licensed technology into our current line of business, our expectations with respect to the pursuit of terrestrial spectrum authorities globally, the success of current and potential future applications for our terrestrial spectrum, our ability to meet our obligations and attain the attempted benefits under the updated services agreements, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “plan,” “may,” “could,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions, although not all forward-looking statements contain these identifying words. 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. Risks and uncertainties that could cause or contribute to such differences include, without limitation, those described under Item 1A. Risk Factors of the Company’s Annual Report on Form 10-K for the fiscal year ended
|
|||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||||
(In thousands, except per share data) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
|
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Revenue: |
|
|
|
|
|
|
|
||||||||
Service revenue |
$ |
68,908 |
|
|
$ |
53,643 |
|
|
$ |
180,008 |
|
|
$ |
155,245 |
|
Subscriber equipment sales |
|
3,399 |
|
|
|
4,040 |
|
|
|
9,164 |
|
|
|
16,154 |
|
Total revenue |
|
72,307 |
|
|
|
57,683 |
|
|
|
189,172 |
|
|
|
171,399 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Cost of services (exclusive of depreciation, amortization, and accretion shown separately below) |
|
19,185 |
|
|
|
13,872 |
|
|
|
54,058 |
|
|
|
37,938 |
|
Cost of subscriber equipment sales |
|
2,515 |
|
|
|
3,458 |
|
|
|
6,739 |
|
|
|
13,429 |
|
Marketing, general and administrative |
|
10,439 |
|
|
|
12,090 |
|
|
|
31,438 |
|
|
|
31,843 |
|
Stock-based compensation |
|
8,254 |
|
|
|
4,346 |
|
|
|
26,645 |
|
|
|
10,638 |
|
Reduction in the value of long-lived assets |
|
231 |
|
|
|
35 |
|
|
|
536 |
|
|
|
35 |
|
Depreciation, amortization, and accretion |
|
22,249 |
|
|
|
21,865 |
|
|
|
66,456 |
|
|
|
65,688 |
|
Total operating expenses |
|
62,873 |
|
|
|
55,666 |
|
|
|
185,872 |
|
|
|
159,571 |
|
Income from operations |
|
9,434 |
|
|
|
2,017 |
|
|
|
3,300 |
|
|
|
11,828 |
|
Other income (expense): |
|
|
|
|
|
|
|
||||||||
Loss on extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(10,403 |
) |
Interest income and expense, net of amounts capitalized |
|
(2,872 |
) |
|
|
(3,945 |
) |
|
|
(10,301 |
) |
|
|
(11,047 |
) |
Foreign currency gain (loss) |
|
4,918 |
|
|
|
(4,151 |
) |
|
|
(3,417 |
) |
|
|
(206 |
) |
Other |
|
186 |
|
|
|
25 |
|
|
|
(605 |
) |
|
|
373 |
|
Total other income (expense) |
|
2,232 |
|
|
|
(8,071 |
) |
|
|
(14,323 |
) |
|
|
(21,283 |
) |
Income (loss) before income taxes |
|
11,666 |
|
|
|
(6,054 |
) |
|
|
(11,023 |
) |
|
|
(9,455 |
) |
Income tax expense |
|
1,732 |
|
|
|
115 |
|
|
|
1,922 |
|
|
|
185 |
|
Net income (loss) |
$ |
9,934 |
|
|
$ |
(6,169 |
) |
|
$ |
(12,945 |
) |
|
$ |
(9,640 |
) |
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to common shareholders |
|
7,261 |
|
|
|
(8,842 |
) |
|
|
(20,906 |
) |
|
|
(17,572 |
) |
Net income (loss) per common share: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
0.00 |
|
|
$ |
(0.00 |
) |
|
$ |
(0.01 |
) |
|
$ |
(0.01 |
) |
Diluted |
|
0.00 |
|
|
$ |
(0.00 |
) |
|
|
(0.01 |
) |
|
|
(0.01 |
) |
Weighted-average shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
|
1,892,253 |
|
|
|
1,836,251 |
|
|
|
1,886,377 |
|
|
|
1,820,582 |
|
Diluted |
|
1,910,061 |
|
|
|
1,836,251 |
|
|
|
1,886,377 |
|
|
|
1,820,582 |
|
|
|||||||
CONSOLIDATED BALANCE SHEETS |
|||||||
(In thousands, except par value and share data) |
|||||||
(Unaudited) |
|||||||
|
|
|
|
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
51,916 |
|
|
$ |
56,744 |
|
Accounts receivable, net of allowance for credit losses of |
|
43,021 |
|
|
|
48,743 |
|
Inventory |
|
11,877 |
|
|
|
14,582 |
|
Prepaid expenses and other current assets |
|
20,638 |
|
|
|
22,584 |
|
Total current assets |
|
127,452 |
|
|
|
142,653 |
|
Property and equipment, net |
|
617,064 |
|
|
|
624,002 |
|
Operating lease right of use assets, net |
|
34,364 |
|
|
|
34,164 |
|
Intangible and other assets, net of accumulated amortization of |
|
138,681 |
|
|
|
123,490 |
|
Total assets |
$ |
917,561 |
|
|
$ |
924,309 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Current portion of long-term debt |
$ |
34,600 |
|
|
$ |
34,600 |
|
Accounts payable and accrued expenses |
|
34,417 |
|
|
|
28,985 |
|
Accrued satellite construction costs |
|
1,015 |
|
|
|
58,187 |
|
Payables to affiliates |
|
274 |
|
|
|
459 |
|
Deferred revenue, net |
|
46,548 |
|
|
|
53,677 |
|
Total current liabilities |
|
116,854 |
|
|
|
175,908 |
|
Long-term debt |
|
359,759 |
|
|
|
325,700 |
|
Operating lease liabilities |
|
28,554 |
|
|
|
29,244 |
|
Other non-current liabilities |
|
18,301 |
|
|
|
14,478 |
|
Total non-current liabilities |
|
406,614 |
|
|
|
369,422 |
|
|
|
|
|
||||
Stockholders’ equity: |
|
|
|
||||
Series A Preferred Convertible Stock of |
|
— |
|
|
|
— |
|
Voting Common Stock of |
|
189 |
|
|
|
188 |
|
Additional paid-in capital |
|
2,466,279 |
|
|
|
2,438,703 |
|
Accumulated other comprehensive income |
|
5,552 |
|
|
|
5,070 |
|
Retained deficit |
|
(2,077,927 |
) |
|
|
(2,064,982 |
) |
Total stockholders’ equity |
|
394,093 |
|
|
|
378,979 |
|
Total liabilities and stockholders’ equity |
$ |
917,561 |
|
|
$ |
924,309 |
|
|
||||||||||||||||
RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP ADJUSTED EBITDA |
||||||||||||||||
(In thousands) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
|
|
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Net income (loss) |
|
$ |
9,934 |
|
|
$ |
(6,169 |
) |
|
$ |
(12,945 |
) |
|
$ |
(9,640 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Interest income and expense, net |
|
|
2,872 |
|
|
|
3,945 |
|
|
|
10,301 |
|
|
|
11,047 |
|
Derivative (gain) loss |
|
|
(130 |
) |
|
|
56 |
|
|
|
849 |
|
|
|
(243 |
) |
Income tax expense |
|
|
1,732 |
|
|
|
115 |
|
|
|
1,922 |
|
|
|
185 |
|
Depreciation, amortization, and accretion |
|
|
22,249 |
|
|
|
21,865 |
|
|
|
66,456 |
|
|
|
65,688 |
|
EBITDA (1) |
|
|
36,657 |
|
|
|
19,812 |
|
|
|
66,583 |
|
|
|
67,037 |
|
|
|
|
|
|
|
|
|
|
||||||||
Non-cash compensation |
|
|
8,254 |
|
|
|
4,346 |
|
|
|
26,645 |
|
|
|
10,638 |
|
Foreign exchange (gain) loss and other |
|
|
(4,973 |
) |
|
|
4,070 |
|
|
|
3,175 |
|
|
|
(234 |
) |
Reduction in value of inventory and long-lived assets |
|
|
266 |
|
|
|
35 |
|
|
|
571 |
|
|
|
35 |
|
Non-cash expenses and transaction costs associated with the License Agreement (2) |
|
|
1,844 |
|
|
|
3,743 |
|
|
|
5,455 |
|
|
|
3,743 |
|
Transaction costs |
|
|
757 |
|
|
|
— |
|
|
|
2,571 |
|
|
|
— |
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10,403 |
|
Adjusted EBITDA (1) |
|
$ |
42,805 |
|
|
$ |
32,006 |
|
|
$ |
105,000 |
|
|
$ |
91,622 |
|
(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-cash or non-recurring charges as applicable. Management uses Adjusted EBITDA 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 revenues and operating profit, to measure operating performance. |
|
|
|
(2) |
In connection with the License Agreement with XCOM, the Company entered into a Support Services Agreement (the “SSA”) with XCOM. Fees payable by
|
|
|||||||||||
SCHEDULE OF SELECTED OPERATING METRICS |
|||||||||||
(In thousands, except subscriber and ARPU data) |
|||||||||||
(Unaudited) |
|||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||
|
|
|
|
|
|
|
|
||||
Service revenue: |
|
|
|
|
|
|
|
||||
Subscriber services |
|
|
|
|
|
|
|
||||
Duplex |
$ |
5,955 |
|
$ |
7,978 |
|
$ |
15,675 |
|
$ |
20,088 |
SPOT |
|
10,444 |
|
|
11,350 |
|
|
31,066 |
|
|
33,703 |
Commercial IoT |
|
6,650 |
|
|
6,347 |
|
|
19,803 |
|
|
16,881 |
Wholesale capacity services |
|
43,861 |
|
|
27,517 |
|
|
109,149 |
|
|
83,406 |
Government and other services |
|
1,998 |
|
|
451 |
|
|
4,315 |
|
|
1,167 |
Total service revenue |
|
68,908 |
|
|
53,643 |
|
|
180,008 |
|
|
155,245 |
|
|
|
|
|
|
|
|
||||
Subscriber equipment sales |
|
3,399 |
|
|
4,040 |
|
|
9,164 |
|
|
16,154 |
|
|
|
|
|
|
|
|
||||
Total revenue |
$ |
72,307 |
|
$ |
57,683 |
|
$ |
189,172 |
|
$ |
171,399 |
|
Three Months Ended |
|
Nine Months Ended |
||||||||
|
|
|
|
|
|
|
|
||||
Average subscribers |
|
|
|
|
|
|
|
||||
Duplex |
|
26,535 |
|
|
33,501 |
|
|
27,899 |
|
|
35,143 |
SPOT |
|
242,134 |
|
|
258,485 |
|
|
245,592 |
|
|
262,818 |
Commercial IoT |
|
512,260 |
|
|
477,344 |
|
|
506,657 |
|
|
472,812 |
Other |
|
286 |
|
|
376 |
|
|
298 |
|
|
391 |
Total |
|
781,215 |
|
|
769,706 |
|
|
780,446 |
|
|
771,164 |
|
|
|
|
|
|
|
|
||||
ARPU (1) |
|
|
|
|
|
|
|
||||
Duplex |
$ |
74.81 |
|
$ |
79.38 |
|
$ |
62.43 |
|
$ |
63.51 |
SPOT |
|
14.38 |
|
|
14.64 |
|
|
14.05 |
|
|
14.25 |
Commercial IoT |
|
4.33 |
|
|
4.43 |
|
|
4.34 |
|
|
3.97 |
(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. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241107317312/en/
Investor Contact Information:
[email protected]
Source: