UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
___________
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of
Report (Date of earliest event reported): May 6, 2010
GLOBALSTAR,
INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
(State
or Other Jurisdiction of Incorporation)
|
001-33117
(Commission
File
Number)
|
41-2116508
(IRS
Employer
Identification
No.)
|
|
461
South Milpitas Blvd. Milpitas, California
|
95035
|
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
Registrant’s
telephone number, including area code: (408) 933-4000
N/A
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
□ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
□ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
□ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
□ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
2.02 Results of Operations and Financial Condition.
On May 6,
2010, Globalstar, Inc. issued a press release to report 2010 first quarter
financial results. The text of the press release and the presentation materials
are furnished as Exhibit 99.1 to this Form 8-K.
Item
7.01 Regulation FD Disclosure.
During
Globalstar’s previously announced conference call at 5 p.m. Eastern time on May
6, 2010, written presentation materials will be used and will be available on
the company’s website. The text of the presentation materials is furnished as
Exhibit 99.2 to this Form 8-K.
The
information in this Current Report on Form 8-K and the Exhibits attached hereto
is furnished pursuant to the rules and regulations of the Securities and
Exchange Commission and shall not be deemed “filed” for purposes of Section 18
of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject
to the liabilities of that section, nor shall it be deemed incorporated by
reference in any filing under the Securities Act of 1933 or the Exchange Act,
except as expressly set forth by specific reference in such a
filing.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits.
99.1 Press
release dated May 6, 2010
99.2 Presentation
materials dated May 6, 2010
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| GLOBALSTAR, INC. | ||||
|
/s/
Fuad Ahmad
|
||||
|
Fuad
Ahmad
|
||||
|
|
Senior
Vice President and
Chief Financial Officer |
Date: May 6,
2010
Exhibit
99.1
461 SO.
MILPITAS BLVD.
MILPITAS
CA
95035
USA
NEWS
For
Immediate Release
GLOBALSTAR
ANNOUNCES FIRST QUARTER
RESULTS
FOR 2010
Key
Quarterly Highlights;
|
·
|
Company
announced first launch window for its second-generation satellite
constellation and displayed satellites nearing completion at Thales Alenia
Space facility in Rome
|
|
·
|
FCC
released its National Broadband Plan proposing to accelerate broader
deployment of wireless broadband and potential use of existing mobile
satellite services spectrum
|
|
·
|
Globalstar
and GPS consumer products manufacturer DeLorme introduced the world’s
first integrated GPS satellite
communicator
|
|
·
|
Company
further established its retail consumer market presence with enhanced SPOT
Satellite GPS Messenger™
|
|
·
|
Globalstar
and Arion Communication Co., Ltd., signed agreement to create new Korean
joint venture company Globalstar Asia
Pacific
|
MILPITAS, CA. -- (May 6,
2010) – Globalstar, Inc. (NASDAQ:GSAT), a leading provider of mobile
satellite voice and data services to businesses, governments and consumers,
today announced its operational and financial results for the three-month period
ended March 31, 2010.
Major
Company Highlights;
|
·
|
In
January the Company announced the first 90-day window to launch six
Globalstar second-generation satellites is scheduled to open on July 5,
2010. Globalstar plans to launch the new satellites in late
September or early October from the Baikonur Cosmodrome in Kazakhstan
using the highly reliable Soyuz launch vehicle. The human-rated
Soyuz is used to ferry astronauts and cosmonauts to the International
Space Station and has been used to successfully launch Globalstar
satellites on eight previous
occasions. .
|
|
·
|
In
late January Globalstar displayed the first of the Company’s new
second-generation constellation satellites nearing completion at the
Thales Alenia Space satellite manufacturing facility in Rome, Italy.
A group of Globalstar investors and members of the media viewed the
pre-launch manufacturing preparations and met with senior company
officials from Globalstar, satellite manufacturer Thales Alenia Space and
launch services provider
Arianespace.
|
|
·
|
Globalstar
applauded the FCC for its recently announced proposal to accelerate the
broader deployment of wireless broadband potentially by utilizing existing
mobile satellite services spectrum. In the plan titled
“Connecting America: The National Broadband Plan,” the FCC presented a
number of Internet broadband initiatives including the recommendation that
it should consider accelerating the,” terrestrial deployment in 90 MHz of
Mobile Satellite Spectrum.” Globalstar is licensed to use more
than 25 MHz of mobile satellite spectrum in the L and
S-band. In 2009 Globalstar became the first MSS provider to
utilize its ATC authority when its partner, Open Range Communications,
Inc. deployed a WiMAX rural broadband service using this
spectrum.
|
|
·
|
In
January Globalstar and GPS manufacturer DeLorme jointly introduced the
world’s first handheld GPS and Satellite Communicator at CES in Las
Vegas. The revolutionary device, designed exclusively for the
new DeLorme PN-60w, merges SPOT functionality and DeLorme state-of-the-art
GPS mapping capability. Users can send customized text messages
using the PN-60w’s keyboard to select individuals or groups from virtually
anywhere. In March Globalstar announced it had received a substantial
order from DeLorme for the initial delivery of more than 15,000 SPOT
Satellite Communicators. Throughout the quarter Globalstar
continued development of its HUG consumer satellite-based asset
monitoring, theft prevention and messaging system designed for mobile
assets such as yachts, snowmobiles and
motorcycles.
|
|
·
|
Globalstar
resumed shipping the new SPOT Satellite GPS Messenger™. The new SPOT
product features several upgrades and modifications. As of
March 31, 2010, and since its inception in November 2007, Globalstar has
received orders to ship more than 230,000 SPOT retail devices to over
10,000 SPOT Satellite GPS Messenger points of distribution in North
America, Europe, Latin America, Australia, New Zealand, and Southeast
Asia. During that time period, the SPOT product line has helped
initiate more than 575 rescues in 51 countries on land and at
sea.
|
|
·
|
The
Company announced it had commenced construction of a satellite tracking
station in Botswana, located in Southern Africa. The station will be used
to complete the Globalstar satellite telemetry control unit (TCU) network
that is to be used to monitor and control the Company’s second-generation
satellite constellation.
|
|
·
|
In
February Globalstar announced the signing of a joint venture agreement
with Arion Communication Co., Ltd., a leading provider of mobile satellite
voice and data products and services to maritime customers in Korea.
The new joint venture company known as Globalstar Asia Pacific will
operate the Globalstar gateway ground station in Korea and provide Simplex
and duplex mobile satellite voice and data services including SPOT
Satellite GPS Messenger™ products and services to customers in Korea and
the surrounding maritime region.
|
|
·
|
Thanks
to its original SPOT Satellite GPS Messenger programs and other Simplex
data initiatives, the Company completed the period ended March 31, 2010
with a total of 394,036 subscribers, 37,166 more than it had at March 31,
2009.
|
|
·
|
The
Company’s operating loss for the three-month period ended March 31, 2010
was $8.7 million compared to a loss of $17.6 million during the same
three-month period in 2009, an improvement of $8.9 million. Due
to Management’s cost containment initiatives and an improving market,
Adjusted EBITDA for the three-month period ended March 31, 2010 of ($1.8)
million was a significant improvement versus the year ago period of ($6.8)
million. Total revenue, net loss and net loss per share for the
three-month period ended March 31, 2010 were $15.6 million, $35.6 million
and $0.13 respectively, compared to $15.2 million, a net loss of $21.8
million and a net loss per share of $0.20, respectively, for the same
three months of 2009. For the three-month period ended March
31, 2010 there was a non-cash derivative loss of $25.0 million related to
a series of transactions associated with the $738 million financing
completed in July 2009. Globalstar’s consolidated statements of
operations and other financial and operating information appear later in
this press release.
|
“We
are now about two months away from taking delivery of the first of our new
second-generation satellites,” said Jay Monroe, Executive Chairman, Globalstar,
Inc. “Once our new satellites are in operational orbit, the most
immediate impact will be on those commercial enterprise and recreational
customers who utilize our satellite voice and duplex data
services. With each of our first four launches, we can expect a
progressive return to the high reliability and service quality they enjoyed
prior to 2007.”
Mr.
Monroe added, “As we prepare for the late September or early October launch of
our first six satellites, we applaud the FCC for its recently announced plans to
accelerate broader deployment of wireless broadband and potentially make use of
existing mobile satellite services spectrum to advance these plans. The proposed changes may
provide us with the ability to utilize increased ATC authority without the
current gating requirements or restrictions. If the FCC allows
Globalstar greater flexibility in the use of the spectrum, we expect to use such
flexibility initially in the U.S. and eventually abroad as FCC policies often
provide a template for similar regulatory policies in international
markets. We feel the plan also validates our current ATC business
model under which we are already receiving revenue for leasing our satellite
spectrum to Open Range. The full extent of the plan’s potential
impact on Globalstar will be better known in the upcoming months as the FCC
initiates a rulemaking proceeding addressing these issues in which Globalstar
will be an active participant.”
“With
cumulative orders for our SPOT consumer products approaching the quarter million
unit mark, we continued to solidify our enviable and unique position of being
the only mobile satellite services provider capable of offering ubiquitous high
value but affordable retail consumer products and services,” said Peter Dalton,
Chief Executive Officer, Globalstar, Inc. “Our continued challenge in
2010 will be to capitalize on, and further expand, our consumer market
success both domestically and around the world. During the first
quarter we did just that by signing a ground-breaking agreement with consumer
GPS product manufacturer DeLorme. This agreement not only continues
to advance our retail market presence but it also lays the foundation for a
whole series of future Globalstar mobile access products Each of
these proposed products will be designed using our open technology platform, to
provide Globalstar satellite coverage to users of everyday mobile wireless
handheld consumer devices."
Conference
Call Note
The
earnings conference call scheduled for today, May 6, 2010 at 5:00 p.m. Eastern
Time, will discuss the first quarter results for 2010.
|
Details
are as follows:
|
|
|
Earnings
Call:
|
Dial: 866.804.6927 (US and Canada), 857.350.1673
(International) and
participant pass code # 15233519
|
|
Audio
Replay:
|
A
replay of the earnings call will be available for a limited time and can
be heard after 8:00 p.m. ET on May 6, 2010. Dial: 888.286.8010 (US
and Canada), 617.801.6888 (International) and pass
code #
11226038
|
About
Globalstar, Inc.
With over
375,000 subscribers, Globalstar is a leading provider of mobile satellite voice
and data services. Globalstar offers these
services to commercial and recreational users in more than 120 countries around
the world. The Company's products include mobile and fixed satellite telephones,
simplex and duplex satellite data modems and flexible service packages. Many
land based and maritime industries benefit from Globalstar with increased
productivity from remote areas beyond cellular and landline service. Global
customer segments include: oil and gas, government, mining, forestry, commercial
fishing, utilities, military, transportation, heavy construction, emergency
preparedness, and business continuity as well as individual recreational users.
Globalstar data solutions are ideal for various asset and personal tracking,
data monitoring and SCADA applications.
For more
information regarding Globalstar, please visit Globalstar's web site at www.globalstar.com
###
For
further media
information:
Globalstar,
Inc.
Dean
Hirasawa
(408)
933-4006
Safe
Harbor Language for Globalstar Releases
This
press release contains certain statements such as, “With each of our first four
launches, we can expect a progressive return to the high reliability and service
quality they enjoyed prior to 2007,” that are “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements are subject to a number of assumptions, risks and
uncertainties, many of which are beyond our control, including demand for our
products and services, including commercial acceptance of our Simplex products
and the SPOT Satellite GPS Messenger, our ability to retain and migrate our
two-way communications services subscribers to our second-generation
constellation when it is deployed; problems relating to the construction, launch
or in-orbit performance of our existing and future satellites, including the
effects of the degrading ability of our first-generation satellite constellation
to support two-way communication; problems relating to the ground-based
facilities operated by us or by independent gateway operators; competition and
its competitiveness vis-a-vis other providers of satellite and ground-based
communications products and services; the pace and effects of industry
consolidation; the continued availability of launch insurance on commercially
reasonable terms, and the effects of any insurance exclusions; changes in
technology; our ability to continue to attract and retain qualified personnel;
worldwide economic, geopolitical and business conditions and risks associated
with doing business on a global basis; and legal, regulatory, and tax
developments, including changes in domestic and international government
regulation.
Any
forward-looking statements made in this press release speak 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 Securities and Exchange Commission,
including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K.
GLOBALSTAR,
INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
(In
thousands, except per share data)
|
Three
Months Ended
|
||||||||
|
March
31, 2010
|
March
31, 2009
As
Revised
|
|||||||
|
Revenue:
|
||||||||
|
Service
revenue
|
$
|
12,454
|
$
|
11,131
|
||||
|
Subscriber
equipment sales
|
3,117
|
4,032
|
||||||
|
Total
revenue
|
15,571
|
15,163
|
||||||
|
Operating
expenses:
|
|
|
||||||
|
Cost
of services (exclusive of depreciation and amortization shown separately
below)
|
7,618
|
10,408
|
||||||
|
Cost
of subscriber equipment sales
|
2,512
|
2,995
|
||||||
|
Marketing,
general, and administrative
|
8,212
|
13,977
|
||||||
|
Depreciation
and amortization
|
5,890
|
5,424
|
||||||
|
Total
operating expenses
|
24,232
|
32,804
|
||||||
|
Operating
loss
|
(8,661
|
)
|
(17,641
|
)
|
||||
|
Other
income (expense):
|
|
|
||||||
|
Interest
income
|
182
|
128
|
||||||
|
Interest
expense
|
(1,410
|
)
|
(240
|
)
|
||||
|
Derivative
loss, net
|
(24,962
|
)
|
—
|
|
||||
|
Other
expense
|
(727)
|
(3,975)
|
||||||
|
Total
other income (expense)
|
(26,917
|
)
|
(4,087
|
)
|
||||
|
Loss
before income taxes
|
(35,578
|
)
|
(21,728
|
)
|
||||
|
Income
tax expense
|
64
|
|
30
|
|||||
|
Net
loss
|
$
|
(35,642
|
)
|
$
|
(21,758
|
)
|
||
|
Loss
per common share:
|
|
|
||||||
|
Basic
|
$
|
(0.13
|
)
|
$
|
(0.20
|
)
|
||
|
Diluted
|
(0.13
|
)
|
(0.20
|
)
|
||||
|
Weighted-average
shares outstanding:
|
|
|
||||||
|
Basic
|
275,370
|
111,308
|
||||||
|
Diluted
|
275,370
|
111,308
|
||||||
Definition
of Terms and Reconciliation of Non-GAAP Financial Measures
We
utilize certain financial measures that are widely used in the
telecommunications industry and are not calculated based on GAAP. A
reconciliation of these measures to GAAP and a discussion of certain other
operating metrics used in the industry are presented below.
|
GLOBALSTAR,
INC.
|
|
RECONCILIATION
OF GAAP TO ADJUSTED
|
|
(Dollars
in thousands, except ARPU)
|
|
(Unaudited)
|
|
Three
months ended
|
||||||||
|
March
31, 2010
|
March
31, 2009
|
|||||||
|
Revenue
|
||||||||
|
Service
Revenue
|
$ | 12,454 | $ | 11,131 | ||||
|
Equipment
Revenue
|
3,117 | 4,032 | ||||||
|
Total
Revenue
|
$ | 15,571 | $ | 15,163 | ||||
|
Operating
Expenses
|
||||||||
|
Cost of
Services
|
7,618 | 10,408 | ||||||
|
Cost of Subscriber
Equipment
|
2,512 | 2,995 | ||||||
|
Marketing, General and
Administrative
|
8,212 | 13,977 | ||||||
|
Depreciation &
Amortization
|
5,890 | 5,424 | ||||||
|
Total Operating
Expenses
|
$ | 24,232 | $ | 32,804 | ||||
|
Operating
Loss
|
$ | (8,661 | ) | $ | (17,641 | ) | ||
|
Interest
and Derivative Income/(Expense)
|
(26,190 | ) | (112 | ) | ||||
|
Other
Income/(Expense)
|
(727 | ) | (3,975 | ) | ||||
|
Income
Tax Expense (Benefit)
|
64 | 30 | ||||||
|
Net
Loss
|
$ | (35,642 | ) | $ | (21,758 | ) | ||
|
EBITDA
(1)
|
$ | (3,498 | ) | $ | (16,192 | ) | ||
|
Impairment of
Assets
|
2 | - | ||||||
|
Non-Cash
Compensation
|
(1,739 | ) | 3,132 | |||||
|
2nd Generation
Development
|
491 | 2,057 | ||||||
|
Other One Time Non Recurring
Charges
|
2,174 | 185 | ||||||
|
Foreign Exchange and Other
Loss/(Income)
|
727 | 3,975 | ||||||
|
Adjusted
EBITDA (2)
|
$ | (1,843 | ) | $ | (6,843 | ) | ||
|
Adjusted
EBITDA Margin
|
(12 | %) | (45 | %) | ||||
|
Retail
ARPU (3)
|
$ | 23.34 | $ | 23.08 | ||||
|
(1)
|
EBITDA
represents earnings before interest, income taxes, depreciation,
amortization and derivative gains/(losses). EBITDA does not
represent and should not be considered as an alternative to GAAP
measurements, such as net income, and the Company’s calculations thereof
may not be comparable to similarly entitled measures reported by other
companies.
|
|
The
Company uses EBITDA as a supplemental measurement of its operating
performance because, by eliminating interest, taxes and the non-cash items
of depreciation and amortization, 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 EBITDA for planning purposes, including the
preparation of its annual operating budget. The company
believes that 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, 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 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 EBITDA in isolation and also uses other
measurements, such as net income, revenues and operating profit, to
measure operating performance.
|
|
|
(2)
|
Adjusted
EBITDA is further adjusted to exclude non-cash compensation expense, asset
impairment charges, foreign exchange gains/(losses) and certain other
one-time charges. Management uses Adjusted figures for EBITDA
in order to manage the Company’s business and to compare its results more
closely to the results of its peers.
|
|
(3)
|
Average
monthly revenue per unit (ARPU) measures service revenues per month
divided by the average number of retail subscribers during that
month. Average monthly revenue per unit 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 income. The
Company believes that average monthly revenue per unit provides useful
information concerning the appeal of its rate plans and service offerings
and its performance in attracting and retaining high value
customers.
|
|
GLOBALSTAR,
INC.
|
|
SCHEDULE OF SELECTED OPERATING
METRICS
|
|
(Dollars in thousands, except
ARPU)
|
|
(Unaudited)
|
|
Three months
ended
|
||||||||
|
March
31, 2010
|
March 31,
2009
|
|||||||
|
Subscribers
(End of Period)
|
394,036 | 356,870 | ||||||
|
Retail
|
104,978 | 113,731 | ||||||
|
IGO
|
63,800 | 73,264 | ||||||
|
Simplex
|
225,258 | 169,875 | ||||||
|
Net
Subscriber Additions/(Losses)
|
3,442 | 12,540 | ||||||
|
Retail
|
(1,996 | ) | (1,640 | ) | ||||
|
IGO
|
(923 | ) | (499 | ) | ||||
|
Simplex
|
6,361 | 14,679 | ||||||
|
Retail
Churn
|
1.1 | % | 1.3 | % | ||||
|
ARPU
|
||||||||
|
Retail
|
$ | 23.34 | $ | 23.08 | ||||
|
IGO
|
$ | 1.12 | $ | 1.66 | ||||
|
Simplex
|
$ | 6.44 | $ | 5.26 | ||||
|
Cash
capital expenditures (in millions)
|
$ | 76.6 | $ | 58.3 | ||||
|
Liquidity
at end of period /1
|
$ | 292,677 | ||||||
Note:
/1
Includes $96.9 million cash on hand, $34.3 million Debt Service Reserve Account,
$12.5 million guarantee, $89.0 million available under the COFACE Facility, and
$60.0 million Thermo contingent equity reserve account
