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): November 8,
2010
GLOBALSTAR,
INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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001-33117
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41-2116508
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(State or Other Jurisdiction
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(Commission
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(IRS Employer
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of Incorporation)
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File Number)
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Identification No.)
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461 South Milpitas Blvd. Milpitas, California
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95035
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(Address of Principal Executive Offices)
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(Zip Code)
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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
November 8, 2010, Globalstar, Inc. issued a press release to report 2010 third
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
November 8, 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.
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99.1
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Press
release dated November 8, 2010
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99.2
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Presentation
materials dated November 8, 2010
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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.
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GLOBALSTAR,
INC.
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||
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/s/ Dirk J. Wild
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Dirk
J. Wild
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Senior
Vice President and
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Chief
Financial Officer
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Date: November
8, 2010
Exhibit 99.1
NEWS
For
Immediate Release
GLOBALSTAR
SETS NEW SPOT ACTIVATION RECORD FOR
SECOND
CONSECUTIVE QUARTER - COMPANY ANNOUNCES
THIRD
QUARTER RESULTS FOR 2010
Key
Company Highlights;
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·
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Company
activates nearly 18,000 SPOT Satellite GPS
Messenger™units
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·
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Post-quarter
launch of six new satellites initiates deployment of new second-generation
satellite constellation
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·
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Corporate
office relocation to Louisiana paves way for future lower operating
costs
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·
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DeLorme
SPOT Communicator shipments commence as product continues to win industry
and consumer accolades
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Covington, LA. — (November
8, 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 and
nine-month periods ended September 30, 2010.
Major
Quarterly Highlights;
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·
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For
the second consecutive quarter Globalstar set a new quarterly activation
record for its award-winning SPOT Satellite GPS Messenger consumer
product. During the three-month period ended September 30,
2010, the Company recorded 17,987 SPOT unit activations, the highest
number of SPOT activations per quarter since the Company began selling the
revolutionary mobile satellite consumer
product.
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·
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Globalstar
completed the quarter with a total of 431,782 mobile satellite voice and
data subscribers.
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·
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Since
the inception of the SPOT Satellite GPS Messenger product in November
2007, Globalstar has received orders to ship more than 273,000 SPOT retail
devices to over 10,000 SPOT Satellite GPS Messenger points of distribution
in North America, Europe, Latin America, Australia, and Southeast
Asia.
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·
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In
July 2010 Globalstar announced that the Company would re-locate its
corporate headquarters to Covington, LA. Globalstar expects to
lower its operating costs by taking advantage of the State’s reimbursement
of relocation costs plus a commercial lease subsidy for its new corporate
headquarters and future tax credits associated with a host of State
programs. The Company plans to maintain its network operations
including its satellite and ground operations control centers in
California.
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·
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In
July 2010 Globalstar also announced it was encouraged by the Federal
Communications Commission (FCC) initiation of proceedings to make
additional wireless spectrum available for mobile broadband networks using
mobile satellite services (MSS) spectrum. On July 15th
the FCC announced it was taking steps, “to make additional spectrum
available for new investment in mobile broadband networks by promoting
flexible use and removing barriers, while ensuring robust mobile satellite
capabilities.” In its recent Notice of Proposed Rulemaking and
Notice of Inquiry the FCC also stated, “three frequency bands that are
allocated to the MSS are capable of supporting broadband service,”
including the “Big LEO Band from 1610-1626.5 MHz and 2483.5-2500
MHz.” Globalstar provides services using Big LEO Band global
MSS spectrum.
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Adjusted
EBITDA loss for the three-month period ended September 30, 2010 was $2.2 million
compared with an Adjusted EBITDA loss of $0.5 million for the third-quarter in
2009. The Company’s operating loss for the three-month period ended
September 30, 2010 was $13.3 million compared to a loss of $11.7 million during
the same three-month period in 2009.
Total
revenue, net loss and net loss per share for the three-month period ended
September 30, 2010 were $18.2 million, $24.5 million and $0.09 respectively,
compared to $17.5 million, $5.5 million and $0.04 respectively, for the same
three months of 2009. Globalstar’s consolidated statements of
operations and other financial and operating information, including the
nine-month results for the period ended September 30, 2010, appear later in this
press release.
Post
Quarter Highlights:
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·
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On
October 19, 2010 Globalstar successfully launched the first six new
second-generation satellites from the Baikonur Cosmodrome in Kazakhstan
using the Soyuz launch vehicle. The launch paves the way for three
additional launches of six satellites each. Globalstar plans to complete
all four launches by summer 2011. The 24 new second-generation
satellites will be integrated with the eight first-generation satellites
that were launched in 2007, to form a 32 satellite
constellation.
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·
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The
launch of 24 satellites by mid 2011 paves the way for the Company’s return
to offering high quality, high revenue generating mobile satellite voice
and duplex data services. Once the first six new Globalstar
satellites become operational, service availability and reliability
improvements will benefit those customers who use the Company’s voice and
duplex data services. With each subsequent launch, these
customers can expect a progressive return to the high quality system
access and data session performance metrics customers enjoyed before
2007.
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·
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In
October Globalstar also announced it had refreshed its visual branding as
it introduced a new logo and launched a new global website
re-design. The Company’s new visual identity was implemented on
the Company’s global websites on October 19th to coincide with the same
day launch of six new second-generation
satellites.
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“After
nearly five years of intense effort we are very pleased to have successfully
completed the inaugural launch of our second-generation constellation
satellites,” said Jay Monroe, Executive Chairman, Globalstar,
Inc. “It is with great enthusiasm and excitement that we begin
initiating the deployment of our new satellite constellation, nearly five years
ahead of our primary competitor. We congratulate and applaud all of
our Globalstar employees world-wide and thank our satellite financing partners,
launch provider Arianespace as well as our satellite contractor Thales Alenia
Space for our recent launch success.”
Peter
Dalton, Chief Executive Officer, Globalstar, Inc. added, “Once again Globalstar
set a new record number of SPOT activations for the quarter, further
demonstrating our leadership in the mobile satellite retail consumer
marketplace. As planned, 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. Once we have completed deployment of our new constellation
next year, we expect to be well positioned to reign as the premier provider of
high quality, reliable mobile satellite voice and duplex data services to both
commercial industrial and government customers.
“Throughout
the quarter we were also pleased to participate in the FCC’s ongoing NPRM and
NOI process to expand use of mobile satellite spectrum for terrestrial wireless
broadband use and believe the Commission’s initiatives will benefit both the
mobile satellite services industry and the American people. During
the quarter the Commission was also supportive of our efforts to launch the
Globalstar second-generation satellite constellation and for this we are greatly
appreciative."
Conference
Call Note
The
earnings conference call scheduled for today, November 8, 2010 at 5:00 p.m.
Eastern Time, will discuss the third quarter results for 2010.
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Details
are as follows:
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Earnings
Call:
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Dial: 800.299.6183 (US and Canada), 617.801.9713
(International)
and participant pass code
# 67314885
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Audio
Replay:
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A replay of the earnings call
will be available for a limited time and can be heard after 8:00 p.m. ET
on November 8, 2010. Dial: 888.286.8010 (US and Canada), 617.801.6888
(International) and pass
code #
62038658
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About
Globalstar, Inc.
With over
425,000 subscribers, Globalstar is a leading provider of mobile satellite voice
and data services. Globalstar offers these
services to commercial customers and recreational consumers in more than 120
countries around the world. The Company's products include mobile and fixed
satellite telephones, simplex and duplex satellite data modems, the SPOT
Satellite GPS Messenger 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, “Once we have completed
deployment of our new constellation next year, we expect to be well positioned
to reign as the premier provider of high quality, reliable mobile satellite
voice and duplex data services to both commercial industrial and government
customers,” 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 ability to develop and expand our business, our
anticipated capital spending (including for future satellite procurements and
launches), our ability to manage costs, our ability to exploit and respond to
technological innovation, the effects of laws and regulations (including tax
laws and regulations) and legal and regulatory changes, the opportunities for
strategic business combinations and the effects of consolidation in our industry
on us and our competitors, our anticipated future revenues, our anticipated
financial resources, our expectations about the future operational performance
of our satellites (including their projected operational lives), the expected
strength of and growth prospects for our existing customers and the markets that
we serve, commercial acceptance of our new Simplex products, including our SPOT
satellite GPS messenger TM
products, problems relating to the ground-based facilities operated by us or by
independent gateway operators, worldwide economic, geopolitical and business
conditions and risks associated with doing business on a global basis 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 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 as amended by our Current Report on
Form 8-K filed June 17, 2010, Quarterly Reports on Form 10-Q and Current Reports
on Form 8-K.
GLOBALSTAR,
INC.
(In
thousands, except per share data)
(Unaudited)
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Three Months Ended
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Nine Months Ended
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|||||||||||||||
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September 30,
2010
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September 30,
2009
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September 30,
2010
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September 30,
2009
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|||||||||||||
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As Adjusted –
Note 1
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As Adjusted –
Note 1
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Revenue:
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||||||||||||||||
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Service
revenue
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$ | 13,389 | $ | 13,260 | 38,751 | $ | 36,953 | |||||||||
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Subscriber
equipment sales
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4,834 | 4,261 | 12,665 | 11,447 | ||||||||||||
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Total
revenue
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18,223 | 17,521 | 51,416 | 48,400 | ||||||||||||
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Operating
expenses:
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||||||||||||||||
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Cost
of services (exclusive of depreciation and amortization shown separately
below)
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7,995 | 9,403 | 22,587 | 27,772 | ||||||||||||
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Cost
of subscriber equipment sales:
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||||||||||||||||
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Cost
of subscriber equipment sales
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3,329 | 1,987 | 9,317 | 7,814 | ||||||||||||
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Cost
of subscriber equipment sales — impairment of assets
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- | 7 | 61 | 655 | ||||||||||||
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Total
cost of subscriber equipment sales
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3,329 | 1,994 | 9,378 | 8,469 | ||||||||||||
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Marketing,
general, and administrative
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12,911 | 12,328 | 31,245 | 37,713 | ||||||||||||
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Depreciation,
amortization, and accretion
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7,301 | 5,473 | 19,164 | 16,365 | ||||||||||||
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Total
operating expenses
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31,536 | 29,198 | 82,374 | 90,319 | ||||||||||||
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Operating
loss
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(13,313 | ) | (11,677 | ) | (30,958 | ) | (41,919 | ) | ||||||||
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Other
income (expense):
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||||||||||||||||
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Interest
income
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63 | 181 | 402 | 365 | ||||||||||||
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Interest
expense
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(1,202 | ) | (1,763 | ) | (3,794 | ) | (5,144 | ) | ||||||||
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Derivative
gain (loss)
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(9,150 | ) | 5,993 | (42,185 | ) | 5,196 | ||||||||||
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Other
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(883 | ) | 1,839 | (2,742 | ) | 393 | ||||||||||
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Total
other income (expense)
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(11,172 | ) | 6,250 | (48,319 | ) | 810 | ||||||||||
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Loss
before income taxes
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(24,485 | ) | (5,427 | ) | (79,277 | ) | (41,109 | ) | ||||||||
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Income
tax expense (benefit)
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8 | 92 | 107 | (70 | ) | |||||||||||
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Net
loss
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$ | (24,493 | ) | $ | (5,519 | ) | (79,384 | ) | $ | (41,039 | ) | |||||
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Loss
per common share:
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||||||||||||||||
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Basic
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$ | (0.09 | ) | $ | (0.04 | ) | $ | (0.28 | ) | $ | (0.35 | ) | ||||
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Diluted
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$ | (0.09 | ) | $ | (0.04 | ) | $ | (0.28 | ) | $ | (0.35 | ) | ||||
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Weighted-average
shares outstanding:
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||||||||||||||||
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Basic
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287,502 | 127,527 | 281,701 | 118,531 | ||||||||||||
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Diluted
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287,502 | 127,527 | 281,701 | 118,531 | ||||||||||||
Note
1: The Company has retrospectively revised the Consolidated
Statements of Operations for the three and nine-month periods ended September
30, 2009, for the adoption of the Financial Accounting Standards
Board’s updated guidance on accounting for share loan
facilities.
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)
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Three months ended
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Nine months ended
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|||||||||||||||
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September 30, 2010
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September 30, 2009
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September 30, 2010
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September 30, 2009
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Revenue
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Service
Revenue
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$ | 13,389 | $ | 13,260 | $ | 38,751 | $ | 36,953 | ||||||||
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Equipment
Revenue
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4,834 | 4,261 | 12,665 | 11,447 | ||||||||||||
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Total
Revenue
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$ | 18,223 | $ | 17,521 | $ | 51,416 | $ | 48,400 | ||||||||
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Operating
Expenses
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Cost
of Services
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7,995 | 9,403 | 22,587 | 27,772 | ||||||||||||
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Cost
of Subscriber Equipment
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3,329 | 1,994 | 9,378 | 8,469 | ||||||||||||
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Marketing,
General and Administrative
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12,911 | 12,328 | 31,245 | 37,713 | ||||||||||||
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Depreciation,
Amortization and Accretion
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7,301 | 5,473 | 19,164 | 16,365 | ||||||||||||
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Total
Operating Expenses
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$ | 31,536 | $ | 29,198 | $ | 82,374 | $ | 90,319 | ||||||||
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Operating
Loss
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$ | (13,313 | ) | $ | (11,677 | ) | $ | (30,958 | ) | $ | (41,919 | ) | ||||
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Interest
and Derivative Income/(Expense)
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(10,289 | ) | 4,411 | (45,577 | ) | 417 | ||||||||||
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Other
Income/(Expense)
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(883 | ) | 1,839 | (2,742 | ) | 393 | ||||||||||
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Income
Tax Expense (Benefit)
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8 | 92 | 107 | (70 | ) | |||||||||||
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Net
Loss
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$ | (24,493 | ) | $ | (5,519 | ) | $ | (79,384 | ) | $ | (41,039 | ) | ||||
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EBITDA (1)
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$ | (6,894 | ) | $ | (4,365 | ) | $ | (14,535 | ) | $ | (25,161 | ) | ||||
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Impairment
of Assets
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1,903 | 6 | 1,965 | 654 | ||||||||||||
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Non-Cash
Compensation
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890 | 2,699 | 164 | 8,345 | ||||||||||||
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Research
and Development
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1,116 | 2,081 | 2,232 | 4,313 | ||||||||||||
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Severance
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933 | 715 | 2,244 | 1,374 | ||||||||||||
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Other
One Time Non Recurring Charges
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916 | 209 | 2,760 | 209 | ||||||||||||
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Foreign
Exchange and Other Loss/(Income)
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(1,021 | ) | (1,839 | ) | 838 | (393 | ) | |||||||||
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Adjusted
EBITDA (2)
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$ | (2,157 | ) | $ | (494 | ) | $ | (4,332 | ) | $ | (10,659 | ) | ||||
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(1)
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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.
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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.
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(2)
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Adjusted
EBITDA is further adjusted to exclude non-cash compensation expense, asset
impairment charges, foreign exchange gains/(losses), R&D costs, 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.
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GLOBALSTAR,
INC.
SCHEDULE
OF SELECTED OPERATING METRICS
(Dollars
in thousands, except ARPU)
(Unaudited)
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Three months ended
|
Nine months ended
|
|||||||||||||||
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September 30, 2010
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September 30, 2009
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September 30, 2010
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September 30, 2009
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|||||||||||||
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Subscribers
(End of Period)
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431,782 | 382,313 | 431,782 | 382,313 | ||||||||||||
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Duplex
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105,301 | 110,293 | 105,301 | 110,293 | ||||||||||||
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IGO
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59,896 | 65,598 | 59,896 | 65,598 | ||||||||||||
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Simplex
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266,585 | 206,422 | 266,585 | 206,422 | ||||||||||||
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Net
Subscriber Additions/(Losses)
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19,487 | 10,830 | 41,188 | 37,983 | ||||||||||||
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Duplex
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(1,381 | ) | (1,820 | ) | (1,673 | ) | (5,078 | ) | ||||||||
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IGO
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(1,082 | ) | (3,893 | ) | (4,827 | ) | (8,165 | ) | ||||||||
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Simplex
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21,950 | 16,543 | 47,688 | 51,226 | ||||||||||||
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Duplex
Churn
|
1.0 | % | 1.2 | % | 1.0 | % | 1.2 | % | ||||||||
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ARPU
|
||||||||||||||||
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Duplex
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$ | 23.89 | $ | 27.60 | $ | 23.45 | $ | 25.49 | ||||||||
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IGO
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$ | 1.39 | $ | (0.16 | ) | $ | 1.47 | $ | 1.23 | |||||||
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Simplex
|
$ | 6.68 | $ | 6.11 | $ | 6.66 | $ | 5.63 | ||||||||
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Cash
capital expenditures (in millions)
|
$ | 31.1 | $ | 172.3 | $ | 162.9 | $ | 252.1 | ||||||||
Notes:
1. 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.
Exhibit 99.2
