Globalstar Announces Full Year and Fourth Quarter Results for
2009
GlobeNewswire
2010-03-11
Key Annual Highlights;
-- Globalstar secured $738m financing for the launch of its
second-generation satellite constellation scheduled to begin this summer
-- Company further established its retail consumer market presence by
introducing new products and services and expanding to over 10,000
points of retail distribution for SPOT Satellite GPS Messenger(TM)
products
-- Globalstar became the first mobile satellite provider to monetize its
ATC spectrum authority by leasing its satellite spectrum to wireless
broadband services provider Open Range Communications
-- Globalstar expanded coverage in Africa with new gateway ground station
and increased Simplex messaging capacity by 10X with data network
upgrades
-- Company increased total subscriber base by approximately 13 percent
growing to over 390,000 subscribers
MILPITAS, Calif., March 11, 2010 (GLOBE NEWSWIRE) -- 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 and twelve-month
periods ended December 31, 2009.
Major Company Highlights:
-- Globalstar became the first mobile satellite services (MSS) company to
monetize its ancillary terrestrial component (ATC) spectrum authority.
In January 2009 Globalstar announced that its service partner, Open
Range Communications Inc. had closed on its Rural Utilities Service loan
and its equity financing of $100 million, permitting Open Range to
commence deployment of WiMAX wireless broadband service in rural America
under its spectrum lease agreement with Globalstar.
-- On July 1st Globalstar announced it had completed a $738 million
financing. The financing funds the deployment of the Company's 24
second-generation satellites. Globalstar now has the resources needed to
deploy a new constellation designed to last beyond 2025. The window for
the first launch of six second-generation satellites is scheduled to
open on July 5, 2010 and the launch is expected to take place in late
summer.
-- Throughout 2009 Globalstar continued to build on its award-wining
presence in the consumer retail marketplace.
-- In January Globalstar announced the introduction of SPOT Assist(TM), a
new GPS safety service offered in conjunction with the SPOT Satellite
GPS Messenger. SPOT Assist Roadside service provides 24 hour roadside
assistance seven days a week in the Continental United States and
Canada. SPOT Assist Maritime services were introduced for the
recreational maritime market in December.
-- In March the Company's SPOT Satellite GPS Messenger received the 2009
Innovation Award from the Mobile Satellite Users Association (MSUA) for
helping introduce mobile satellite services to the large mainstream
consumer market and for elevating the visibility of the entire Mobile
Satellite industry.
-- In October the Company unveiled a new SPOT satellite-based, security,
recovery and messaging product for recreational maritime users. SPOT HUG
is scheduled to be commercially available in North America summer 2010.
SPOT HUG monitors a boat's location and sends "unauthorized movement"
alerts to the SPOT Asset Monitoring Center providing satellite-based
theft protection.
-- Globalstar expanded its retail product line by introducing the new
enhanced SPOT Satellite GPS Messenger (SPOT 2). The new SPOT 2 device is
approximately 30 percent smaller and lighter than the original
award-winning SPOT product.
-- As of December 31, 2009, Globalstar had received orders to ship
approximately 190,000 SPOT and SPOT 2 units to over 10,000 SPOT
Satellite GPS Messenger points of distribution in North America, Europe,
Latin America, Australia, New Zealand, and Southeast Asia. Since its
inception in November 2007, the SPOT product line has helped initiate
more than 550 rescues in 51 countries on land and at sea.
-- On July 9 the Company announced that Peter Dalton had been appointed as
its Chief Executive Officer. Mr. Dalton has served as a director of the
Company since 2004 and as Chair of the Audit Committee since 2006. Mr.
Dalton served as chief executive officer of Dalton Partners, Inc., a
turnaround management firm, since January 1989. As chief executive
officer of Dalton Partners, Inc., Mr. Dalton also has served as chief
executive officer and director of a number of its clients.
-- In November the Company announced the installation of a simplex data
applique and the completion of a new gateway ground station in Nigeria.
The gateway provides Globalstar satellite coverage to Nigeria, the
surrounding portions of Western and Central Africa, as well as parts of
the coastal Atlantic and Gulf of Guinea maritime region. Globalstar
independent service provider Globaltouch (West Africa) Limited (GWAL)
based in Lagos, Nigeria owns and operates the gateway located in Kaduna.
Globalstar owns a 30 percent equity stake in Globaltouch.
-- In December Globalstar acquired substantially all of the assets of
Axonn, L.L.C. (Axonn). Axonn is a leading developer and manufacturer of
high quality and affordable satellite GPS asset-tracking and messaging
products including Globalstar's award-winning consumer retail device,
the SPOT Satellite GPS Messenger. Axonn also designs and markets
enterprise products which utilize the highly reliable Globalstar Simplex
data network, including the AXTracker(TM) and SMARTONE asset-tracking
solutions.
-- In December 2009 Globalstar completed installation of Simplex 2.0
network upgrades designed to enhance the overall Simplex data customer
messaging capacity by 10X and increase the data receiver sensitivity of
the Simplex data network. The upgrades also resulted in the overall
expansion of Globalstar's Simplex data network geographic coverage.
Globalstar now offers Simplex coverage in previously un-served areas
including parts of Western Asia and numerous maritime coastal and
oceanic regions plus continuous northern hemisphere coverage across the
Atlantic Ocean.
-- In 2009 Globalstar continued to exhibit significant growth in
subscribers for Simplex data and SPOT Satellite GPS Messenger(TM) during
2009. The Company completed the period ended December 31, 2009 with
390,594 subscribers, 46,264 more than it had at December 31, 2008.
-- The Company's operating loss for the three-month period ended December
31, 2009 was $11.9 million compared to a loss of $16.6 million during
the same three-month period in 2008, an improvement of $4.7 million. The
adjusted EBITDA for the three-month period ended December 31, 2009
decreased by $4.0 million or by approximately 67 percent compared to the
same period in 2008. Total revenue, net loss and net loss per share for
the three-month period ended December 31, 2009 were $15.9 million, $33.9
million and $0.20 respectively, compared to $18.4 million, a net gain of
$24.7 million and a net gain per share of $0.27, respectively, for the
same three months of 2008. (The net loss for the three month period
ended December 31, 2009 included a non-cash loss of $21 million based on
the re-valuation of derivative liabilities. The net gain for the same
three-month period in 2008 included a non-cash gain due to an
extinguishment of debt of approximately $49 million. The 2008 gain and
gain per share were calculated using newly adopted GAAP requirements for
convertible debt instruments that may be settled in cash upon
conversion.) Globalstar's twelve-month results, consolidated statements
of operations and other financial and operating information appear later
in this press release.
"Completing our $738 million financing was the 2009 watershed event for
Globalstar as the funding empowered us to re-focus our energies on
completing the milestones required to launch our second-generation
satellite constellation," said Jay Monroe, Executive Chairman,
Globalstar, Inc. "We are now less than four months away from the
opening of our first launch window. We expect the deployment of our
first six satellites to have an immediate positive impact on the
quality and reliability of our voice and duplex data services. Once the
constellation is fully deployed, it will not only fully restore our
legacy voice and duplex data services, but it will also position us to
be the first MSS to market a second-generation network and a host of
advanced IP Multimedia Subsystem or IMS-based mobile satellite
services."
"Throughout 2009 we enhanced our unique mobile satellite consumer
retail market presence as we introduced new SPOT Satellite GPS
Messenger products and services, grew the number of retail global
points of distribution, increased our SPOT Satellite GPS Messenger and
Simplex data network messaging capacity and expanded our coverage,"
said Peter Dalton, Chief Executive Officer. "With the first of our
satellite launches planned for this summer, 2010 represents a
game-changing year for Globalstar. Once we fully deploy our new
constellation, we expect to be the envy of the mobile satellite
industry, capable of providing ubiquitous high quality, high
revenue-generating voice and duplex data solutions plus an equally
compelling lineup of high value but affordable consumer products and
services."
Conference Call Note
The earnings conference call scheduled for today, March 11, 2010 at
5:00 p.m. Eastern Time, will discuss the fourth quarter and full-year
results for 2009.
Details are as follows:
Dial: 866.277.1182 (U.S. and Canada), 617.597.5359
Earnings Call: (International) and participant pass code # 28628176
A replay of the earnings call will be available for a limited time and can be heard
after 7:00 p.m. ET on March 11, 2010. Dial: 888.286.8010 (U.S. and Canada),
Audio Replay: 617.801.6888 (International) and pass code # 95068490
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
Safe Harbor Language for Globalstar Releases
This press release contains certain statements such as, "We expect the
deployment of these first six satellites to have an almost immediate
positive impact on the quality and reliability of our voice and duplex
data services," 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, including SPOT Satellite GPS Messenger, and the
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 LOSS
(In thousands, except per share data)
Year Ended December 31,
-------------------------------
2009 2008 2007
--------- --------- ---------
Revenue:
Service revenue $50,228 $61,794 $78,313
Subscriber equipment sales 14,051 24,261 20,085
--------- --------- ---------
Total revenue 64,279 86,055 98,398
--------- --------- ---------
Operating expenses:
Cost of services (exclusive
of depreciation and
amortization shown
separately below) 36,204 37,132 27,775
Cost of subscriber equipment
sales:
Cost of subscriber
equipment sales 9,881 17,921 13,863
Cost of subscriber
equipment
sales--impairment of
assets 913 405 19,109
--------- --------- ---------
Total cost of subscriber
equipment sales 10,794 18,326 32,972
Marketing, general, and
administrative 49,210 61,351 49,146
Depreciation and
amortization 21,862 26,956 13,137
--------- --------- ---------
Total operating expenses 118,070 143,765 123,030
--------- --------- ---------
Operating loss (53,791) (57,710) (24,632)
--------- --------- ---------
Other income (expense):
Gain on extinguishment of
debt -- 49,042 --
Interest income 502 4,713 3,170
Interest expense (6,730) (5,733) (9,023)
Derivative loss, net (15,585) (3,259) (3,232)
Other income (expense) 665 (4,497) 8,656
--------- --------- ---------
Total other income
(expense) (21,148) 40,266 (429)
--------- --------- ---------
Loss before income taxes (74,939) (17,444) (25,061)
Income tax expense (benefit) (16) (2,283) 2,864
--------- --------- ---------
Net loss $(74,923) $(15,161) $(27,925)
========= ========= =========
Loss per common share:
Basic $(0.52) $(0.18) $(0.36)
Diluted (0.52) (0.18) (0.36)
Weighted-average shares
outstanding:
Basic 145,430 86,405 77,169
Diluted 145,430 86,405 77,169
See notes to consolidated financial statements.
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 Year ended
------------------------ ------------------------
December December December December
31, 2009 31, 2008 31, 2009 31, 2008
----------- ----------- ----------- -----------
Revenue
Service Revenue $ 13,275 $ 12,961 $ 50,228 $ 61,794
Equipment Revenue 2,604 5,436 14,051 24,261
----------- ----------- ----------- -----------
Total Revenue $ 15,879 $ 18,397 $ 64,279 $ 86,055
Operating Expenses
Cost of Services 8,432 10,598 36,204 37,132
Cost of Subscriber Equipment 2,325 3,872 10,794 18,326
Marketing, General and
Administrative 11,497 12,749 49,210 61,351
Depreciation & Amortization 5,497 7,821 21,862 26,956
Impairment of Assets -- -- -- --
----------- ----------- ----------- -----------
Total Operating Expenses $ 27,751 $ 35,040 $ 118,070 $ 143,765
Operating Income/(Loss) $ (11,872) $ (16,643) $ (53,791) $ (57,710)
----------- ----------- ----------- -----------
Interest and Derivative
Income/(Expense) (22,230) (6,162) (21,813) (4,279)
Gain on Extinguishment of
Debt -- 49,042 -- 49,042
Other Income/(Expense) 272 (6,084) 665 (4,497)
Income Tax Expense (Benefit) 54 (4,517) (16) (2,283)
----------- ----------- ----------- -----------
Net Income/(Loss) $ (33,884) $ 24,670 $ (74,923) $ (15,161)
=========== =========== =========== ===========
EBITDA (1) $ (6,103) $ (14,906) $ (31,264) $ (35,251)
Impairment of Assets 259 -- 913 404
Non-Cash Compensation 2,231 2,277 10,576 12,932
2nd Generation Development 15 589 4,328 2,678
Other One Time Non Recurring
Charges 1,897 -- 3,480 552
Foreign Exchange and Other
Loss/(Income) (272) 6,084 (665) 4,497
Adjusted EBITDA (2) $ (1,973) $ (5,956) $ (12,632) $ (14,188)
Adjusted EBITDA Margin (12%) (32%) (20%) (16%)
Retail ARPU (3) $ 24.39 $ 28.71 $ 25.22 $ 35.19
(1) EBITDA represents earnings before interest, income taxes,
depreciation and amortization. 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 Year ended
-------------------- ------------------
December December December December
31, 31, 31, 31,
2009 2008 2009 2008
---------- -------- -------- --------
Subscribers (End
of Period) 390,594 344,330 390,594 344,330
Retail 106,974 115,371 106,974 115,371
IGO 64,723 73,763 64,723 73,763
Simplex 218,897 155,196 218,897 155,196
Net Subscriber
Additions/(Loss
es) 8,281 14,942 46,264 60,204
Retail (3,319) (3,431) (8,397) (7,721)
IGO (875) (509) (9,040) (7,545)
Simplex 12,475 18,882 63,701 75,470
Retail Churn 1.4% 1.7% 1.3% 1.6%
ARPU
Retail $ 24.39 $ 28.71 $ 25.22 $ 35.19
IGO $ 1.98 $ 2.17 $ 1.42 $ 3.26
Simplex $ 6.51 $ 4.82 $ 5.85 $ 4.48
Cash capital
expenditures
(in millions) $ 62.4 $ 76.7 $ 303.2 $ 286.1
Liquidity at end
of period /1 $ 389,777
Note:
/1 Includes $67.9 million cash on hand, $34.3
million Debt Service Reserve Account, $12.5
million guarantee,
$215.1 million available under the COFACE
Facility, and $60.0 million Thermo contingent
equity reserve account.
CONTACT: Globalstar, Inc.
Media Information:
Dean Hirasawa
(408) 933-4006
Dean.hirasawa@globalstar.com
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