Globalstar, Inc. (NYSE American: GSAT) today announced financial
and operating results for the fourth quarter and year ended
December 31, 2020.
Dave Kagan, Chief Executive Officer of Globalstar, commented,
"2020 was a very productive year for Globalstar as we surpassed a
series of milestones in both the satellite business and in
terrestrial spectrum. Momentum has continued into 2021. In this
release we provide an overview of the satellite business’s recent
performance and update our strategies going forward. We also
revisit the terrestrial spectrum progress that we have made in
recent months and expected developments in the next year. This
release is meant to offer investors a fulsome view of where the
Company is today and where we believe we are going."
The most significant development for Globalstar in recent weeks
was Qualcomm Technologies’ announcement of their Snapdragon X65
modem-RF System which includes support for 3GPP Band n53, covering
S-band spectrum currently licensed to Globalstar. This marks a
significant milestone for the Company and is critical to the
commercialization of Globalstar's terrestrial spectrum. By having
5G band support for n53 in Qualcomm Technologies’ 5G solutions, the
potential device ecosystem expands significantly to include a host
of consumer and industrial devices.
Another recent spectrum-related announcement is the planned
deployment of Band 53 at the Port of Seattle. This deployment is
one of many we expect will come through our partnership with Nokia.
The Company also recently announced an alliance with Paul Jacobs’s
company XCOM Labs, where Globalstar and XCOM will jointly pursue
private network opportunities in dense environments. With
regulatory, standardization and ecosystem hurdles behind it, and
with the help of a growing list of a high quality companies, the
Company is well positioned to meet increasing demands for licensed
spectrum for both 5G dedicated networks and new private LTE/5G
business models.
Mr. Kagan continued, "2020 brought a record number of
activations for our SPOT products. This has continued into 2021,
with sales of outdoor and recreational equipment maintaining
elevated levels in this social distancing environment. We are
pursuing growth through new partnerships, such as with Battlbox, a
subscription box service popular with the SPOT demographic as well
as our partnership with Jeep which was announced last year.”
Demand for Globalstar’s Commercial IoT products was unfavorably
impacted by the exposure to the oil and gas industry throughout
2020, however, this trend is reversing in 2021 as exploration and
production activity recovers. Globalstar continues to believe IoT
is a transformative growth story which is driving increased focus
in this area of the business and believes it will soon have a
product suite that significantly improves its competitive position,
including the introduction of a two-way IoT device, which is first
priority on the product road map. Ceres Tag supplies satellite
services to the livestock industry through the world’s first and
only satellite connected smart ear tag. Our value-added resellers
in this market vertical expect orders of up to 300,000 units over
the next 24 months, and we anticipate significant growth
thereafter. As the Company has communicated previously, this is low
ARPU business but also low churn, not capacity-demanding and one of
our largest IoT growth opportunities to date. Globalstar’s low
earth orbit satellite constellation is well suited to deliver
connectivity to small, low-cost devices due to a combination of the
network architecture and its low band spectrum position. The
livestock opportunity is a match for the types of service and price
point that the Company can offer. While this is a one-way service,
the Company is focused on expanding applications to deliver similar
opportunities in the two-way market just as we did when SPOT
expanded to two-way, multiplying the addressable market in outdoor
retail beyond positioning and emergency services to full messaging
applications. In IoT we will have both one and two-way products
providing transparency in the logistics supply chain and expanding
from tracking-only to tracking combined with command and control
applications where needed.
Mr. Kagan concluded, "Finally, we are on sound footing relative
to our debt repayment obligations with the funding of our second
quarter 2021 principal payment fully committed. We are required to
raise $45 million through equity proceeds this month and we
confidently expect to meet this requirement through second lien
warrant exercises. Pro forma for the scheduled second quarter
payment, we will have only approximately $90 million of first lien
principal outstanding, net of restricted cash."
The Company expects to file a Prospectus Supplement at the end
of this month following the anticipated exercise of the remaining
warrants held by the Company’s second lien lenders. This Prospectus
Supplement completes the registration for the shares underlying the
warrants issued in November 2019 and does not relate to any new
financing, nor does it indicate an intention of any holders to sell
their shares upon exercise. If all remaining warrants are exercised
prior to the expiration date on March 31, the Company expects total
proceeds of $43.7 million, which would reduce the principal
outstanding under the Company's first lien facility agreement.
Jay Monroe, Executive Chairman of Globalstar, added, “While the
team was largely unable to travel in the past year, we managed to
capitalize on the time to make significant progress on our
terrestrial spectrum efforts and continued to develop products we
think will help us transform the satellite business. The
development work over the last year culminated in several
announcements in the first few weeks of 2021. Some of these
announcements had been foreshadowed in prior earnings releases but
hard milestones were recently passed representing tangible
progress. The team continues to push every day towards our goal of
maximizing the value of the diverse assets within Globalstar."
Globalstar controls a unique collection of assets for the future
connected world. The Company’s in-orbit LEO constellation allows it
to offer low-cost connectivity to the billions of future connected
devices outside of the terrestrial wireless footprint. While a
variety of satellite constellations are being dreamt up and some
are being launched, the new entrants are generally using higher
frequency spectrum bands that make hand-held device mobility
difficult, and are also addressing different business models than
Globalstar. Globalstar has the advantage of being available now and
is expanding the list of parties and subscribers that can leverage
our low band, low power, and low price connectivity. Meanwhile,
Globalstar’s terrestrial spectrum is a global opportunity that can
offer a controlled, licensed spectrum resource to future
applications where secure reliable connectivity is critical. While
Band 53 is currently ready to service the needs of more bespoke
deployments like ports, the recent news of broad chip availability
expands the ecosystem and reduces barriers to use. Spectrum is a
non-depleting natural resource and the Company is looking forward
to the annuity-like cash flow that management expects to
generate.
Mr. Monroe continued, “The bear thesis on Globalstar has been
some combination of a not wide enough terrestrial spectrum band,
low power levels, underperforming satellite business and balance
sheet risks. But our recent announcements of milestones hit over
the last few months deliver against each element of this thesis.
The announcement of Nokia’s work with Tideworks and Band 53’s
inclusion in major 5G chipsets provides more concrete evidence that
there are current use cases for our spectrum resource. The Ceres
Tag announcement is another example, like the SPOT franchise before
it, to address the underperforming satellite business narrative.
Other near-term opportunities will address any remaining satellite
performance arguments. Lastly, as the equity market begins to
reflect more of the value we have long seen, the balance sheet
risks continue to diminish, allowing investors to more comfortably
see what we are developing.”
The Company is aggressively commercializing Band 53 globally and
expects to close many revenue generating opportunities both in the
US and in other approved countries in 2021. Management looks
forward to sharing those wins as they are completed. Opportunities
in 2021 are likely to remain in the transportation, logistics, oil
and gas or mining sectors but the Company looks forward to reaching
broader markets as the new 5G modem is deployed. The recent
successes of Anterix’s private networks deals, CBRS and the C-band
auction have all combined to highlight the value for spectrum,
especially licensed spectrum, and Globalstar looks forward to deals
and deployments in a similar fashion.
While commercialization efforts have picked up, the Company is
still proceeding with multiple regulatory efforts around the world.
Today, the Company’s terrestrial authorities cover 730 million
people with 9.1 billion MHz-POPs and we expect to continue to add
more approved countries. The Company is also developing other
regulatory strategies to further increase the value of Globalstar’s
other spectrum bands and satellite resources after successfully
“terrestrializing” Band 53 in Canada, Brazil, Kenya and South
Africa in roughly the last year.
Mr. Monroe concluded, “As many of you know, I spend the vast
majority of my time trying to maximize the value of Globalstar.
Thermo also has venture and late-stage investments outside of
Globalstar which have been made to deliberately create synergies
intended to benefit Globalstar. Fitting this theme, Thermo has made
small, minority investments in Orion Labs, Pivotal Commware,
Airspan, Recon Dynamics and XCOM Labs. Each one of these companies
is either working directly to create Band 53 opportunities and
provides insight into new mission critical networks or is advancing
new opportunities in satellite services. Independent profit to
Thermo from these investments is a secondary motivation with the
primary intention being to back great technologies and management
teams whose products and services can improve Globalstar’s
prospects.
"These companies are at different stages of their development,
but all have increased our conviction that we are entering a
substantial secular growth period for new telecom equipment,
related software and services. Airspan is building new small cell
networks in the US and abroad. Pivotal is driving mmWave
deployments that could alter the dynamic between cable and wireless
which have direct implications for Band 53. Recon offers
operational intelligence through their adaptable sensor technology
connected terrestrially or over our satellites. Orion allows the
“undesked” worker to communicate effectively with their teams, a
vital application in many private networks. XCOM is doing exciting
things to allow highly spectrally efficient connectivity in very
dense and dynamic environments and providing the network for
advanced VR and AR experiences with better mobility. All of these
companies are cutting edge and actively helping Globalstar better
position the satellite and spectrum resources to maximize their
value.
"While 2020 was an exciting year, the Company expects 2021 to be
the defining year where our assets are transformed from what were
speculative opportunities to producing meaningful revenue."
FOURTH QUARTER FINANCIAL REVIEW
Revenue
Total revenue for the fourth quarter of 2020 increased $1.3
million, or 4%, from the fourth quarter of 2019 due to an increase
in service revenue, offset partially by a decrease in subscriber
equipment sales revenue.
Service revenue increased $2.4 million, or 9%, in the fourth
quarter of 2020 compared to the fourth quarter of 2019. This
increase was due to higher engineering services revenue of $2.4
million, which was related primarily to a network feasibility
study. Additionally, in the fourth quarter of 2020, we recognized
$2.9 million of revenue associated with a contract that was
executed in 2007 for the construction of a gateway in Nigeria. This
contract was terminated in December 2020 due to a lack of
performance by the partner, and our performance of all obligations
in accordance with the terms of the contract. Offsetting these two
items was a decrease in subscriber-driven revenue streams totaling
$2.9 million, primarily due to lower Duplex and SPOT service
revenue.
The decline in Duplex service revenue was due primarily to fewer
average subscribers driven by normal churn in the base exceeding
gross activations over the last twelve months. Notably, however,
gross activations during the fourth quarter of 2020 were up nearly
7% from the prior year's quarter following a higher volume of
Duplex handset sales during 2020. The decline in Duplex service
revenue was also impacted by lower ARPU resulting from lower priced
service plans and promotional pricing in place during 2020, which
contributed to higher activations.
The decline in SPOT service revenue in the fourth quarter of
2020 was due to fewer subscribers and lower ARPU. The decrease in
SPOT subscribers during 2020 is due to elevated churn, both
voluntary and involuntary. While the involuntary churn is related
to subscriber base cleanup and, therefore, not expected to recur,
we have various initiatives underway that are focused on reducing
voluntary subscriber churn, which has normalized in recent months.
Importantly, gross subscriber activations were 22% higher during
the fourth quarter of 2020 from the prior year's fourth quarter.
The decrease in SPOT ARPU was due to lower-priced service plans
rolled out during mid-2019, including flex plans which allow
subscribers to suspend their service when not in use. These
competitive pricing and service options contributed to higher
activations during 2020.
The decline in Commercial IoT service revenue in the fourth
quarter of 2020 was due primarily to lower ARPU. We issued service
credits to certain of our largest customers that operate in the oil
and gas industry in order to support them and their direct
customers following the market downturn in 2020; we do not expect
these credits to recur in 2021. Average subscribers were also lower
due to the impact of COVID-19, which reduced overall demand in
2020.
Subscriber equipment sales revenue decreased $1.0 million, or
19%, in the fourth quarter of 2020 compared to the fourth quarter
of 2019. This decline was due primarily to a decrease in Commercial
IoT sales, offset partially by an increase in SPOT equipment sales.
We experienced lower demand for our Commercial IoT devices from our
customers that operate in the oil and gas industry. To address this
concentration risk, we continue to diversify and expand our
value-added reseller partnerships to both reduce our exposure to
cyclical downturns in any particular industry and broaden our reach
to new verticals. Integrated closely with this expansion is an
augmented product lineup that addresses the connectivity needs of
various customers and deployment strategies.
Offsetting the decline from Commercial IoT sales was an increase
in revenue generated from SPOT hardware sales. This increase in
volume of SPOT sales is driven primarily by SPOT Gen4TM, our
refreshed SPOT Satellite GPS Messenger, which was launched in
August 2020 as well as SPOT X®. Included in fourth quarter of 2020
sales were 8,500 units sold as part of our partnership with monthly
subscription box service, Battlbox.
Loss from Operations
Loss from operations decreased $2.0 million, or 12%, to $15.1
million in the fourth quarter of 2020. This decrease was driven by
higher revenue of $1.3 million and lower operating expenses of $0.7
million. Lower operating expenses resulted primarily from lower
cost of subscriber equipment sales and asset impairment charges.
Slightly higher marketing, general and administrative (MG&A)
expenses and depreciation, amortization and accretion partially
offset these decreases. The decrease in cost of subscriber
equipment sales was generally consistent with the decrease in
revenue from subscriber equipment sales. Lower asset impairment
charges were due to the write-down of the carrying value of our
former gateway site in Nicaragua based on the expected selling
price of this property as of December 31, 2020.
Net Loss
Net loss was $21.7 million for the fourth quarter of 2020
compared to $37.7 million for the fourth quarter of 2019. Lower
interest expense, changes in foreign currency exchange rates, and
fluctuations in non-cash derivative valuation adjustments primarily
impacted net loss during the respective periods.
Adjusted EBITDA
Adjusted EBITDA of $9.8 million for the quarter ended December
31, 2020 was generally flat from the prior year's fourth quarter.
Lower revenue of $1.9 million was offset by a $1.9 million decrease
in operating expenses (both excluding adjustments for non-cash or
non-recurring items).
ANNUAL FINANCIAL REVIEW
Revenue
During the twelve months ended December 31, 2020, total revenue
increased 1% to $128.5 million from $127.8 million in 2019, after
excluding a non-recurring, out-of-period adjustment to Duplex
service revenue that was recorded during the third quarter of 2019.
The increase in total revenue was driven by higher service revenue
of $3.7 million offset by lower revenue generated from subscriber
equipment sales of $3.0 million.
This increase was due to higher engineering services revenue of
$10.5 million, which was related primarily to a network feasibility
study. Additionally, we recognized $2.9 million of revenue
associated with a contract that was executed in 2007 for the
construction of a gateway in Nigeria (as previously discussed).
Lower subscriber-driven revenue totaling $9.8 million negatively
impacted service revenue during 2020; this decrease was primarily
due to lower Duplex and SPOT service revenue.
Duplex service revenue decreased during 2020 due to fewer
average subscribers driven by normal churn in the base exceeding
gross activations over the last twelve months. Notably, however,
gross activations during 2020 were up from 2019. While lower priced
service plans and promotional pricing during 2020 contributed to
the increase in activations, these initiatives also lowered ARPU
between the respective periods. Unfavorable exchange rate movements
also reduced ARPU in 2020.
SPOT service revenue decreased during 2020 due primarily to
lower ARPU. The decrease in ARPU was due primarily to lower pricing
plans in place during the year that were originally rolled out in
mid-2019. These plans include lower entry-level rates, as well as
flex plans which attract seasonal users since they allow
subscribers to suspend service when not in use. Fewer average
subscribers also negatively impacted SPOT service revenue during
2020, consistent with the quarter over quarter discussion above.
While churn was temporarily elevated during a portion of 2020,
gross activations were 12% higher in 2020 from 2019. Competitive
pricing and a change in consumer lifestyle following the start of
the pandemic contributed to the record gross activations during the
year.
Revenue from subscriber equipment sales was impacted primarily
by fewer Commercial IoT sales, contributing $4.2 million to the
total decrease in subscriber equipment sales revenue. The decline
in Commercial IoT sales was due to the impact on demand from the
pandemic and downturn in the oil and gas industry. As previously
discussed, we have various initiatives underway to stimulate demand
in a diverse range of markets, expand our product offerings, and
leverage new reseller partnerships in order to grow sales.
Offsetting the unfavorable impact from Commercial IoT were
higher sales of Duplex and SPOT equipment. Hardware pricing and
product mix were the primary drivers of the increase in Duplex
revenue. The increase in revenue from SPOT equipment was driven by
a higher sales volume of SPOT X® and SPOT Gen4TM, our newest SPOT
Satellite GPS Messenger, which was launched in August 2020. As
previously discussed, included in our SPOT Gen4TM sales were 8,500
units sold to Battlbox, a subscription box service, in December
2020. We expect to see an increase in gross subscriber activations
during 2021 following distribution of these boxes to Battlbox
subscribers.
Loss from Operations
Loss from operations improved by $8.8 million, or 13%, during
2020 due to an $8.1 million decrease in operating expenses and a
$0.7 million increase in total revenue (after excluding the
out-of-period adjustment to Duplex service revenue previously
discussed). The reduction in operating expenses was due to lower
cost of services, cost of subscriber equipment sales and
MG&A.
The decrease in cost of services was driven by lower maintenance
costs due to revisions made with certain contracts to support our
network as well as lower research and development costs due to the
timing and scope of product development. The decrease in the cost
of subscriber equipment sales was due primarily to the decline in
volume of Commercial IoT equipment sales. The decrease in MG&A
expenses was due to a $3.1 million write-off of certain financing
costs during 2019 as well as lower subscriber acquisition costs and
travel, both impacted by COVID-19.
Net (Loss) Income
Net loss was $109.6 million for 2020 compared to net income of
$11.4 million for 2019 (after excluding the out-of-period
adjustment to Duplex service revenue previously discussed). This
fluctuation is due primarily to non-cash items, including a $142.2
million decrease in derivative gains, offset partially by an $14.1
million decrease in net interest expense and an $8.1 million
decrease in operating expenses (as previously discussed). The
conversion of the Thermo loan in February 2020 contributed to the
derivative activity in both 2020 and 2019. Lower interest expense
was impacted primarily by lower interest on the First Lien Facility
Agreement (due to the modification of this agreement in November
2019, which reduced the principal amount outstanding, as well as
lower LIBOR rates during 2020) and lower interest on the Thermo
loan (due to its conversion in February 2020); these items were
offset partially by higher interest expense for the Second Lien
Facility Agreement entered into in November 2019.
Adjusted EBITDA
Adjusted EBITDA increased by 12% to $42.2 million in 2020 due
primarily to a $2.6 million decrease in total revenue (for reasons
previously discussed) and a $7.0 million decrease in operating
expenses (both excluding adjustments for non-cash or non-recurring
items).
Liquidity
Cash and cash equivalents were $13.3 million as of December 31,
2020, up from $7.6 million at December 31, 2019. We also have $54.7
million in restricted cash, which includes $51.1 million reserved
for the final principal and interest payment under our first lien
facility agreement in December 2022 and $3.6 million, which are
equity proceeds received from warrants exercised through December
31, 2020, and is reserved for our second quarter of 2021 principal
payment. Our sources of cash also include operating cash flows
generated from the business. We expect our uses of cash over the
next twelve months to include primarily operating costs, capital
expenditures related to network expenditures and principal and
interest payments. Our next scheduled principal payment is due in
the second quarter of 2021 and is expected to be funded from the
proceeds from the exercise of the remaining warrants issued to our
second lien lenders that expire in March 2021. Through today, an
additional 5.5 million warrants have been exercised at a price of
$0.38 per share.
About Globalstar, Inc.
Globalstar is a leading provider of customizable Satellite IoT
Solutions for customers around the world in industries such as oil
and gas, transportation, emergency management, government, maritime
and outdoor recreation. A pioneer of mobile satellite voice and
data services, Globalstar solutions connect people to their devices
and allow businesses to streamline operations providing safety and
communication and enabling mobile assets to be monitored remotely
via the Globalstar Satellite Network. The Company's Commercial IoT
product portfolio includes industry-acclaimed SmartOne asset
tracking products, Commercial IoT satellite transmitters and the
SPOT® product line for personal safety, messaging and emergency
response, all supported on SPOT My Globalstar, a robust cloud-based
enhanced mapping solution. Learn more at Globalstar.com.
Note that all SPOT products described in this press release are
the products of SPOT LLC, a subsidiary of Globalstar, which is not
affiliated in any manner with Spot Image of Toulouse, France or
Spot Image Corporation of Chantilly, Virginia.
For more information, visit www.globalstar.com.
Safe Harbor Language for Globalstar Releases
This press release contains certain statements that are
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are based on current expectations and assumptions that
are subject to risks and uncertainties which may cause actual
results to differ materially from the forward-looking statements.
Forward-looking statements, such as the statements regarding our
expectations with respect to the pursuit of terrestrial spectrum
authorities globally, future increases in our revenue and
profitability, the impact on our business due to unexpected events
such as the COVID-19 coronavirus, and other statements contained in
this release regarding matters that are not historical facts,
involve predictions. Any forward-looking statements made in this
press release are believed to be accurate as of the date made and
are not guarantees of future performance. Actual results or
developments may differ materially from the expectations expressed
or implied in the forward-looking statements, and we undertake no
obligation to update any such statements. Additional information on
factors that could influence our financial results is included in
our filings with the 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)
(unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2020
2019
2020
2019
Revenue:
Service revenue
$
28,781
$
26,415
$
113,191
$
113,386
Subscriber equipment sales
4,391
5,420
15,296
18,332
Total revenue
33,172
31,835
128,487
131,718
Operating expenses:
Cost of services (exclusive of
depreciation, amortization and accretion shown separately
below)
8,796
8,992
34,751
37,456
Cost of subscriber equipment sales
3,653
4,554
13,268
15,763
Cost of subscriber equipment sales -
reduction in the value of inventory
662
416
662
416
Marketing, general and administrative
10,331
9,710
41,738
45,233
Reduction in the value of long-lived
assets
416
1,124
416
1,124
Depreciation, amortization and
accretion
24,378
24,093
96,815
95,772
Total operating expenses
48,236
48,889
187,650
195,764
Loss from operations
(15,064
)
(17,054
)
(59,163
)
(64,046
)
Other (expense) income:
Interest income and expense, net of
amounts capitalized
(11,513
)
(22,315
)
(48,429
)
(62,464
)
Derivative gain
1,333
2,793
2,897
145,073
Gain on legal settlement
—
—
—
120
Foreign currency gain (loss)
6,646
1,292
(727
)
64
Other
(2,643
)
(2,042
)
(3,555
)
(2,878
)
Total other (expense) income
(6,177
)
(20,272
)
(49,814
)
79,915
(Loss) income before income taxes
(21,241
)
(37,326
)
(108,977
)
15,869
Income tax expense
493
421
662
545
Net (loss) income
$
(21,734
)
$
(37,747
)
$
(109,639
)
$
15,324
(Loss) income per common share:
Basic
$
(0.01
)
$
(0.03
)
$
(0.07
)
$
0.01
Diluted
(0.01
)
(0.03
)
(0.07
)
(0.07
)
Weighted-average shares outstanding:
Basic
1,671,561
1,452,614
1,642,359
1,450,768
Diluted
1,671,561
1,452,614
1,642,359
1,655,191
GLOBALSTAR, INC.
RECONCILIATION OF GAAP NET
INCOME (LOSS) TO NON-GAAP ADJUSTED EBITDA
(In thousands)
(unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2020
2019
2020
2019
Net (loss) income
$
(21,734
)
$
(37,747
)
$
(109,639
)
$
15,324
Interest income and expense, net
11,513
22,315
48,429
62,464
Derivative gain
(1,333
)
(2,793
)
(2,897
)
(145,073
)
Income tax expense
493
421
662
545
Depreciation, amortization, and
accretion
24,378
24,093
96,815
95,772
EBITDA
13,317
6,289
33,370
29,032
Non-cash reduction in the value of
inventory
662
416
662
416
Non-cash reduction in the value of
long-lived assets
416
1,124
416
1,124
Non-cash compensation
1,783
1,595
5,808
6,162
Foreign exchange and other
(5,852
)
(1,157
)
1,629
235
Debt refinancing third party fees
308
2,451
1,113
5,232
Revenue recognition related to terminated
contract
(2,915
)
—
(2,915
)
—
Non-cash settlement of pension plan
2,075
455
2,075
455
Non-cash adjustment to international
operations
—
334
—
927
Merger and shareholder litigation costs
(recovery)
(1,709
)
—
(1,820
)
Gain on legal settlement
—
—
—
(120
)
Change to estimated impact upon adoption
of ASC 606
—
—
(3,885
)
Adjusted EBITDA (1)
$
9,794
$
9,798
$
42,158
$
37,758
(1)
EBITDA represents earnings before
interest, income taxes, depreciation, amortization, accretion and
derivative (gains)/losses. Adjusted EBITDA excludes non-cash
compensation expense, reduction in the value of assets, foreign
exchange (gains)/losses, and certain other non-recurring charges as
applicable. Management uses Adjusted EBITDA in order to manage the
Company's business and to compare its results more closely to the
results of its peers. EBITDA and Adjusted EBITDA do not represent
and should not be considered as alternatives to GAAP measurements,
such as net income/(loss). These terms, as defined by us, may not
be comparable to similarly titled measures used by other companies.
The Company uses Adjusted EBITDA as a supplemental measurement of
its operating performance. The Company believes it best reflects
changes across time in the Company's performance, including the
effects of pricing, cost control and other operational decisions.
The Company's management uses Adjusted EBITDA for planning
purposes, including the preparation of its annual operating budget.
The Company believes that Adjusted EBITDA also is useful to
investors because it is frequently used by securities analysts,
investors and other interested parties in their evaluation of
companies in similar industries. As indicated, Adjusted EBITDA does
not include interest expense on borrowed money or depreciation
expense on our capital assets or the payment of income taxes, which
are necessary elements of the Company's operations. Because
Adjusted EBITDA does not account for these expenses, its utility as
a measure of the Company's operating performance has material
limitations. Because of these limitations, the Company's management
does not view Adjusted EBITDA in isolation and also uses other
measurements, such as revenues and operating profit, to measure
operating performance.
GLOBALSTAR, INC.
SCHEDULE OF SELECTED OPERATING
METRICS
(In thousands, except subscriber
and ARPU data)
(unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2020
2019
2020
2019
Service
Equipment
Service
Equipment
Service
Equipment
Service
Equipment
Revenue
Duplex(2)
$
7,703
$
344
$
9,414
$
419
$
33,878
$
1,883
$
39,794
$
1,325
SPOT
11,319
2,472
12,265
1,960
46,417
8,176
50,461
7,617
Commercial IoT
4,146
1,532
4,395
3,074
17,174
5,140
16,972
9,300
Engineering and Other
5,613
43
341
(33
)
15,722
97
2,274
90
$
28,781
$
4,391
$
26,415
$
5,420
$
113,191
$
15,296
$
109,501
$
18,332
Average Subscribers
Duplex
48,420
54,352
50,116
56,856
SPOT
261,008
275,629
267,816
281,584
Commercial IoT
410,803
417,818
414,452
399,960
IGO and Other
27,373
26,969
27,264
27,481
ARPU (1)
Duplex(2)
$
53.03
$
57.74
$
56.33
$
58.33
SPOT
14.46
14.83
14.44
14.93
Commercial IoT
3.36
3.51
3.45
3.54
(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.
(2)
We recorded an out-of-period adjustment of
$3.9 million during the third quarter of 2019 as a result of a
change in the estimated impact of the adoption of ASC 606 on
January 1, 2018. This adjustment, which increased Duplex service
revenue, is excluded from service revenue and ARPU in the table
above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210303005894/en/
Investor Contact Information: Denise Davila Email:
investorrelations@globalstar.com
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