ORBCOMM Announces Second Quarter 2016 Results
– Total Revenues of $50.1 Million Increase 12% and Service
Revenues Grow 15%, Over Prior Year –
– Adjusted
EBITDA of $12.1 Million, Increases 17% Over Prior Year –
–
Company Adds Over 41,000 Net Subscriber Communicators in the Quarter –
ROCHELLE PARK, N.J.,
August 4, 2016 -
ORBCOMM Inc. (NASDAQ:ORBC), a global provider of Machine-to-Machine (M2M) and Internet of Things (IoT) solutions, today announced financial results for the second quarter ended June 30, 2016.
The following financial highlights are in thousands of dollars.
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Quarter Ended June 30,
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Six months Ended June 30,
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2016
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2015
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2016
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2015
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Service Revenues
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$27,694
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$24,011
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$54,608
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$47,785
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Product Sales
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$22,370
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$20,872
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$39,016
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$39,428
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Total Revenues
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$50,064
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$44,883
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$93,624
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$87,213
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Net Income (Loss) attributable to ORBCOMM Inc. Common Stockholders
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($4,169)
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($12,217)
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($6,265)
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($15,099)
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Basic EPS
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($0.06)
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($0.17)
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($0.09)
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($0.21)
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EBITDA (1,3)
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$9,948
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($4,707)
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$18,584
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$523
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Adjusted EBITDA (2,3)
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$12,116
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$10,337
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$22,815
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$19,382
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(1) EBITDA is defined as earnings attributable to ORBCOMM
Inc. before interest income (expense), loss on debt extinguishment,
provision for income taxes and depreciation and amortization.
(2)
Adjusted EBITDA is defined as EBITDA, adjusted for stock-based
compensation expense, noncontrolling interests, impairment loss,
non-capitalized satellite launch and in-orbit insurance, insurance
recovery, and acquisition-related and integration costs.
(3)
A table presenting EBITDA and Adjusted EBITDA, reconciled to GAAP Net
Income, is among other financial tables at the end of this release.
“In the second quarter we established highs in Service Revenues, Product
Sales, Total Revenues, and Adjusted EBITDA,” said Marc Eisenberg,
ORBCOMM’s Chief Executive Officer. “We are encouraged by our continued
momentum in the global IoT industry and continue to show leadership and
innovation.”
“Q2 Service Revenues took a step higher to nearly $28 million. Satellite
and AIS revenues are benefiting from the new OG2 satellites and led to
increased service gross profit margins,” said Robert Costantini, Chief
Financial Officer of ORBCOMM. “Product Sales of over $22 million
included a broad range of product shipments, large and small. Overall
product gross profit margin was 23% that included low margin sales of
aging inventory which now can begin generating Service Revenues.”
Recent Highlights:
Financial Highlights
-
For Q2 of 2016, Total Revenues of $50.1 million were up 12%
year-over-year. Service Revenues increased 15% over the prior year
period to $27.7 million. Product Sales of $22.4 million were $1.5
million, or 7% higher than the prior year period. Service gross
margins improved 1% from last year to over 66% and Product Sales gross
margins declined to 23% from 29% year over year reflecting large order
pricing and product pricing to move aging inventory.
-
For Q2 of 2016, Adjusted EBITDA was $12.1 million, 24% of Total
Revenues, and increased $1.8 million or 17% over the prior year period.
-
Net Income (Loss) attributable to ORBCOMM Inc. Common Stockholders was
($4.2) million for the second quarter of 2016, narrowing from a Net
Loss of ($12.2) million for the same period in 2015.
-
Net subscriber communicator additions for ORBCOMM were 41,000 in Q2 of
2016, taking the total billable subscriber communicators to 1,650,000
at June 30, 2016, which compares to 1,297,000 at the end of the same
period last year; a 27% increase year-over-year.
Customer Highlights
-
On August 3, 2016, we announced that ORBCOMM has been selected by
Barnes Transportation Services Inc. to provide a solar-powered
asset tracking solution for its dry van trailers. Headquartered in
Wilson, North Carolina, Barnes is a family-owned and operated
truckload carrier servicing the Eastern United States. ORBCOMM’s
maintenance-free solution will provide wireless connectivity through
its proprietary hardware and a web-based reporting platform for
optimal fleet
management.
-
On August 1, 2016, we announced that ORBCOMM and its partner, LuxSpace
Sàrl, an affiliate of OHB SE, were awarded a four-year satellite
Automatic Identification System (AIS) data service framework contract
with the European Maritime Safety Agency (EMSA). The EMSA framework
contract is funded for up to 10.2 Million Euro for the fixed 4-year
service period. LuxSpace will provide ORBCOMM’s global real-time data
feed of satellite-based AIS (SAT-AIS) data, which will be used by
EMSA, other EU agencies and EU Member States for ship tracking and
other maritime navigational, safety and security applications.
-
On July 19, 2016, we announced that Gulick Trucking, Inc. has selected
ORBCOMM to provide industry-leading telematics solutions for its mixed
fleet of dry van and refrigerated trailers. Based in Vancouver, WA,
Gulick offers full-service truckload, dry van and refrigerated
services for food, beverages, paper and wood products, and nursery
stock.
-
On June 13, 2016, we announced that ORBCOMM will provide its satellite
AIS data to Genscape, a leading global provider of energy information
for commodity, shipping and financial markets. ORBCOMM’s extensive AIS
data will be utilized by customers of Genscape’s value added AIS-based
solutions.
Product Highlights
-
On July 26, 2016, we announced that ORBCOMM received a 2016 Smart Grid
Product of the Year Award for exceptional innovation from SmartGrid.TMCnet.com,
a TMC
and Crossfire
Media sponsored technology media website. ORBCOMM’s dual-mode
satellite-cellular solution enables utility companies to efficiently
manage their Smart Grids by monitoring
and controlling reclosers and other network distribution devices
in real time.
-
On June 15, 2016, we announced that ORBCOMM received the 2016 IoT
Innovations Award from Connected World magazine, recognizing
the ORBCOMMconnect
multi-network management portal for technological advancement and
creativity in the IoT market. The ORBCOMMconnect portal gives
customers comprehensive control over their wireless services and
connected devices, while reducing the complexity of managing and
integrating multiple networks. With ORBCOMMconnect, customers have
access to three satellite
and seven Tier One cellular
networks in a single platform.
-
On June 14, 2016, we announced that ORBCOMM received the 2016 Connected
World Award, recognizing the Company for its IoT leadership and
the ability to leverage connected technology to improve business
processes. ORBCOMM provided Rehrig
Pacific Company, a global leader in reusable smart
container/pallet solution for the supply chain and waste management
industries, with a single platform for all of its sensor-enabled
applications.
M&A Highlights
-
On May 26, 2016, we closed on the acquisition of Skygistics (PTY) Ltd.
Based outside of Johannesburg, South Africa, Skygistics provides a
broad range of satellite and cellular connectivity options as well as
telematics solutions serving 250 telematics and enterprise customers.
Skygistics adds distribution for ORBCOMM’s broad range of IoT products
in South Africa and 22 other African nations.
Financial Results and Highlights
Revenues
For the second quarter ended June 30, 2016, Service Revenues were up 15%
over the prior year period to $27.7 million. The increase in Service
Revenues in Q2 this year was driven by both organic growth and the
recent acquisitions. Organic growth benefited from the OG2 satellite
constellation and a growing subscriber base across multiple lines of
business.
Product Sales during the second quarter of 2016 were $22.4 million
compared to $20.9 million during the same period last year, increasing
$1.5 million or 7%. The quarterly year-over-year increase in Product
Sales was largely driven by sales in Transportation solutions in the US
and Europe, and in new markets such as containers, partially offset by
lower sales in the South American markets.
Total Revenues for the second quarter ended June 30, 2016 were $50.1
million compared to $44.9 million during the same period of 2015, an
increase of approximately 12%.
Direct Costs and Operating Expenses
Total direct costs and operating expenses for the second quarter of 2016
were $51.7 million compared to $56.4 million during the same period in
2015. Direct costs, exclusive of Depreciation and Amortization,
increased year-over-year largely due to increases in both Service
Revenues and Product Sales and costs to operate the companies acquired.
Gross Profit for the quarter ended June 30, 2016 was $23.5 million
compared to $21.8 million for the prior year quarter, increasing $1.7
million or 8% due to the increase in Service Revenues and Product Sales.
Operating Expenses were lower than the prior year period primarily due
to the 2015 Impairment Charge of ($12.7) million related to an OG2
satellite that lost communication, as well as lower Acquisition-Related
and Integration Costs of $0.5 million, partially offset by higher
Depreciation and Amortization in the current year.
Income (Loss) Before Income Taxes, Net Income (Loss), and Earnings
Per Share
Income (Loss) Before Income Taxes for the second quarter of 2016 was a
($3.9) million loss, an improvement over the ($12.6) million loss for
the second quarter of 2015.
Net Income (Loss) attributable to ORBCOMM Inc. Common Stockholders was
($4.2) million for the second quarter of 2016, narrowing from a Net Loss
of ($12.2) million for the same period in 2015. Basic EPS was a loss of
($0.06) per share for the second quarter of 2016 versus a loss of
($0.17) per share for the second quarter of 2015.
EBITDA and Adjusted EBITDA
EBITDA for the second quarter of 2016 was $9.9 million compared to a
loss of ($4.7) million in the second quarter of 2015, which included a
($12.7) million Impairment Charge and ($1.1) million in
Acquisition-Related and Integration costs.
Adjusted EBITDA was $12.1 million for the second quarter of 2016
compared to $10.3 million in the second quarter of 2015, an increase of
17%.
EBITDA and Adjusted EBITDA are non-GAAP financial measures used by the
Company to measure operating performance and the quality of earnings.
Please see the financial tables at the end of the release for a
reconciliation of EBITDA and Adjusted EBITDA.
Balance Sheet & Cash Flow
At June 30, 2016, Cash and Cash Equivalents and Restricted Cash totaled
$15.5 million, compared to $28.1 million at December 31, 2015,
decreasing ($12.6) million. The cash decline was partially offset by the
$7.9 million of Cash generated by Operations through the first six
months of 2016. Cash invested in Capital Expenditures was ($16.9)
million, of which ($8.3) million was due to the completion of milestone
and insurance payments for the OG2 program related to the final launch
in late 2015 and includes ($1.6) million of capitalized interest. In
addition, we paid ($3.8) million for the Skygistics acquisition in the
second quarter of 2016.
Guidance
For the Full Year 2016, the Company is re-affirming its outlook of
approximately $200 million in Total Revenues and Adjusted EBITDA at
about 25% margins to Total Revenues.
Investment Community Conference Call
ORBCOMM will host a conference call and webcast for the investment
community this morning at 8:30 AM ET. Senior management will review the
results, discuss ORBCOMM’s business, and address questions. To access
the call, domestic participants should dial 1-888-523-1225 at least ten
minutes prior to the start of the call. International callers should
dial 1-719-325-2429. To hear a live web simulcast or to listen to the
archived webcast following completion of the call, please visit the
Company’s website at http://investors.orbcomm.com
and then select “News & Events” to access the link to the call. To
listen to a replay of the conference call, please visit https://streaming.webcasts.com/starthere.jsp?ei=1110692
enter the confirmation code number 4927028. The replay will be available
from approximately 3:00 PM ET on August 4, 2016, through 3:00 PM ET on
August 18, 2016.
About ORBCOMM Inc.
ORBCOMM Inc. (Nasdaq:ORBC) is a leading global provider of
Machine-to-Machine (M2M) communication solutions and the only commercial
satellite network dedicated to M2M. ORBCOMM’s unique combination of
global satellite, cellular and dual-mode network connectivity, hardware,
web reporting applications and software is the M2M industry’s most
complete service offering. Our solutions are designed to remotely track,
monitor, and control fixed and mobile assets in core vertical markets
including transportation & distribution, heavy equipment, industrial
fixed assets, oil & gas, maritime, mining and government.
With close to two decades of innovation and expertise in M2M, ORBCOMM
has more than 1.6 million subscribers with a diverse customer base
including premier OEMs such as Caterpillar Inc., Doosan Infracore
America, Hitachi Construction Machinery Co., Ltd., John Deere, Komatsu
Ltd., and Volvo Construction Equipment, as well as end-to-end solutions
customers such as C&S Wholesale, Canadian National Railways, CR England,
Hub Group, KLLM Transport Services, Marten Transport, Swift
Transportation, Target, Tropicana, Tyson Foods, Walmart, Union Pacific
Railroad and Werner Enterprises. For more information, visit www.orbcomm.com.
Forward-Looking Statements
Certain statements discussed in this press release constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements
generally relate to our plans, estimates, objectives and expectations
for future events and other statements that are not historical facts.
Such forward-looking statements, including those concerning the
Company’s expectations and estimates, are subject to known and unknown
risks and uncertainties, which could cause actual results to differ
materially from the results projected, expected or implied by the
forward-looking statements, some of which are beyond the Company’s
control, that may cause the Company’s actual results, performance or
achievements, or industry results, to be materially different from any
future results, performance or achievements expressed or implied by such
forward-looking statements. These risks and uncertainties include but
are not limited to: dependence of SkyWave’s business on its commercial
relationship with Inmarsat plc and the services provided by Inmarsat
plc, including the continued availability of Inmarsat plc’s satellites;
substantial losses we have incurred and may continue to incur; demand
for and market acceptance of our products and services and the
applications developed by us and our resellers; market acceptance and
success of our Automatic Identification System business; dependence on a
few significant customers, including a concentration in Brazil, loss or
decline or slowdown in the growth in business from key customers, such
as Caterpillar Inc., Hitachi Construction Machinery Co., Ltd., Komatsu
Ltd., Onixsat, Satlink S.L., Sascar and Maersk Lines, other value-added
resellers, or VARs, and international value-added resellers, or IVARs,
and other value-added Solution Providers, or SPs; dependence on a few
significant vendors or suppliers, loss or disruption or slowdown in the
supply of products and services from key vendors, such as Inmarsat plc.
and Sanmina Corporation; loss or decline or slowdown in growth in
business of any of the specific industry sectors we serve, such as
transportation, heavy equipment, fixed assets and maritime; our
potential future need for additional capital to execute on our growth
strategy; additional debt service acquired with or incurred in
connection with existing or future business operations; our acquisitions
may expose us to additional risks, such as unexpected costs, contingent
or other liabilities, or weaknesses in internal controls, and expose us
to issues related to non-compliance with domestic and foreign laws,
particularly regarding our acquisitions of businesses domiciled in
foreign countries; the terms of our credit agreement, under which we
currently have borrowed $150 million and may borrow up to an additional
$10 million, could restrict our business activities or our ability to
execute our strategic objectives or adversely affect our financial
performance; the inability to effect suitable investments, alliances and
acquisitions or the failure to integrate and effectively operate the
acquired businesses; fluctuations in foreign currency exchange rates;
the inability of our subsidiaries, international resellers and licensees
to develop markets outside the United States; the inability to obtain or
maintain the necessary regulatory authorizations, approvals or licenses,
including those that must be obtained and maintained by third parties,
for particular countries or to operate our satellites; technological
changes, pricing pressures and other competitive factors; in-orbit
satellite failures or reduced performance of our existing satellites;
the failure of our system or reductions in levels of service due to
technological malfunctions or deficiencies or other events; significant
liabilities created by products we sell; litigation proceedings;
inability to operate due to changes or restrictions in the political,
legal, regulatory, government, administrative and economic conditions
and developments in the United States and other countries and
territories in which we provide our services; ongoing global economic
instability and uncertainty; and changes in our business strategy. In
addition, specific consideration should be given to various factors
described in Part I, Item 1A. “Risk Factors” and Part II, Item 7.
“Management’s Discussion and Analysis of Financial Condition and Results
of Operations”, and elsewhere in our Annual Report on Form 10-K for the
year ended December 31, 2015, and other documents, on file with the
Securities and Exchange Commission. The Company undertakes no obligation
to publicly revise any forward-looking statements or cautionary factors,
except as required by law.
|
ORBCOMM Inc.
|
Condensed Consolidated Balance Sheets
|
(In thousands, except par value and share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
June 30,
|
|
|
|
December 31,
|
|
|
|
|
2016
|
|
|
|
2015
|
ASSETS
|
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|
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|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
|
15,465
|
|
|
|
|
|
$
|
|
27,077
|
|
Accounts receivable, net of allowance for doubtful accounts of
$1,326 and $1,233,
|
|
|
|
|
|
|
|
respectively
|
|
|
|
38,128
|
|
|
|
|
|
|
|
29,816
|
|
Inventories
|
|
|
|
20,416
|
|
|
|
|
|
|
|
20,712
|
|
Prepaid expenses and other current assets
|
|
|
|
7,576
|
|
|
|
|
|
|
|
5,646
|
|
Restricted cash
|
|
|
|
-
|
|
|
|
|
|
|
|
1,000
|
|
Deferred income taxes
|
|
|
|
508
|
|
|
|
|
|
|
|
508
|
|
Total current assets
|
|
|
|
82,093
|
|
|
|
|
|
|
|
84,759
|
|
|
|
|
|
|
|
|
|
Satellite network and other equipment, net
|
|
|
|
232,167
|
|
|
|
|
|
|
|
229,970
|
|
Goodwill
|
|
|
|
114,038
|
|
|
|
|
|
|
|
112,425
|
|
Intangible assets, net
|
|
|
|
88,298
|
|
|
|
|
|
|
|
93,172
|
|
Other assets
|
|
|
|
7,662
|
|
|
|
|
|
|
|
6,573
|
|
Total assets
|
|
$
|
|
524,258
|
|
|
|
|
|
$
|
|
526,899
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
|
14,356
|
|
|
|
|
|
$
|
|
13,895
|
|
Accrued liabilities
|
|
|
|
25,630
|
|
|
|
|
|
|
|
24,186
|
|
Current portion of deferred revenue
|
|
|
|
8,373
|
|
|
|
|
|
|
|
7,652
|
|
Total current liabilities
|
|
|
|
48,359
|
|
|
|
|
|
|
|
45,733
|
|
|
|
|
|
|
|
|
|
Note payable - related party
|
|
|
|
1,264
|
|
|
|
|
|
|
|
1,241
|
|
Note payable
|
|
|
|
150,000
|
|
|
|
|
|
|
|
150,000
|
|
Deferred revenue, net of current portion
|
|
|
|
4,411
|
|
|
|
|
|
|
|
6,024
|
|
Deferred tax liabilities
|
|
|
|
18,972
|
|
|
|
|
|
|
|
18,440
|
|
Other liabilities
|
|
|
|
4,294
|
|
|
|
|
|
|
|
5,705
|
|
Total liabilities
|
|
|
|
227,300
|
|
|
|
|
|
|
|
227,143
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
ORBCOMM Inc. stockholders' equity
|
|
|
|
|
|
|
|
Series A Convertible Preferred Stock, par value $0.001; 1,000,000
shares authorized;
|
|
|
|
|
|
|
35,051 and 35,759 shares issued and outstanding
|
|
|
|
350
|
|
|
|
|
|
|
|
357
|
|
Common stock, par value $0.001; 250,000,000 share authorized;
71,009,088 and
|
|
|
|
|
|
|
|
70,613,642 shares issued at June 30, 2016 and December 31, 2015
|
|
|
|
71
|
|
|
|
|
|
|
|
71
|
|
Additional paid-in capital
|
|
|
|
384,355
|
|
|
|
|
|
|
|
381,659
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
(496
|
)
|
|
|
|
|
|
|
(1,174
|
)
|
Accumulated deficit
|
|
|
|
(87,689
|
)
|
|
|
|
|
|
|
(81,424
|
)
|
Less treasury stock, at cost; 29,990 shares at June 30, 2016 and
December 31,
|
|
|
|
|
|
|
|
2015, respectively
|
|
|
|
(96
|
)
|
|
|
|
|
|
|
(96
|
)
|
Total ORBCOMM Inc. stockholders' equity
|
|
|
|
296,495
|
|
|
|
|
|
|
|
299,393
|
|
Noncontrolling interest
|
|
|
|
463
|
|
|
|
|
|
|
|
363
|
|
Total equity
|
|
|
|
296,958
|
|
|
|
|
|
|
|
299,756
|
|
Total liabilities and equity
|
|
$
|
|
524,258
|
|
|
|
|
|
$
|
|
526,899
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ORBCOMM Inc.
|
Condensed Consolidated Statements of Operations
|
(In thousands, except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended June 30,
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
2016
|
|
2015
|
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Service revenues
|
|
$
|
|
27,694
|
|
|
$
|
|
24,011
|
|
|
|
|
|
$
|
|
54,608
|
|
|
$
|
|
47,785
|
|
Product sales
|
|
|
|
22,370
|
|
|
|
|
20,872
|
|
|
|
|
|
|
|
39,016
|
|
|
|
|
39,428
|
|
Total revenues
|
|
|
|
50,064
|
|
|
|
|
44,883
|
|
|
|
|
|
|
|
93,624
|
|
|
|
|
87,213
|
|
Cost of revenues, exclusive of depreciation and
|
|
|
|
|
|
|
|
|
|
|
|
amortization shown below:
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services
|
|
|
|
9,351
|
|
|
|
|
8,318
|
|
|
|
|
|
|
|
18,539
|
|
|
|
|
16,022
|
|
Cost of product sales
|
|
|
|
17,200
|
|
|
|
|
14,790
|
|
|
|
|
|
|
|
28,650
|
|
|
|
|
28,738
|
|
Gross profit
|
|
|
|
23,513
|
|
|
|
|
21,775
|
|
|
|
|
|
|
|
46,435
|
|
|
|
|
42,453
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
|
11,056
|
|
|
|
|
11,025
|
|
|
|
|
|
|
|
22,812
|
|
|
|
|
22,466
|
|
Product development
|
|
|
|
1,952
|
|
|
|
|
1,818
|
|
|
|
|
|
|
|
3,909
|
|
|
|
|
3,426
|
|
Depreciation and amortization
|
|
|
|
11,551
|
|
|
|
|
6,640
|
|
|
|
|
|
|
|
20,510
|
|
|
|
|
13,095
|
|
Impairment loss - satellite network
|
|
|
|
-
|
|
|
|
|
12,748
|
|
|
|
|
|
|
|
-
|
|
|
|
|
12,748
|
|
Acquisition - related and integration costs
|
|
|
|
569
|
|
|
|
|
1,110
|
|
|
|
|
|
|
|
933
|
|
|
|
|
3,561
|
|
Loss from operations
|
|
|
|
(1,615
|
)
|
|
|
|
(11,566
|
)
|
|
|
|
|
|
|
(1,729
|
)
|
|
|
|
(12,843
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
|
95
|
|
|
|
|
85
|
|
|
|
|
|
|
|
183
|
|
|
|
|
156
|
|
Other income (expense)
|
|
|
|
99
|
|
|
|
|
204
|
|
|
|
|
|
|
|
(91
|
)
|
|
|
|
392
|
|
Interest expense
|
|
|
|
(2,445
|
)
|
|
|
|
(1,332
|
)
|
|
|
|
|
|
|
(4,144
|
)
|
|
|
|
(2,574
|
)
|
Total other (expense)
|
|
|
|
(2,251
|
)
|
|
|
|
(1,043
|
)
|
|
|
|
|
|
|
(4,052
|
)
|
|
|
|
(2,026
|
)
|
Loss before income taxes
|
|
|
|
(3,866
|
)
|
|
|
|
(12,609
|
)
|
|
|
|
|
|
|
(5,781
|
)
|
|
|
|
(14,869
|
)
|
Income taxes
|
|
|
|
216
|
|
|
|
|
(386
|
)
|
|
|
|
|
|
|
378
|
|
|
|
|
91
|
|
Net loss
|
|
|
|
(4,082
|
)
|
|
|
|
(12,223
|
)
|
|
|
|
|
|
|
(6,159
|
)
|
|
|
|
(14,960
|
)
|
Less: Net income (loss) attributable to the noncontrolling
|
|
|
|
|
|
|
|
|
|
|
|
interests
|
|
|
|
87
|
|
|
|
|
(15
|
)
|
|
|
|
|
|
|
106
|
|
|
|
|
121
|
|
Net loss attributable to ORBCOMM Inc.
|
|
$
|
|
(4,169
|
)
|
|
$
|
|
(12,208
|
)
|
|
|
|
|
$
|
|
(6,265
|
)
|
|
$
|
|
(15,081
|
)
|
Net loss attributable to ORBCOMM Inc.
|
|
|
|
|
|
|
|
|
|
|
|
common stockholders
|
|
$
|
|
(4,169
|
)
|
|
$
|
|
(12,217
|
)
|
|
|
|
|
$
|
|
(6,265
|
)
|
|
$
|
|
(15,099
|
)
|
Per share information-basic:
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to ORBCOMM Inc.
|
|
|
|
|
|
|
|
|
|
|
|
common stockholders
|
|
$
|
|
(0.06
|
)
|
|
$
|
|
(0.17
|
)
|
|
|
|
|
$
|
|
(0.09
|
)
|
|
$
|
|
(0.21
|
)
|
Per share information-diluted:
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to ORBCOMM Inc.
|
|
|
|
|
|
|
|
|
|
|
|
common stockholders
|
|
$
|
|
(0.06
|
)
|
|
$
|
|
(0.17
|
)
|
|
|
|
|
$
|
|
(0.09
|
)
|
|
$
|
|
(0.21
|
)
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
70,900
|
|
|
|
|
70,427
|
|
|
|
|
|
|
|
70,800
|
|
|
|
|
70,333
|
|
Diluted
|
|
|
|
70,900
|
|
|
|
|
70,427
|
|
|
|
|
|
|
|
70,800
|
|
|
|
|
70,333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ORBCOMM Inc.
|
Condensed Consolidated Statements of Cash Flows
|
(In thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
|
2015
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Net loss
|
$
|
|
(6,159
|
)
|
|
|
|
|
$
|
|
(14,960
|
)
|
Adjustments to reconcile net loss to net cash provided by operating
activities:
|
|
Change in allowance for doubtful accounts
|
|
|
(24
|
)
|
|
|
|
|
|
|
246
|
|
Change in the fair value of acquisition-related contingent
consideration
|
|
|
29
|
|
|
|
|
|
|
|
(732
|
)
|
Amortization of the fair value adjustment related to warranty
liabilities acquired through acquisitions
|
|
|
(57
|
)
|
|
|
|
|
|
|
(12
|
)
|
Amortization of deferred financing fees
|
|
|
383
|
|
|
|
|
|
|
|
220
|
|
Depreciation and amortization
|
|
|
20,510
|
|
|
|
|
|
|
|
13,095
|
|
Impairment loss - satellite network
|
|
|
-
|
|
|
|
|
|
|
|
12,748
|
|
Stock-based compensation
|
|
|
2,605
|
|
|
|
|
|
|
|
2,235
|
|
Foreign exchange loss (gain)
|
|
|
84
|
|
|
|
|
|
|
|
(273
|
)
|
Deferred income taxes
|
|
|
623
|
|
|
|
|
|
|
|
(271
|
)
|
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(7,294
|
)
|
|
|
|
|
|
|
7,772
|
|
Inventories
|
|
|
951
|
|
|
|
|
|
|
|
(4,525
|
)
|
Prepaid expenses and other assets
|
|
|
(3,714
|
)
|
|
|
|
|
|
|
(1,061
|
)
|
Accounts payable and accrued liabilities
|
|
|
1,300
|
|
|
|
|
|
|
|
(8,255
|
)
|
Deferred revenue
|
|
|
(1,223
|
)
|
|
|
|
|
|
|
806
|
|
Other liabilities
|
|
|
(108
|
)
|
|
|
|
|
|
|
302
|
|
Net cash provided by operating activities
|
|
|
7,906
|
|
|
|
|
|
|
|
7,335
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Acquisition of businesses, net of cash acquired
|
|
|
(3,452
|
)
|
|
|
|
|
|
|
(133,408
|
)
|
Capital expenditures
|
|
|
(16,864
|
)
|
|
|
|
|
|
|
(22,818
|
)
|
Cash held for acquisition
|
|
|
-
|
|
|
|
|
|
|
|
123,000
|
|
Change in restricted cash
|
|
|
1,000
|
|
|
|
|
|
|
|
-
|
|
Other
|
|
|
(198
|
)
|
|
|
|
|
|
|
-
|
|
Net cash used in investing activities
|
|
|
(19,514
|
)
|
|
|
|
|
|
|
(33,226
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Proceeds received from issuance of long-term debt
|
|
|
-
|
|
|
|
|
|
|
|
10,000
|
|
Cash paid for debt issuance costs
|
|
|
-
|
|
|
|
|
|
|
|
(842
|
)
|
Proceeds received from exercise of stock options
|
|
|
-
|
|
|
|
|
|
|
|
244
|
|
Payment of deferred purchase consideration
|
|
|
(342
|
)
|
|
|
|
|
|
|
-
|
|
Principal payment of note payable
|
|
|
-
|
|
|
|
|
|
|
|
(10,000
|
)
|
Principal payments of capital leases
|
|
|
-
|
|
|
|
|
|
|
|
(48
|
)
|
Net cash used in financing activities
|
|
|
(342
|
)
|
|
|
|
|
|
|
(646
|
)
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
338
|
|
|
|
|
|
|
|
(300
|
)
|
Net decrease in cash and cash equivalents
|
|
|
(11,612
|
)
|
|
|
|
|
|
|
(26,837
|
)
|
Beginning of period
|
|
|
27,077
|
|
|
|
|
|
|
|
91,565
|
|
End of period
|
$
|
|
15,465
|
|
|
|
|
|
$
|
|
64,728
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
Cash paid for
|
|
|
|
|
|
|
Interest
|
$
|
|
4,400
|
|
|
|
|
|
$
|
|
4,508
|
|
Income taxes
|
$
|
|
(101
|
)
|
|
|
|
|
$
|
|
384
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table reconciles our Net Income (Loss) attributable to
ORBCOMM Inc. to EBITDA and Adjusted EBITDA for the periods shown:
|
|
|
|
Quarter Ended
|
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
|
June 30,
|
(In thousands)
|
|
|
|
2016
|
|
|
|
2015
|
|
|
|
2016
|
|
|
|
2015
|
Net Income (Loss) attributable to ORBCOMM Inc.
|
|
|
|
($4,169)
|
|
|
|
($12,208)
|
|
|
|
($6,265)
|
|
|
|
($15,081)
|
Net interest (income) expense
|
|
|
|
2,350
|
|
|
|
1,247
|
|
|
|
3,961
|
|
|
|
2,418
|
Provision (benefit) for income taxes
|
|
|
|
216
|
|
|
|
(386)
|
|
|
|
378
|
|
|
|
91
|
Depreciation and amortization
|
|
|
|
11,551
|
|
|
|
6,640
|
|
|
|
20,510
|
|
|
|
13,095
|
EBITDA
|
|
|
|
$9,948
|
|
|
|
($4,707)
|
|
|
|
$18,584
|
|
|
|
$523
|
Stock-based compensation
|
|
|
|
1,219
|
|
|
|
1,104
|
|
|
|
2,605
|
|
|
|
2,235
|
Noncontrolling interests
|
|
|
|
87
|
|
|
|
(15)
|
|
|
|
106
|
|
|
|
121
|
Acquisition-related and integration costs
|
|
|
|
569
|
|
|
|
1,110
|
|
|
|
933
|
|
|
|
3,561
|
In-orbit insurance
|
|
|
|
293
|
|
|
|
97
|
|
|
|
587
|
|
|
|
194
|
Impairment loss – satellite network
|
|
|
|
0
|
|
|
|
12,748
|
|
|
|
0
|
|
|
|
12,748
|
Adjusted EBITDA
|
|
|
|
$12,116
|
|
|
|
$10,337
|
|
|
|
$22,815
|
|
|
|
$19,382
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ORBCOMM publically reports its financial information in accordance with
accounting principles generally accepted in the United States of America
(“US GAAP”). To facilitate external analysis of the Company’s operating
performance, ORBCOMM also presents financial information that are
considered “non-GAAP financial measures” under Regulation G and related
reporting requirements promulgated by the Securities and Exchange
Commission. Non-GAAP measures should be considered in addition to, and
not as a substitute for, or superior to, Net Income or other measures of
financial performance prepared in accordance with GAAP and may be
different than those presented by other companies. EBITDA, Adjusted
EBITDA and Adjusted EBITDA Margin are not performance measures
calculated in accordance with GAAP and are therefore considered non-GAAP
measures. A reconciliation table is presented above.
EBITDA is defined as earnings attributable to ORBCOMM Inc. before
interest income (expense), loss on debt extinguishment, provision for
income taxes and depreciation and amortization. ORBCOMM believes EBITDA
is useful to its management and investors in evaluating operating
performance because it is one of the primary measures used to evaluate
the economic productivity of the Company’s operations, including its
ability to obtain and maintain its customers, its ability to operate its
business effectively, the efficiency of its employees and the
profitability associated with their performance. It also helps ORBCOMM’s
management and investors to meaningfully evaluate and compare the
results of the Company’s operations from period to period on a
consistent basis by removing the impact of its financing transactions
and the depreciation and amortization impact of capital investments from
its operating results. In addition, ORBCOMM management uses EBITDA in
presentations to its board of directors to enable it to have the same
measurement of operating performance used by management and for planning
purposes, including the preparation of the annual operating budget.
The Company also believes that Adjusted EBITDA, defined as EBITDA
adjusted for stock-based compensation expense, noncontrolling interests,
impairment loss, non-capitalized satellite launch and in-orbit
insurance, insurance recovery, and acquisition-related and integration
costs, is useful to investors to evaluate the Company’s core operating
results and financial performance because it excludes items that are
significant non-cash or non-recurring expenses reflected in the
Condensed Consolidated Statements of Operations. Adjusted EBITDA Margin
equals Adjusted EBITDA divided by Total Revenues.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160804005637/en/
Source: ORBCOMM Inc.
Investor Inquiries:
ORBCOMM Inc.
Michelle
Ferris, 703-433-6516
Director of Corporate Communications
ferris.michelle@orbcomm.com
or
Financial
and Trade Media:
The Abernathy MacGregor Group
Alan
Oshiki, 212-371-5999
Executive Vice President
aho@abmac.com