ORBCOMM Announces Fourth Quarter and Full Year 2015 Results
– 2015 Total Revenues of $178.3 Million Increased 85% Year-Over-Year with 17% Organic Growth –
– Adjusted EBITDA of $11.9 Million in Q4 and $42.3 Million for 2015 –
– Successful Launch of 11 OG2 Satellites Completes Second Generation Constellation –
Rochelle Park, NJ, March 9, 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 fourth quarter and full year ended December 31, 2015.
The following financial highlights are in thousands of dollars.
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Three months ended
December 31,
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Twelve months ended
December 31,
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2015
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2014
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2015
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2014
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Service Revenues
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$27,140
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$15,183
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$99,973
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$59,695
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Product sales
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$17,856
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$14,285
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$78,320
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$36,547
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Total Revenues
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$44,996
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$29,468
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$178,293
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$96,242
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Net Income (Loss) attributable to ORBCOMM Inc. Common Stockholders
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$230
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($5,641)
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($13,287)
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($4,721)
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Net Income (Loss) – Ex-Items, attributable to ORBCOMM Inc. Common
Stockholders (1,5)
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$972
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($2,830)
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$4,264
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($297)
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Basic EPS
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$0.00
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($0.09)
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($0.19)
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($0.08)
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Basic EPS – Ex-Items (2,5)
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$0.01
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($0.04)
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$0.06
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($0.01)
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EBITDA (3,5)
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$9,535
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$1,205
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$19,443
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$9,331
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Adjusted EBITDA (4,5)
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$11,895
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$5,154
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$42,307
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$17,704
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(1)
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Net Income (Loss) – Ex-Items, attributable to ORBCOMM Inc. Common
Stockholders is defined as Net Income (Loss) attributable to ORBCOMM
Inc. Common Stockholders, excluding Impairment Loss-satellite
network, and Acquisition-related and integration costs.
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(2)
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Basic EPS – Ex-Items is defined as Basic EPS excluding Impairment
Loss-satellite network, and Acquisition-related and integration
costs.
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(3)
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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.
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(4)
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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.
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(5)
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A table presenting Net Income (Loss) – Ex-Items, attributable to
ORBCOMM Inc. Common Stockholders, EBITDA and Adjusted EBITDA,
reconciled to GAAP Net Income and Basic EPS – Ex-Items reconciled to
GAAP Basic EPS, is among other financial tables at the end of this
release.
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“2015 has been our most significant year to date, not only based on our
solid financial performance but also our strong market position as a
leading global provider of M2M and IoT solutions,” said Marc Eisenberg,
ORBCOMM’s Chief Executive Officer. “From new customer wins, to executing
on our large deployments, to the integration of our three acquisitions,
to continued innovation, as well as the completion of our advanced OG2
satellite constellation, ORBCOMM has a great deal of momentum. With our
flexibility, dynamic capabilities and global footprint, backed by our
incredible technical strength, ORBCOMM is well positioned for 2016 and
beyond.”
“The fourth quarter marked another high-performance quarter for ORBCOMM,
with Revenue growth translating into improving profitability. Service
Revenues increased 79% over the prior year, boosted by both acquisitions
and organic growth as we continue to install and activate the hardware
sold,” said Robert Costantini, ORBCOMM’s Chief Financial Officer.
“Adjusted EBITDA of $11.9 million increased 131% over the prior year
with healthy margin expansion to 26%, reflecting our operating leverage
as we scale the business.”
Recent Highlights:
Financial Highlights
-
For Q4 of 2015, Total Revenues of $45.0 million were up 53%
year-over-year. Service Revenues increased 79% over the prior year
period to $27.1 million and Product Sales of $17.9 million were 25%
higher than the prior year period. For the full year 2015, Total
Revenues were $178.3 million, up 85% over last year, with 17% organic
growth on a constant currency basis.
-
For Q4 of 2015, Adjusted EBITDA was $11.9 million, an increase of
$6.7
million
or 131% over the prior year period. Full year 2015 Adjusted
EBITDA totaled $42.3 million, up $24.6 million or 139% compared to the
prior year.
-
ORBCOMM’s Q4 2015 Net Income of $0.2 million improved $5.9 million
compared to the Net (Loss) of ($5.6) million in last year’s fourth
quarter. For the full year 2015, ORBCOMM’s Net (Loss) of
($13.3)
million
due to a satellite impairment charge of $12.7 million, and
increases in Depreciation and Amortization of $15.7 million, compared
to a Net (Loss) of ($4.7) million in 2014.
Net Income (Loss) Ex-Items (see non-GAAP reconciliation table at the end
of this release), excluding Acquisition-Related and Integration costs
and Impairment charges was Net Income – Ex-Items of $1.0 million for the
fourth quarter of 2015 compared to a Net (Loss) – Ex-Items of
($2.8)
million
for the same period last year. For the full year 2015, Net
Income – Ex-Items was $4.3 million compared to a Net (Loss) – Ex-Items
of ($0.3) million for the year in 2014.
-
Net subscriber communicator additions for ORBCOMM were 239,000 in Q4
of 2015, including over 200,000 subscribers being added from the
acquisition of WAM Technologies in the quarter, taking the total
billable subscriber communicators to 1,569,000 at December 31, 2015,
which compares to 976,000 at the end of last year; a 61% increase
year-over-year.
Launch Highlights
-
On December 21, 2015, ORBCOMM successfully launched eleven second
generation OG2 satellites from Cape Canaveral, Florida. After
undergoing extensive In-Orbit Testing to verify that all subsystems
are properly functioning, all eleven satellites are providing
commercial M2M messaging and Automatic Identification System (AIS)
services as of March 1, 2016.
Customer Highlights
-
On January 28, 2016, ORBCOMM announced that it was selected by Terex
Materials Processing, a business segment of Terex Corporation (Terex),
to deliver a customized end-to-end telematics solution to track and
monitor Powerscreen® and Terex® Finlay machines. ORBCOMM’s
comprehensive dual-mode solution will provide global satellite data
service combined with cellular connectivity through ORBCOMM’s wireless
partner, AT&T, along with state-of-the-art hardware and a robust
web-based platform for asset management. Terex Materials Processing
has officially begun offering the factory installed deployment of
ORBCOMM’s telematics system on its machinery and expects to
standardize the solution across several different models that ship
from its primary factory in Ireland.
-
On February 11, 2016, ORBCOMM announced that Lockheed Martin’s
Aeronautics Division has selected ORBCOMM’s turnkey iApp platform as a
replacement to their existing RFID-based data collection solution.
ORBCOMM’s robust iApp platform will enable automated data capture,
processing, traceability and analysis of assets located at global
storage sites managed by Lockheed Martin, their partners and their
sellers.
-
On February 25, 2016 and March 3, 2016, ORBCOMM announced that it has
added Bay and Bay Transportation (Bay and Bay) and
Commercial Trailer
Leasing
(CTL) respectively to its customer portfolio. Founded in 1959,
Bay and Bay is a premier trucking and logistics provider and a leader
in the temperature-control market with extensive reach across
the
United States
. ORBCOMM will provide Bay and Bay with industry-leading
telematics solutions to track and monitor its mixed fleet, including
dry van and refrigerated trailers as well as dry tank assets, which
are used to transport a variety of non-food grade materials. ORBCOMM
will provide CTL, a New Jersey-based lessor of trailers, with its
solar-powered asset tracking solution for select customers on their
dry van trailers. ORBCOMM's solution will provide wireless
connectivity through ORBCOMM's state-of-the-art hardware and a
web-based reporting platform for optimal fleet management.
Product Highlights
-
On January 26, 2016, ORBCOMM launched the commercial availability of
its new OGi IsatData Pro (IDP) core modem, which is the smallest and
lowest cost IDP modem built to date utilizing the Inmarsat I-4 L-band
satellites. The OGi modem is a software-defined radio that leverages
the ORBCOMM satellite modem platform. With a footprint nearly 50%
smaller than a credit card, both ORBCOMM’s OG2 and OGi modems utilize
the same electrical and application interfaces, including the
connectors, power input and programming environment. This
interchangeable format enables customers to plug-n-play satellite
connectivity utilizing the ORBCOMM VHF network and/or the Inmarsat
L-band network without the need to redesign their M2M solutions.
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On February 23, 2016, ORBCOMM announced additions to its fleet
management portfolio. This includes the new cellular-only SkyWave
IDP-782 device and the viaFleet web application for tracking,
monitoring and managing trucks, railcars and other mobile assets. By
leveraging ORBCOMM's extensive fleet management solutions, fleet
operators can reduce fuel costs, optimize travel routes, monitor
driver behavior, minimize idle times and ensure cargo and driver
security.
-
On February 29, 2016, ORBCOMM announced the new release of CargoWatch®
Secure, a powerful, real-time cargo security and condition monitoring
solution that provides complete shipment lifecycle awareness and
visibility of dry and refrigerated cargo in transit and in storage.
The application is designed to traverse across a variety of
transportation modes and serve multiple parties from origin to
destination.
Industry Awards
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On January 4, 2016, ORBCOMM was recognized by Food Logistics, the only
publication dedicated exclusively to the global food and beverage
supply chain, on the 12th annual FL100+ list. The FL100+ is a listing
of software, hardware and IT service providers that focus on the
unique technology needs of the food distribution business.
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On January 8, 2016, ORBCOMM was named the Satellite M2M Service
Provider of the Year as part of the 3rd Annual 2016 Compass
Intelligence A-List in M2M Awards. ORBCOMM received the award at the
Compass Intelligence press luncheon held at the
Las Vegas Convention
Center
and World Trade Center during the 2016 International CES® trade
show in Las Vegas, NV.
-
On February 4, 2016, ORBCOMM announced that it is one of four
prestigious New Jersey companies to have been chosen as an honoree for
the 2016
Association for Corporate Growth (ACG) NJ Corporate
Conference and Awards Program
. The award honors middle market
companies with operations in NJ that have revenue between
$5 million
and $500 million
and that have quantifiably grown through an
innovative business model, deal or best practice.
For more information on recent highlights, please visit www.orbcomm.com.
Financial Results and Highlights
Revenues
Total Revenues for the fourth quarter of 2015 were $45.0 million
compared to $29.5 million during the same period last year, an increase
of 53%. Total Revenues for the full year 2015 were $178.3 million
compared to $96.2 million in 2014, an increase of 85%, with organic
constant currency growth of 17%.
For the fourth quarter of 2015, Service Revenues were up 79% over the
comparable period in 2014, to $27.1 million. The increase in Service
Revenues in Q4 of 2015 was driven by strong organic constant currency
growth of 10%, as well as acquisitions. Service Revenues in Q4 of 2015
also benefitted from higher than usual installation and professional
fees of $0.4 million. For the full year 2015, Service Revenues were
$100.0 million compared to $59.7 million in 2014, an increase of
$40.3
million
or 67%.
Product Sales during the fourth quarter of 2015 were $17.9 million
compared to $14.3 million during the same period last year, increasing
$3.6 million or 25%. The quarterly year-over-year increase in Product
Sales was aided by sales from the acquired companies. Product Sales for
the full year 2015 were $78.3 million compared to $36.5 million in 2014,
an increase of $41.8 million or 114%, with solid organic constant
currency growth of $12.5 million or 34%.
Direct Costs and Operating Expenses
Total direct costs and operating expenses for the fourth quarter of 2015
were $42.6 million compared to $32.7 million during the same period in
2014. Direct costs increased year-over-year largely due to increases in
Service Revenues and costs to operate the companies acquired during the
year in 2015. Gross Profit for the fourth quarter of 2015 was
$23.4
million
, increasing $11.6 million or 97% compared to $11.9 million for
the prior year quarter, due to the increase in Service Revenues and
Product Sales. Q4 2015 operating expenses were higher than the prior
year period primarily due to expenses from the companies acquired such
as acquired employees and higher Depreciation and Amortization,
partially offset by lower Acquisition-Related and Integration costs in
the fourth quarter of 2015 versus the prior year and the impact on a
comparable basis from an asset impairment charge of $0.6 million in the
fourth quarter of 2014.
Total direct and operating expenses for the full year 2015 were
$185.5
million
compared to $97.8 million in 2014. Gross Profit for the full
year 2015 was $87.8 million, increasing $40.2 million or 85% over the
prior year.
Income (Loss) Before Income Taxes, Net Income (Loss), and Earnings
Per Share
Income Before Income Taxes for the fourth quarter of 2015 was
$1.2
million
, a significant improvement over the ($5.9) million loss for the
fourth quarter of 2014. For the full year 2015, the (Loss) Before Income
Taxes was ($11.8) million compared to a ($4.1) million loss in 2014 and
included $12.7 million in satellite impairment charges and increases in
Depreciation and Amortization of $15.7 million in 2015.
Net Income attributable to ORBCOMM Inc. Common Stockholders was
$0.2
million
for the fourth quarter of 2015, compared to a loss of
($5.6)
million
for the same period in 2014. Basic EPS was $0.00 per share for
the fourth quarter of 2015 versus a loss of ($0.09) per share for the
fourth quarter of 2014. Net (Loss) attributable to ORBCOMM Inc. Common
Stockholders was ($13.3) million for the full year 2015 compared to a
loss of ($4.7) million in 2014. Basic EPS was a loss of ($0.19) per
share for the full year 2015 versus a loss of ($0.08) per share for 2014.
Net Income (Loss) Ex-Items excluding Acquisition-Related and Integration
costs and Satellite Impairment charges was $1.0 million (basic EPS –
Ex-Items was $0.01) for the fourth quarter of 2015 compared to Net
(Loss) – Ex-Items of ($2.8) million (basic EPS Ex-Items of a loss of
($0.04)) for the comparable period last year. For the full year 2015,
Net Income – Ex-Items was $4.3 million (basic EPS – Ex-Items was $0.06)
compared to Net (Loss) – Ex-Items of ($0.3) million (basic EPS Ex-Items
of a loss of ($0.01)) for 2014.
Net Income (Loss) – Ex-Items, attributable to ORBCOMM Inc. Common
Stockholders and Basic EPS – Ex-Items are non-GAAP financial measures
used by the Company. Please see the financial tables at the end of the
release for a reconciliation of Net Income (Loss) – Ex-Items,
attributable to ORBCOMM Inc. Common Stockholders and Basic EPS –
Ex-Items.
EBITDA and Adjusted EBITDA
EBITDA for the fourth quarter of 2015 was $9.5 million compared to
$1.2
million
in the fourth quarter of 2014. For the full year 2015, EBITDA
was $19.4 million compared to $9.3 million in 2014, an increase of
$10.1
million
or 108%.
Adjusted EBITDA of $11.9 million for the fourth quarter of 2015 compared
to $5.2 million in the fourth quarter of 2014, an increase of
$6.7
million
or 131%. For the full year 2015, Adjusted EBITDA was
$42.3
million
compared to $17.7 million for 2014, an increase of $24.6 million
or 139%.
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 December 31, 2015, Cash and Cash Equivalents, Cash Held for
Acquisition and Restricted Cash totaled $28.1 million, compared to
$215.8 million at December 31, 2014, decreasing $187.7 million. Cash
decreased primarily due to the acquisitions of SkyWave, InSync and WAM
Technologies and Capital Expenditures of $70.0 million mostly related to
milestone and insurance payments for the OG2 program, offset by Cash
from Operations of $26.1 million.
Investment Community Conference Call
ORBCOMM will host a conference call and webcast for the investment
community this morning at 10:00 AM ET. Senior management will review the
results, discuss ORBCOMM’s business, and address questions. To access
the call, domestic participants should dial 1-888-417-8516 at least ten
minutes prior to the start of the call. International callers should
dial 1-719-457-2689. 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 telephone replay of the conference call, please dial
1-888-203-1112 domestically or 1-719-457-0820 internationally and enter
reservation identification number 9246532. The replay will be available
from approximately 3:30 PM ET on March 9, 2016, through 3:30 PM ET on
March 23, 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 nearly 20 years of innovation and expertise in M2M, ORBCOMM has
more than 1.5 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.
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ORBCOMM Inc.
|
|
Consolidated Balance Sheets
|
|
(In thousands, except par value and share data)
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
2015
|
|
2014
|
|
ASSETS
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
27,077
|
|
$
|
91,565
|
|
Cash held for acquisition
|
|
|
-
|
|
|
123,000
|
|
Accounts receivable, net of allowance for doubtful accounts of
$1,233 and $706,
|
|
|
|
|
|
respectively
|
|
|
29,816
|
|
|
23,194
|
|
Inventories
|
|
|
20,712
|
|
|
11,650
|
|
Prepaid expenses and other current assets
|
|
|
5,646
|
|
|
2,333
|
|
Restricted cash - current
|
|
|
1,000
|
|
|
-
|
|
Deferred income taxes
|
|
|
508
|
|
|
814
|
|
Total current assets
|
|
|
84,759
|
|
|
252,556
|
|
Satellite network and other equipment, net
|
|
|
229,970
|
|
|
180,621
|
|
Goodwill
|
|
|
112,425
|
|
|
39,870
|
|
Intangible assets, net
|
|
|
93,172
|
|
|
26,334
|
|
Restricted cash - non-current
|
|
|
-
|
|
|
1,195
|
|
Other assets
|
|
|
6,573
|
|
|
5,921
|
|
Deferred income taxes
|
|
|
-
|
|
|
51
|
|
Total assets
|
|
$
|
526,899
|
|
$
|
506,548
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$
|
13,895
|
|
$
|
8,750
|
|
Accrued expenses
|
|
|
24,186
|
|
|
20,336
|
|
Current portion of deferred revenue
|
|
|
7,652
|
|
|
3,525
|
|
Total current liabilities
|
|
|
45,733
|
|
|
32,611
|
|
Note payable - related party
|
|
|
1,241
|
|
|
1,389
|
|
Note payable
|
|
|
150,000
|
|
|
150,000
|
|
Deferred revenue, net of current portion
|
|
|
6,024
|
|
|
2,579
|
|
Deferred tax liabilities
|
|
|
18,440
|
|
|
5,696
|
|
Other liabilities
|
|
|
5,705
|
|
|
5,764
|
|
Total liabilities
|
|
|
227,143
|
|
|
198,039
|
|
Commitments and contingencies
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
ORBCOMM Inc. stockholders' equity
|
|
|
|
|
|
Convertible Series A Preferred Stock, par value $0.001; 1,000,000
shares authorized;
|
|
|
|
|
|
35,759 and 90,973 shares issued and outstanding
|
|
|
357
|
|
|
909
|
|
Common stock, par value $0.001; 250,000,000 share authorized;
70,613,642 and
|
|
|
|
|
|
70,109,488 shares issued at December 31, 2015 and December 31, 2014
|
|
|
71
|
|
|
70
|
|
Additional paid-in capital
|
|
|
381,659
|
|
|
376,297
|
|
Accumulated other comprehensive income (loss)
|
|
|
(1,174)
|
|
|
(583)
|
|
Accumulated deficit
|
|
|
(81,424)
|
|
|
(68,137)
|
|
Less treasury stock, at cost; 29,990 shares at December 31, 2015 and
December 31,
|
|
|
|
|
|
2014, respectively
|
|
|
(96)
|
|
|
(96)
|
|
Total ORBCOMM Inc. stockholders' equity
|
|
|
299,393
|
|
|
308,460
|
|
Noncontrolling interest
|
|
|
363
|
|
|
49
|
|
Total equity
|
|
|
299,756
|
|
|
308,509
|
|
Total liabilities and equity
|
|
$
|
526,899
|
|
$
|
506,548
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ORBCOMM Inc.
|
|
Consolidated Statements of Operations
|
|
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended December 31,
|
|
Years Ended December 31,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Service revenues
|
|
$ 27,140
|
|
$ 15,183
|
|
$ 99,973
|
|
$ 59,695
|
|
Product sales
|
|
17,856
|
|
14,285
|
|
78,320
|
|
36,547
|
|
Total revenues
|
|
44,996
|
|
29,468
|
|
178,293
|
|
96,242
|
|
Cost of revenues, exclusive of depreciation and
|
|
|
|
|
|
|
|
|
|
amortization shown below:
|
|
|
|
|
|
|
|
|
|
Cost of services
|
|
9,321
|
|
5,348
|
|
34,109
|
|
20,339
|
|
Cost of product sales
|
|
12,251
|
|
12,247
|
|
56,413
|
|
28,345
|
|
Gross profit
|
|
23,424
|
|
11,873
|
|
87,771
|
|
47,558
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
11,261
|
|
7,149
|
|
44,395
|
|
30,989
|
|
Product development
|
|
1,841
|
|
787
|
|
6,469
|
|
2,895
|
|
Impairment charges - satellite network
|
|
-
|
|
605
|
|
12,748
|
|
605
|
|
Depreciation and amortization
|
|
7,145
|
|
4,386
|
|
26,571
|
|
10,856
|
|
Acquisition-related and integration costs
|
|
742
|
|
2,206
|
|
4,803
|
|
3,819
|
|
Income (loss) from operations
|
|
2,435
|
|
(3,260)
|
|
(7,215)
|
|
(1,606)
|
|
|
|
|
|
|
|
|
|
|
Other (expense) income:
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
98
|
|
16
|
|
344
|
|
47
|
|
Other income
|
|
32
|
|
133
|
|
339
|
|
240
|
|
Interest expense
|
|
(1,336)
|
|
(146)
|
|
(5,242)
|
|
(149)
|
|
(Loss) on debt extinguishment
|
|
-
|
|
(2,649)
|
|
-
|
|
(2,649)
|
|
Total other (expense) income
|
|
(1,206)
|
|
(2,646)
|
|
(4,559)
|
|
(2,511)
|
|
Income (loss) before income taxes
|
|
1,229
|
|
(5,906)
|
|
(11,774)
|
|
(4,117)
|
|
Income taxes
|
|
913
|
|
(337)
|
|
1,225
|
|
408
|
|
Net income (loss)
|
|
316
|
|
(5,569)
|
|
(12,999)
|
|
(4,525)
|
|
Less: Net income attributable to the noncontrolling
|
|
|
|
|
|
|
|
|
|
interests
|
|
77
|
|
54
|
|
252
|
|
159
|
|
Net income (loss) attributable to ORBCOMM Inc.
|
|
$ 239
|
|
$ (5,623)
|
|
$ (13,251)
|
|
$ (4,684)
|
|
Net income (loss) attributable to ORBCOMM Inc.
|
|
|
|
|
|
|
|
|
|
common stockholders
|
|
$ 230
|
|
$ (5,641)
|
|
$ (13,287)
|
|
$ (4,721)
|
|
Per share information-basic:
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to ORBCOMM Inc.
|
|
|
|
|
|
|
|
|
|
common stockholders
|
|
$ 0.00
|
|
$ (0.09)
|
|
$ (0.19)
|
|
$ (0.08)
|
|
Per share information-diluted:
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to ORBCOMM Inc.
|
|
|
|
|
|
|
|
|
|
common stockholders
|
|
$ 0.00
|
|
$ (0.09)
|
|
$ (0.19)
|
|
$ (0.08)
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
70,546
|
|
62,984
|
|
70,419
|
|
56,684
|
|
Diluted
|
|
72,209
|
|
62,984
|
|
70,419
|
|
56,684
|
|
|
|
|
|
|
|
|
|
|
|
|
ORBCOMM Inc.
|
|
Consolidated Statements of Cash Flows
|
|
(In Thousands)
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
2015
|
|
2014
|
|
Cash flows from operating activities:
|
|
|
|
|
|
Net loss
|
|
$
|
(12,999)
|
|
$
|
(4,525)
|
|
Adjustments to reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
Change in allowance for doubtful accounts
|
|
|
676
|
|
|
427
|
|
Change in the fair value of acquisition-related contingent
consideration
|
|
|
(1,606)
|
|
|
(2,132)
|
|
Amortization of the fair value adjustment related to warranty
liabilities acquired through acquisitions
|
|
|
(12)
|
|
|
(164)
|
|
Amortization and write off of deferred financing fees
|
|
|
464
|
|
|
869
|
|
Depreciation, amortization and impairment loss
|
|
|
26,571
|
|
|
10,856
|
|
Impairment loss - satellite network
|
|
|
12,748
|
|
|
605
|
|
Stock-based compensation
|
|
|
4,620
|
|
|
3,610
|
|
Foreign exchange (gains) losses
|
|
|
(413)
|
|
|
(227)
|
|
Increase in fair value of indemnification assets
|
|
|
-
|
|
|
(126)
|
|
Loss on settlement agreement in connection with the indemnification
assets
|
|
|
-
|
|
|
97
|
|
Deferred income taxes
|
|
|
825
|
|
|
(276)
|
|
Other
|
|
|
-
|
|
|
173
|
|
Changes in operating assets and liabilities, net of acquisition:
|
|
|
|
|
|
Accounts receivable
|
|
|
8,045
|
|
|
(6,882)
|
|
Inventories
|
|
|
(7,953)
|
|
|
(5,291)
|
|
Prepaid expenses and other assets
|
|
|
(449)
|
|
|
(173)
|
|
Accounts payable and accrued liabilities
|
|
|
(2,995)
|
|
|
5,353
|
|
Deferred revenue
|
|
|
(1,126)
|
|
|
611
|
|
Other liabilities
|
|
|
(313)
|
|
|
397
|
|
Net cash provided by operating activities
|
|
|
26,083
|
|
|
3,202
|
|
Cash flows from investing activities:
|
|
|
|
|
|
Acquisition of businesses, net of cash acquired
|
|
|
(141,575)
|
|
|
(28,883)
|
|
Capital expenditures
|
|
|
(70,017)
|
|
|
(45,543)
|
|
Cash held for acquisition
|
|
|
123,000
|
|
|
(123,000)
|
|
Proceeds received from settlement agreement in connection with the
indemnification assets
|
|
|
-
|
|
|
691
|
|
Proceeds from warranty claim on acquired inventory
|
|
|
-
|
|
|
167
|
|
Changes in restricted cash
|
|
|
-
|
|
|
1,000
|
|
Net cash used in investing activities
|
|
|
(88,592)
|
|
|
(195,568)
|
|
Cash flows from financing activities
|
|
|
|
|
|
Proceeds received from issuance of common stock in connection with
public offering, net of
|
|
|
|
|
|
underwriters' discounts and commissions and offering costs
|
|
|
-
|
|
|
114,798
|
|
Proceeds received from long-term debt
|
|
|
10,000
|
|
|
150,000
|
|
Cash paid for debt issuance costs
|
|
|
(942)
|
|
|
(3,652)
|
|
Proceeds received from exercise of stock options
|
|
|
244
|
|
|
101
|
|
Payment of deferred purchase consideration
|
|
|
(1,106)
|
|
|
(25)
|
|
Principal payment of note payable
|
|
|
(10,000)
|
|
|
(45,000)
|
|
Principal payments of capital leases
|
|
|
-
|
|
|
(163)
|
|
Net cash (used in) provided by financing activities
|
|
|
(1,804)
|
|
|
216,059
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
(175)
|
|
|
(482)
|
|
Net (decrease) increase in cash and cash equivalents
|
|
|
(64,488)
|
|
|
23,211
|
|
Beginning of period
|
|
|
91,565
|
|
|
68,354
|
|
End of period
|
|
$
|
27,077
|
|
$
|
91,565
|
|
|
|
|
|
|
|
The following table reconciles our Net Income attributable to
ORBCOMM
Inc.
to EBITDA and Adjusted EBITDA for the periods shown:
|
|
|
|
|
|
|
Three months ended
|
|
Twelve months ended
|
|
|
December 31,
|
|
December 31,
|
|
(in thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Net Income (Loss) attributable to ORBCOMM Inc.
|
|
$239
|
|
($5,623)
|
|
($13,251)
|
|
($4,684)
|
|
Net interest expense (income)
|
|
1,238
|
|
130
|
|
4,898
|
|
102
|
|
Loss on debt extinguishment
|
|
0
|
|
2,649
|
|
0
|
|
2,649
|
|
Provision for income taxes
|
|
913
|
|
(337)
|
|
1,225
|
|
408
|
|
Depreciation and amortization
|
|
7,145
|
|
4,386
|
|
26,571
|
|
10,856
|
|
EBITDA
|
|
$9,535
|
|
$1,205
|
|
$19,443
|
|
$9,331
|
|
Stock-based compensation
|
|
1,405
|
|
987
|
|
4,620
|
|
3,610
|
|
Noncontrolling interests
|
|
77
|
|
54
|
|
252
|
|
159
|
|
Acquisition-related and integration costs
|
|
742
|
|
2,206
|
|
4,803
|
|
3,819
|
|
In-orbit insurance
|
|
136
|
|
97
|
|
441
|
|
180
|
|
Impairment loss – satellite network
|
|
0
|
|
605
|
|
12,748
|
|
605
|
|
Adjusted EBITDA
|
|
$11,895
|
|
$5,154
|
|
$42,307
|
|
$17,704
|
|
|
|
|
|
|
|
|
|
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 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
and its capacity to fund capital expenditures, 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. EBITDA, Adjusted
EBITDA and Adjusted EBITDA Margin are not performance measures
calculated in accordance with accounting principles generally accepted
in the United States, or GAAP. While ORBCOMM considers EBITDA, Adjusted
EBITDA and Adjusted EBITDA Margin to be important measures of operating
performance, they 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 EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin
measures presented by other companies. A reconciliation table is
presented above.
The following table reconciles our Net Income (Loss) attributable to
ORBCOMM Inc. Common Stockholders to Net Income (Loss) – Ex-Items,
attributable to ORBCOMM Inc. Common Stockholders and Basic EPS to Basic
EPS – Ex-Items for the periods shown:
|
|
|
|
|
|
|
Three months ended
|
|
Twelve months ended
|
|
|
December 31,
|
|
December 31,
|
|
(in thousands except per share data)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Net Income (Loss) attributable to ORBCOMM Inc. Common Stockholders
|
|
$230
|
|
($5,641)
|
|
($13,287)
|
|
($4,721)
|
|
Impairment Loss – satellite network
Acquisition-related and integration costs
|
|
0
742
|
|
605
2,206
|
|
12,748
4,803
|
|
605
3,819
|
|
Net Income (Loss) – Ex-Items attributable to ORBCOMM Inc. Common
Stockholders
|
|
$972
|
|
($2,830)
|
|
$4,264
|
|
($297)
|
|
Basic EPS
|
|
$0.00
|
|
($0.09)
|
|
($0.19)
|
|
($0.08)
|
|
Impact of Adjustments on Basic EPS
|
|
$0.01
|
|
$0.04
|
|
$0.25
|
|
$0.08
|
|
Basic EPS – Ex-Items
|
|
$0.01
|
|
($0.04)
|
|
$0.06
|
|
($0.01)
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) – Ex-Items attributable to ORBCOMM Inc. Common
Stockholders is defined as Net Income (Loss) attributable to
ORBCOMM Inc. Common Stockholders, excluding Impairment Loss-satellite
network, and Acquisition-related and integration costs. Basic EPS –
Ex-Items is defined as Basic EPS excluding Impairment Loss-satellite
network, and Acquisition-related and integration costs. Net Income
(Loss) – Ex-Items attributable to ORBCOMM Inc. Common Stockholders and
Basic EPS – Ex-Items are non-GAAP financial measures used by the
Company. These non-GAAP financial measures are used as a means to
evaluate period-to-period comparisons. These non-GAAP measures are
presented in this press release as management believes that they will
provide investors with a means of evaluating, and an understanding of
how management evaluates, the Company’s performance and results on a
comparable basis that is not otherwise apparent on a GAAP basis, since
many non-recurring, infrequent or non-cash items that management
believes are not indicative of the core performance of the business may
not be excluded when preparing financial measures under GAAP. These
non-GAAP measures should not be considered in isolation from, as
substitutes for, or superior to financial measures prepared in
accordance with GAAP, or may be different from similarly titled measures
reported by other companies. A reconciliation table is presented above.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160309005757/en/
Source: ORBCOMM Inc.
Investor Inquiries:
ORBCOMM Inc.
Michelle
Ferris, 703-433-6516
Director of Corporate Communications
ferris.michelle@orbcomm.com
or
Media
Inquiries:
The Abernathy MacGregor Group
Chuck
Burgess, 212-371-5999
President
clb@abmac.com
