– Total Revenues Reach Record of $51.9 Million, Up 19% Compared to Last Year –
– Adjusted EBITDA of $12.4 Million Increased 16% Year Over Year –
– Strong Momentum in Q1 as the Company Adds Over 42,000 Net Subscriber Communicators –
- May 4, 2017
The following financial highlights are in thousands of dollars.
Three Months Ended March 31, | |||||||||||
2017 | 2016 | ||||||||||
Service Revenues | $ | 29,512 | $ | 26,914 | |||||||
Product Sales | $ | 22,409 | $ | 16,646 | |||||||
Total Revenues | $ | 51,921 | $ | 43,560 | |||||||
Net Loss attributable to ORBCOMM Inc. Common Stockholders | ($3,343 | ) | ($2,096 | ) | |||||||
Basic EPS | ($0.05 | ) | ($0.03 | ) | |||||||
EBITDA (1,3) | $ | 10,610 | $ | 8,636 | |||||||
Adjusted EBITDA (2,3) | $ | 12,404 | $ | 10,698 | |||||||
(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 (Loss), is among other financial tables at the end of this release |
“Our strong sales pipeline resulted in a fast start to 2017, with a
record first quarter despite typically being the softest quarter of the
year,” said
“Total Revenues for the first quarter reached a record
Recent Highlights:
Financial Highlights
-
For Q1 of 2017, record Total Revenues of
$51.9 million were up 19.2% year-over-year, with Service Revenues and Product Sales reaching record levels in the quarter. Service Revenues of$29.5 million increased 9.7% and Product Sales of$22.4 million were 34.6% higher this quarter than the prior year period. -
For Q1 of 2017, Adjusted EBITDA of
$12.4 million increased$1.7 million , improving 15.9% over the prior year period. Adjusted EBITDA margin was 23.9% of Total Revenues. -
Net subscriber communicator additions for
ORBCOMM were over 42,000 in Q1 of 2017, increasing the total billable subscriber communicators to nearly 1,766,000 atMarch 31, 2017 , which compares to 1,609,000 at the end of last year; a 9.8% increase year-over-year. -
On
March 31, 2017 ,ORBCOMM announced that it has priced$250,000,000 aggregate principal amount of 8.0% senior secured notes due 2024. The net proceeds from the sale of the notes were used to repay the$150 million outstanding loans under ORBCOMM’s prior secured credit facilities, with the remaining intended for general corporate purposes, including potential future acquisitions.
Customer and Product Highlights
-
On
April 4, 2017 ,ORBCOMM announced thatKevadiya Inc. (Kevadiya) selectedORBCOMM to provide satellite communications services and hardware in support of the Vehicle Tracking Program for theFederal Bureau of Prisons (BOP), a division of theU.S. Department of Justice . Kevadiya will be providing a fleet mobility tracking solution as part of the BOP program. -
On
March 21, 2017 ,ORBCOMM announced that it has collaborated with maritime technology industry leadersPole Star and Weatherdock to develop Hali, a Class B tri-mode vessel tracking solution that ensures complete vessel visibility. Hali combines terrestrial and satellite Automatic Identification System (AIS) data capability with two-way satellite M2M technology to deliver reliable vessel location data to small craft and fleet owners & operators, maritime authorities and enforcement agencies, providing the actionable intelligence required to maximize maritime safety, security and environmental compliance. -
On
March 20, 2017 ,ORBCOMM announced that Kevadiya selectedORBCOMM to provide satellite and cellular communications services and asset tracking and monitoring devices in support of the Veterans Transportation Service (VTS) provided by theU.S. Department of Veterans Affairs (VA). The VA recently extended the VTS program based on the success of the ORBCOMM-Kevadiya telematics solution launched in 2015. -
On
March 10, 2017 ,ORBCOMM announced the award of a multi-year contract with theAustralian Maritime Safety Authority (AMSA) throughKordia Pty Ltd (Kordia).ORBCOMM and Kordia, a leading provider of mission-critical networks inNew Zealand , will provide satellite Automatic Identification System (AIS) data used for ship tracking and other maritime navigational and safety efforts to AMSA. -
On
February 28, 2017 ,ORBCOMM announced that Maerospace has won a multi-year contract with the Government ofCanada to supply satellite Automatic Identification System (AIS) data used for ship tracking and other maritime navigational and safety efforts in conjunction with Maerospace’s TimeCaster™ technology. Maerospace, an industry expert in advanced data analytics, andORBCOMM , providing AIS data through its Canadian subsidiary SkyWave, have partnered to provide the Government ofCanada the technology to monitor Canadian and global maritime traffic.
For more information on recent highlights, please visit www.orbcomm.com.
Financial Results and Highlights
Revenues
For the first quarter ended
Product Sales during the first quarter of 2017 were a record
Total Revenues reached a record
Cost of Revenues and Operating Expenses
Total Cost of Revenues and Operating Expenses for the first quarter of
2017 were
Income (Loss) Before Income Taxes, Net Income (Loss), and Earnings Per Share
Income (Loss) Before Income Taxes for the first quarter of 2017 was a
Net Loss attributable to
EBITDA and Adjusted EBITDA
EBITDA for the first quarter of 2017 was
Adjusted EBITDA of
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
Investment Community Conference Call
About
With close to two decades of innovation and expertise in M2M,
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, as well as projections, business trends and other
statements that are not historical facts. Such forward-looking
statements are subject to known and unknown risks and uncertainties,
some of which are beyond the Company’s control, which 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: demand for
and market acceptance of our products and services and our ability to
successfully implement our business plan; our dependence on our
subsidiary companies (Market Channel Affiliates (MCAs)) and third party
product and service developers and providers, distributors and resellers
(
ORBCOMM Inc. | |||||||||||
Condensed Consolidated Balance Sheets | |||||||||||
(in thousands, except par value and share data) | |||||||||||
(Unaudited) | |||||||||||
March 31, | December 31, | ||||||||||
2017 | 2016 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 19,955 | $ | 25,023 | |||||||
Accounts receivable, net of allowance for doubtful accounts of
$1,021
|
38,453 | 31,937 | |||||||||
Inventories | 23,401 | 23,217 | |||||||||
Prepaid expenses and other current assets | 6,418 | 8,031 | |||||||||
Total current assets | 88,227 | 88,208 | |||||||||
Satellite network and other equipment, net | 214,059 | 215,841 | |||||||||
Goodwill | 114,033 | 114,033 | |||||||||
Intangible assets, net | 80,031 | 82,545 | |||||||||
Other assets | 10,323 | 5,447 | |||||||||
Deferred income taxes | 86 | 80 | |||||||||
Total assets | $ | 506,759 | $ | 506,154 | |||||||
LIABILITIES AND EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 12,535 | $ | 12,481 | |||||||
Accrued liabilities | 32,678 | 30,431 | |||||||||
Current portion of deferred revenue | 7,293 | 7,414 | |||||||||
Total current liabilities | 52,506 | 50,326 | |||||||||
Note payable - related party | 1,218 | 1,195 | |||||||||
Note payable, net of unamortized deferred issuance costs | 147,685 | 147,458 | |||||||||
Deferred revenue, net of current portion | 2,888 | 2,978 | |||||||||
Deferred tax liabilities | 18,799 | 18,645 | |||||||||
Other liabilities | 3,401 | 3,684 | |||||||||
Total liabilities | 226,497 | 224,286 | |||||||||
Commitments and contingencies | |||||||||||
Equity: | |||||||||||
ORBCOMM Inc. stockholders' equity | |||||||||||
Series A Convertible Preferred Stock, par value $0.001; 1,000,000
shares
|
364 | 364 | |||||||||
Common stock, par value $0.001; 250,000,000 shares authorized;
71,695,802 and
|
72 | 71 | |||||||||
Additional paid-in capital | 388,418 | 386,920 | |||||||||
Accumulated other comprehensive income (loss) | (887 | ) | (1,089 | ) | |||||||
Accumulated deficit | (108,292 | ) | (104,949 | ) | |||||||
Less treasury stock, at cost; 29,990 shares at March 31, 2017 and
|
(96 | ) | (96 | ) | |||||||
Total ORBCOMM Inc. stockholders' equity | 279,579 | 281,221 | |||||||||
Noncontrolling interest | 683 | 647 | |||||||||
Total equity | 280,262 | 281,868 | |||||||||
Total liabilities and equity | $ | 506,759 | $ | 506,154 | |||||||
ORBCOMM Inc. | |||||||||||
Condensed Consolidated Statements of Operations | |||||||||||
(In thousands, except per share data) | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended March 31, | |||||||||||
2017 | 2016 | ||||||||||
Revenues: | |||||||||||
Service revenues | $ | 29,512 | $ | 26,914 | |||||||
Product sales | 22,409 | 16,646 | |||||||||
Total revenues | 51,921 | 43,560 | |||||||||
Cost of revenues, exclusive of depreciation and amortization
|
|||||||||||
Cost of services | 9,569 | 9,188 | |||||||||
Cost of product sales | 17,648 | 11,450 | |||||||||
Operating expenses: | |||||||||||
Selling, general and administrative | 12,241 | 11,756 | |||||||||
Product development | 1,588 | 1,957 | |||||||||
Depreciation and amortization | 11,022 | 8,959 | |||||||||
Acquisition - related and integration costs | 228 | 364 | |||||||||
Loss from operations | (375 | ) | (114 | ) | |||||||
Other income (expense): | |||||||||||
Interest income | 118 | 88 | |||||||||
Other income (expense) | 5 | (190 | ) | ||||||||
Interest expense | (2,426 | ) | (1,699 | ) | |||||||
Total other expense | (2,303 | ) | (1,801 | ) | |||||||
Loss before income taxes | (2,678 | ) | (1,915 | ) | |||||||
Income taxes | 623 | 162 | |||||||||
Net loss | (3,301 | ) | (2,077 | ) | |||||||
Less: Net income attributable to the noncontrolling
|
42 | 19 | |||||||||
Net loss attributable to ORBCOMM Inc. | $ | (3,343 | ) | $ | (2,096 | ) | |||||
Net loss attributable to ORBCOMM Inc.
|
$ | (3,343 | ) | $ | (2,096 | ) | |||||
Per share information-basic: | |||||||||||
Net loss attributable to ORBCOMM Inc.
|
$ | (0.05 | ) | $ | (0.03 | ) | |||||
Per share information-diluted: | |||||||||||
Net loss attributable to ORBCOMM Inc.
|
$ | (0.05 | ) | $ | (0.03 | ) | |||||
Weighted average common shares outstanding: | |||||||||||
Basic | 71,424 | 70,700 | |||||||||
Diluted | 71,424 | 70,700 | |||||||||
ORBCOMM Inc. | |||||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||||
(In thousands) | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended March 31, | |||||||||||
2017 | 2016 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net loss | $ | (3,301 | ) | $ | (2,077 | ) | |||||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||
Change in allowance for doubtful accounts | (36 | ) | (303 | ) | |||||||
Change in the fair value of acquisition-related contingent consideration | (495 | ) | 100 | ||||||||
Amortization of the fair value adjustment related to warranty
liabilities acquired through
acquisitions |
— | (8 | ) | ||||||||
Amortization of deferred financing fees | 229 | 155 | |||||||||
Depreciation and amortization | 11,022 | 8,959 | |||||||||
Stock-based compensation | 1,524 | 1,386 | |||||||||
Foreign exchange (gain) loss | (26 | ) | 351 | ||||||||
Deferred income taxes | 155 | 203 | |||||||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||||||
Accounts receivable | (6,399 | ) | (1,096 | ) | |||||||
Inventories | (151 | ) | (864 | ) | |||||||
Prepaid expenses and other assets | 1,768 | (969 | ) | ||||||||
Accounts payable and accrued liabilities | (3,461 | ) | (877 | ) | |||||||
Deferred revenue | (229 | ) | (1,178 | ) | |||||||
Other liabilities | (98 | ) | (118 | ) | |||||||
Net cash provided by operating activities | 502 | 3,664 | |||||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | (5,645 | ) | (9,835 | ) | |||||||
Net cash (used in) investing activities | (5,645 | ) | (9,835 | ) | |||||||
Cash flows from financing activities: | |||||||||||
Net cash (used in) financing activities | — | — | |||||||||
Effect of exchange rate changes on cash and cash equivalents | 75 | 252 | |||||||||
Net decrease in cash and cash equivalents | (5,068 | ) | (5,919 | ) | |||||||
Beginning of period | 25,023 | 27,077 | |||||||||
End of period | $ | 19,955 | $ | 21,158 | |||||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid for | |||||||||||
Interest | $ | 1,176 | $ | 2,198 | |||||||
Income taxes | $ | — | $ | 138 | |||||||
The following table reconciles our Net Loss attributable to
Three Months Ended | ||||||||||||
March 31, | ||||||||||||
(In thousands) | 2017 | 2016 | ||||||||||
Adjustments to EBITDA |
||||||||||||
Net Loss attributable to ORBCOMM Inc. | ($3,343 | ) | ($2,096 | ) | ||||||||
Income tax expense | 623 | 162 | ||||||||||
Interest income | (118 | ) | (88 | ) | ||||||||
Interest expense | 2,426 | 1,699 | ||||||||||
Depreciation and amortization | 11,022 | 8,959 | ||||||||||
EBITDA | $ | 10,610 | $ | 8,636 | ||||||||
Adjustments to Adjusted EBITDA |
||||||||||||
Stock-based compensation | 1,524 | 1,386 | ||||||||||
Minority interest | 42 | 19 | ||||||||||
Acquisition-related and Integration costs | 228 | 364 | ||||||||||
In-orbit insurance | - | 293 | ||||||||||
Adjusted EBITDA | $ | 12,404 | $ | 10,698 | ||||||||
EBITDA is defined as earnings attributable to
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/20170504005490/en/
Source:
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