– Total Revenues of $68.0 Million, Up 31% Compared to Last Year –
– Margins Trending Higher for both Services and Products Over Q4 2017 –
– Over 100,000 Net Subscriber Communicators Additions in Q1 2018 –
- May 3, 2018
The following financial highlights are in thousands of dollars.
|
Three Months Ended |
||||||||||||||
March 31, |
March 31, |
December 31, |
|||||||||||||
|
2018 |
|
2017 |
2017 |
|||||||||||
Recurring Service Revenues | $36,725 | $27,945 | $35,537 | ||||||||||||
Other Service Revenues | $1,267 | $1,567 | $3,772 | ||||||||||||
Total Service Revenues | $37,992 | $29,512 | $39,309 | ||||||||||||
Product Sales | $29,981 | $22,409 | $36,667 | ||||||||||||
Total Revenues | $67,973 | $51,921 | $75,976 | ||||||||||||
Net Loss attributable to ORBCOMM Inc. Common Stockholders | ($10,086) | ($3,343) | ($7,519) | ||||||||||||
Basic EPS |
($0.13) |
($0.05) |
($0.10) |
||||||||||||
EBITDA (1,3) |
$7,805 |
$10,610 |
$6,848 |
||||||||||||
Adjusted EBITDA (2,3) |
$10,141 |
$12,404 |
$9,266 |
||||||||||||
(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, 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. |
“We’ve entered 2018 with a market-leading portfolio of industrial IoT
products and services and a robust pipeline of opportunities, creating
strong momentum,” said
“Service margins improved in the first quarter of 2018 to 59.1% from
57.5% in the fourth quarter of 2017, helped by a 3.3% sequential
increase in higher-margin Recurring Service Revenues of
Recent Highlights:
Financial Highlights
-
For Q1 of 2018, Total Revenues were
$68.0 million , up 31% year-over-year. Service Revenues of$38.0 million were up 29%, and Product Sales rose 34% to$30.0 million . -
First Quarter 2018 Adjusted EBITDA of
$10.1 million , representing 14.9% of Total Revenues, was$2.3 million lower than the same period last year. The decline was the result of higher operating costs, mostly from the acquisitions in the second half of 2017 as well as completing the large deployments. -
Net subscriber communicator additions for
ORBCOMM were over 100,000 in Q1 of 2018, increasing the total billable subscriber communicators to 2,126,000 atMarch 31, 2018 , which compares to 1,766,000 at the end of March last year; a 20.4% increase year-over-year.
Business Highlights
-
On
February 28, 2018 ,ORBCOMM announced that it had been selected by Armstrong Transportation to provide its industry-leading logistics tracking and monitoring solution for their trailer fleet. ORBCOMM’s end-to-end solution will provide wireless connectivity through its proprietary hardware and a web-based reporting platform for optimal fleet management. ORBCOMM added 20 new Blue Tree customers, including deployments and evaluations, since completing the acquisition inOctober 2017 , and expects to add 10 additional customers in the second quarter.
For more information on recent highlights and the Company’s business, operations and network, please visit www.orbcomm.com and see the Company’s annual report on Form 10-K.
Financial Results and Highlights
Revenues
Total Revenues of
Service Revenues of
Product Sales of
Revenue contribution margins for Service Revenues and Product Sales in the first quarter of 2018 were 59.1% and 21.6%, improving sequentially from 57.5% and 12.7%, respectively, in the fourth quarter of 2017.
Cost of Revenues and Operating Expenses
Total Cost of Revenue and Operating Expenses for the first quarter of
2018 were
Loss Before Income Taxes, Net Income (Loss), and Earnings Per Share
Loss Before Income Taxes for the first quarter of 2018 was
Net Loss attributable to
EBITDA and Adjusted EBITDA
EBITDA for the first quarter of 2018 was
Adjusted EBITDA was
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
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 our control, which may cause our 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, | ||||||||
2018 | 2017 | ||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 28,225 | $ | 34,830 | |||||
Accounts receivable, net of allowance for doubtful accounts of $1,083 and $400, respectively |
48,512 | 46,900 | |||||||
Inventories | 48,250 | 42,437 | |||||||
Prepaid expenses and other current assets | 19,798 | 18,692 | |||||||
Total current assets | 144,785 | 142,859 | |||||||
Satellite network and other equipment, net | 171,633 | 174,178 | |||||||
Goodwill | 166,436 | 166,678 | |||||||
Intangible assets, net | 96,058 | 99,339 | |||||||
Other assets | 12,686 | 12,036 | |||||||
Deferred income taxes | 161 | 104 | |||||||
Total assets | $ | 591,759 | $ | 595,194 | |||||
LIABILITIES AND EQUITY | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 24,040 | $ | 29,298 | |||||
Accrued liabilities | 43,329 | 33,016 | |||||||
Current portion of deferred revenue | 4,631 | 6,263 | |||||||
Total current liabilities | 72,000 | 68,577 | |||||||
Note payable - related party | 1,400 | 1,366 | |||||||
Note payable, net of unamortized deferred issuance costs | 245,325 | 245,131 | |||||||
Deferred revenue, net of current portion | 3,304 | 2,459 | |||||||
Deferred tax liabilities | 18,519 | 17,646 | |||||||
Other liabilities | 11,889 | 13,619 | |||||||
Total liabilities | 352,437 | 348,798 | |||||||
Commitments and contingencies | |||||||||
Equity: | |||||||||
ORBCOMM Inc. stockholders' equity | |||||||||
Series A Convertible Preferred Stock, par value $0.001; 1,000,000 shares authorized; 37,544 shares issued and outstanding |
376 | 376 | |||||||
Common stock, par value $0.001; 250,000,000 shares authorized; 75,010,790 and 74,436,579 shares issued at March 31, 2018 and December 31, 2017 |
75 | 74 | |||||||
Additional paid-in capital | 413,866 | 411,298 | |||||||
Accumulated other comprehensive loss | 674 | 256 | |||||||
Accumulated deficit | (176,331 | ) | (166,245 | ) | |||||
Less treasury stock, at cost; 29,990 shares at March 31, 2018 and December 31, 2017 |
(96 | ) | (96 | ) | |||||
Total ORBCOMM Inc. stockholders' equity | 238,564 | 245,663 | |||||||
Noncontrolling interest | 758 | 733 | |||||||
Total equity | 239,322 | 246,396 | |||||||
Total liabilities and equity | $ | 591,759 | $ | 595,194 | |||||
ORBCOMM Inc. | ||||||||
Condensed Consolidated Statements of Operations | ||||||||
(In thousands, except per share data) | ||||||||
(Unaudited) | ||||||||
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
Revenues: | ||||||||
Service revenues | $ | 37,992 | $ | 29,512 | ||||
Product sales | 29,981 | 22,409 | ||||||
Total revenues | 67,973 | 51,921 | ||||||
Cost of revenues, exclusive of depreciation and amortization shown below: |
||||||||
Cost of services | 15,548 | 9,569 | ||||||
Cost of product sales | 23,511 | 17,648 | ||||||
Operating expenses: | ||||||||
Selling, general and administrative | 17,500 | 12,241 | ||||||
Product development | 2,813 | 1,588 | ||||||
Depreciation and amortization | 12,223 | 11,022 | ||||||
Acquisition - related and integration costs | 606 | 228 | ||||||
Loss from operations | (4,228 | ) | (375 | ) | ||||
Other income (expense): | ||||||||
Interest income | 475 | 118 | ||||||
Other (expense) income | (167 | ) | 5 | |||||
Interest expense | (5,200 | ) | (2,426 | ) | ||||
Total other expense | (4,892 | ) | (2,303 | ) | ||||
Loss before income taxes | (9,120 | ) | (2,678 | ) | ||||
Income taxes | 943 | 623 | ||||||
Net loss | (10,063 | ) | (3,301 | ) | ||||
Less: Net income attributable to the noncontrolling interests |
23 | 42 | ||||||
Net loss attributable to ORBCOMM Inc. | $ | (10,086 | ) | $ | (3,343 | ) | ||
Net loss attributable to ORBCOMM Inc. common stockholders |
$ | (10,086 | ) | $ | (3,343 | ) | ||
Per share information-basic: | ||||||||
Net loss attributable to ORBCOMM Inc. common stockholders |
$ | (0.13 | ) | $ | (0.05 | ) | ||
Per share information-diluted: | ||||||||
Net loss attributable to ORBCOMM Inc. common stockholders |
$ | (0.13 | ) | $ | (0.05 | ) | ||
Weighted average common shares outstanding: | ||||||||
Basic | 74,729 | 71,424 | ||||||
Diluted | 74,729 | 71,424 | ||||||
ORBCOMM Inc. | ||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (10,063 | ) | $ | (3,301 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Change in allowance for doubtful accounts | 881 | (36 | ) | |||||
Change in the fair value of acquisition-related contingent consideration | (1,508 | ) | (495 | ) | ||||
Amortization and write off of deferred financing fees | 194 | 229 | ||||||
Depreciation and amortization | 12,223 | 11,022 | ||||||
Stock-based compensation | 1,707 | 1,524 | ||||||
Foreign exchange loss (gain) | 176 | (26 | ) | |||||
Deferred income taxes | 779 | 155 | ||||||
Changes in operating assets and liabilities, net of acquisitions: | ||||||||
Accounts receivable | (2,155 | ) | (6,399 | ) | ||||
Inventories | (5,549 | ) | (151 | ) | ||||
Prepaid expenses and other assets | 1,070 | 1,768 | ||||||
Accounts payable and accrued liabilities | 2,076 | (3,461 | ) | |||||
Deferred revenue | (578 | ) | (229 | ) | ||||
Other liabilities | (435 | ) | (98 | ) | ||||
Net cash (used in) provided by operating activities | (1,182 | ) | 502 | |||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (5,623 | ) | (5,645 | ) | ||||
Net cash (used in) investing activities | (5,623 | ) | (5,645 | ) | ||||
Cash flows from financing activities: | ||||||||
Net cash provided by (used in) financing activities | — | — | ||||||
Effect of exchange rate changes on cash and cash equivalents | 200 | 75 | ||||||
Net decrease in cash and cash equivalents | (6,605 | ) | (5,068 | ) | ||||
Beginning of period | 34,830 | 25,023 | ||||||
End of period | $ | 28,225 | $ | 19,955 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid for | ||||||||
Interest | $ | — | $ | 2,194 | ||||
Income taxes | $ | — | $ | — | ||||
The following table reconciles our Net Loss attributable to
Three Months Ended | ||||
March 31, | ||||
(In thousands) |
2018 |
2017 |
||
Adjustments to EBITDA |
||||
Net Loss attributable to ORBCOMM Inc. | ($10,086) | ($3,343) | ||
Income tax expense | 943 | 623 | ||
Interest income | (475) | (118) | ||
Interest expense | 5,200 | 2,426 | ||
Depreciation and amortization | 12,223 | 11,022 | ||
EBITDA | $7,805 | $10,610 | ||
Adjustments to Adjusted EBITDA |
||||
Stock-based compensation | 1,707 | 1,524 | ||
Noncontrolling interests | 23 | 42 | ||
Acquisition-related and integration costs | 606 | 228 | ||
Adjusted EBITDA | $10,141 | $12,404 | ||
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, 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: https://www.businesswire.com/news/home/20180503005469/en/
Source:
Investor Inquiries:
ORBCOMM Inc.
Aly Bonilla,
703-433-6360
Vice President, Investor Relations
bonilla.aly@orbcomm.com
or
Financial
and Trade Media:
The Abernathy MacGregor Group
Alan
Oshiki, 212-371-5999
Executive Vice President
aho@abmac.com