– Q4 2017 Total Revenues of $76.0 Million; $254.2 Million Full Year, Up 36% –
– Q4 2017 Service Revenues of $39.3 Million; $134.9 Million Full Year, Up 20% –
– Q4 2017 Subscriber Communicator Net Adds of 127,000; Full Year of 300,000 Net Adds, Up 18% –
- March 1, 2018
The following financial highlights are in thousands of dollars.
Three Months Ended December 31, |
Twelve Months Ended December 31, |
||||||||||||||||||
2017 |
2016 |
2017 |
2016 |
||||||||||||||||
Service Revenues | $ | 39,309 | $ | 29,427 | $ | 134,938 | $ | 112,881 | |||||||||||
Product Sales | $ | 36,667 | $ | 17,405 | $ | 119,282 | $ | 73,863 | |||||||||||
Total Revenues | $ | 75,976 | $ | 46,832 | $ | 254,220 | $ | 186,744 | |||||||||||
Net Loss attributable to |
($7,519 | ) | ($3,208 | ) | ($61,296 | ) | ($23,525 | ) | |||||||||||
Net Loss – Ex-Items, |
($6,494 | ) | ($2,757 | ) | ($26,757 | ) | ($11,215 | ) | |||||||||||
Basic EPS |
($0.10 |
) |
($0.05 |
) |
($0.84 |
) |
($0.33 |
) |
|||||||||||
Basic EPS – Ex-Items (2,5) |
($0.09 |
) |
($0.04 |
) |
($0.37 |
) |
($0.16 |
) |
|||||||||||
EBITDA (3,5) |
$ |
6,848 |
$ |
10,453 |
$ |
4,550 |
$ |
28,516 |
|||||||||||
Adjusted EBITDA (4,5) |
$ |
9,266 |
$ |
12,477 |
$ |
44,851 |
$ |
47,253 |
(1) Net Loss – Ex-Items, attributable to ORBCOMM Inc. Common Stockholders is defined as Net Loss attributable to ORBCOMM Inc. Common Stockholders, excluding Impairment Loss-satellite network, and Acquisition-related and integration costs. |
(2) Basic EPS – Ex-Items is defined as Basic EPS excluding Impairment Loss-satellite network, and Acquisition-related and integration costs. |
(3) 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. |
(4) 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. |
(5) A table presenting Net 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. |
“In 2017 we made investments in products and deployments that solidify
our leadership position in industrial IoT solutions to serve many of the
largest players in transportation, heavy equipment, marine and other key
markets,” said
“Fourth quarter Revenue growth was 62% reflecting record revenues for
services and products. Service Revenues exceeded
Recent Highlights:
Financial Highlights
-
For Q4 of 2017, record Total Revenues were
$76.0 million , up 62% year-over-year. Service Revenues of$39.3 million were up 34%, and Product Sales rose 111% to$36.7 million . For 2017, Total Revenues were$254.2 million versus$186.7 million in 2016, increasing 36%. Service Revenues grew 20% and Product Sales 61% for the full year. -
Net Loss was
($7.5) million for the fourth quarter of 2017, versus a($3.2) million Loss in 2016. Customer installations, the recent acquisitions, and higher Interest Expense of($2.7) million increased the loss. For 2017, a Net Loss of($61.3) million versus($23.5) million in 2016, increased from a non-cash satellite impairment charge of($31.2) million that was($20.5) million higher than the 2016 impairment charge, along with higher operating costs described above. -
Q4 2017 Adjusted EBITDA of
$9.3 million , or 12.2% of Total Revenues, was($3.2) million lower than the prior year period. Adjusted EBITDA was impacted by nearly$4.0 million due to higher installation and service delivery costs, lower margin Product Sales, increase in inventory reserves, and incremental costs for the recent acquisition. For 2017, Adjusted EBITDA totaled$44.9 million , down($2.4) million or 5% compared to the prior year. -
Net subscriber communicator additions for
ORBCOMM were over 127,000 in Q4 of 2017, including 37,000 from Blue Tree, yielding organic net additions of over 90,000 units in the quarter. This is a record number of net additions propelling our subscriber base to over 2 million total billable subscriber communicators in ORBCOMM’s base in the quarter. The year ended at 2,026,000, a 17.6% increase year-over-year.
Product Highlights
-
In 2017, acquisitions played a key role in expanding and enhancing our
solutions portfolio, with the acquisitions of inthinc, Inc. in
June 2017 andBlue Tree Systems Limited inOctober 2017 . The acquisitions added to our transportation portfolio focused on vehicle fleet management, with offerings for in-cab and fleet vehicle solutions. Together with inthinc and Blue Tree,ORBCOMM provides the most complete, integrated transportation solution offering – from in-cab fleet vehicles to refrigerated assets to dry vans – all visible in a single platform.
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 that will be filed later today.
Financial Results and Highlights
Revenues
Total Revenues of
Service Revenues of
Product Sales of
Cost of Revenues and Operating Expenses
Total Cost of Revenues and Operating Expenses for the fourth quarter of
2017 were
Impairment Loss – satellite network
For 2017 results include an impairment charge of
Loss Before Income Taxes, Net Income (Loss), and Earnings Per Share
Loss Before Income Taxes for the fourth quarter of 2017 was
Net Loss attributable to
EBITDA and Adjusted EBITDA
EBITDA for the fourth quarter of 2017 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 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. | |||||||||||||
Consolidated Balance Sheets | |||||||||||||
(in thousands, except par value and share data) | |||||||||||||
(Unaudited) | |||||||||||||
December 31, | |||||||||||||
2017 | 2016 | ||||||||||||
ASSETS | |||||||||||||
Current assets: | |||||||||||||
Cash and cash equivalents | $ | 34,830 | $ | 25,023 | |||||||||
Accounts receivable, net of allowance for doubtful accounts of $400 and $1,057, | |||||||||||||
respectively | 46,900 | 31,937 | |||||||||||
Inventories | 42,437 | 23,217 | |||||||||||
Prepaid expenses and other current assets |
18,692 | 8,031 | |||||||||||
Total current assets | 142,859 | 88,208 | |||||||||||
Satellite network and other equipment, net | 174,178 | 215,841 | |||||||||||
Goodwill | 166,678 | 114,033 | |||||||||||
Intangible assets, net | 99,339 | 82,545 | |||||||||||
Other assets | 12,036 | 5,447 | |||||||||||
Deferred income taxes | 104 | 80 | |||||||||||
Total assets | $ | 595,194 | $ | 506,154 | |||||||||
LIABILITIES AND EQUITY | |||||||||||||
Current liabilities: | |||||||||||||
Accounts payable |
$ | 29,298 | $ | 12,481 | |||||||||
Accrued liabilities | 33,016 | 30,431 | |||||||||||
Current portion of deferred revenue | 6,263 | 7,414 | |||||||||||
Total current liabilities | 68,577 | 50,326 | |||||||||||
Note payable - related party | 1,366 | 1,195 | |||||||||||
Note payable, net of unamortized deferred issuance costs | 245,131 | 147,458 | |||||||||||
Deferred revenue, net of current portion | 2,459 | 2,978 | |||||||||||
Deferred tax liabilities | 17,646 | 18,645 | |||||||||||
Other liabilities | 13,619 | 3,684 | |||||||||||
Total liabilities | 348,798 | 224,286 | |||||||||||
Commitments and contingencies | |||||||||||||
Equity: | |||||||||||||
ORBCOMM Inc. stockholders' equity | |||||||||||||
Series A Convertible Preferred Stock, par value $0.001; 1,000,000 shares authorized; | |||||||||||||
37,544 and 36,466 shares issued and outstanding | 376 | 364 | |||||||||||
Common stock, par value $0.001; 250,000,000 share authorized; 74,436,579 and | |||||||||||||
71,111,863 shares issued at December 31, 2017 and December 31, 2016 | 74 | 71 | |||||||||||
Additional paid-in capital | 411,298 | 386,920 | |||||||||||
Accumulated other comprehensive (loss) | 256 | (1,089 | ) | ||||||||||
Accumulated deficit | (166,245 | ) | (104,949 | ) | |||||||||
Less treasury stock, at cost; 29,990 shares at December 31, 2017 and December 31, | |||||||||||||
2016, respectively | (96 | ) | (96 | ) | |||||||||
Total ORBCOMM Inc. stockholders' equity | 245,663 | 281,221 | |||||||||||
Noncontrolling interest | 733 | 647 | |||||||||||
Total equity | 246,396 | 281,868 | |||||||||||
Total liabilities and equity | $ | 595,194 | $ | 506,154 | |||||||||
ORBCOMM Inc. | ||||||||||||||||||||||
Consolidated Statements of Operations | ||||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
Quarters Ended December 31, | Years Ended December 31, | |||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||
Service revenues | $ | 39,309 | $ | 29,427 | $ | 134,938 | $ | 112,881 | ||||||||||||||
Product sales | 36,667 | 17,405 | 119,282 | 73,863 | ||||||||||||||||||
Total revenues | 75,976 | 46,832 | 254,220 | 186,744 | ||||||||||||||||||
Cost of revenues, exclusive of depreciation and | ||||||||||||||||||||||
amortization shown below: | ||||||||||||||||||||||
Cost of services | 16,692 | 9,583 | 50,548 | 37,913 | ||||||||||||||||||
Cost of product sales | 32,026 | 13,169 | 99,640 | 55,037 | ||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||
Selling, general and administrative | 16,424 | 12,072 | 55,753 | 46,915 | ||||||||||||||||||
Product development | 2,977 | 1,126 | 8,941 | 6,252 | ||||||||||||||||||
Impairment charges - satellite network | — | — | 31,224 | 10,680 | ||||||||||||||||||
Depreciation and amortization | 11,218 | 11,135 | 45,681 | 42,803 | ||||||||||||||||||
Acquisition-related and integration costs | 1,025 | 451 | 3,315 | 1,630 | ||||||||||||||||||
Loss from operations | (4,386 | ) | (704 | ) | (40,882 | ) | (14,486 | ) | ||||||||||||||
Other (expense) income : | ||||||||||||||||||||||
Interest income | 437 | 95 | 959 | 378 | ||||||||||||||||||
Other income | 50 | 149 | (160 | ) | 484 | |||||||||||||||||
Interest expense | (5,187 | ) | (2,470 | ) | (17,653 | ) | (9,085 | ) | ||||||||||||||
Loss on debt extinguishment | — | — | (3,868 | ) | — | |||||||||||||||||
Total other (expense) | (4,700 | ) | (2,226 | ) | (20,722 | ) | (8,223 | ) | ||||||||||||||
Loss before income taxes | (9,086 | ) | (2,930 | ) | (61,604 | ) | (22,709 | ) | ||||||||||||||
Income taxes | (1,601 | ) | 148 | (409 | ) | 517 | ||||||||||||||||
Net loss | (7,485 | ) | (3,078 | ) | (61,195 | ) | (23,226 | ) | ||||||||||||||
Less: Net income attributable to the noncontrolling | ||||||||||||||||||||||
interests | 34 | 127 | 89 | 285 | ||||||||||||||||||
Net loss attributable to ORBCOMM Inc. | $ | (7,519 | ) | $ | (3,205 | ) | $ | (61,284 | ) | $ | (23,511 | ) | ||||||||||
Net loss attributable to ORBCOMM Inc. | ||||||||||||||||||||||
common stockholders | $ | (7,519 | ) | $ | (3,208 | ) | $ | (61,296 | ) | $ | (23,525 | ) | ||||||||||
Per share information-basic: | ||||||||||||||||||||||
Net loss attributable to ORBCOMM Inc. | ||||||||||||||||||||||
common stockholders | $ | (0.10 | ) | $ | (0.05 | ) | $ | (0.84 | ) | $ | (0.33 | ) | ||||||||||
Per share information-diluted: | ||||||||||||||||||||||
Net loss attributable to ORBCOMM Inc. | ||||||||||||||||||||||
common stockholders | $ | (0.10 | ) | $ | (0.05 | ) | $ | (0.84 | ) | $ | (0.33 | ) | ||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||||
Basic | 74,325 | 71,032 | 72,882 | 70,907 | ||||||||||||||||||
Diluted | 74,325 | 71,032 | 72,882 | 70,907 | ||||||||||||||||||
ORBCOMM Inc. | |||||||||||||||||
Consolidated Statements of Cash Flows | |||||||||||||||||
(in thousands) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2017 | 2016 | ||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||
Net loss | $ | (61,195 | ) | $ | (23,226 | ) | |||||||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||||||||
Change in allowance for doubtful accounts | 85 | 310 | |||||||||||||||
Depreciation and amortization | 45,681 | 42,803 | |||||||||||||||
Impairment loss - satellite network | 31,224 | 10,680 | |||||||||||||||
Change in the fair values of acquisition-related contingent consideration | (1,002 | ) | (360 | ) | |||||||||||||
Amortization of the fair value adjustment related to StarTrak warranty liabilities | - | (57 | ) | ||||||||||||||
Amortization and write off of deferred debt fees | 3,106 | 835 | |||||||||||||||
Stock-based compensation | 5,673 | 5,023 | |||||||||||||||
Foreign exchange loss (gain) | 299 | (106 | ) | ||||||||||||||
Deferred income taxes | (2,047 | ) | 256 | ||||||||||||||
Changes in operating assets and liabilities, net of acquisition: | |||||||||||||||||
Accounts receivable | (10,025 | ) | (1,702 | ) | |||||||||||||
Inventories |
(16,922 | ) | (1,950 | ) | |||||||||||||
Prepaid expenses and other assets | (10,474 | ) | (4,574 | ) | |||||||||||||
Accounts payable and accrued liabilities | 12,168 | 4,893 | |||||||||||||||
Deferred revenue | (1,653 | ) | (3,332 | ) | |||||||||||||
Other liabilities | 41 | (567 | ) | ||||||||||||||
Net cash (used in) provided by operating activities | (5,041 | ) | 28,926 | ||||||||||||||
Cash flows from investing activities: | |||||||||||||||||
Acquisition of businesses, net of cash acquired | (67,911 | ) | (3,452 | ) | |||||||||||||
Capital expenditures | (27,360 | ) | (28,424 | ) | |||||||||||||
Changes in restricted cash | - | 1,000 | |||||||||||||||
Other | (650 | ) | (198 | ) | |||||||||||||
Net cash used in investing activities | (95,921 | ) | (31,074 | ) | |||||||||||||
Cash flows from financing activities: | |||||||||||||||||
Proceeds received from issuance of common stock | 15,000 | — | |||||||||||||||
Proceeds received from issuance of long-term debt | 250,000 | — | |||||||||||||||
Cash paid for debt issuance costs | (5,359 | ) | — | ||||||||||||||
Proceeds received from employee stock purchase plan | 1,001 | 345 | |||||||||||||||
Principal payment of long-term debt | (150,000 | ) | — | ||||||||||||||
Payment of deferred purchase consideration | (347 | ) | (342 | ) | |||||||||||||
Net cash provided by financing activities | 110,295 | 3 | |||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 474 | 91 | |||||||||||||||
Net increase (decrease) in cash and cash equivalents | 9,807 | (2,054 | ) | ||||||||||||||
Beginning of year | 25,023 | 27,077 | |||||||||||||||
End of year | $ | 34,830 | $ | 25,023 | |||||||||||||
Supplemental disclosures of cash flow information: | |||||||||||||||||
Cash paid for: | |||||||||||||||||
Interest | $ | 12,911 | $ | 8,787 | |||||||||||||
Income taxes | $ | 805 | $ | (94 | ) | ||||||||||||
The following table reconciles our Net Loss attributable to
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
(In thousands) |
2017 |
2016 |
2017 |
2016 |
||||||||||||
Adjustments to EBITDA |
||||||||||||||||
Net Loss attributable to ORBCOMM Inc. | ($7,519 | ) | ($3,205 | ) | ($61,284 | ) | ($23,511 | ) | ||||||||
Income tax expense | (1,601 | ) | 148 | (409 | ) | 517 | ||||||||||
Interest income | (437 | ) | (95 | ) | (959 | ) | (378 | ) | ||||||||
Interest expense | 5,187 | 2,470 | 17,653 | 9,085 | ||||||||||||
Loss on debt extinguishment | - | - | 3,868 | - | ||||||||||||
Depreciation and amortization | 11,218 | 11,135 | 45,681 | 42,803 | ||||||||||||
EBITDA | $ | 6,848 | $ | 10,453 | $ | 4,550 | $ | 28,516 | ||||||||
Adjustments to Adjusted EBITDA |
||||||||||||||||
Stock-based compensation | 1,359 | 1,199 | 5,673 | 5,023 | ||||||||||||
Noncontrolling interests | 34 | 127 | 89 | 285 | ||||||||||||
Impairment Loss | - | - | 31,224 | 10,680 | ||||||||||||
Acquisition-related and integration costs | 1,025 | 451 | 3,315 | 1,630 | ||||||||||||
In-orbit insurance | - | 247 | - | 1,119 | ||||||||||||
Adjusted EBITDA | $ | 9,266 | $ | 12,477 | $ | 44,851 | $ | 47,253 | ||||||||
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.
The following table reconciles our Net Loss attributable to
Three Months Ended |
Twelve Months Ended |
||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||
(in thousands except per share data) |
|||||||||||||||||
Net Loss attributable to ORBCOMM Inc. |
$ | (7,519 | ) | $ | (3,208 | ) | $ | (61,296 | ) | $ | (23,525 | ) | |||||
Impairment Loss - satellite network | - | - | 31,224 | 10,680 | |||||||||||||
Acquisition-related and integration costs | 1,025 | 451 | 3,315 | 1,630 | |||||||||||||
Net Loss – Ex-Items attributable to |
$ | (6,494 | ) | $ | (2,757 | ) | $ | (26,757 | ) | $ | (11,215 | ) | |||||
Basic EPS | $ | (0.10 | ) | $ | (0.05 | ) | $ | (0.84 | ) | $ | (0.33 | ) | |||||
Impact of Adjustments listed above on Basic EPS | $ | 0.01 | $ | 0.01 | $ | 0.47 | $ | 0.17 | |||||||||
Basic EPS – Ex-Items | $ | (0.09 | ) | $ | (0.04 | ) | $ | (0.37 | ) | $ | (0.16 | ) | |||||
Net Loss – Ex-Items attributable to
View source version on businesswire.com: http://www.businesswire.com/news/home/20180301005483/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
Blair
Hennessy, 212-371-5999
Vice President
bth@abmac.com