– Total Revenues Reach New High of $57.0 Million, Up 14% Compared to Last Year –
– Service Revenues Grow 12% Over Prior Year to $31.1 Million –
– Acquisition of inthinc, Inc. Accelerates Entry into Vehicle Fleet Management Market –
- August 3, 2017
The following financial highlights are in thousands of dollars.
Quarter Ended September 30, |
Nine Months Ended |
||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||||
Service Revenues | $ | 35,040 | $ | 28,846 | $ | 95,629 | $ | 83,454 | |||||||||||||
Product Sales | $ | 34,326 | $ | 17,442 | $ | 82,615 | $ | 56,458 | |||||||||||||
Total Revenues | $ | 69,366 | $ | 46,288 | $ | 178,244 | $ | 139,912 | |||||||||||||
Net Loss attributable to |
($39,694 | ) | ($14,048 | ) | ($53,777 | ) | ($20,313 | ) | |||||||||||||
Net Loss – Ex-Items, |
($7,670 | ) | ($3,122 | ) | ($20,263 | ) | ($8,454 | ) | |||||||||||||
Basic EPS |
($0.54 |
) |
($0.20 |
) |
($0.74 |
) |
($0.29 |
) |
|||||||||||||
Basic EPS – Ex-Items (2,5) |
($0.10 |
) |
($0.04 |
) |
($0.28 |
) |
($0.12 |
) |
|||||||||||||
EBITDA (3,5) |
($22,231 |
) |
($521 |
) |
($2,298 |
) |
$ |
18,063 |
|||||||||||||
Adjusted EBITDA (4,5) |
$ |
11,157 |
$ |
11,961 |
$ |
35,585 |
$ |
34,776 |
|||||||||||||
(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. | |
“We continue to experience strong growth as we head into the fourth
quarter,” said
“The third quarter growth was very strong with Revenues 50% higher than
last year and Product Sales up 97%. With the addition of Blue Tree
Systems, we’re moving forward with great momentum,” said
Recent Highlights:
Financial Highlights
-
For Q3 of 2017, Total Revenues of
$69.4 million were up 49.9% year-over-year, with Service Revenues and Product Sales reaching record levels in the quarter. Service Revenues increased 21.5% to$35.0 million and Product Sales rose 96.8% to$34.3 million . -
Net Loss attributable to
ORBCOMM Inc. Common Stockholders was($39.7) million for the third quarter of 2017, compared to the($14.0) million loss for the same period in 2016. The increased Net Loss was mainly due to the Impairment Loss of($31.2) million in 2017 versus an Impairment Loss of($10.7) million in 2016, both related to in-orbit OG2 satellites that lost communications. -
For Q3 of 2017, Adjusted EBITDA of
$11.2 million was($0.8) million or 6.7% lower than the prior year period. Adjusted EBITDA margin was 16.1% of Total Revenues, which was lower due to lower margins on Product Sales due to accelerated deployments with higher installation and delivery costs. -
Net subscriber communicator additions for
ORBCOMM were over 70,000 in Q3 of 2017, increasing the total billable subscriber communicators to over 1,898,000 atSeptember 30, 2017 , which compares to 1,687,000 at the end of the same period last year, a 12.5% increase year-over-year.
Customer and Product Highlights
-
On
November 1, 2017 ,ORBCOMM announced that it has been selected byLTI Trucking Services, Inc. , a nationwide truckload carrier and full-service logistics company based inSt. Louis, MO , to provide its industry-leading cold chain telematics solution to track, monitor and control its fleet of refrigerated trailers. -
On
October 5, 2017 ,ORBCOMM announced that it has been selected by TOTE Maritime Alaska, the leading Jones Act carrier serving theAlaska market, to provide a broad portfolio of telematics solutions to monitor and control its refrigerated and dry intermodal and over-the-road assets, including containers, trailers and flatbeds throughoutAlaska ,Canada and the Continental United States. -
On
September 26, 2017 ,ORBCOMM announced that it has been selected byUNIT45 B.V. , an industry leader in the design, construction, financing, and delivery of 45 foot containers for European intermodal transport operations, to provide its end-to-end telematics solution and Cloud platform for remote container monitoring and control, along theNew Silk Road linkingChina andEurope . -
On
August 14, 2017 ,ORBCOMM announced that it launched the next generation of its cold chain monitoring solution. ORBCOMM’s PT 6000, which is available as a 3G or LTE cellular or dual-mode satellite-cellular version, enables fuel and temperature management, maintenance, logistics and regulatory compliance for refrigerated transport assets.
M&A Highlights
-
On
October 2, 2017 ,ORBCOMM completed the acquisition ofBlue Tree Systems Limited (Blue Tree) based in Galway,Ireland , along with its subsidiaries inthe United States ,Germany andFrance . Blue Tree provides world-class transportation management solutions across multiple classes of assets that include trucks, refrigerated straight trucks as well as refrigerated and dry trailers. The acquisition solidifies ORBCOMM’s transportation portfolio by adding truck in-cab and refrigerated fleet vehicle solutions to ORBCOMM’s industry-leading cargo solutions. The acquisition adds strength and distribution in key geographies such asEurope , theMiddle East andAfrica .
For more information on recent highlights and the Company’s business, operations and network, please visit www.orbcomm.com and see the Company’s quarterly report on Form 10-Q which will be filed later today.
Financial Results and Highlights
Revenues
For the third quarter ended
Product Sales during the third 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 third quarter
ended
Impairment Loss-satellite network
As previously disclosed, the Company lost communication with three OG2
satellites. While the Company is continuing its investigation and
recovery efforts, an impairment charge of
Loss Before Income Taxes, Net Income (Loss), and Earnings Per Share
Loss Before Income Taxes for the third quarter of 2017 was a
Net Loss attributable to
EBITDA and Adjusted EBITDA
EBITDA for the third 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, including those concerning our expectations, are subject to
known and unknown risks and uncertainties, some of which are beyond
ORBCOMM’s control, which may cause ORBCOMM’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) | ||||||||||||
September 30, | December 31, | |||||||||||
2017 | 2016 | |||||||||||
ASSETS | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | $ | 37,412 | $ | 25,023 | ||||||||
Cash held for acquisition | 34,500 | - | ||||||||||
Accounts receivable, net of allowance for doubtful accounts of $1,298 | ||||||||||||
and $1,057, respectively | 51,987 | 31,937 | ||||||||||
Inventories | 36,186 | 23,217 | ||||||||||
Prepaid expenses and other current assets | 13,152 | 8,031 | ||||||||||
Total current assets | 173,237 | 88,208 | ||||||||||
Satellite network and other equipment, net | 176,104 | 215,841 | ||||||||||
Goodwill | 132,994 | 114,033 | ||||||||||
Intangible assets, net | 98,747 | 82,545 | ||||||||||
Other assets | 11,021 | 5,447 | ||||||||||
Deferred income taxes | 86 | 80 | ||||||||||
Total assets | $ | 592,189 | $ | 506,154 | ||||||||
LIABILITIES AND EQUITY | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payable | $ | 21,237 | $ | 12,481 | ||||||||
Accrued liabilities | 34,090 | 30,431 | ||||||||||
Current portion of deferred revenue | 6,738 | 7,414 | ||||||||||
Total current liabilities | 62,065 | 50,326 | ||||||||||
Note payable - related party | 1,343 | 1,195 | ||||||||||
Note payable, net of unamortized deferred issuance costs | 244,937 | 147,458 | ||||||||||
Deferred revenue, net of current portion | 2,559 | 2,978 | ||||||||||
Deferred tax liabilities | 19,402 | 18,645 | ||||||||||
Other liabilities | 12,261 | 3,684 | ||||||||||
Total liabilities | 342,567 | 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; 74,114,319 and | ||||||||||||
71,111,863 shares issued at September 30, 2017 and December 31, 2016 | 74 | 71 | ||||||||||
Additional paid-in capital | 407,616 | 386,920 | ||||||||||
Accumulated other comprehensive income (loss) | (319 | ) | (1,089 | ) | ||||||||
Accumulated deficit | (158,726 | ) | (104,949 | ) | ||||||||
Less treasury stock, at cost; 29,990 shares at September 30, 2017 and December 31, | ||||||||||||
2016 | (96 | ) | (96 | ) | ||||||||
Total ORBCOMM Inc. stockholders' equity | 248,925 | 281,221 | ||||||||||
Noncontrolling interest | 697 | 647 | ||||||||||
Total equity | 249,622 | 281,868 | ||||||||||
Total liabilities and equity | $ | 592,189 | $ | 506,154 | ||||||||
ORBCOMM Inc. | ||||||||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
Quarter Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||
Service revenues | $ | 35,040 | $ | 28,846 | $ | 95,629 | $ | 83,454 | ||||||||||||||
Product sales | 34,326 | 17,442 | 82,615 | 56,458 | ||||||||||||||||||
Total revenues | 69,366 | 46,288 | 178,244 | 139,912 | ||||||||||||||||||
Cost of revenues, exclusive of depreciation and | ||||||||||||||||||||||
amortization shown below: | ||||||||||||||||||||||
Cost of services | 13,638 | 9,791 | 33,856 | 28,330 | ||||||||||||||||||
Cost of product sales | 29,676 | 13,218 | 67,614 | 41,868 | ||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||
Selling, general and administrative | 13,755 | 12,031 | 39,329 | 34,843 | ||||||||||||||||||
Product development | 2,453 | 1,217 | 5,964 | 5,126 | ||||||||||||||||||
Depreciation and amortization | 12,041 | 11,158 | 34,463 | 31,668 | ||||||||||||||||||
Impairment loss - satellite network | 31,224 | 10,680 | 31,224 | 10,680 | ||||||||||||||||||
Acquisition - related and integration costs | 800 | 246 | 2,290 | 1,179 | ||||||||||||||||||
Loss from operations | (34,221 | ) | (12,053 | ) | (36,496 | ) | (13,782 | ) | ||||||||||||||
Other income (expense): | ||||||||||||||||||||||
Interest income | 266 | 100 | 522 | 283 | ||||||||||||||||||
Other (expense) income | (32 | ) | 426 | (210 | ) | 335 | ||||||||||||||||
Interest expense | (5,197 | ) | (2,471 | ) | (12,466 | ) | (6,615 | ) | ||||||||||||||
Loss on debt extinguisment | - | - | (3,868 | ) | - | |||||||||||||||||
Total other (expense) | (4,963 | ) | (1,945 | ) | (16,022 | ) | (5,997 | ) | ||||||||||||||
Loss before income taxes | (39,184 | ) | (13,998 | ) | (52,518 | ) | (19,779 | ) | ||||||||||||||
Income taxes | 479 | (9 | ) | 1,192 | 369 | |||||||||||||||||
Net loss | (39,663 | ) | (13,989 | ) | (53,710 | ) | (20,148 | ) | ||||||||||||||
Less: Net income attributable to the noncontrolling | ||||||||||||||||||||||
interests | 19 | 52 | 55 | 158 | ||||||||||||||||||
Net loss attributable to ORBCOMM Inc. | $ | (39,682 | ) | $ | (14,041 | ) | $ | (53,765 | ) | $ | (20,306 | ) | ||||||||||
Net loss attributable to ORBCOMM Inc. | ||||||||||||||||||||||
common stockholders | $ | (39,694 | ) | $ | (14,048 | ) | $ | (53,777 | ) | $ | (20,313 | ) | ||||||||||
Per share information-basic: | ||||||||||||||||||||||
Net loss attributable to ORBCOMM Inc. | ||||||||||||||||||||||
common stockholders | $ | (0.54 | ) | $ | (0.20 | ) | $ | (0.74 | ) | $ | (0.29 | ) | ||||||||||
Per share information-diluted: | ||||||||||||||||||||||
Net loss attributable to ORBCOMM Inc. | ||||||||||||||||||||||
common stockholders | $ | (0.54 | ) | $ | (0.20 | ) | $ | (0.74 | ) | $ | (0.29 | ) | ||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||||
Basic | 73,762 | 70,997 | 72,396 | 70,866 | ||||||||||||||||||
Diluted | 73,762 | 70,997 | 72,396 | 70,866 | ||||||||||||||||||
ORBCOMM Inc. | ||||||||||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||||||||||
(In thousands) | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Nine Months Ended September 30, | ||||||||||||||||||
2017 | 2016 | |||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||
Net loss | $ | (53,710 | ) | $ | (20,148 | ) | ||||||||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||||||
Change in allowance for doubtful accounts | 241 | 146 | ||||||||||||||||
Change in the fair value of acquisition-related contingent consideration | (1,276 | ) | (213 | ) | ||||||||||||||
Amortization of the fair value adjustment related to warranty liabilities acquired through acquisitions | - | (57 | ) | |||||||||||||||
Amortization and write off of deferred financing fees | 2,912 | 611 | ||||||||||||||||
Depreciation and amortization | 34,463 | 31,668 | ||||||||||||||||
Impairment loss - satellite network | 31,224 | 10,680 | ||||||||||||||||
Stock-based compensation | 4,314 | 3,824 | ||||||||||||||||
Foreign exchange loss | 366 | 482 | ||||||||||||||||
Deferred income taxes | 758 | 538 | ||||||||||||||||
Changes in operating assets and liabilities, net of acquisitions: | ||||||||||||||||||
Accounts receivable | (18,010 | ) | (3,925 | ) | ||||||||||||||
Inventories | (11,893 | ) | (336 | ) | ||||||||||||||
Prepaid expenses and other assets | (4,156 | ) | 134 | |||||||||||||||
Accounts payable and accrued liabilities | 8,929 | (1,013 | ) | |||||||||||||||
Deferred revenue | (1,106 | ) | (2,540 | ) | ||||||||||||||
Other liabilities | (262 | ) | (664 | ) | ||||||||||||||
Net cash (used in) provided by operating activities | (7,206 | ) | 19,187 | |||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||
Acquisition of businesses, net of cash acquired | (34,236 | ) | (3,452 | ) | ||||||||||||||
Cash held for acquisition | (34,500 | ) | - | |||||||||||||||
Capital expenditures | (21,410 | ) | (22,519 | ) | ||||||||||||||
Change in restricted cash | - | 1,000 | ||||||||||||||||
Other | (650 | ) | (198 | ) | ||||||||||||||
Net cash used in investing activities | (90,796 | ) | (25,169 | ) | ||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||
Proceeds from issuance of common stock | 15,000 | - | ||||||||||||||||
Payment of long-term debt | (150,000 | ) | - | |||||||||||||||
Proceeds received from issuance of long-term debt | 250,000 | - | ||||||||||||||||
Cash paid for debt issuance costs | (5,359 | ) | - | |||||||||||||||
Proceeds from employee stock purchase plan | 529 | - | ||||||||||||||||
Payment of deferred purchase consideration | (347 | ) | (342 | ) | ||||||||||||||
Net cash provided by (used in) financing activities | 109,823 | (342 | ) | |||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 568 | 520 | ||||||||||||||||
Net increase (decrease) in cash and cash equivalents | 12,389 | (5,804 | ) | |||||||||||||||
Beginning of period | 25,023 | 27,077 | ||||||||||||||||
End of period | $ | 37,412 | $ | 21,273 | ||||||||||||||
Supplemental disclosures of cash flow information: | ||||||||||||||||||
Cash paid for | ||||||||||||||||||
Interest | $ | 3,411 | $ | 6,581 | ||||||||||||||
Income taxes | $ | 508 | $ | (110 | ) | |||||||||||||
The following table reconciles our Net Loss attributable to
Quarter Ended | Nine Months Ended | |||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||
(In thousands) | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||
Adjustments to EBITDA |
||||||||||||||||||||
Net Loss attributable to ORBCOMM Inc. | ($39,682 | ) | ($14,041 | ) | ($53,765 | ) | ($20,306 | ) | ||||||||||||
Income tax expense | 479 | (9 | ) | 1,192 | 369 | |||||||||||||||
Interest income | (266 | ) | (100 | ) | (522 | ) | (283 | ) | ||||||||||||
Interest expense | 5,197 | 2,471 | 12,466 | 6,615 | ||||||||||||||||
Loss on debt extinguishment | - | - | 3,868 | - | ||||||||||||||||
Depreciation and amortization | 12,041 | 11,158 | 34,463 | 31,668 | ||||||||||||||||
EBITDA | ($22,231 | ) | ($521 | ) | ($2,298 | ) | $ | 18,063 | ||||||||||||
Adjustments to Adjusted EBITDA |
||||||||||||||||||||
Stock-based compensation | 1,345 | 1,219 | 4,314 | 3,824 | ||||||||||||||||
Noncontrolling interests | 19 | 52 | 55 | 158 | ||||||||||||||||
Impairment Loss | 31,224 | 10,680 | 31,224 | 10,680 | ||||||||||||||||
Acquisition-related and Integration costs | 800 | 246 | 2,290 | 1,179 | ||||||||||||||||
In-orbit insurance | - | 285 | - | 872 | ||||||||||||||||
Adjusted EBITDA | $ | 11,157 | $ | 11,961 | $ | 35,585 | $ | 34,776 | ||||||||||||
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
ORBCOMM Inc. | |||||||||||||||||||
Net Loss Ex-Items Schedule | |||||||||||||||||||
$ in thousands | |||||||||||||||||||
Quarter Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||
(in thousands except per share data) |
|||||||||||||||||||
Net Loss attributable to ORBCOMM Inc. Common Stockholders | $ | (39,694 | ) | $ | (14,048 | ) | $ | (53,777 | ) | $ | (20,313 | ) | |||||||
Impairment Loss - satellite network | 31,224 | 10,680 | 31,224 | 10,680 | |||||||||||||||
Acquisition-related and integration costs | 800 | 246 | 2,290 | 1,179 | |||||||||||||||
Net Loss – Ex-Items attributable to ORBCOMM Inc. Common Stockholders | $ | (7,670 | ) | $ | (3,122 | ) | $ | (20,263 | ) | $ | (8,454 | ) | |||||||
Basic EPS | $ | (0.54 | ) | $ | (0.20 | ) | $ | (0.74 | ) | $ | (0.29 | ) | |||||||
Impact of Adjustments listed above on Basic EPS | $ | 0.44 | $ | 0.16 | $ | 0.46 | $ | 0.17 | |||||||||||
Basic EPS – Ex-Items | $ | (0.10 | ) | $ | (0.04 | ) | $ | (0.28 | ) | $ | (0.12 | ) | |||||||
Net Loss – Ex-Items attributable to
View source version on businesswire.com: http://www.businesswire.com/news/home/20171102005442/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