UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
___________
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of
Report (Date of earliest event reported): November 5,
2009
GLOBALSTAR,
INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
(State
or Other Jurisdiction of Incorporation)
|
001-33117
(Commission
File
Number)
|
41-2116508
(IRS
Employer
Identification
No.)
|
|
461
South Milpitas Blvd. Milpitas, California
|
95035
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
Registrant’s
telephone number, including area code: (408) 933-4000
N/A
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
□ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
□ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
□ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
□ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
2.02 Results of Operations and Financial Condition.
On
November 5, 2009, Globalstar, Inc. issued a press release to report 2009 third
quarter financial results. The text of the press release is furnished as
Exhibit 99.1 to this Form 8-K.
Item
7.01 Regulation FD Disclosure.
During
Globalstar’s previously announced conference call at 5 p.m. Eastern time on
November 5, 2009, written presentation materials will be used and will be
available on the company’s website. The text of the presentation materials is
furnished as Exhibit 99.2 to this Form 8-K.
The
information in this Current Report on Form 8-K and the Exhibits attached hereto
is furnished pursuant to the rules and regulations of the Securities and
Exchange Commission and shall not be deemed “filed” for purposes of Section 18
of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject
to the liabilities of that section, nor shall it be deemed incorporated by
reference in any filing under the Securities Act of 1933 or the Exchange Act,
except as expressly set forth by specific reference in such a
filing.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits.
99.1 Press
release dated November 5, 2009
99.2 Presentation
materials dated November 5, 2009
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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GLOBALSTAR,
INC.
|
|
|
/s/ Fuad Ahmad
|
|
|
Fuad
Ahmad
|
|
|
Senior
Vice President and
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|
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Chief
Financial Officer
|
Date: November
5, 2009
Exhibit
99.1
461 SO.
MILPITAS BLVD.
MILPITAS
CA
95035
USA
NEWS
Not
for Release
GLOBALSTAR
ANNOUNCES THIRD QUARTER
RESULTS
FOR 2009
Key
Quarterly Highlights;
|
·
|
Globalstar
began to ship new smaller and lighter SPOT Satellite GPS
Messenger™
|
|
·
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New
Best Buy and Pep Boys distribution agreements expand SPOT points of
distribution to nearly 10,000
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·
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Globalstar
total subscriber base grew to over
382,000
|
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·
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Globalstar
began implementation of Simplex data network upgrades designed to increase
messaging capacity by 10X
|
MILPITAS, CA. -- (November
5, 2009) – Globalstar, Inc. (NASDAQ:GSAT), a leading provider of mobile
satellite voice and data services to businesses, governments and consumers,
today announced its operational and financial results for the three and
nine-month periods ended September 30, 2009.
Major
Company Highlights:
|
·
|
On
July 1st
Globalstar announced it had completed a $738 million
financing. The financing funds the deployment of the Company’s
24 second-generation satellites. Globalstar now has the
resources needed to deploy a new constellation designed to last beyond
2025.
|
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·
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Globalstar
continued to exhibit significant growth in subscribers for Simplex data
and SPOT Satellite GPS Messenger™ during the third quarter of
2009. The Company completed the period ended September 30, 2009
with 382,313 subscribers, 52,925 more than it had at September 30,
2008.
|
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·
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As
of September 30, 2009, Globalstar had received orders to ship more than
167,000 units to the nearly 10,000 SPOT Satellite GPS Messenger points of
distribution in North America, Europe, Latin America, Australia, New
Zealand, and Southeast Asia. During the quarter, SPOT Satellite
GPS Messenger distribution agreements were completed with Best Buy Co.,
Inc. and The Pep Boys retailers in the United
States
|
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·
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On
July 9 the Company announced that Peter Dalton had been appointed as its
Chief Executive Officer. Mr. Dalton has served as a director of
the Company since 2004, as Chair of the Audit Committee and has served as
chief executive officer of Dalton Partners, Inc., a turnaround management
firm, since January 1989. As chief executive officer of Dalton
Partners, Inc., Mr. Dalton also has served as chief executive officer and
director of a number of its
clients.
|
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·
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Globalstar
began to ship initial limited quantities of its new enhanced SPOT
Satellite GPS Messenger. The new SPOT device is approximately
30 percent smaller and lighter than the original award-winning
product. Initial shipments of the new product began in late
September.
|
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·
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Globalstar
continued to demonstrate its commitment to growing its consumer SPOT
Satellite GPS Messenger and commercial Simplex data M2M markets by
commencing installation of Simplex 2.0 network upgrades, supplied by
Comtech Aero Astro. The software upgrades, expected to be
completed later this fall, are designed to enhance the overall customer
messaging capacity by 10X and increase the data receiver sensitivity of
the Globalstar Simplex data
network.
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·
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The
Company’s total revenue, net loss and net loss per share for the
three-month period ended September 30, 2009 were $17.5 million, $5.5
million and $0.04 respectively, compared to $22.5 million, $26.0 million
and $0.31, respectively, for the same three months of
2008. Globalstar’s nine-month results, consolidated statements
of operations and other financial and operating information appear later
in this press release.
|
“With the
financing completed, we can now focus our energies on the major operational
milestones pertaining to the manufacture and launch of our second-generation
satellite constellation,” said Jay Monroe, Executive Chairman, Globalstar,
Inc. “The deployment of our new satellite constellation, expected to
begin in 2010, will pave the way for the immediate return of the high quality
and reliability historically provided to Globalstar’s voice and duplex data
subscribers. It will also position us to be first to market with a
second-generation satellite network and a host of advanced IP Multimedia
Subsystem or IMS based mobile satellite.”
“Throughout
the quarter we continued to expand our Simplex data network messaging capacity
and geographic coverage capabilities while we introduced enhanced new SPOT
Satellite GPS Messenger products and services,” said Peter Dalton, Chief
Executive Officer, Globalstar, Inc. Mr. Dalton added, “Thanks to the
innovation of Globalstar, we are in the enviable position of owning and
operating a low-cost highly reliable global Simplex satellite data
network capable of delivering affordable high utility consumer and enterprise
solutions. We intend to fully take advantage of this by effectively
identifying SPOT Satellite GPS Messenger consumer and enterprise
opportunities and by working within each of the markets to deliver the
required hardware and service solutions.”
About
Globalstar, Inc.
With over
350,000 subscribers, Globalstar is a leading provider of mobile satellite voice
and data services. Globalstar offers these
services to commercial and recreational users in more than 120 countries around
the world. The Company's products include mobile and fixed satellite telephones,
simplex and duplex satellite data modems and flexible service packages. Many
land based and maritime industries benefit from Globalstar with increased
productivity from remote areas beyond cellular and landline service. Global
customer segments include: oil and gas, government, mining, forestry, commercial
fishing, utilities, military, transportation, heavy construction, emergency
preparedness, and business continuity as well as individual recreational users.
Globalstar data solutions are ideal for various asset and personal tracking,
data monitoring and SCADA applications.
For more
information regarding Globalstar, please visit Globalstar's web site at www.globalstar.com
###
For
further media
information:
Globalstar,
Inc.
Dean
Hirasawa
(408)
933-4006
Dean.hirasawa@globalstar.com
Safe
Harbor Language for Globalstar Releases
This
press release contains certain statements such as, “We intend to fully take
advantage of this by effectively identifying SPOT Satellite GPS Messenger
consumer and enterprise opportunities and by working within each of the markets
to deliver the required hardware and service solutions,” that are
“forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are subject to a number of
assumptions, risks and uncertainties, many of which are beyond our control,
including demand for our products and services, including commercial acceptance
of our new Simplex products, including SPOT Satellite GPS Messenger, and the
ability to retain and migrate our two-way communications services subscribers to
our second-generation constellation when it is deployed; problems relating to
the construction, launch or in-orbit performance of our existing and future
satellites, including the effects of the degrading ability of our
first-generation satellite constellation to support two-way communication;
problems relating to the ground-based facilities operated by us or by
independent gateway operators; competition and its competitiveness vis-a-vis
other providers of satellite and ground-based communications products and
services; the pace and effects of industry consolidation; the continued
availability of launch insurance on commercially reasonable terms, and the
effects of any insurance exclusions; changes in technology; our ability to
continue to attract and retain qualified personnel; worldwide economic,
geopolitical and business conditions and risks associated with doing business on
a global basis; and legal, regulatory, and tax developments, including changes
in domestic and international government regulation.
Any
forward-looking statements made in this press release speak as of the date made
and are not guarantees of future performance. Actual results or developments may
differ materially from the expectations expressed or implied in the
forward-looking statements, and we undertake no obligation to update any such
statements. Additional information on factors that could influence our financial
results is included in our filings with the Securities and Exchange Commission,
including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K.
GLOBALSTAR,
INC.
(In
thousands, except per share data)
(Unaudited)
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Three Months Ended
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Nine Months Ended
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|||||||||||||||
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Sept 30,
2009
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Sept 30,
2008
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Sept 30,
2009
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Sept 30,
2008
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|||||||||||||
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As Adjusted
–
Note 1
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As Adjusted
–
Note 1
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|||||||||||||||
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Revenue:
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||||||||||||||||
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Service
revenue
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$ | 13,260 | $ | 16,150 | $ | 36,953 | $ | 48,833 | ||||||||
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Equipment
sales
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4,261 | 6,375 | 11,447 | 18,825 | ||||||||||||
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Total
revenue
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17,521 | 22,525 | 48,400 | 67,658 | ||||||||||||
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Operating
expenses:
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||||||||||||||||
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Cost
of services (exclusive of depreciation and amortization shown separately
below)
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9,403 | 10,452 | 27,772 | 26,534 | ||||||||||||
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Cost
of equipment sales:
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||||||||||||||||
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Cost
of equipment sales
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1,987 | 4,942 | 7,814 | 14,050 | ||||||||||||
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Cost
of equipment sales — Impairment of assets
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7 | --- | 655 | 404 | ||||||||||||
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Total
cost of equipment sales
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1,994 | 4,942 | 8,469 | 14,454 | ||||||||||||
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Marketing,
general, and administrative
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12,328 | 17,372 | 37,713 | 48,602 | ||||||||||||
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Depreciation
and amortization
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5,473 | 7,196 | 16,365 | 19,135 | ||||||||||||
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Total
operating expenses
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29,198 | 39,962 | 90,319 | 108,725 | ||||||||||||
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Operating
loss
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(11,677 | ) | (17,437 | ) | (41,919 | ) | (41,067 | ) | ||||||||
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Other
income (expense):
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||||||||||||||||
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Interest
income
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181 | 1,474 | 365 | 4,407 | ||||||||||||
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Interest
expense
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(1,763 | ) | (1,201 | ) | (5,144 | ) | (2,499 | ) | ||||||||
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Derivative
gain (loss)
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5,993 | (229 | ) | 5,196 | (25 | ) | ||||||||||
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Other
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1,839 | (6,587 | ) | 393 | 1,587 | |||||||||||
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Total
other income (expense)
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6,250 | (6,543 | ) | 810 | 3,470 | |||||||||||
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Loss
before income taxes
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(5,427 | ) | (23,980 | ) | (41,109 | ) | (37,597 | ) | ||||||||
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Income
tax expense (benefit)
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92 | 2,039 | (70 | ) | 2,234 | |||||||||||
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Net
loss
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$ | (5,519 | ) | $ | (26,019 | ) | $ | (41,039 | ) | $ | (39,831 | ) | ||||
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Loss
per common share:
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||||||||||||||||
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Basic
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$ | (0.04 | ) | $ | (0.31 | ) | $ | (0.30 | ) | $ | (0.48 | ) | ||||
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Diluted
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(0.04 | ) | (0.31 | ) | (0.30 | ) | (0.48 | ) | ||||||||
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Weighted-average
shares outstanding:
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||||||||||||||||
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Basic
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144,827 | 84,631 | 135,831 | 83,711 | ||||||||||||
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Diluted
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144,827 | 84,631 | 135,831 | 83,711 | ||||||||||||
NOTE 1 –
Adjusted to reflect Retrospective Adoption of FSP APB 14-1
Definition
of Terms and Reconciliation of Non-GAAP Financial Measures
We
utilize certain financial measures that are widely used in the
telecommunications industry and are not calculated based on GAAP. A
reconciliation of these measures to GAAP and a discussion of certain other
operating metrics used in the industry are presented below.
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GLOBALSTAR,
INC.
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||||||||
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RECONCILIATION
OF GAAP TO ADJUSTED
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||||||||
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(Dollars
in thousands, except ARPU)
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||||||||
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(Unaudited)
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|
Three
months ended
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Nine
months ended
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|||||||||||||||
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September
30, 2009
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September
30, 2008
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September
30, 2009
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September
30, 2008
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|||||||||||||
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Revenue
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||||||||||||||||
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Service
Revenue
|
$ | 13,260 | $ | 16,150 | $ | 36,953 | $ | 48,833 | ||||||||
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Equipment
Revenue
|
4,261 | 6,375 | 11,447 | 18,825 | ||||||||||||
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Total
Revenue
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$ | 17,521 | $ | 22,525 | $ | 48,400 | $ | 67,658 | ||||||||
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Operating
Expenses
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||||||||||||||||
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Cost
of Services
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9,403 | 10,452 | 27,772 | 26,534 | ||||||||||||
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Cost
of Subscriber Equipment
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1,994 | 4,942 | 8,469 | 14,454 | ||||||||||||
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Marketing,
General and Administrative
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12,328 | 17,372 | 37,713 | 48,602 | ||||||||||||
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Depreciation
& Amortization
|
5,473 | 7,196 | 16,365 | 19,135 | ||||||||||||
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Impairment
of Assets
|
- | - | - | - | ||||||||||||
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Total
Operating Expenses
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$ | 29,198 | $ | 39,962 | $ | 90,319 | $ | 108,725 | ||||||||
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Operating
Income/(Loss)
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$ | (11,677 | ) | $ | (17,437 | ) | $ | (41,919 | ) | $ | (41,067 | ) | ||||
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Interest
and Derivative Income/(Expense)
|
4,411 | 44 | 417 | 1,883 | ||||||||||||
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Other
Income/(Expense)
|
1,839 | (6,587 | ) | 393 | 1,587 | |||||||||||
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Income
Tax Expense (Benefit)
|
92 | 2,039 | (70 | ) | 2,234 | |||||||||||
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Net
Income/(Loss)
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$ | (5,519 | ) | $ | (26,019 | ) | $ | (41,039 | ) | $ | (39,831 | ) | ||||
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EBITDA
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$ | (4,365 | ) | $ | (16,828 | ) | $ | (25,161 | ) | $ | (20,345 | ) | ||||
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Impairment
of Assets
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6 | (8 | ) | 654 | 404 | |||||||||||
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Non-Cash
Compensation
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2,699 | 3,427 | 8,345 | 10,655 | ||||||||||||
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2nd
Generation Development
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2,081 | 1,474 | 4,313 | 2,089 | ||||||||||||
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Other
One Time Non Recurring Charges
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924 | 552 | 1,583 | 552 | ||||||||||||
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Foreign
Exchange and Other Loss/(Income)
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(1,839 | ) | 6,587 | (393 | ) | (1,587 | ) | |||||||||
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Adjusted
EBITDA
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$ | (494 | ) | $ | (4,796 | ) | $ | (10,659 | ) | $ | (8,232 | ) | ||||
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Adjusted
EBITDA Margin
|
(3 | %) | (21 | %) | (22 | %) | (12 | %) | ||||||||
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Retail
ARPU
|
$ | 27.60 | $ | 35.32 | $ | 25.49 | $ | 37.34 | ||||||||
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(1)
|
Average
monthly revenue per unit (ARPU) measures service revenues per month
divided by the average number of retail subscribers during that
month. Average monthly revenue per unit as so defined may not
be similar to average monthly revenue per unit as defined by other
companies in the Company’s industry, is not a measurement under GAAP and
should be considered in addition to, but not as a substitute for, the
information contained in the Company’s statement of income. The
Company believes that average monthly revenue per unit provides useful
information concerning the appeal of its rate plans and service offerings
and its performance in attracting and retaining high value
customers.
|
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(2)
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EBITDA
represents earnings before interest, income taxes, depreciation and
amortization. EBITDA does not represent and should not be
considered as an alternative to GAAP measurements, such as net income, and
the Company’s calculations thereof may not be comparable to similarly
entitled measures reported by other companies.
The Company uses EBITDA as a supplemental
measurement of its operating performance because, by eliminating interest,
taxes and the non-cash items of depreciation and amortization, the company
believes it best reflects changes across time in the company’s
performance, including the effects of pricing, cost control and other
operational decisions. The company’s management uses EBITDA for
planning purposes, including the preparation of its annual operating
budget. The company believes that EBITDA also is useful to
investors because it is frequently used by securities analysts, investors
and other interested parties in their evaluation of companies in similar
industries. As indicated, EBITDA does not include interest expense on
borrowed money or depreciation expense on our capital assets or the
payment of income taxes, which are necessary elements of the company’s
operations. Because EBITDA does not account for these expenses,
its utility as a measure of the Company’s operating performance has
material limitations. Because of these limitations, the
company’s management does not view EBITDA in isolation and also uses other
measurements, such as net income, revenues and operating profit, to
measure operating performance.
|
|
(3)
|
Adjusted
EBITDA is further adjusted to exclude non-cash compensation expense, asset
impairment charges, foreign exchange gains/(losses) and certain other
non-cash charges. Management uses Adjusted figures for EBITDA
in order to manage the Company’s business and to compare its results more
closely to the results of its
peers.
|
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GLOBALSTAR,
INC.
|
||||||||||||||||
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SCHEDULE
OF SELECTED OPERATING METRICS
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||||||||||||||||
|
(Dollars
in thousands, except ARPU)
|
||||||||||||||||
|
(Unaudited)
|
||||||||||||||||
|
Three
months ended
|
Nine
months ended
|
|||||||||||||||
|
September
30, 2009
|
September
30, 2008
|
September
30, 2009
|
September
30, 2008
|
|||||||||||||
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Subscribers
(End of Period)
|
382,313 | 329,388 | 382,313 | 329,388 | ||||||||||||
|
Retail
|
110,293 | 118,802 | 110,293 | 118,802 | ||||||||||||
|
IGO
|
65,598 | 74,272 | 65,598 | 74,272 | ||||||||||||
|
Simplex
|
206,422 | 136,314 | 206,422 | 136,314 | ||||||||||||
|
Net
Subscriber Additions/(Losses)
|
10,830 | 13,477 | 37,983 | 45,262 | ||||||||||||
|
Retail
|
(1,820 | ) | (839 | ) | (5,078 | ) | (4,290 | ) | ||||||||
|
IGO
|
(3,893 | ) | (3,657 | ) | (8,165 | ) | (7,036 | ) | ||||||||
|
Simplex
|
16,543 | 17,973 | 51,226 | 56,588 | ||||||||||||
|
Retail
Churn
|
1.2 | % | 1.6 | % | 1.2 | % | 1.6 | % | ||||||||
|
ARPU
|
||||||||||||||||
|
Retail
|
$ | 27.60 | $ | 35.32 | $ | 25.49 | $ | 37.34 | ||||||||
|
IGO
|
$ | (0.16 | ) | $ | 3.89 | $ | 1.23 | $ | 3.62 | |||||||
|
Simplex
|
$ | 6.11 | $ | 4.85 | $ | 5.63 | $ | 4.36 | ||||||||
|
Cash
capital expenditures
|
$ | 172,311 | $ | 68,888 | $ | 252,133 | $ | 209,370 | ||||||||
|
Liquidity
at end of period /1
|
$ | 441,095 | ||||||||||||||
|
Note:
|
|
/1
|
Includes
$131.7 million cash on hand, $34.3 million Debt Service Reserve Account,
$215.1 million available under the COFACE Facility, and $60.0 million
Thermo contingent equity account.
|
