Delaware
(State or Other Jurisdiction of Incorporation)
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001-33117
(Commission
File Number)
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41-2116508
(IRS Employer
Identification No.)
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300 Holiday Square Blvd. Covington, LA
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70433
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(Address of Principal Executive Offices) | (Zip Code) |
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GLOBALSTAR, INC.
/s/ Dirk J. Wild
Dirk J. Wild
Senior Vice President and
Chief Financial Officer
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·
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Globalstar began deployment of its new second-generation constellation by launching six new satellites in October
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·
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SPOT consumer product revenue increased by 47 percent and Simplex data commercial revenue increased by 129 percent, driving total revenue to approximately $68 million
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·
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Globalstar further established its innovative retail consumer market leadership position by introducing new and enhanced SPOT consumer products and services
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·
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Globalstar reduced cost of services and marketing, general and administrative expenses with cost saving initiatives and relocation of its corporate office to Louisiana
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·
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On October 19, 2010 Globalstar successfully launched the first six new second-generation satellites from the Baikonur Cosmodrome in Kazakhstan using the Soyuz launch vehicle. The launch initiates deployment of the Company’s second-generation constellation. A total of 24 new second-generation satellites will be launched and integrated with the eight first-generation satellites that were launched in 2007 to form a 32-satellite constellation.
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·
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The launch of the second-generation constellation paves the way for the Company’s return to offering high quality, high revenue generating mobile satellite voice and duplex data services. The six new satellites will provide service availability and reliability improvements benefiting those customers who use the Company’s voice and duplex data services. With each subsequent launch, these customers can expect a progressive improvement in reliability and performance.
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·
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Due to the continued success of Globalstar’s SPOT Satellite GPS Messenger™, revenues generated by SPOT and related consumer products and services for the year ended December 31, 2010 were $23.7 million compared with $16.1 million for 2009, an increase of over 47 percent. Revenues generated by Globalstar’s Simplex data commercial products and services for the year ended December 31, 2010 were $10.2 million compared with $4.4 million for 2009, an increase of more than 129 percent.
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·
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Globalstar reduced its general and administrative expenses to $41.8 million for the year ended December 31, 2010 compared with $49.2 million for 2009. This decrease of over 15 percent was due primarily to initiation of a number of cost saving initiatives within the Company including a decrease in employee stock-based compensation, plus the relocation of its corporate headquarters to Covington, LA. Globalstar also accepted a package of economic incentives from the State of Louisiana.
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·
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Globalstar completed 2010 with a total of 439,253 mobile satellite voice and data subscribers. This increase was due primarily to the continued success of the SPOT consumer products noted above. Since the introduction of the SPOT Satellite GPS Messenger product in November 2007, Globalstar has received orders to ship approximately 280,000 SPOT retail devices to over 10,000 SPOT Satellite GPS Messenger points of distribution in North America, Europe, Latin America, Australia, and Southeast Asia.
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·
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In July the Federal Communications Commission (FCC) announced it was taking steps, “to make additional spectrum available for new investment in mobile broadband networks by promoting flexible use and removing barriers, while ensuring robust mobile satellite capabilities.” In its Notice of Proposed Rulemaking and Notice of Inquiry the FCC also stated, “three frequency bands that are allocated to the MSS are capable of supporting broadband service,” including the “Big LEO Band from 1610-1626.5 MHz and 2483.5-2500 MHz.” Globalstar provides services using Big LEO Band global MSS spectrum and expects to take advantage of any such additional flexibility.
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·
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In January 2011, Globalstar’s SPOT LLC earned the Innovations Design and Engineering Award from the Consumer Electronics Association after unveiling the all-new SPOT Connect™ satellite communicator for smartphones at this year’s Consumer Electronics Show in Las Vegas. SPOT Connect provides one-way messaging connectivity using the Globalstar satellite network for sending GPS location-based messages from cities or areas far beyond the range of cellular phone coverage. By simply downloading the SPOT Connect app, SPOT Connect wirelessly synchs via Bluetooth with smartphone operating systems like Android and Apple’s iPhone. SPOT Satellite GPS Messenger features are then initiated using the SPOT Connect app on the smartphone device.
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·
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In February of 2011, Globalstar announced it expects to conduct the next launch of six new second-generation satellites in May 2011 plus two additional launches of six satellites per launch within 60-90 days following the previous launch.
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In March of 2011 Globalstar announced that the International Bureau of the Federal Communications Commission (FCC) had granted Globalstar conditional authority to operate its second-generation satellites within the United States. This authority will become effective once Globalstar completes registering the first six new second-generation constellation with France.
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Details are as follows:
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Earnings Call:
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Dial: 888.396.2298 (US and Canada), 617.847.8708
(International) and participant pass code #41577879
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Audio Replay:
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A replay of the earnings call will be available for a limited time and can be heard after 8:00 p.m. ET on March 31, 2011. Dial: 888.286.8010 (US and Canada), 617.801.6888 (International) and pass code #27714946
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Year Ended December 31,
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||||||||||||
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2010
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2009
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2008
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|||||||||
Revenue:
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||||||||||||
Service revenue
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$
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50,937
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$
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50,228
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$
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61,794
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||||||
Subscriber equipment sales
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17,004
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14,051
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24,261
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|||||||||
Total revenue
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67,941
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64,279
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86,055
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|||||||||
Operating expenses:
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||||||||||||
Cost of services (exclusive of depreciation, amortization and accretion shown separately below)
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31,172
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36,204
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37,132
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|||||||||
Cost of subscriber equipment sales:
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||||||||||||
Cost of subscriber equipment sales
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13,182
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9,881
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17,921
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|||||||||
Reduction in the value of equipment
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10,862
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913
|
405
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|||||||||
Total cost of subscriber equipment sales
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24,044
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10,794
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18,326
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|||||||||
Marketing, general, and administrative
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41,827
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49,210
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61,351
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|||||||||
Reduction in the value of assets
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3,249
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—
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—
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|||||||||
Depreciation, amortization and accretion
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27,418
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21,862
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26,956
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|||||||||
Total operating expenses
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127,710
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118,070
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143,765
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|||||||||
Operating loss
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(59,769
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)
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(53,791
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)
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(57,710
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)
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||||||
Other income (expense):
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||||||||||||
Gain on extinguishment of debt
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—
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—
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41,411
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|||||||||
Interest income
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424
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502
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4,713
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|||||||||
Interest expense
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(5,021
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)
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(6,730
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)
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(5,733
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)
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||||||
Derivative loss
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(29,975
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)
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(15,585
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)
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(3,259
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)
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||||||
Other
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(2,730
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)
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665
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(4,497
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)
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|||||||
Total other income (expense)
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(37,302
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)
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(21,148
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)
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32,635
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|||||||
Loss before income taxes
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(97,071
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)
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(74,939
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)
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(25,075
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)
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||||||
Income tax expense (benefit)
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396
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(16
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)
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(2,283
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)
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|||||||
Net loss
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$
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(97,467
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)
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$
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(74,923
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)
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$
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(22,792
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)
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Loss per common share:
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||||||||||||
Basic
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$
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(0.34
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)
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$
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(0.58
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)
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$
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(0.27
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)
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|||
Diluted
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(0.34
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)
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(0.58
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)
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(0.27
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)
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||||||
Weighted-average shares outstanding:
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||||||||||||
Basic
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285,316
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128,130
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85,478
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|||||||||
Diluted
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285,316
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128,130
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85,478
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Three months ended
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Year ended
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|||||||||||||||
December 31, 2010
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December 31, 2009
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December 31, 2010
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December 31, 2009
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|||||||||||||
Net Loss
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$ | (18,083 | ) | $ | (33,884 | ) | $ | (97,467 | ) | $ | (74,923 | ) | ||||
Interest and Derivative Income/(Expense)
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$ | 11,006 | $ | (22,230 | ) | $ | (34,572 | ) | $ | (21,813 | ) | |||||
Income Tax Expense (Benefit)
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289 | 54 | 396 | (16 | ) | |||||||||||
Depreciation, Amortization and Accretion
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8,254 | 5,497 | 27,418 | 21,862 | ||||||||||||
EBITDA
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$ | (20,546 | ) | $ | (6,103 | ) | $ | (35,081 | ) | $ | (31,264 | ) | ||||
Reduction in value of equipment
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$ | 10,801 | $ | 259 | $ | 10,862 | $ | 913 | ||||||||
Reduction in value of assets
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3,249 | - | 3,249 | - | ||||||||||||
Impairment of equity method investment
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- | - | 1,903 | - | ||||||||||||
Non-Cash Compensation
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882 | 2,231 | 1,046 | 10,576 | ||||||||||||
Research and Development
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1,450 | 15 | 3,681 | 4,328 | ||||||||||||
Severance
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(96 | ) | 177 | 2,148 | 1,551 | |||||||||||
Foreign Exchange and Other Loss/(Income)
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(11 | ) | (272 | ) | 827 | (665 | ) | |||||||||
Other One Time Non Recurring Charges
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- | 1,720 | 2,890 | 1,929 | ||||||||||||
Adjusted EBITDA
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$ | (4,271 | ) | $ | (1,973 | ) | $ | (8,475 | ) | $ | (12,632 | ) |
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(1)
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EBITDA represents earnings before interest, income taxes, depreciation, amortization and derivative gains/(losses). 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.
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(2)
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Adjusted EBITDA is further adjusted to exclude non-cash compensation expense, asset impairment charges, foreign exchange gains/(losses), R&D costs associated with the development of new consumer products, and certain other one-time charges. Management uses Adjusted 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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Year Ended
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Year Ended
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|||||||||||||||||||||||
December 31, 2010
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December 31, 2009
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Service
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Equipment
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% of Total
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Service
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Equipment
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% of Total
|
|||||||||||||||||||
Revenue
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||||||||||||||||||||||||
Duplex
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$ | 23,294 | $ | 2,174 | 37 | % | $ | 29,517 | $ | 3,086 | 51 | % | ||||||||||||
SPOT
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14,756 | 8,934 | 35 | % | 9,557 | 6,561 | 25 | % | ||||||||||||||||
Simplex
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4,583 | 5,582 | 15 | % | 3,873 | 557 | 7 | % | ||||||||||||||||
IGO
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1,140 | - | 2 | % | 1,191 | - | 2 | % | ||||||||||||||||
Other
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7,164 | 314 | 11 | % | 6,090 | 3,847 | 15 | % | ||||||||||||||||
$ | 50,937 | $ | 17,004 | 100 | % | $ | 50,228 | $ | 14,051 | 100 | % | |||||||||||||
Average Subscribers
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||||||||||||||||||||||||
Duplex
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97,708 | 103,429 | ||||||||||||||||||||||
SPOT
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125,576 | 80,190 | ||||||||||||||||||||||
Simplex
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120,253 | 109,044 | ||||||||||||||||||||||
IGO
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60,443 | 69,940 | ||||||||||||||||||||||
ARPU
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Duplex
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$ | 19.87 | $ | 23.78 | ||||||||||||||||||||
SPOT
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$ | 9.79 | $ | 9.93 | ||||||||||||||||||||
Simplex
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$ | 3.18 | $ | 2.96 | ||||||||||||||||||||
IGO
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$ | 1.57 | $ | 1.42 |