Summary
Globalstar, Inc.'s 2017 Form 10-K details a challenging year marked by revenue growth but continued operating losses. The company's primary business involves providing Mobile Satellite Services (MSS) globally, with its services extending to areas underserved by terrestrial networks. Key revenue drivers are its Duplex (two-way voice and data) and SPOT (consumer tracking and messaging) services, which saw an increase in service revenue in 2017 due to higher average revenue per user (ARPU) and subscriber growth in the SPOT segment. However, the company's financial health remains strained by significant debt obligations and substantial depreciation expenses related to its second-generation satellite constellation. Operating expenses increased, primarily due to a large reduction in the value of long-lived assets and higher costs of services. Despite efforts to improve liquidity through equity financings, including a public offering in October 2017, the company anticipates its current liquidity sources will be insufficient to meet its obligations for the upcoming year. The company also highlights ongoing risks related to satellite performance, technological advancements, competition, and regulatory changes, particularly concerning its spectrum utilization for terrestrial broadband services.
Financial Highlights
49 data points| Revenue | $112.66M |
| Cost of Revenue | $9.94M |
| Gross Profit | $102.72M |
| R&D Expenses | $3.80M |
| SG&A Expenses | $38.76M |
| Operating Expenses | $181.11M |
| Operating Income | -$68.45M |
| Net Income | -$89.07M |
| EPS (Basic) | $-1.20 |
| EPS (Diluted) | $-1.20 |
| Shares Outstanding (Basic) | 77.77M |
| Shares Outstanding (Diluted) | 77.77M |
Key Highlights
- 1Total revenue increased by approximately 16.3% to $112.7 million in 2017, driven primarily by a 18.4% increase in service revenue to $98.5 million.
- 2The company reported an operating loss of $68.8 million for 2017, a slight increase from $63.7 million in 2016, indicating persistent operational challenges.
- 3Significant debt remains a concern, with total debt (less current portion) at $434.7 million as of December 31, 2017, although total debt decreased from the previous year.
- 4Globalstar received FCC authorization to provide terrestrial broadband services over its satellite spectrum, a potential future revenue stream.
- 5The company's liquidity remains tight, with management expecting current sources to be insufficient for obligations in 2018, despite raising $115.0 million in net proceeds from a stock offering in October 2017.
- 6Depreciation, amortization, and accretion expenses remained high at $77.5 million in 2017, reflecting the significant investment in its satellite constellation.
- 7The company faces various risks, including satellite operational issues, intense competition from other MSS providers, and the need for ongoing capital expenditures.