01—Abstract
Summary
Summary of the 10-K filed February 28, 2020. Cited figures are marked; the original filing is the authoritative source.
Globalstar, Inc. (GSAT) reported its 2019 annual results, highlighting a slight increase in total revenue to $131.7 milliona, driven by growth in Commercial IoT services and an out-of-period adjustment.
However, the company experienced a decrease in Duplex service revenue due to a decline in subscribers, partially offset by higher Average Revenue Per User (ARPU). Equipment sales saw a marginal decrease, impacted by lower volumes and pricing for Duplex and SPOT products, though Commercial IoT equipment sales showed growth. Operationally, Globalstar's loss from operations widened to $64.0 millionb, primarily due to increased depreciation, amortization, and accretion expenses related to its next-generation ground infrastructure, alongside higher cost of goods sold impacted by tariffs.
The company continues to manage a significant debt load, with total debt at $528.4 millionc. Despite these challenges, Globalstar is focused on expanding its service offerings, including development of new IoT products and exploring opportunities within its licensed spectrum for terrestrial broadband services. The company's financial stability remains heavily influenced by its ability to manage debt and secure future financing, with Thermo remaining a significant stakeholder and provider of capital.
02—Key points
Key Highlights
- Total revenue increased slightly to $131.7 million in 2019, up from $130.1 million in 2018, boosted by an out-of-period adjustment.
- Loss from operations increased to $64.0 million in 2019, compared to $47.4 million in 2018, driven by higher depreciation and operating expenses.
- Service revenue was $113.4 million, with SPOT and Commercial IoT showing growth, while Duplex service revenue declined.
- Commercial IoT service revenue increased by 26%, indicating strong growth in this segment.
- Total debt remained substantial at $528.4 million as of December 31, 2019, with significant interest expenses.
- The company continues to invest in product development and explore its licensed spectrum for terrestrial broadband services.
- Globalstar's primary shareholder, Thermo, remains a significant source of capital and influence.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2019filed February 28, 2020Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $131.72M$130.11M | +1.2% |
| R&D Expenses | $3.20M$2.70M | +18.5% |
| SG&A Expenses | $45.23M$55.44M | −18.4% |
| Operating Expenses | $195.76M$177.49M | +10.3% |
| Operating Income | -$64.05M-$47.38M | −35.2% |
| Net Income | $15.32M-$6.52M | +335.2% |
| EPS (Basic) | $0.15$-0.15 | +200.0% |
| EPS (Diluted) | $-1.05$-0.15 | −600.0% |
| Shares Outstanding (Basic) | 96.72M84.64M | +14.3% |
| Shares Outstanding (Diluted) | 110.35M84.64M | +30.4% |
05—Questions
Frequently Asked Questions
What was Globalstar's revenue performance in 2019?
Globalstar's total revenue increased slightly to $131.7 million in 2019 from $130.1 million in 2018. This increase was primarily due to an out-of-period adjustment and growth in Commercial IoT services, although Duplex service revenue saw a decline due to fewer subscribers.
How did Globalstar's operational profitability fare in 2019?
The company reported a wider loss from operations of $64.0 million in 2019, an increase from $47.4 million in 2018. This was largely attributed to higher depreciation and amortization expenses related to the company's ground infrastructure and an increase in the cost of goods sold, partly due to tariffs.
What is Globalstar's debt situation?
Globalstar carried significant debt, totaling $528.4 million as of December 31, 2019. The company's financial discussions heavily involve managing this debt, including interest payments and covenant compliance, with recent refinancing activities taking place in November 2019.
What are Globalstar's key growth areas or strategic initiatives?
Globalstar is focusing on expanding its Commercial IoT business, which showed strong revenue growth in 2019. Additionally, the company is actively pursuing opportunities to leverage its licensed spectrum for terrestrial broadband services and is developing new products within its IoT and Sat-Fi offerings.
06—Continue