01—Abstract
Summary
Summary of the 10-K filed February 25, 2022. Cited figures are marked; the original filing is the authoritative source.
Globalstar, Inc. (GSAT) reported total revenues of $124.3 milliona for the year ended December 31, 2021, a slight decrease from $128.5 million in 2020.
The company experienced a net loss of $112.6 millionb for 2021, an increase from a net loss of $109.6 million in the prior year. While service revenue remained the dominant portion of total revenue (85% in 2021), it saw a decline across most segments, notably in Duplex services. The company is strategically shifting focus towards its Commercial IoT business, which showed growth in service revenue and equipment sales.
A significant development for the company is the February 2022 agreement to procure 17 new satellites for $327 millionc, ensuring long-term service continuity and supporting a major customer under a "Terms Agreement" which will reimburse 95% of capital expenditures for these satellites. This, along with ongoing gateway expansion and technological upgrades, positions Globalstar for future growth, albeit amidst challenges like global chip shortages and the ongoing impact of COVID-19 on supply chains and demand.
02—Key points
Key Highlights
- Total revenue for 2021 was $124.3 million, a decrease of 3.3% from $128.5 million in 2020.
- The company reported a net loss of $112.6 million for 2021, compared to a net loss of $109.6 million in 2020.
- Service revenue constituted 85% of total revenue in 2021, while equipment sales made up 15%.
- The company has a strategic focus on growing its Commercial IoT business, which saw an increase in service revenue (5%) and equipment sales (39%) in 2021.
- Globalstar entered into a significant agreement in February 2022 to procure 17 new satellites for $327 million to ensure long-term service continuity, with 95% of the costs reimbursed by a customer under a 'Terms Agreement'.
- The company has been working to strengthen its financial position, fully repaying its 2009 Facility Agreement in November 2021.
- Despite a recovery from COVID-19 impacts in 2020, the company still faces challenges such as global chip shortages affecting manufacturing and supply chains.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 25, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $124.30M$128.49M | −3.3% |
| R&D Expenses | $1.00M$1.90M | −47.4% |
| SG&A Expenses | $34.63M$41.74M | −17.0% |
| Operating Expenses | $189.80M$187.65M | +1.1% |
| Operating Income | -$65.50M-$59.16M | −10.7% |
| Net Income | -$112.63M-$109.64M | −2.7% |
| EPS (Basic) | $-0.90$-1.05 | +14.3% |
| EPS (Diluted) | $-0.90$-1.05 | +14.3% |
| Shares Outstanding (Basic) | 117.68M109.49M | +7.5% |
| Shares Outstanding (Diluted) | 117.68M109.49M | +7.5% |
05—Questions
Frequently Asked Questions
What was Globalstar's financial performance in 2021?
In 2021, Globalstar reported total revenue of $124.3 million, a slight decrease from $128.5 million in 2020. The company experienced a net loss of $112.6 million, an increase from the $109.6 million net loss in the previous year. Key drivers included a shift in service revenue away from Duplex services towards Commercial IoT and continued investment in network infrastructure.
What are the key strategic initiatives for Globalstar going forward?
Globalstar is focusing on expanding its Commercial IoT business and upgrading its gateway infrastructure. A major strategic move is the procurement of 17 new satellites for $327 million, which will ensure long-term service continuity and is largely funded by a key customer under a 'Terms Agreement'. The company is also leveraging its licensed 2.4 GHz spectrum for potential terrestrial broadband services.
What are the main risks and challenges facing Globalstar?
Globalstar faces several risks, including the ongoing impact of global chip shortages on its manufacturing and supply chain, potential disruptions from pandemics like COVID-19, competition in the MSS market, reliance on regulatory approvals, and its capital-intensive business model which requires significant ongoing investment in its satellite constellation and ground network. Additionally, the company carries substantial debt.
How is Globalstar addressing its debt obligations?
Globalstar made significant progress in managing its debt in 2021 by fully repaying its 2009 Facility Agreement in November 2021. The company also has a $199 million facility agreement entered into in 2019 with Thermo, which is due in 2025. Future refinancing of the 2019 facility is planned in conjunction with the satellite procurement financing.
06—Continue