Summary
Globalstar, Inc. reported a net loss of $25.1 million for the first quarter of 2013, compared to a net loss of $24.5 million in the same period of 2012. Revenue increased by 15% to $19.3 million, driven by a significant rise in service revenues, particularly from SPOT and Simplex services, and a rebound in Duplex equipment sales. However, the company faces significant going concern risks. Its liquidity sources are insufficient to meet existing contractual obligations over the next 12 months, necessitating additional external financing, debt restructuring, and covenant waivers. The company is in default on several covenants under its Facility Agreement, and a major concern is its inability to meet the April 1, 2013 repurchase obligation and interest payment for its 5.75% Convertible Senior Notes, leading to potential acceleration of other debt. The successful resolution of these financial challenges is critical for Globalstar's continued operation.
Financial Highlights
44 data points| Revenue | $19.33M |
| Cost of Revenue | $2.94M |
| Gross Profit | $16.39M |
| SG&A Expenses | $6.92M |
| Operating Expenses | $37.72M |
| Operating Income | -$18.39M |
| Net Income | -$25.08M |
| EPS (Basic) | $-0.75 |
| EPS (Diluted) | $-0.75 |
| Shares Outstanding (Basic) | 31.48M |
| Shares Outstanding (Diluted) | 31.48M |
Key Highlights
- 1Total revenue increased by 15% to $19.3 million, primarily due to a 19.6% increase in service revenue to $15.4 million.
- 2Net loss for the quarter was $25.1 million, a slight increase from $24.5 million in the prior year's quarter.
- 3The company continues to be in a precarious financial position, with substantial doubt about its ability to continue as a going concern, requiring significant external financing and debt restructuring.
- 4Default events occurred under the Facility Agreement due to the Thales arbitration ruling and settlement, and further defaults are anticipated regarding covenant compliance.
- 5Globalstar failed to meet its April 1, 2013 obligations for its 5.75% Convertible Senior Notes, leading to a forbearance agreement and ongoing debt restructuring negotiations.
- 6Capital expenditures for the quarter were $9.2 million, primarily for second-generation satellites and ground infrastructure, a decrease from $23.3 million in the prior year, reflecting the nearing completion of the satellite constellation.
- 7Cash and cash equivalents significantly decreased to $1.3 million as of March 31, 2013, from $11.8 million as of December 31, 2012.