Summary
Globalstar, Inc. reported revenues of $25.1 million for the three months ended June 30, 2016, an increase of 9% compared to the same period in the prior year, driven primarily by a 16% increase in Duplex service revenue and a 14% increase in SPOT service revenue. Service revenue growth was supported by an increase in the average subscriber base and higher Average Revenue Per User (ARPU) across key service categories. However, the company experienced a net loss of $12.8 million for the six months ended June 30, 2016, a significant decrease from the net income of $75.0 million in the same period of 2015. This swing in profitability is largely attributable to a substantial decrease in derivative gains, which were $39.2 million in the first six months of 2016 compared to $129.2 million in the prior year's comparable period. The company's balance sheet reflects total assets of $1.16 billion and total liabilities of $1.16 billion, with total stockholders' equity standing at $256.1 million. Cash and cash equivalents stood at $11.3 million, while long-term debt, net of current portion, was $540.4 million. Operationally, Globalstar continues to invest in its network infrastructure, with $190.3 million in construction in progress for next-generation upgrades. The company maintained compliance with its debt covenants, utilizing equity contributions from Terrapin Opportunity, L.P. to satisfy financial covenant requirements. Significant ongoing dialogue with Thales Alenia Space France regarding ownership of certain deliverables for second-generation satellites remains a notable point of attention. The company also highlighted the potential impact of the UK's vote to leave the EU (Brexit) on its European operations and currency exchange risk.
Financial Highlights
45 data points| Revenue | $25.09M |
| Cost of Revenue | $2.89M |
| Gross Profit | $22.20M |
| SG&A Expenses | $11.45M |
| Operating Expenses | $41.50M |
| Operating Income | -$16.41M |
| Net Income | $14.10M |
| EPS (Basic) | $0.15 |
| EPS (Diluted) | $0.15 |
| Shares Outstanding (Basic) | 69.96M |
| Shares Outstanding (Diluted) | 83.31M |
Key Highlights
- 1Total revenue increased by 9% to $25.1 million for Q2 2016, driven by service revenue growth in Duplex and SPOT services.
- 2Despite revenue growth, the company reported a net loss of $12.8 million for the six months ended June 30, 2016, compared to a net income of $75.0 million in the prior year, largely due to a significant decrease in derivative gains.
- 3Cash and cash equivalents stood at $11.3 million, with $31.5 million remaining available under the August 2015 Terrapin common stock purchase agreement.
- 4Long-term debt, net of current portion, was $540.4 million as of June 30, 2016.
- 5Significant investment in network infrastructure continues, with $190.3 million in construction in progress for next-generation ground upgrades.
- 6The company remains compliant with its debt covenants, having made equity cure contributions from Terrapin.
- 7Dispute with Thales Alenia Space France regarding ownership of second-generation satellite deliverables is ongoing.