Summary
Globalstar, Inc.'s first quarter 2019 report indicates a modest year-over-year increase in total revenue, reaching $30.1 million, primarily driven by a 36% surge in subscriber equipment sales. Service revenue remained largely flat at $26.1 million. The company reported a net income of $25.8 million for the quarter, a significant decrease from $87.9 million in the prior year, largely influenced by a substantial reduction in derivative gains ($57.0 million in Q1 2019 vs. $108.9 million in Q1 2018). Financially, Globalstar continues to manage a significant debt load. While the company reported positive cash flow from operations ($1.3 million), its ability to meet upcoming debt obligations remains a concern, with management stating that existing liquidity is expected to be insufficient. The company anticipates needing "Equity Cure Contributions" to maintain compliance with financial covenants under its Facility Agreement through the end of 2019, with the source of these funds not yet arranged. The report also highlights an ongoing securities claim settlement expected to result in a $3.0 million loss and a related insurance receivable.
Financial Highlights
41 data points| Revenue | $30.08M |
| SG&A Expenses | $11.61M |
| Operating Expenses | $48.41M |
| Operating Income | -$18.33M |
| Net Income | $25.77M |
| EPS (Basic) | $0.30 |
| EPS (Diluted) | $-0.30 |
| Shares Outstanding (Basic) | 96.55M |
| Shares Outstanding (Diluted) | 108.82M |
Key Highlights
- 1Total revenue increased 5% to $30.1 million for Q1 2019, driven by a 36% increase in subscriber equipment sales.
- 2Service revenue was flat year-over-year at $26.1 million, with Duplex service revenue declining 2% due to fewer subscribers, partially offset by higher ARPU.
- 3Net income decreased significantly to $25.8 million from $87.9 million in Q1 2018, primarily due to a lower derivative gain.
- 4Operating expenses increased 16% to $48.4 million, largely due to higher depreciation, amortization, and accretion expenses related to new ground infrastructure.
- 5The company reported positive operating cash flow of $1.3 million, a decrease from $9.8 million in Q1 2018, impacted by unfavorable working capital changes.
- 6Globalstar faces ongoing liquidity concerns, with management indicating that current sources are insufficient to meet future debt service obligations and anticipating the need for "Equity Cure Contributions" to maintain loan covenant compliance.
- 7The company recorded a $3.0 million loss provision for a shareholder securities claim settlement, with a corresponding $3.1 million insurance receivable.