Globalstar, Inc. Quarterly Report for Q2 Ended Jun 30, 2019

Summary

Globalstar, Inc. reported a net income of $6.19 million for the three months ended June 30, 2019, a significant improvement from a net loss of $7.01 million in the prior year's comparable quarter. This turnaround was largely driven by a substantial derivative gain of $35.12 million, which more than offset a decrease in service and equipment revenue. For the six months ended June 30, 2019, the company reported a net income of $31.96 million, also a considerable increase from $80.92 million in the same period of 2018, though this figure was significantly influenced by derivative gains and a one-time contract termination charge reversal in the prior year. Total revenue saw a slight decrease year-over-year, reflecting challenges in Duplex and SPOT service revenue, partially offset by growth in Commercial IoT. The company continues to manage its significant debt obligations and is actively pursuing refinancing options to improve its capital structure.

Key Highlights

• 1Reported a net income of $6.19 million for Q2 2019, a turnaround from a net loss of $7.01 million in Q2 2018.
• 2Significant derivative gain of $35.12 million in Q2 2019 contributed substantially to profitability.
• 3Total revenue for the quarter decreased to $31.19 million from $33.73 million in Q2 2018, primarily due to lower service revenue.
• 4Commercial IoT service revenue increased by 35% year-over-year, indicating growth in this segment.
• 5The company's long-term debt remains substantial, standing at $392.71 million as of June 30, 2019.
• 6Globalstar is actively pursuing debt refinancing to improve its capital structure, with options including a complete debt refinancing or an amendment to existing agreements.
• 7Cash used in investing activities decreased significantly to $5.10 million in the first six months of 2019 from $8.90 million in the prior year period.

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