Globalstar, Inc. Quarterly Report for Q3 Ended Sep 30, 2019

Summary

Globalstar, Inc. reported a net income of $21.1 million for the third quarter of 2019, a significant increase from $9.0 million in the same quarter of the prior year. This improvement was largely driven by a substantial derivative gain of $50.2 million, which offset an operating loss of $12.0 million. For the nine months ended September 30, 2019, net income was $53.1 million compared to $89.9 million in the prior year, also heavily influenced by derivative gains. Total revenue saw a modest increase to $38.6 million for the third quarter and $99.9 million for the first nine months of 2019, with service revenue showing growth, partly due to an out-of-period revenue adjustment. However, subscriber equipment sales declined. The company continues to manage a significant debt load, with long-term debt totaling $402.5 million as of September 30, 2019, and is actively negotiating amendments to its Facility Agreement to address potential covenant compliance issues and debt repayment schedules.

Key Highlights

• 1Reported a net income of $21.1 million for Q3 2019, up from $9.0 million in Q3 2018, primarily driven by a $50.2 million derivative gain.
• 2Total revenue increased to $38.6 million in Q3 2019 from $35.7 million in Q3 2018, with service revenue showing growth.
• 3Operating loss for Q3 2019 was $12.0 million, an improvement from $18.0 million in Q3 2018.
• 4Long-term debt stood at $402.5 million as of September 30, 2019, with the company actively negotiating amendments to its Facility Agreement.
• 5Cash and cash equivalents increased to $26.2 million as of September 30, 2019, from $15.2 million at the end of 2018.
• 6The company recognized a $3.9 million out-of-period revenue adjustment in Q3 2019 related to ASC 606 adoption.
• 7New lease accounting standards (ASC 842) resulted in the recognition of right-of-use assets and lease liabilities on the balance sheet.

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