10-QPeriod: Q1 FY2021

Globalstar, Inc. Quarterly Report for Q1 Ended Mar 31, 2021

Filed May 6, 2021For Securities:GSAT

Summary

Globalstar, Inc. reported a total revenue of $26.9 million for the first quarter of 2021, a decrease from $32.2 million in the same period of 2020, primarily driven by lower service revenue. The company experienced a net loss of $36.3 million for the quarter, compared to a net loss of $38.2 million in Q1 2020, indicating a slight improvement in loss but continued profitability challenges. The company's financial position shows increased cash, cash equivalents, and restricted cash to $106.7 million from $68.0 million at the end of 2020, largely due to significant proceeds from warrant exercises related to the Second Lien Facility Agreement. Despite this, total debt remains substantial at $390.9 million, with the First Lien Facility Agreement maturing in December 2022, requiring careful management of upcoming debt obligations. The company highlighted a focus on transitioning its business model towards the growing IoT sector, with a temporary pause on certain Duplex device sales to optimize capacity utilization.

Financial Highlights

39 data points
Beta

Revenue

$26.93M

Net Income

-$36.33M

-134.9% Net Margin

EPS (Diluted)

$-0.30

Total Assets

$913.30M

Cash & Equivalents

$106.74M

Free Cash Flow

$4.51M

Financial Statements
Beta
Revenue$26.93M
SG&A Expenses$10.10M
Operating Expenses$46.19M
Operating Income-$19.26M
Net Income-$36.33M
EPS (Basic)$-0.30
EPS (Diluted)$-0.30
Shares Outstanding (Basic)111.98M
Shares Outstanding (Diluted)111.98M

Key Highlights

  • 1Total revenue declined by 16% year-over-year to $26.9 million, driven by decreases in service revenue, particularly from Duplex and SPOT services, although Commercial IoT service revenue saw a modest increase.
  • 2Net loss for the quarter was $36.3 million, an improvement from $38.2 million in the prior year's first quarter, though the company remains unprofitable.
  • 3Total debt stands at $390.9 million as of March 31, 2021, with the First Lien Facility Agreement maturing in December 2022, presenting a near-term refinancing or repayment challenge.
  • 4The company received $43.7 million in proceeds from the exercise of warrants related to the Second Lien Facility Agreement, which helped meet an equity raising requirement and was used for debt principal payments.
  • 5Cash and cash equivalents, along with restricted cash, increased significantly to $106.7 million from $68.0 million at the end of 2020, improving liquidity.
  • 6Globalstar is strategically shifting focus towards the growing Internet of Things (IoT) market, evidenced by efforts to develop new IoT products and temporarily pausing sales of certain Duplex devices.
  • 7The company continues to explore opportunities for its 2.4GHz spectrum (Band 53) for terrestrial broadband services, noting advancements in 5G integration and global authorization efforts.

Frequently Asked Questions

In the first quarter of 2021, Globalstar reported a total revenue of $26.9 million, a decrease from $32.2 million in the same period of 2020. The company's net loss narrowed slightly to $36.3 million from $38.2 million in Q1 2020. While the revenue decline is a concern, the reduction in net loss indicates some operational efficiency or cost management improvements.

Globalstar's total debt was $390.9 million as of March 31, 2021. The First Lien Facility Agreement matures in December 2022. The company received significant proceeds ($43.7 million) from warrant exercises which helped meet an equity requirement tied to the facility and was used for principal payments. The company also maintains a debt service reserve account of over $50 million for the final payment. Discussions with senior lenders regarding 2021 capital expenditures relative to covenant levels are ongoing.

Globalstar is strategically focusing on the growing Internet of Things (IoT) market. This includes developing a two-way reference design module for Commercial IoT offerings and launching new devices like the ST100. The company has temporarily ceased sales of certain Duplex devices to evaluate profitability and optimize network capacity for higher-demand services like IoT.

In Q1 2021, Globalstar received $43.7 million from the exercise of warrants issued to lenders of the Second Lien Facility Agreement. This inflow was crucial as it helped the company meet a requirement of raising at least $45.0 million in equity prior to March 30, 2021, thus avoiding a potential default. The proceeds were subsequently used for debt principal payments in April 2021, improving the company's liquidity and debt repayment schedule.