10-QPeriod: Q3 FY2021

Globalstar, Inc. Quarterly Report for Q3 Ended Sep 30, 2021

Filed November 4, 2021For Securities:GSAT

Summary

Globalstar, Inc. reported total revenue of $32.6 million for the third quarter of 2021, a slight decrease of 0.4% compared to the same period in 2020. For the first nine months of 2021, total revenue was $89.8 million, a 5.8% decrease year-over-year. The company experienced a net loss of $30.9 million for the third quarter of 2021, compared to a net loss of $24.9 million in the prior year period. This wider loss was primarily driven by increased interest expenses and derivative losses. Operationally, service revenue remained relatively stable, with growth in SPOT and Commercial IoT services offsetting a decline in Duplex services, reflecting a strategic shift towards IoT. However, the company's financial performance continues to be heavily impacted by significant interest expenses related to its debt obligations. Despite these challenges, Globalstar made substantial principal payments on its First Lien Facility Agreement during the first nine months of 2021, reducing its overall debt burden. The company expects its liquidity sources to be sufficient to cover obligations over the next twelve months.

Financial Highlights

39 data points
Beta

Revenue

$32.61M

Net Income

-$30.89M

-94.7% Net Margin

EPS (Diluted)

$-0.30

Total Assets

$884.12M

Cash & Equivalents

$62.37M

Free Cash Flow

$51.25M

Financial Statements
Beta
Revenue$32.61M
SG&A Expenses$9.20M
Operating Expenses$47.33M
Operating Income-$14.71M
Net Income-$30.89M
EPS (Basic)$-0.30
EPS (Diluted)$-0.30
Shares Outstanding (Basic)119.54M
Shares Outstanding (Diluted)119.54M

Key Highlights

  • 1Total revenue for Q3 2021 was $32.6 million, a slight decrease from Q3 2020's $32.8 million.
  • 2Net loss for Q3 2021 widened to $30.9 million from $24.9 million in Q3 2020.
  • 3Service revenue showed resilience, with growth in SPOT and Commercial IoT offsetting declines in Duplex services.
  • 4Significant debt reduction occurred, with $126.7 million in principal payments made on the First Lien Facility Agreement during the first nine months of 2021.
  • 5The company continues to strategically shift focus towards the growing Commercial IoT market.
  • 6Restricted cash stands at $51.1 million, primarily earmarked for the final payment of the First Lien Facility Agreement.
  • 7Cash and cash equivalents were $11.3 million at the end of the quarter.

Frequently Asked Questions

Globalstar's total revenue saw a slight decrease in Q3 2021 to $32.6 million compared to $32.8 million in Q3 2020. For the nine months ended September 30, 2021, revenue was $89.8 million, down from $95.3 million in the same period of 2020. While overall revenue declined, service revenue demonstrated stability, with growth in SPOT and Commercial IoT services compensating for a decrease in Duplex services.

The company's profitability remains a significant concern, with a net loss of $30.9 million reported for Q3 2021, an increase from the $24.9 million net loss in Q3 2020. This widened loss is attributed to factors including higher interest expenses and derivative losses, indicating continued financial strain despite efforts to manage operational costs.

Globalstar has been actively reducing its debt. During the first nine months of 2021, the company made significant principal payments totaling $126.7 million on its First Lien Facility Agreement. This has led to a substantial reduction in total debt outstanding, from $385.4 million at the end of 2020 to $286.9 million by September 30, 2021. The company intends to fully pay off the remaining balance of the First Lien Facility Agreement in the fourth quarter of 2021.

Globalstar is strategically pivoting its focus towards the growing Internet of Things (IoT) market. This involves a reduction in sales and services for certain Duplex devices, which have seen declining demand, and an increased investment in IoT-enabled devices and services, particularly in the Commercial IoT segment. This shift aims to align the business model with evolving market demands and capitalize on growth opportunities.