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Quarterly Results
Globalstar, Inc. Announces First Quarter Results for 2008
Quarter Highlighted by Closing Acquisition for Brazilian Corporate
Expansion, Accolades for the SPOT Satellite Messenge and Net
Subscriber Growth
Post-Quarter Highlights Include Receipt of Expanded ATC Spectrum
Authority From the FCC and Securing $150 Million in Additional Financing
MILPITAS, Calif. - Globalstar, Inc. announced its financial and operational results for the three month period ended March 31, 2008.
"Globalstar concluded the first quarter of the year with considerably
lower churn compared to our last quarter of 2007 while growing to over
293,000 customers," said Jay Monroe, Chairman and CEO of Globalstar,
Inc. Mr. Monroe added, "This growth permits us to retain our position
as the largest North American-based satellite voice and data services
provider. While collecting awards and rave media reviews throughout the
quarter, I am proud to say that our SPOT Satellite Messenger was also
instrumental in saving the lives of a number of individuals. From off
the coast of Tasmania, to the snowmobile trails of Colorado, to the
harsh remote regions of Alaska - the SPOT Satellite Messenger has done
exactly what it was designed to do."
"Throughout the quarter preparations for the deployment of Globalstar's
second-generation constellation continued on budget and on schedule for
launch beginning in the second half of next year. Since the end of the
quarter, we were able to secure $150 million of additional funding
before offering expenses. This is great news for Globalstar, especially
considering the adverse state of the capital markets. This financing is
required for the procurement and launch of our second-generation
constellation and all of the enhanced product and service possibilities
it will bring, especially with our newly expanded Ancillary Terrestrial
Component (ATC) authority."
On April 10, 2008 the U.S. Federal Communications Commission (FCC)
issued a Report and Order expanding Globalstar's authority to offer ATC
services in the United States in conjunction with its mobile satellite
services. Globalstar is now authorized to use 19.275 MHz, compared to
11 MHz previously, of its 1.6/2.4 GHz mobile satellite service (MSS)
spectrum for ATC.
First Quarter Company Highlights:
In January the SPOT Satellite Messenger was showcased successfully at
the Consumer Electronics Show (CES) in Las Vegas and was named by CRN
ChannelWeb as one of the top 20 products at the show. CES is the
world's largest tradeshow for consumer technology. This year's show
featured 2,700 companies and displayed over 20,000 products on 1.85
million square feet of exhibit space in front of an estimated gathering
of over 130,000 attendees.
In March Globalstar completed the purchase of the Globalstar
independent gateway operator in Brazil from affiliates of Loral Space &
Communications Inc. The acquisition adds substantially to Globalstar's
wholly-owned service provider operations and paves the way for
Globalstar to expand immediately its Simplex data coverage in South
America. Globalstar also expects to engage in future discussions with
potential partners to provide ancillary terrestrial component or
ATC-type services in Brazil pending regulatory approval for such
services.
Service Revenue for the first quarter of 2008 was $16.0 million
compared to $17.5 million during the same period of 2007. Total Revenue
in the first quarter of 2008 was $22.1 million compared to $23.2
million during the same period in 2007. Adjusted Revenue (adjusted for
the Company's annual rate plans) in the first quarter was $23.0 million
compared to $25.7 million during the same period in 2007.
During the first quarter of 2008, Globalstar recorded an operating loss
of $11.6 million and Adjusted EBITDA loss of $1.5 million, compared to
an operating loss of $0.6 million and Adjusted EBITDA of $4.6 million
during the same period in 2007. Net loss for the first quarter of 2008
was $6.6 million, compared to net income of $0.4 million in the same
period of 2007.
The net loss in the first quarter of 2008 included approximately $4.3
million in marketing and advertising expenses as well as other costs
related to the launch of the SPOT Satellite Messenger, non-cash stock
compensation of $3.7 million, and higher depreciation costs associated
with the placement of recently launched satellites into service. (For
details concerning Adjusted EBITDA, please see the chart titled
"Definition of Terms and Reconciliation of Non-GAAP Financial Measures"
found later in this release.)
Key financial performance measures (see the chart titled "Definition of
Terms and Reconciliation of Non-GAAP Financial Measures" found later in
this release) for the three months ended March 31, 2008 were as
follows:
* Net subscribers increased during the first quarter of 2008 by
approximately 9,100 compared to approximately 8,800 during the same
period in 2007, and a net decrease of approximately 1,100
subscribers in the fourth quarter of 2007.
* The average monthly retail churn rate in the first quarter was 1.3
percent compared to 1.0 percent during the first quarter of 2007
and 2.0 percent in the fourth quarter of 2007.
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