Globalstar Announces Second Quarter 2013 Results

Globalstar Announces Second Quarter 2013 Results

  *Total second quarter 2013 revenue of $19.8 million compared to $20.0
    million in 2012; service revenue increased 9%
  *Duplex ARPU increased 27% to $21.29 during second quarter of 2013
  *5.75% Notes refinancing completed; amended and restated COFACE Facility
    signed
  *SPOT Global Phone and SPOT Gen3™ successfully released to retail
    distribution
  *Duplex service coverage improved significantly; final second-generation
    satellite to be placed into service later this month

COVINGTON, La., Aug. 13, 2013 (GLOBE NEWSWIRE) -- Globalstar, Inc.
(OTCBB:GSAT) today announced its financial results for the three-month period
ended June 30, 2013.

SECOND QUARTER FINANCIAL REVIEW

Jay Monroe, Chairman and CEO of Globalstar, commented, "Globalstar's progress
toward our 2013 operating objectives continued during the second quarter. The
critical drivers of our business are beginning to come together as ARPU and
network usage have surged while we continue to strategically invest in the
development and roll-out of our innovative product set. As we begin to receive
the financial benefits of our second-generation constellation, government and
enterprise customers are returning in greater numbers, driving growth in our
core Duplex performance metrics – minutes of use grew 41% from second quarter
2012, the largest percentage increase since 2006, gross subscriber additions
more than doubled in the quarter and we experienced an increase in
revenue-generating Duplex subscribers on a consecutive basis for the first
time in three years – confirming our expectation of accelerating growth during
the second half of the year. On the new product front, SPOT Global Phone, our
new consumer focused voice and data product, was released in May to positive
reviews, leveraging our retail distribution base. SPOT Gen3™, the
next-generation personal tracking device that is the flagship of our SPOT
family, was released in July and is off to a promising start."

Revenue

Revenue was $19.8 million for the second quarter of 2013 compared to $20.0
million for the second quarter of 2012. Although service revenue increased in
the quarter, equipment revenue was adversely affected by a delay in the
release of SPOT Gen3™ associated with product testing and final certification.

Service revenue was $15.4 million for the second quarter of 2013 compared to
$14.2 million for the second quarter of 2012, an increase of $1.2 million, or
9%. The primary driver of this increase was growth in Duplex revenue, which
increased $0.9 million, or 19%. The growth in Duplex service revenue was due
primarily to recent new subscriber additions and the migration of subscribers
to higher rate plans that reflect improved network performance and usage.
These factors drove an increase in Duplex ARPU of 27% to $21.29. Average
Duplex subscribers decreased 6% from the second quarter of 2012 reflecting
churn associated with rate plan migration instituted this year, offset partly
by accelerating net subscriber additions in the quarter. Second quarter 2013
service revenue growth was driven to a lesser extent by SPOT revenue, which
increased $0.4 million, or 6%, as ARPU and revenue-generating subscribers
increased. SPOT ARPU increased 8% to $10.69 due to the deactivation of
non-revenue generating subscribers beginning in the first quarter of 2013. As
previously announced, the Company initiated a process to deactivate certain
suspended subscribers in its subscriber base beginning in 2013; 36,000
subscribers were deactivated during the first quarter. In comparison, if these
suspended subscribers were excluded from the 2012 subscriber count, average
subscribers for the second quarter of 2013 would have increased. Simplex
service revenue also increased $0.3 million, or 21%, due to a 29% increase in
the average subscriber base.

Subscriber equipment sales of $4.4 million decreased 24% in the second quarter
of 2013 from the second quarter of 2012. Duplex equipment sales increased $1.2
million, more than tripling from the second quarter of 2012. Duplex units sold
increased during the quarter, which included the successful introduction of
the SPOT Global Phone. Comparing the second quarter of 2013 to the same period
in 2012, Simplex equipment sales decreased $1.6 million, or 55%, and SPOT
equipment sales decreased $0.8 million, or 45%. Both decreases were due to
high volume sales in the second quarter of 2012 that did not recur in 2013.
Additionally, in anticipation of the release of SPOT Gen3™, sales of our SPOT2
product slowed in our consumer market channels during the first half of 2013;
the Company expects this new product to increase equipment sales in future
periods.

Net Loss

The Company reported a net loss of $126.3 million for the second quarter of
2013 compared to $27.5 million for the second quarter of 2012. Increased net
loss was due primarily to the recognition of a non-cash loss on extinguishment
of debt of $47.2 million and a non-cash loss on future equity issuances of
$14.0 million, both resulting from transactions executed in connection with
the refinancing of the Company's 5.75% Notes in May 2013. The increased net
loss was also due to the impact of non-cash derivative gains and losses in the
respective quarters, higher interest expense as the amount of interest being
capitalized decreases and higher depreciation expense as the Company placed
additional satellites into service.

Adjusted EBITDA

Adjusted EBITDA was $2.9 million for the second quarter of 2013 and 2012,
respectively, due to a $0.2 million decrease in total revenue offset by a $0.2
million decrease in total operating expenses (excluding EBITDA adjustments).

FINANCING UPDATE

During the second quarter, Globalstar successfully completed the refinancing
of its 5.75% Convertible Senior Unsecured Notes.

In July 2013, Globalstar announced the signing of a Global Deed of Amendment
and Restatement of its COFACE Facility Agreement. Closing of the COFACE
Facility Agreement requires satisfaction of conditions precedent, which the
Company expects will be met in the near future.

OPERATIONAL AND REGULATORY UPDATE

Second-Generation Constellation

  *As previously announced, all satellites launched on February 6, 2013 have
    successfully completed in-orbit testing. The placing of these satellites
    into commercial service has proceeded on schedule; two additional
    satellites went into service in May and another in June. The final
    satellite is on track to be in service by the end of the month, marking
    the completion of the second-generation constellation.

Regulatory Reform for Terrestrial Spectrum Authority

  *As a reminder, in January 2013, Globalstar filed with the Federal
    Communications Commission (the "FCC") its responses to all comments
    received with regard to its November 13, 2012 Petition for Rulemaking
    asking the FCC for the regulatory flexibility necessary to use the
    Company's licensed MSS spectrum terrestrially to support mobile broadband
    applications throughout the United States.
  *On June 20, Globalstar met in person with FCC Chairwoman Clyburn to
    present the case for its Petition.
  *Globalstar expects the FCC to act on its Petition in the near future.

Mr. Monroe concluded, "In just two weeks, the final satellite of our
second-generation constellation is scheduled to be placed into service, fully
restoring the service capability of our Duplex growth engine. To support the
return of our Duplex service and our slate of new products, we are putting
more muscle behind our marketing efforts, balancing these investments with
continued stringent operational discipline to maximize our revenue and EBITDA
generation for the remainder of the year while building momentum heading into
2014. With superior service quality, feature-rich products and pricing that
provides significant cost savings over our competitors' offerings, Globalstar
is tapping a broader addressable market and offering a compelling value
proposition to our customers. In addition, we believe we have made substantial
progress at the FCC with our petition to obtain terrestrial authority to
utilize our spectrum for terrestrial mobile broadband services and expect the
FCC to release our requested notice of proposed rulemaking in the near future.
Globalstar's Terrestrial Low Power Service is the only near-term solution to
the increasing congestion being experienced in the public Wi-Fi bands and we
are hopeful for a decision from the FCC before the end of the year."

CONFERENCE CALL

The Company will conduct an investor conference call today at 5:00pm EDT to
discuss second quarter 2013 financial results.


Details are as follows:
                 5:00pm EDT
Conference Call: Dial: 1 (877) 261-8990 (US and Canada), 1 (847) 619-6441
                 (International) and participant pass code 35393899
                 A replay of the earnings call will be available for a
Audio Replay:    limited time and can be heard after 7:30 p.m. EDT on August
                 20, 2013. Dial: 1 (888) 843-7419 (U.S. and Canada), 1 (630)
                 652-3042 (International) and pass code 3539 3899#
                                                                            

About Globalstar, Inc. Globalstar is a leading provider of mobile satellite
voice and data services. Globalstar offers these services to commercial
customers and recreational consumers in more than 120 countries around the
world. The Company's products include mobile and fixed satellite telephones,
simplex and duplex satellite data modems, flexible airtime service packages
and the SPOT family of mobile satellite consumer products including the SPOT
Satellite GPS Messenger. Many land based and maritime industries benefit from
Globalstar with increased productivity from remote areas beyond cellular and
landline service. Global customer segments include: oil and gas, government,
mining, forestry, commercial fishing, utilities, military, transportation,
heavy construction, emergency preparedness, and business continuity as well as
individual recreational users. Globalstar data solutions are ideal for various
asset and personal tracking, data monitoring and SCADA applications. Note that
all SPOT products described in this press release are the products of Spot
LLC, which is not affiliated in any manner with Spot Image of Toulouse, France
or Spot Image Corporation of Chantilly, Virginia.

For more information regarding Globalstar, please visit Globalstar's web site
at www.globalstar.com

Safe Harbor Language for Globalstar Releases

This press release contains certain statements that are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements are based on current expectations
and assumptions that are subject to risks and uncertainties which may cause
actual results to differ materially from the forward-looking statements.
Forward-looking statements, such as the statements regarding our expectations
with respect to actions by the FCC, the closing of the amendment and
restatement of our senior credit facility, future increases in our revenue and
profitability and other statements contained in this release regarding matters
that are not historical facts, involve predictions.

Any forward-looking statements made in this press release speak as of the date
made and are not guarantees of future performance. Actual results or
developments may differ materially from the expectations expressed or implied
in the forward-looking statements, and we undertake no obligation to update
any such statements. Additional information on factors that could influence
our financial results is included in our filings with the Securities and
Exchange Commission, including our Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K.




GLOBALSTAR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
(unaudited)
                                                                
                                                  Three Months Ended June 30,
                                                  2013           2012
Revenue:                                                         
Service revenues                                   $15,409      $14,150
Subscriber equipment sales                         4,426         5,831
Total revenue                                      19,835        19,981
Operating expenses:                                              
Cost of services (exclusive of depreciation,       7,205         7,542
amortization and accretion shown separately below)
Cost of subscriber equipment sales                 3,587         3,701
Cost of subscriber equipment sales - reduction in  --           49
the value of inventory
Marketing, general, and administrative             6,577         7,018
Reduction in the value of long-lived assets        --           7,139
Contract termination charge                        --           22,048
Depreciation, amortization, and accretion          22,067        15,888
Total operating expenses                           39,436        63,385
Loss from operations                               (19,601)      (43,404)
Other income (expense):                                          
Loss on extinguishment of debt                     (47,240)      --
Loss on future equity issuance                     (13,969)      --
Interest income and expense, net of amounts        (15,216)      (3,781)
capitalized
Derivative gain (loss)                             (29,903)      20,432
Other                                              (224)         (632)
Total other expense                                (106,552)     16,019
Loss before income taxes                           (126,153)     (27,385)
Income tax expense                                 119           148
Net loss                                           $(126,272)   $(27,533)
                                                                
Loss per common share:                                           
Basic                                              $(0.25)      $(0.07)
Diluted                                            (0.25)        (0.07)
                                                                
Weighted-average shares outstanding                              
Basic                                              496,169       379,433
Diluted                                            496,169       379,433




GLOBALSTAR, INC.
RECONCILIATION OF GAAP NET LOSS TO ADJUSTED EBITDA
(Dollars in thousands)
(unaudited)
                                                                
                                                  Three Months Ended June 30,
                                                  2013           2012
                                                                
Net loss                                           $(126,272)   $(27,533)
                                                                
Interest income and expense, net                   15,216        3,781
Derivative (gain) loss                             29,903        (20,432)
Income tax expense                                 119           148
Depreciation, amortization, and accretion          22,067        15,888
EBITDA                                             (58,967)      (28,148)
                                                                
Reduction in the value of long-lived assets and    --           7,188
inventory
Non-cash compensation                              335           320
Research and development                           125           55
Severance                                          --           21
Foreign exchange and other                         224           632
Thales arbitration expenses                        --           774
Contract termination charge                        --           22,048
Loss on extinguishment of debt                     47,240        --
Loss on future equity issuance                     13,969        --
Adjusted EBITDA (1)                                $2,926       $2,890


(1) EBITDA represents earnings before interest, income taxes, depreciation,
amortization, accretion and derivative (gains)/losses. Adjusted EBITDA
excludes non-cash compensation expense, reduction in the value of assets,
foreign exchange (gains)/losses, R&D costs associated with the development of
new consumer products, and certain other significant charges. Management uses
Adjusted EBITDA in order to manage the Company's business and to compare its
results more closely to the results of its peers. EBITDA and Adjusted EBITDA
do not represent and should not be considered as alternatives to GAAP
measurements, such as net income. These terms, as defined by us, may not be
comparable to a similarly titled measures used by other companies.

The Company uses Adjusted EBITDA as a supplemental measurement of its
operating performance because, by eliminating interest, taxes and the non-cash
items of depreciation and amortization, the Company believes it best reflects
changes across time in the Company's performance, including the effects of
pricing, cost control and other operational decisions.The Company's
management uses Adjusted EBITDA for planning purposes, including the
preparation of its annual operating budget.The Company believes that Adjusted
EBITDA also is useful to investors because it is frequently used by securities
analysts, investors and other interested parties in their evaluation of
companies in similar industries. As indicated, Adjusted EBITDA does not
include interest expense on borrowed money or depreciation expense on our
capital assets or the payment of income taxes, which are necessary elements of
the Company's operations.Because Adjusted EBITDA does not account for these
expenses, its utility as a measure of the Company's operating performance has
material limitations.Because of these limitations, the Company's management
does not view Adjusted EBITDA in isolation and also uses other measurements,
such as net income, revenues and operating profit, to measure operating
performance.




GLOBALSTAR, INC.
SCHEDULE OF SELECTED OPERATING METRICS
(Dollars in thousands, except subscriber and ARPU)
(unaudited)
                                              
                   Three Months Ended June 30,
                   2013                2012
                   Service   Equipment Service   Equipment
Revenue                                        
Duplex              $5,363  $1,923  $4,490  $682
SPOT                6,853    938      6,496    1,727
Simplex             1,634    1,346    1,354    2,992
IGO                 256      179      195      285
Other               1,303    40       1,615    145
                   $15,409 $4,426  $14,150 $5,831
                                              
Average Subscribers                            
Duplex              83,974            89,433   
SPOT                213,788           218,522  
Simplex             201,834           156,519  
IGO                 40,360            42,325   
                                              
ARPU (1)                                       
Duplex              $21.29           $16.74  
SPOT                10.69             9.91     
Simplex             2.70              2.88     
IGO                 2.11              1.54     


(1) Average monthly revenue per user (ARPU) measures service revenues per
month divided by the average number of subscribers during that month. Average
monthly revenue per user as so defined may not be similar to average monthly
revenue per unit as defined by other companies in the Company's industry, is
not a measurement under GAAP and should be considered in addition to, but not
as a substitute for, the information contained in the Company's statement of
income. The Company believes that average monthly revenue per unit provides
useful information concerning the appeal of its rate plans and service
offerings and its performance in attracting and retaining high value
customers.

CONTACT: Investor contact information:
         LHA
         Jody Burfening/Carolyn Capaccio
         (212) 838-3777
         ccapaccio@lhai.com

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