Globalstar Announces 2013 Fourth Quarter and Annual Results

Globalstar Announces 2013 Fourth Quarter and Annual Results

Highlights Include Significant Increases in Total Revenue; Increases in Duplex
Metrics Such as Subscriber Additions, Service Revenue and ARPU; and a
Substantial Increase in Adjusted EBITDA

COVINGTON, La., March 11, 2014 (GLOBE NEWSWIRE) -- Globalstar, Inc.
(OTCQB:GSAT) today announced its financial results for the three-month and
twelve-month periods ended December 31, 2013.

FOURTH QUARTER FINANCIAL REVIEW

Jay Monroe, Chairman and CEO of Globalstar, commented, "2013 represents a
truly historic year for Globalstar and, after a multi-year period marked by
numerous difficulties and delays, this year we were able to emerge with a
fully operational second-generation constellation, a materially improved
balance sheet and liquidity position, improved growth profile including
rapidly increasing Adjusted EBITDA and the initiation of an important
regulatory proceeding for our Terrestrial Low Power Service ("TLPS"). I am
proud of the Company's ability to navigate through many issues during 2013 and
to have successfully removed many impediments. The Company is on a renewed
path to prosperity leveraging its unique set of assets and capabilities."

Revenue

Revenue was $21.0 million for the fourth quarter of 2013 compared to $19.1
million for the fourth quarter of 2012, an increase of 10%, which was due to
increases in both service revenue and subscriber equipment revenue.

Service revenue was $16.8 million for the fourth quarter of 2013 compared to
$15.3 million for the fourth quarter of 2012, an increase of $1.5 million, or
10%. The primary driver of this increase was growth in Duplex revenue, which
increased $1.5 million, or 33%. The growth in Duplex service revenue was due
to improved network performance driving higher minutes of use, a 16% increase
in revenue-generating subscribers, and an almost 90% increase in gross
activations over the fourth quarter of 2012. These factors drove a 35%
increase in Duplex ARPU to $24.97. Fourth quarter 2013 service revenue growth
also reflected, to a lesser extent, both SPOT and Simplex revenue growth,
which increased 2% and 13%, respectively. The increases in Duplex, SPOT and
Simplex service revenue were offset partially by decreases in other service
revenue. Other service revenue decreased to $1.1 million for the fourth
quarter of 2013 compared to $1.7 million for the fourth quarter of 2012, a
decrease of $0.6 million, or 33%. This decrease was due to a decline in
revenue generated from various non-core operations, including a line of
business in certain of our European markets and third party revenue as we
transition wholesale subscribers back to our network.

Subscriber equipment sales revenue was $4.2 million in the fourth quarter of
2013, an increase of 13% from the fourth quarter of 2012. Consistent with
trends the Company has experienced throughout 2013, Duplex equipment sales
revenue increased nearly 70%, or $0.6 million, from the fourth quarter of
2012, which was due to recapturing MSS market share driven by new sales of our
Duplex GSP 1700 satellite phone and the SPOT Global Phone. SPOT equipment
sales revenue also increased 30%, or $0.3 million, due in large part to the
successful introduction of SPOT Gen 3™ at the end of the third quarter 2013
and the SPOT Trace in November 2013. Comparing the fourth quarter of 2013 to
the same period in 2012, Simplex equipment sales revenue decreased $0.5
million due to the change in the mix of products sold during the respective
quarters.

Net Loss

Net loss increased during the fourth quarter of 2013 reflecting the impact of
substantial non-cash charges resulting from an increase in the value of the
Company's derivative instruments, which was driven primarily from a 61%
increase in the Company's stock price during the fourth quarter of 2013. The
Company reported a net loss of $234.8 million for the fourth quarter of 2013
compared to $19.0 million for the fourth quarter of 2012. The increased net
loss was due also to several other non-cash items, such as higher interest
expense driven by decreases in the amount of interest being capitalized and
note conversion activity, as well as higher depreciation expense as the
Company placed additional satellites into service during 2013.

Adjusted EBITDA

Adjusted EBITDA was $3.9 million for the fourth quarter of 2013 compared to
$2.5 million in the fourth quarter of 2012, an increase of 58%. This increase
was due to a $1.9 million increase in revenue offset by a $0.5 million
increase in total operating expenses (excluding EBITDA adjustments). The
increase in operating expense was due primarily to investments made for sales
and marketing initiatives, including expanding the Company's distribution
network and additional advertising spend associated with new product launches.

OPERATIONAL AND REGULATORY UPDATE

Regulatory Reform for Terrestrial Spectrum Authority

  *On November 1, 2013, the FCC voted unanimously to release proposed rules
    that would permit Globalstar to provide low-power terrestrial mobile
    broadband services over 22 MHz of spectrum, including 11.5 MHz of
    Globalstar's licensed S‐band spectrum at 2483.5-2495 MHz, as well as the
    non-exclusive use of the adjacent 10.5 MHz of unlicensed spectrum at
    2473‐2483.5 MHz. The comment period ends May 5, 2014 following the
    February 24, 2014 publication of the proposal in the Federal Register with
    reply comments due June 4, 2014.

Product Developments

  *In November 2013, Globalstar introduced SPOT Trace, a consumer-focused
    anti-theft asset tracking device. SPOT Trace helps ensure cars,
    motorcycles, boats, ATVs, snowmobiles and other valuable assets are
    constantly monitored with a notification alert system when improper
    movement is detected.
  *In January 2014, Globalstar announced Sat-Fi, a revolutionary new
    technology that the Company intends to bring to market during the second
    quarter of 2014. Sat-Fi will permit customers to use their existing
    smartphones and other Wi-Fi enabled devices to communicate over
    Globalstar's satellite system.
  *In February 2014, Globalstar announced STX3, a Simplex satellite global
    transmitter featuring the world's lowest power-consuming technology for
    global M2M solutions.

2013 FINANCIAL REVIEW

Revenue increased to $82.7 million during 2013 compared to $76.3 million for
2012. Service revenue for 2013 increased 12% to $64.6 million compared to
$57.5 million in 2012 while equipment sales revenue decreased slightly to
$18.1 million from $18.9 million in 2012. Net loss increased to $591.1 million
compared to $112.2 million in 2012 due primarily to non-cash items, including
an increase in the value of the Company's derivative instruments, which was
driven by the more than 400% increase in the Company's stock price during
2013, and other non-cash debt transactions, including the recognition of
non-cash losses on extinguishment of debt resulting from transactions executed
in connection with the refinancing of its 5.75% Notes in May 2013 and the
Amended and Restated Loan Agreement with Thermo in July 2013. Net loss also
increased during 2013 due to other non-cash items, including primarily higher
interest and depreciation expense. Adjusted EBITDA during 2013 increased 21%
to $11.9 million from $9.8 million in 2012. This improvement was due to growth
in service revenue, offset partially by increases in operating costs due
primarily to strategic investments in the Company's sales and marketing
initiatives and in its gateway infrastructure.

Mr. Monroe concluded, "Globalstar is well positioned in the evolving world of
communications with a restored global constellation, new product suite and an
ongoing TLPS regulatory process which will provide the nation with an
incremental 22 MHz of terrestrial spectrum for broadband services. TLPS offers
a controlled, managed terrestrial service with superior throughput and quality
of service characteristics without the limitations of highly compromised
public Wi-Fi channels. We look forward to significant operating growth in our
Duplex, SPOT and Simplex business lines and to clearing the important
milestones of our process before the FCC."

CONFERENCE CALL

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


Details are as follows:
Conference Call: 5:00 p.m. EDT
                
                 Investors and the media are encouraged to listen to the call
                through the Investor Relations section of the Company's
                 website at www.globalstar.com/investors.
                
                 If you would like to participate in the live question and
                 answer session following the Company's conference call,
                please dial 1 (800) 708-4540 (US and Canada), 1 (847)
                 619-6397 (International) and use the participant pass code
                 36721314.
                
Audio Replay:    A replay of the earnings call will be available for a limited
                 time and can be heard after 7:30 p.m. EDT on March 10, 2014.
                 Dial: 1 (888) 843-7419 (US and Canada), 1 (630) 652-3042
                 (International) and pass code 3672 1314#


About Globalstar, Inc.

Globalstar provides 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, 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 are accurate 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 December Twelve Months Ended
                         31,                         December 31,
                        2013           2012         2013         2012
Revenue:                                                       
Service revenues         $16,789      $15,323    $64,644    $57,468
Subscriber equipment     4,205         3,739       18,067      18,850
sales
Total revenue            20,994        19,062      82,711      76,318
Operating expenses:                                            
Cost of services
(exclusive of
depreciation,            7,297         7,853       30,210      30,071
amortization, and
accretion shown
separately below)
Cost of subscriber       2,948         2,816       13,623      13,280
equipment sales
Cost of subscriber
equipment sales -        5,794         439         5,794       1,397
reduction in the value
of inventory
Marketing, general, and  7,308         6,434       29,888      27,496
administrative
Reduction in the value   --           --         --         7,218
of long-lived assets
Contract termination     --           --         --         22,048
charge
Depreciation,
amortization, and        24,478        20,524      90,592      69,801
accretion
Total operating expenses 47,825        38,066      170,107     171,311
Loss from operations     (26,831)      (19,004)    (87,396)    (94,993)
Other expense:                                                 
Gain (loss) on           1,717         --         (109,092)   --
extinguishment of debt
Loss on equity issuance  --           --         (16,701)    --
Interest income and
expense, net of amounts  (27,959)      (8,090)     (67,828)    (21,486)
capitalized
Derivative gain (loss)   (179,087)     9,535       (305,999)   6,974
Other                    (1,839)       (1,341)     (2,962)     (2,280)
Total other income       (207,168)     104         (502,582)   (16,792)
(expense)
Loss before income taxes (233,999)     (18,900)    (589,978)   (111,785)
Income tax expense       798           52          1,138       413
Net loss                 $ (234,797)   $(18,952)  $ (591,116) $ (112,198)
                                                              
Loss per common share:                                         
Basic                    $(0.36)      $(0.05)    $(0.96)    $(0.29)
Diluted                  (0.36)        (0.05)      (0.96)      (0.29)
                                                              
Weighted-average shares                                        
outstanding
Basic                    779,483       424,180     614,959     388,453
Diluted                  779,483       424,180     614,959     388,453


GLOBALSTAR, INC.
RECONCILIATION OF GAAP NET LOSS TO ADJUSTED EBITDA
(Dollars in thousands)
(unaudited)
                                                              
                        Three Months Ended December Twelve Months Ended
                         31,                         December 31,
                        2013           2012         2013         2012
                                                              
Net loss                 $ (234,797)   $(18,952)  $ (591,116) $ (112,198)
                                                              
Interest income and      27,959        8,090       67,828      21,486
expense, net
Derivative (gain) loss   179,087       (9,535)     305,999     (6,974)
Income tax expense       798           52          1,138       413
Depreciation,
amortization, and        24,478        20,524      90,592      69,801
accretion
EBITDA                   (2,475)       179         (125,559)   (27,472)
                                                              
Reduction in the value
of long-lived assets and 5,794         439         5,794       8,615
inventory
Non-cash compensation    403           341         2,282       1,322
Research and development 98            120         572         336
Severance                --           5           5           51
Foreign exchange and     1,839         1,341       2,962       2,280
other
Thales arbitration       --           72          --         1,803
expenses
Contract termination     --           --         --         22,048
charge
Gain (loss) on           (1,717)       --         109,092     --
extinguishment of debt
Loss on equity issuance  --           --         16,702      --
Write off of deferred    --           --         --         833
financing costs
Adjusted EBITDA (1)      $3,942       $2,497     $11,850    $9,816

(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 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/(loss). 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. 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
revenues and operating profit, to measure operating performance.

GLOBALSTAR, INC.
SCHEDULE OF SELECTED OPERATING METRICS
(Dollars in thousands, except subscriber and ARPU data)
(unaudited)
                                                                          
           Three Months Ended December 31,         Twelve Months Ended December 31,
           2013                2012                2013                2012
           Service   Equipment Service   Equipment Service   Equipment Service   Equipment
Revenue                                                                    
Duplex      $6,345  $1,409  $4,755  $836    $22,788 $6,565  $18,438 $3,447
SPOT        6,994    1,465    6,868    1,128    27,902   4,546    25,227   5,196
Simplex     2,023    1,176    1,792    1,630    7,619    5,927    6,146    9,081
IGO         290      176      223      119      1,029    841      804      990
Other       1,137    (21)     1,685    26       5,306    188      6,853    136
           $16,789 $4,205  $15,323 $3,739  $64,644 $18,067 $57,468 $18,850
                                                                          
Average                                                           
Subscribers
Duplex      84,691            85,734            84,247            88,189   
SPOT (2)    221,129           238,487           231,488           221,911  
Simplex     224,504           185,137           209,756           164,459  
IGO         39,456            41,128            40,249            42,252   
                                                                          
ARPU (1)                                                                   
Duplex      $24.97           $18.49           $22.54           $17.42  
SPOT (2)    10.54             9.60              10.04             9.47     
Simplex     3.00              3.23              3.03              3.11     
IGO         2.45              1.81              2.13              1.59     

(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 user provides
useful information concerning the appeal of its rate plans and service
offerings and its performance in attracting and retaining high value
customers.

(2) Beginning in 2013, Globalstar initiated a process to deactivate certain
suspended subscribers in its SPOT subscriber base. During the first quarter of
2013, approximately 36,000 subscribers were deactivated.

CONTACT: Investor contact information:
         Email
         investorrelations@globalstar.com
         Phone
         (985) 335-1538

company logo
 
Press spacebar to pause and continue. Press esc to stop.