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Exhibit 99

 

ORBCOMM ANNOUNCES FOURTH QUARTER AND FULL YEAR 2015 RESULTS

 

2015 Total Revenues of $178.3 Million Increased 85% Year-Over-Year with 17% Organic Growth –

– Adjusted EBITDA of $11.9 Million in Q4 and $42.3 Million for 2015 –

Successful Launch of 11 OG2 Satellites Completes Second Generation Constellation –

 

Rochelle Park, NJ, March 9, 2016 – ORBCOMM Inc. (NASDAQ: ORBC), a global provider of Machine-to-Machine (M2M) and Internet of Things (IoT) solutions, today announced financial results for the fourth quarter and full year ended December 31, 2015.

The following financial highlights are in thousands of dollars.

 

 

 

 

 

 

 

Three months ended December 31,

 

Twelve months ended December 31,

 

 

2015

2014

 

2015

2014

Service Revenues

 

$27,140

$15,183

 

$99,973

$59,695

Product sales

 

$17,856

$14,285

 

$78,320

$36,547

Total Revenues

 

$44,996

$29,468

 

$178,293

$96,242

Net Income (Loss) attributable to ORBCOMM Inc. Common Stockholders

 

$230

($5,641)

 

($13,287)

($4,721)

Net Income (Loss) – Ex-Items, attributable to ORBCOMM Inc. Common Stockholders (1,5)

 

$972

($2,830)

 

$4,264

($297)

Basic EPS

 

$0.00

($0.09)

 

($0.19)

($0.08)

Basic EPS – Ex-Items (2,5)

 

$0.01

($0.04)

 

$0.06

($0.01)

EBITDA (3,5)

 

$9,535

$1,205

 

$19,443

$9,331

Adjusted EBITDA (4,5)

 

$11,895

$5,154

 

$42,307

$17,704

 

 

 

 

 

 

 

 

 

(1) Net Income (Loss) – Ex-Items, attributable to ORBCOMM Inc. Common Stockholders is defined as Net Income (Loss) attributable to ORBCOMM Inc. Common Stockholders, excluding Impairment Loss-satellite network, and Acquisition-related and integration costs.

(2) Basic EPS – Ex-Items is defined as Basic EPS excluding Impairment Loss-satellite network, and Acquisition-related and integration costs.

(3) EBITDA is defined as earnings attributable to ORBCOMM Inc. before interest income (expense), loss on debt extinguishment, provision for income taxes and depreciation and amortization.

(4) Adjusted EBITDA is defined as EBITDA, adjusted for stock-based compensation expense, noncontrolling interests, impairment loss, non-capitalized satellite launch and in-orbit insurance, insurance recovery, and acquisition-related and integration costs.

(5) A table presenting Net Income (Loss) – Ex-Items, attributable to ORBCOMM Inc. Common Stockholders, EBITDA and Adjusted EBITDA, reconciled to GAAP Net Income and Basic EPS – Ex-Items reconciled to GAAP Basic EPS, is among other financial tables at the end of this release.

 

 

1

 


 

“2015 has been our most significant year to date, not only based on our solid financial performance but also our strong market position as a leading global provider of M2M and IoT solutions,” said Marc Eisenberg, ORBCOMM’s Chief Executive Officer. “From new customer wins, to executing on our large deployments, to the integration of our three acquisitions, to continued innovation, as well as the completion of our advanced OG2 satellite constellation, ORBCOMM has a great deal of momentum. With our flexibility, dynamic capabilities and global footprint, backed by our incredible technical strength, ORBCOMM is well positioned for 2016 and beyond.”

 

“The fourth quarter marked another high-performance quarter for ORBCOMM, with Revenue growth translating into improving profitability. Service Revenues increased 79% over the prior year, boosted by both acquisitions and organic growth as we continue to install and activate the hardware sold,” said Robert Costantini, ORBCOMM’s Chief Financial Officer.  “Adjusted EBITDA of $11.9 million increased 131% over the prior year with healthy margin expansion to 26%, reflecting our operating leverage as we scale the business.”

 

 

Recent Highlights:

 

Financial Highlights

 

 

·

For Q4 of 2015, Total Revenues of $45.0 million were up 53% year-over-year.   Service Revenues increased 79% over the prior year period to $27.1 million and Product Sales of $17.9 million, were 25% higher than the prior year period.  For the full year 2015, Total Revenues were $178.3 million, up 85% over last year, with 17% organic growth on a constant currency basis.  

 

 

·

For Q4 of 2015, Adjusted EBITDA was $11.9 million, an increase of $6.7 million or 131% over the prior year period.  Full year 2015 Adjusted EBITDA totaled $42.3 million, up $24.6 million or 139% compared to the prior year.  

 

 

·

ORBCOMM’s Q4 2015 Net Income of $0.2 million improved $5.9 million compared to the Net (Loss) of ($5.6) million in last year’s fourth quarter.  For the full year 2015, ORBCOMM’s Net (Loss) of ($13.3) million due to a satellite impairment charge of $12.7 million, and increases in Depreciation and Amortization of $15.7 million, compared to a Net (Loss) of ($4.7) million in 2014.

 

Net Income (Loss) Ex-Items (see non-GAAP reconciliation table at the end of this release),  excluding Acquisition-Related and Integration costs and Impairment charges was Net Income – Ex-Items of $1.0 million for the fourth quarter of 2015 compared to a Net (Loss) – Ex-Items of ($2.8) million for the same period last year.  For the full year 2015, Net Income – Ex-Items was $4.3 million compared to a Net (Loss) – Ex-Items of ($0.3) million for the year in 2014.

 

 

·

Net subscriber communicator additions for ORBCOMM were 239,000 in Q4 of 2015, including over 200,000 subscribers being added from the acquisition of WAM Technologies in the quarter, taking the total billable subscriber communicators to 1,569,000 at December 31, 2015, which compares to 976,000 at the end of last year; a 61% increase year-over-year.

 

 

 


 

Launch Highlights

 

 

·

On December 21, 2015, ORBCOMM successfully launched eleven second generation OG2 satellites from Cape Canaveral, Florida. After undergoing extensive In-Orbit Testing to verify that all subsystems are properly functioning all eleven satellites are providing commercial M2M messaging and Automatic Identification System (AIS) services as of March 1, 2016.

 

Customer Highlights

 

 

·

On January 28, 2016, ORBCOMM announced that it was selected by Terex Materials Processing, a business segment of Terex Corporation (Terex), to deliver a customized end-to-end telematics solution to track and monitor Powerscreen® and Terex® Finlay machines. ORBCOMM’s comprehensive dual-mode solution will provide global satellite data service combined with cellular connectivity through ORBCOMM’s wireless partner, AT&T, along with state-of-the-art hardware and a robust web-based platform for asset management. Terex Materials Processing has officially begun offering the factory installed deployment of ORBCOMM’s telematics system on its machinery and expects to standardize the solution across several different models that ship from its primary factory in Ireland.

 

 

·

On February 11, 2016, ORBCOMM announced that Lockheed Martin’s Aeronautics Division has selected ORBCOMM’s turnkey iApp platform as a replacement to their existing RFID-based data collection solution. ORBCOMM’s robust iApp platform will enable automated data capture, processing, traceability and analysis of assets located at global storage sites managed by Lockheed Martin, their partners and their sellers.

 

 

·

On February 25, 2016 and March 3, 2016, ORBCOMM announced that it has added Bay and Bay Transportation (Bay and Bay) and Commercial Trailer Leasing (CTL) respectively to its customer portfolio. Founded in 1959, Bay and Bay is a premier trucking and logistics provider and a leader in the temperature-control market with extensive reach across the United States.  ORBCOMM will provide Bay and Bay with industry-leading telematics solutions to track and monitor its mixed fleet, including dry van and refrigerated trailers as well as dry tank assets, which are used to transport a variety of non-food grade materials. ORBCOMM will provide CTL, a New Jersey-based lessor of trailers, with its solar-powered asset tracking solution for select customers on their dry van trailers. ORBCOMM's solution will provide wireless connectivity through ORBCOMM's state-of-the-art hardware and a web-based reporting platform for optimal fleet management.

 

Product Highlights

 

 

·

On January 26, 2016, ORBCOMM launched the commercial availability of its new OGi IsatData Pro (IDP) core modem, which is the smallest and lowest cost IDP modem built to date utilizing the Inmarsat I-4 L-band satellites. The OGi modem is a software-defined radio that leverages the ORBCOMM satellite modem platform. With a footprint nearly 50% smaller than a credit card, both ORBCOMM’s OG2 and OGi modems utilize the same electrical and application interfaces, including the connectors, power input and programming environment. This interchangeable format enables customers to plug-n-play satellite connectivity utilizing the ORBCOMM VHF network and/or the Inmarsat L-band network without the need to redesign their M2M solutions.

 


 

 

 

·

On February 23, 2016, ORBCOMM announced additions to its fleet management portfolio. This includes the new cellular-only SkyWave IDP-782 device and the viaFleet web application for tracking, monitoring and managing trucks, railcars and other mobile assets. By leveraging ORBCOMM's extensive fleet management solutions, fleet operators can reduce fuel costs, optimize travel routes, monitor driver behavior, minimize idle times and ensure cargo and driver security.

 

 

·

On February 29, 2016, ORBCOMM announced the new release of CargoWatch® Secure, a powerful, real-time cargo security and condition monitoring solution that provides complete shipment lifecycle awareness and visibility of dry and refrigerated cargo in transit and in storage. The application is designed to traverse across a variety of transportation modes and serve multiple parties from origin to destination.

 

Industry Awards

 

 

·

On January 4, 2016, ORBCOMM was recognized by Food Logistics, the only publication dedicated exclusively to the global food and beverage supply chain, on the 12th annual FL100+ list. The FL100+ is a listing of software, hardware and IT service providers that focus on the unique technology needs of the food distribution business.

 

 

·

On January 8, 2016, ORBCOMM was named the Satellite M2M Service Provider of the Year as part of the 3rd Annual 2016 Compass Intelligence A-List in M2M Awards. ORBCOMM received the award at the Compass Intelligence press luncheon held at the Las Vegas Convention Center and World Trade Center during the 2016 International CES® trade show in Las Vegas, NV.

 

 

·

On February 4, 2016, ORBCOMM announced that it is one of four prestigious New Jersey companies to have been chosen as an honoree for the 2016 Association for Corporate Growth (ACG) NJ Corporate Conference and Awards Program. The award honors middle market companies with operations in NJ that have revenue between $5 million and $500 million and that have quantifiably grown through an innovative business model, deal or best practice.

 

For more information on recent highlights, please visit www.orbcomm.com.

 

Financial Results and Highlights

 

Revenues

 

Total Revenues for the fourth quarter of 2015 were $45.0 million compared to $29.5 million during the same period last year, an increase of 53%.  Total Revenues for the full year 2015 were $178.3 million compared to $96.2 million in 2014, an increase of 85%, with organic constant currency growth of 17%.

 


 

 

For the fourth quarter of 2015, Service Revenues were up 79% over the comparable period in 2014, to $27.1 million.  The increase in Service Revenues in Q4 of 2015 was driven by strong organic constant currency growth of 10%, as well as acquisitions. Service Revenues in Q4 of 2015 also benefitted from higher than usual installation and professional fees of $0.4 million.  For the full year 2015, Service Revenues were $100.0 million compared to $59.7 million in 2014, an increase of $40.3 million or 67%.

 

Product Sales during the fourth quarter of 2015 were $17.9 million compared to $14.3 million during the same period last year, increasing $3.6 million or 25%.  The quarterly year-over-year increase in Product Sales was aided by sales from the acquired companies.  Product Sales for the full year 2015 were $78.3 million compared to $36.5 million in 2014, an increase of $41.8 million or 114%, with solid organic constant currency growth of $12.5 million or 34%.                        

 

Direct Costs and Operating Expenses

 

Total direct costs and operating expenses for the fourth quarter of 2015 were $42.6 million compared to $32.7 million during the same period in 2014. Direct costs increased year-over-year largely due to increases in Service Revenues and costs to operate the companies acquired during the year in 2015.  Gross Profit for the fourth quarter of 2015 was $23.4 million, increasing $11.6 million or 97% compared to $11.9 million for the prior year quarter, due to the increase in Service Revenues and Product Sales.  Q4 2015 operating expenses were higher than the prior year period primarily due to expenses from the companies acquired such as acquired employees and higher Depreciation and Amortization, partially offset by lower Acquisition-Related and Integration costs in the fourth quarter of 2015 versus the prior year and the impact on a comparable basis from an asset impairment charge of $0.6 million in the fourth quarter of 2014.

 

Total direct and operating expenses for the full year 2015 were $185.5 million compared to $97.8 million in 2014.  Gross Profit for the full year 2015 was $87.8 million, increasing $40.2 million or 85% over the prior year.  

 

Income (Loss) Before Income Taxes, Net Income (Loss), and Earnings Per Share

 

Income Before Income Taxes for the fourth quarter of 2015 was $1.2 million, a significant improvement over the ($5.9) million loss for the fourth quarter of 2014.  For the full year 2015, the (Loss) Before Income Taxes was ($11.8) million compared to a ($4.1) million loss in 2014 and included $12.7 million in satellite impairment charges and increases in Depreciation and Amortization of $15.7 million in 2015.

 

Net Income attributable to ORBCOMM Inc. Common Stockholders was $0.2 million for the fourth quarter of 2015, compared to a loss of ($5.6) million for the same period in 2014.  Basic EPS was $0.00 per share for the fourth quarter of 2015 versus a loss of ($0.09) per share for the fourth quarter of 2014.  Net (Loss) attributable to ORBCOMM Inc. Common Stockholders was ($13.3) million for the full year 2015 compared to a loss of ($4.7) million in 2014.  Basic EPS was a loss of ($0.19) per share for the full year 2015 versus a loss of ($0.08) per share for 2014.  

 

 


 

Net Income (Loss) Ex-Items excluding Acquisition-Related and Integration costs and Satellite Impairment charges was $1.0 million (basic EPS – Ex-Items was $0.01) for the fourth quarter of 2015 compared to Net (Loss) – Ex-Items of ($2.8) million (basic EPS Ex-Items of a loss of ($0.04)) for the comparable period last year.  For the full year 2015, Net Income – Ex-Items was $4.3 million (basic EPS – Ex-Items was $0.06) compared to Net (Loss) – Ex-Items of ($0.3) million (basic EPS Ex-Items of a loss of ($0.01)) for 2014.

 

Net Income (Loss) – Ex-Items, attributable to ORBCOMM Inc. Common Stockholders and Basic EPS – Ex-Items are non-GAAP financial measures used by the Company. Please see the financial tables at the end of the release for a reconciliation of Net Income (Loss) – Ex-Items, attributable to ORBCOMM Inc. Common Stockholders and Basic EPS – Ex-Items.

 

EBITDA and Adjusted EBITDA

 

EBITDA for the fourth quarter of 2015 was $9.5 million compared to $1.2 million in the fourth quarter of 2014.  For the full year 2015, EBITDA was $19.4 million compared to $9.3 million in 2014, an increase of $10.1 million or 108%.

 

Adjusted EBITDA of $11.9 million for the fourth quarter of 2015 compared to $5.2 million in the fourth quarter of 2014, an increase of $6.7 million or 131%.  For the full year 2015, Adjusted EBITDA was $42.3 million compared to $17.7 million for 2014, an increase of $24.6 million or 139%.

 

EBITDA and Adjusted EBITDA are non-GAAP financial measures used by the Company to measure operating performance and the quality of earnings. Please see the financial tables at the end of the release for a reconciliation of EBITDA and Adjusted EBITDA.

 

Balance Sheet & Cash Flow

 

At December 31, 2015, Cash and Cash Equivalents, Cash Held for Acquisition and Restricted Cash totaled $28.1 million, compared to $215.8 million at December 31, 2014, decreasing $187.7 million.  Cash decreased primarily due to the acquisitions of SkyWave, InSync and WAM Technologies and Capital Expenditures of $70.0 million mostly related to milestone and insurance payments for the OG2 program, offset by Cash from Operations of $26.1 million.

 

Investment Community Conference Call

ORBCOMM will host a conference call and webcast for the investment community this morning at 10:00 AM ET. Senior management will review the results, discuss ORBCOMM’s business, and address questions.  To access the call, domestic participants should dial 1-888-417-8516 at least ten minutes prior to the start of the call. International callers should dial 1-719-457-2689.  To hear a live web simulcast or to listen to the archived webcast following completion of the call, please visit the Company’s website at http://investors.orbcomm.com and then select “News & Events” to access the link to the call.  To listen to a telephone replay of the conference call, please dial 1-888-203-1112 domestically or 1-719-457-0820 internationally and enter reservation identification number 9246532.  The replay will be available from approximately 3:30 PM ET on March 9, 2016, through 3:30 PM ET on March 23, 2016.

 


 

 

About ORBCOMM Inc.

ORBCOMM Inc. (NASDAQ: ORBC) is a leading global provider of Machine-to-Machine (M2M) communication solutions and the only commercial satellite network dedicated to M2M. ORBCOMM’s unique combination of global satellite, cellular and dual-mode network connectivity, hardware, web reporting applications and software is the M2M industry’s most complete service offering. Our solutions are designed to remotely track, monitor, and control fixed and mobile assets in core vertical markets including transportation & distribution, heavy equipment, industrial fixed assets, oil & gas, maritime, mining and government.

 

With nearly 20 years of innovation and expertise in M2M, ORBCOMM has more than 1.5 million subscribers with a diverse customer base including premier OEMs such as Caterpillar Inc., Doosan Infracore America, Hitachi Construction Machinery Co., Ltd., John Deere, Komatsu Ltd., and Volvo Construction Equipment, as well as end-to-end solutions customers such as C&S Wholesale, Canadian National Railways, CR England, Hub Group, KLLM Transport Services, Marten Transport, Swift Transportation, Target, Tropicana, Tyson Foods, Walmart, Union Pacific Railroad and Werner Enterprises. For more information, visit www.orbcomm.com.

 

Forward-Looking Statements

Certain statements discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to our plans, estimates, objectives and expectations for future events and other statements that are not historical facts. Such forward-looking statements, including those concerning the Company’s expectations and estimates, are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from the results, projected, expected or implied by the forward-looking statements, some of which are beyond the Company’s control, that may cause the Company’s actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include but are not limited to: dependence of SkyWave’s business on its commercial relationship with Inmarsat plc and the services provided by Inmarsat plc, including the continued availability of Inmarsat plc’s satellites; substantial losses we have incurred and may continue to incur; demand for and market acceptance of our products and services and the applications developed by us and our resellers; market acceptance and success of our Automatic Identification System business; dependence on a few significant customers, including a concentration in Brazil, loss or decline or slowdown in the growth in business from key customers, such as Caterpillar Inc., Hitachi Construction Machinery Co., Ltd., Komatsu Ltd., Onixsat, Satlink S.L., Sascar and Maersk Lines, other value-added resellers, or VARs, and international value-added resellers, or IVARs, and other value-added Solution Providers, or SPs; dependence on a few significant vendors or suppliers, loss or disruption or slowdown in the supply of products and services from key vendors, such as Inmarsat plc. and Sanmina Corporation; loss or decline or slowdown in growth in business of any of the specific industry sectors we serve, such as transportation, heavy equipment, fixed assets and maritime; our potential future need for additional capital to execute on our growth strategy; additional debt service acquired with or incurred in connection with existing or future business operations; our acquisitions may expose us to additional risks, such as unexpected costs, contingent or other liabilities, or weaknesses in internal controls, and expose us to issues related to non-compliance with domestic and foreign laws, particularly regarding our acquisitions of businesses domiciled in foreign countries; the terms of our credit agreement, under which we currently have borrowed $150 million and may borrow up to an additional $10

 


 

million, could restrict our business activities or our ability to execute our strategic objectives or adversely affect our financial performance; the inability to effect suitable investments, alliances and acquisitions or the failure to integrate and effectively operate the acquired businesses; fluctuations in foreign currency exchange rates; the inability of our subsidiaries, international resellers and licensees to develop markets outside the United States; the inability to obtain or maintain the necessary regulatory authorizations, approvals or licenses, including those that must be obtained and maintained by third parties, for particular countries or to operate our satellites; technological changes, pricing pressures and other competitive factors; in-orbit satellite failures or reduced performance of our existing satellites; the failure of our system or reductions in levels of service due to technological malfunctions or deficiencies or other events; significant liabilities created by products we sell; litigation proceedings; inability to operate due to changes or restrictions in the political, legal, regulatory, government, administrative and economic conditions and developments in the United States and other countries and territories in which we provide our services; ongoing global economic instability and uncertainty; and changes in our business strategy. In addition, specific consideration should be given to various factors described in Part I, Item 1A. “Risk Factors” and Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2015, and other documents, on file with the Securities and Exchange Commission. The Company undertakes no obligation to publicly revise any forward-looking statements or cautionary factors, except as required by law.

 

 

Contacts

Investor Inquiries:

Media Inquiries:

Michelle Ferris

Chuck Burgess

Director of Corporate Communications

President

ORBCOMM Inc.

The Abernathy MacGregor Group

703-433-6516

212-371-5999

ferris.michelle@orbcomm.com

clb@abmac.com

 

 

 

 

 

 

 

 


 


 

ORBCOMM Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share data)

 

 

 

December 31,

 

 

 

2015

 

 

2014

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

27,077

 

 

$

91,565

 

Cash held for acquisition

 

 

 

 

 

123,000

 

Accounts receivable, net of allowances for doubtful accounts of $1,233 and $706,

   respectively

 

 

29,816

 

 

 

23,194

 

Inventories

 

 

20,712

 

 

 

11,650

 

Prepaid expenses and other current assets

 

 

5,646

 

 

 

2,333

 

Restricted cash - current

 

 

1,000

 

 

 

 

Deferred income taxes

 

 

508

 

 

 

814

 

Total current assets

 

 

84,759

 

 

 

252,556

 

Satellite network and other equipment, net

 

 

229,970

 

 

 

180,621

 

Goodwill

 

 

112,425

 

 

 

39,870

 

Intangible assets, net

 

 

93,172

 

 

 

26,334

 

Restricted cash - non-current

 

 

 

 

 

1,195

 

Other assets

 

 

6,573

 

 

 

5,921

 

Deferred income taxes

 

 

 

 

 

51

 

Total assets

 

$

526,899

 

 

$

506,548

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

13,895

 

 

$

8,750

 

Accrued liabilities

 

 

24,186

 

 

 

20,336

 

Current portion of deferred revenue

 

 

7,652

 

 

 

3,525

 

Total current liabilities

 

 

45,733

 

 

 

32,611

 

Note payable — related party

 

 

1,241

 

 

 

1,389

 

Notes payable

 

 

150,000

 

 

 

150,000

 

Deferred revenue, net of current portion

 

 

6,024

 

 

 

2,579

 

Deferred tax liabilities

 

 

18,440

 

 

 

5,696

 

Other liabilities

 

 

5,705

 

 

 

5,764

 

Total liabilities

 

 

227,143

 

 

 

198,039

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

ORBCOMM Inc. stockholders’ equity

 

 

 

 

 

 

 

 

Series A Convertible Preferred Stock, par value $0.001; 1,000,000 shares authorized;

   35,759 and 90,973 shares issued and outstanding

 

 

357

 

 

 

909

 

Common stock, par value $0.001; 250,000,000 shares authorized; 70,613,642

   and 70,109,488 shares issued at December 31, 2015 and December 31, 2014

 

 

71

 

 

 

70

 

Additional paid-in capital

 

 

381,659

 

 

 

376,297

 

Accumulated other comprehensive income (loss)

 

 

(1,174

)

 

 

(583

)

Accumulated deficit

 

 

(81,424

)

 

 

(68,137

)

Less treasury stock, at cost, 29,990 shares at December 31, 2015 and December 31,

   2014

 

 

(96

)

 

 

(96

)

Total ORBCOMM Inc. stockholders’ equity

 

 

299,393

 

 

 

308,460

 

Noncontrolling interests

 

 

363

 

 

 

49

 

Total equity

 

 

299,756

 

 

 

308,509

 

Total liabilities and equity

 

$

526,899

 

 

$

506,548

 

 

 


 

 

ORBCOMM Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

 

 

 

Quarters Ended December 31,

 

 

Year Ended December 31,

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service revenues

 

$

27,140

 

 

$

15,183

 

 

$

99,973

 

 

$

59,695

 

Product sales

 

 

17,856

 

 

 

14,285

 

 

 

78,320

 

 

 

36,547

 

Total revenues

 

 

44,996

 

 

 

29,468

 

 

 

178,293

 

 

 

96,242

 

Cost of revenues, exclusive of depreciation and amortization

    shown below:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services

 

 

9,321

 

 

 

5,348

 

 

 

34,109

 

 

 

20,339

 

Cost of product sales

 

 

12,251

 

 

 

12,247

 

 

 

56,413

 

 

 

28,345

 

Gross profit

 

 

23,424

 

 

 

11,873

 

 

 

87,771

 

 

 

47,558

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

11,261

 

 

 

7,149

 

 

 

44,395

 

 

 

30,989

 

Product development

 

 

1,841

 

 

 

787

 

 

 

6,469

 

 

 

2,895

 

Impairment charges - satellite network

 

 

-

 

 

 

605

 

 

 

12,748

 

 

 

605

 

Depreciation and amortization

 

 

7,145

 

 

 

4,386

 

 

 

26,571

 

 

 

10,856

 

Acquisition-related and integration costs

 

 

742

 

 

 

2,206

 

 

 

4,803

 

 

 

3,819

 

Income (loss) from operations

 

 

2,435

 

 

 

(3,260

)

 

 

(7,215

)

 

 

(1,606

)

Other (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

98

 

 

 

16

 

 

 

344

 

 

 

47

 

Other income

 

 

32

 

 

 

133

 

 

 

339

 

 

 

240

 

Interest expense

 

 

(1,336

)

 

 

(146

)

 

 

(5,242

)

 

 

(149

)

Loss on debt extinguishment

 

 

 

 

 

(2,649

)

 

 

 

 

 

(2,649

)

Total other (expense) income

 

 

(1,206

)

 

 

(2,646

)

 

 

(4,559

)

 

 

(2,511

)

Income (loss) before income taxes

 

 

1,229

 

 

 

(5,906

)

 

 

(11,774

)

 

 

(4,117

)

Income taxes

 

 

913

 

 

 

(337

)

 

 

1,225

 

 

 

408

 

Net income (loss)

 

 

316

 

 

 

(5,569

)

 

 

(12,999

)

 

 

(4,525

)

Less: Net income attributable to the noncontrolling interests

 

 

77

 

 

 

54

 

 

 

252

 

 

 

159

 

Net income (loss) attributable to ORBCOMM Inc.

 

$

239

 

 

$

(5,623

)

 

$

(13,251

)

 

$

(4,684

)

Net income (loss) attributable to ORBCOMM Inc. common

   stockholders

 

$

230

 

 

$

(5,641

)

 

$

(13,287

)

 

$

(4,721

)

Per share information-basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to ORBCOMM Inc. common stockholders

 

$

0.00

 

 

$

(0.09

)

 

$

(0.19

)

 

$

(0.08

)

Per share information-diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to ORBCOMM Inc. common stockholders

 

$

0.00

 

 

$

(0.09

)

 

$

(0.19

)

 

$

(0.08

)

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

Basic

 

 

70,546

 

 

 

62,984

 

 

 

70,419

 

 

 

56,684

 

Diluted

 

 

72,209

 

 

 

62,984

 

 

 

70,419

 

 

 

56,684

 

 

 

 

 

 

 


 

ORBCOMM Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

 

 

 

Years ended December 31,

 

 

 

2015

 

 

2014

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(12,999

)

 

$

(4,525

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Change in allowance for doubtful accounts

 

 

676

 

 

 

427

 

Change in the fair values of acquisitions-related contingent consideration

 

 

(1,606

)

 

 

(2,132

)

Amortization of the fair value adjustment related to StarTrak warranty liabilities

 

 

(12

)

 

 

(164

)

Amortization and write-off of deferred debt fees

 

 

464

 

 

 

869

 

Depreciation and amortization

 

 

26,571

 

 

 

10,856

 

Impairment loss – satellite network

 

 

12,748

 

 

 

605

 

Stock-based compensation

 

 

4,620

 

 

 

3,610

 

Foreign exchange (gains) losses

 

 

(413

)

 

 

(227

)

Increase in fair value of indemnification assets

 

 

 

 

 

(126

)

Loss on settlement agreement in connection with the indemnification assets

 

 

 

 

 

97

 

Deferred income taxes

 

 

825

 

 

 

(276

)

Other

 

 

 

 

 

173

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

8,045

 

 

 

(6,882

)

Inventories

 

 

(7,953

)

 

 

(5,291

)

Prepaid expenses and other assets

 

 

(449

)

 

 

(173

)

Accounts payable and accrued liabilities

 

 

(2,995

)

 

 

5,353

 

Deferred revenue

 

 

(1,126

)

 

 

611

 

Other liabilities

 

 

(313

)

 

 

397

 

Net cash provided by operating activities

 

 

26,083

 

 

 

3,202

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Acquisition of businesses, net of cash acquired

 

 

(141,575

)

 

 

(28,883

)

Capital expenditures

 

 

(70,017

)

 

 

(45,543

)

Cash held for acquisition

 

 

123,000

 

 

 

(123,000

)

Proceeds received from settlement agreement in connection with

   indemnification assets

 

 

 

 

 

691

 

Proceeds from warranty claim on acquired inventory

 

 

 

 

 

167

 

Change in restricted cash

 

 

 

 

 

1,000

 

Net cash used in investing activities

 

 

(88,592

)

 

 

(195,568

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds received from issuance of common stock in connection with

   public offerings, net of underwriters’ discounts and commissions and

   offering costs

 

 

 

 

 

114,798

 

Proceeds received from issuance of long-term debt

 

 

10,000

 

 

 

150,000

 

Cash paid for debt issuance costs

 

 

(942

)

 

 

(3,652

)

Proceeds received from exercise of stock options

 

 

244

 

 

 

101

 

Payment of deferred purchase consideration

 

 

(1,106

)

 

 

(25

)

Principal payment of long-term debt

 

 

(10,000

)

 

 

(45,000

)

Principal payments of capital leases

 

 

 

 

 

(163

)

Net cash (used in) provided by financing activities

 

 

(1,804

)

 

 

216,059

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(175

)

 

 

(482

)

Net (decrease) increase in cash and cash equivalents

 

 

(64,488

)

 

 

23,211

 

Beginning of year

 

 

91,565

 

 

 

68,354

 

End of year

 

$

27,077

 

 

$

91,565

 

 


 

The following table reconciles our Net Income attributable to ORBCOMM Inc. to EBITDA and Adjusted EBITDA for the periods shown:

 

 

Three months ended

Twelve months ended

 

December 31,

December 31,

(in thousands)

2015

2014

2015

2014

Net Income (Loss) attributable to ORBCOMM Inc.

$239

($5,623)

($13,251)

($4,684)

Net interest expense (income)

1,238

130

4,898

102

Loss on debt extinguishment

0

2,649

0

2,649

Provision for income taxes

913

(337)

1,225

408

Depreciation and amortization

7,145

4,386

26,571

10,856

EBITDA

$9,535

$1,205

$19,443

$9,331

Stock-based compensation

1,405

987

4,620

3,610

Noncontrolling interests

77

54

252

159

Acquisition-related and integration costs

742

2,206

4,803

3,819

In-orbit insurance

136

97

441

180

Impairment loss – satellite network

0

605

12,748

605

Adjusted EBITDA

$11,895

$5,154

$42,307

$17,704

 

EBITDA is defined as earnings attributable to ORBCOMM Inc. before interest income (expense), loss on debt extinguishment, provision for income taxes and depreciation and amortization. ORBCOMM believes EBITDA is useful to its management and investors in evaluating operating performance because it is one of the primary measures used to evaluate the economic productivity of the Company’s operations, including its ability to obtain and maintain its customers, its ability to operate its business effectively, the efficiency of its employees and the profitability associated with their performance. It also helps ORBCOMM’s management and investors to meaningfully evaluate and compare the results of the Company’s operations from period to period on a consistent basis by removing the impact of its financing transactions and the depreciation and amortization impact of capital investments from its operating results. In addition, ORBCOMM management uses EBITDA in presentations to its board of directors to enable it to have the same measurement of operating performance used by management and for planning purposes, including the preparation of the annual operating budget. The Company also believes that EBITDA, adjusted for Stock-based compensation expense, noncontrolling interests, impairment loss, non-capitalized satellite launch and in-orbit insurance, insurance recovery, and acquisition-related and integration costs is useful to investors to evaluate the Company’s core operating results and financial performance and its capacity to fund capital expenditures, because it excludes items that are significant non-cash or non-recurring expenses reflected in the Condensed Consolidated Statements of Operations. Adjusted EBITDA Margin equals Adjusted EBITDA divided by Total Revenues.  EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are not performance measures calculated in accordance with accounting principles generally accepted in the United States, or GAAP. While ORBCOMM considers EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin to be important measures of operating performance, they should be considered in addition to, and not as a substitute for, or superior to, Net Income or other measures of financial performance prepared in accordance with GAAP and may be different than EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin measures presented by other companies. A reconciliation table is presented above.

 

 


 

The following table reconciles our Net Income (Loss) attributable to ORBCOMM Inc. Common Stockholders to Net Income (Loss) – Ex-Items, attributable to ORBCOMM Inc. Common Stockholders and Basic EPS to Basic EPS – Ex-Items for the periods shown:

 

 

 

 

Three months ended

 

Twelve months ended

 

 

December 31,

December 31,

 

(in thousands except per share data)

2015

2014

2015

2014

Net Income (Loss) attributable to ORBCOMM Inc. Common Stockholders

$230

($5,641)

($13,287)

($4,721)

Impairment Loss – satellite network

0

605

12,748

605

Acquisition-related and integration costs

742

2,206

4,803

3,819

Net Income (Loss) – Ex-Items attributable to ORBCOMM Inc. Common Stockholders

$972

($2,830)

$4,264

($297)

 

Basic EPS

 

$0.00

 

($0.09)

 

($0.19)

 

($0.08)

Impact of Adjustments on Basic EPS

$0.01

$0.04

$0.25

$0.08

Basic EPS – Ex-Items

$0.01

($0.04)

$0.06

($0.01)

 

Net Income (Loss) – Ex-Items attributable to ORBCOMM Inc. Common Stockholders is defined as Net Income (Loss) attributable to ORBCOMM Inc. Common Stockholders, excluding Impairment Loss-satellite network, and Acquisition-related and integration costs.  Basic EPS – Ex-Items is defined as Basic EPS excluding Impairment Loss-satellite network, and Acquisition-related and integration costs.  Net Income (Loss) – Ex-Items attributable to ORBCOMM Inc. Common Stockholders and Basic EPS – Ex-Items are non-GAAP financial measures used by the Company.  These non-GAAP financial measures are used as a means to evaluate period-to-period comparisons.  These non-GAAP measures are presented in this press release as management believes that they will provide investors with a means of evaluating, and an understanding of how management evaluates, the Company’s performance and results on a comparable basis that is not otherwise apparent on a GAAP basis, since many non-recurring, infrequent or non-cash items that management believes are not indicative of the core performance of the business may not be excluded when preparing financial measures under GAAP.  These non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with GAAP, or may be different from similarly titled measures reported by other companies.  A reconciliation table is presented above.