Mobile satellite voice and data services provider Globalstar has reported that its fourth quarter revenues rose 10 percent from the year before to US$19.12 million while service revenue increased to US$15.3 million from US$13.6 million the year earlier.
However, the company still posted net loss of US$19 million for the three months ended December 31, 2012 compared to a net loss of US$33.7 million for the fourth quarter of 2011.
For its whole year 2012 operations, Globalstar said its revenue increased 5% to $76.3 million compared to US$72.8 million for 2011. Service revenue for 2012 increased 4% to US$57.5 million compared to US$55.4 million in 2011.
Globalstar said net loss increased US$57.3 million in 2012 to US$112.2 million due to non-cash items, including a reduction in derivative gains and an increase in depreciation expense, as well as an accrual for a contract termination charge and an increase in interest expense. Adjusted EBITDA in 2012 was US$9.8 million, an improvement of US$16.2 million from 2011 due to a combination of growth in both service and equipment revenue and reductions in the company's operating costs.
Jay Monroe, chairman and CEO of Globalstar, said the company has recorded its fifth consecutive quarter of positive Adjusted EBITDA, driving profitability improvement in a seasonally slow quarter.
“By leveraging operational improvements, which have been our focus during the launch of our second-generation constellation, we are turning the corner financially. We are now well positioned to drive further profitability as we complete the deployment of the world's first Low Earth Orbit second-generation constellation and complete the restoration of our industry leading Duplex service,” he said.
Globalstar said the increase in revenue during the fourth quarter was due to higher service revenue resulting from growth in the company's average SPOT subscriber base of 21%. Duplex service revenue and Simplex service revenue also increased 14% and 18%, respectively. The company said improvement in Duplex service revenue was driven by an increase in ARPU to US$18.49, an improvement of 23% over the fourth quarter of 2011.
However, subscriber equipment sales were relatively flat for the fourth quarter of 2012 compared to the fourth quarter of 2011. Duplex and Simplex equipment sales increased slightly, while sales of SPOT equipment decreased due to higher demand in 2011 from certain product releases early in that year.
In 2012, Globalstar successfully completed the fourth launch campaign for additional second-generation satellites on February 6, 2013 with its launch services provider, Arianespace. Throughout 2012, Globalstar placed all previously launched second-generation satellites into commercial service. The improved service levels helped increase total Duplex minutes of use for the year by 17%.
The company also completed the initial in-orbit systems performance review for all satellites launched in February and placed the first two satellites into commercial service in March. The remaining satellites are expected to be placed into service over the next few months.
In the meantime, Globalstar said holders of the company's 5.75% Convertible Senior Notes have the right to surrender their 5.75% Notes for purchase by Globalstar on April 1, 2013 at an aggregate purchase price of $71.8 million, payable in cash. But Globalstar currently lacks the liquidity to purchase the 5.75% Notes if they are tendered for purchase. Globalstar is currently negotiating with the note holders to restructure the terms of the 5.75% Notes, but the company added resolution of this matter is uncertain.
