Globalstar Announces 2013 Fourth Quarter and Annual Results
Covington, Louisiana, March 10, 2014--Globalstar, Inc. today announced its financial results for the three-month and twelve-month periods ended December 31, 2013. 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.
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 was US$ 21.0 million for the fourth quarter of 2013 compared to US$ 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 US$ 16.8 million for the fourth quarter of 2013 compared to US$ 15.3 million for the fourth quarter of 2012, an increase of US$ 1.5 million, or 10%. The primary driver of this increase was growth in Duplex revenue, which increased US$ 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 US$ 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 US$ 1.1 million for the fourth quarter of 2013 compared to US$ 1.7 million for the fourth quarter of 2012, a decrease of US$ 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 US$ 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 US $0.6 million, from the fourth quarter of 2012, which was due to recapturing MSS market share driven by new sales of our Duplex GSP 1700 satellite phone and the SPOT Global Phone. SPOT equipment sales revenue also increased 30%, or US$ 0.3 million, due in large part to the successful introduction of SPOT Gen 3(TM) 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 US$ 0.5 million due to the change in the mix of products sold during the respective quarters.
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 US$ 234.8 million for the fourth quarter of 2013 compared to US$ 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 was US$ 3.9 million for the fourth quarter of 2013 compared to US$ 2.5 million in the fourth quarter of 2012, an increase of 58%. This increase was due to a US $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.
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