Globalstar Post Increased Net Loss but Increased EBITDA in 1st Quarter 2014
Covington, LA , May 8, 2014- Mobile satellite services operator Globalstar, Inc. reported a net loss of US$ 250.5 million for the first quarter of 2014, driven almost entirely from non-cash sources, compared to US$25.1 million for the first quarter of 2013. Adjusted EBITDA was US$ 3.8 million for the first quarter of 2014 compared to $2.5 million in the first quarter of 2013, an increase of 54%.
Revenue was US$ 20.5 million for the first quarter of 2014 compared to US$ 19.3 million for the first quarter of 2013, an increase of 6%, which was due to increases in both service revenue and subscriber equipment sales revenue.
Service revenue was US$16.2 million for the first quarter of 2014 compared to US$15.4 million for the first quarter of 2013, an increase of 6%. The primary driver for this increase was a 21% increase in Duplex revenue. The growth in Duplex service revenue was driven by improved network performance leading to higher minutes of use and an increase in the number of revenue-generating subscribers compared to the first quarter of 2013.
Service revenue for both SPOT and Simplex during the first quarter of 2014 remained relatively flat compared to the first quarter 2013. The increase in Duplex service revenue was offset partially by decreases in other service revenue. Other service revenue decreased to US$ 1.2 million for the first quarter of 2014 compared to $1.4 million for the first quarter of 2013, a decrease of 15%. This decrease was due to a decline in revenue generated from non-core operations.
Subscriber equipment sales revenue was US$ 4.3 million in the first quarter of 2014, an increase of 9% from the first quarter of 2013. Duplex equipment sales revenue increased nearly 22% from the first quarter of 2013, which was driven primarily by the continued success of the SPOT Global Phone. SPOT equipment sales revenue increased 54%, or $0.5 million, due to sales of SPOT Gen 3™ and the newly launched SPOT Trace. Comparing the first quarter of 2014 to the same period in 2013, commercial Simplex equipment sales revenue decreased $0.3 million.
Net loss increased during the first quarter of 2014 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 by a 50% increase in the company’s stock price during the first quarter of 2014. The company reported a net loss of $250.5 million for the first quarter of 2014, driven almost entirely from non-cash sources, compared to $25.1 million for the first quarter of 2013. The increased net loss was due also to a loss on extinguishment of debt, which was driven by the value of the equity issued in connection with note conversions during the first quarter of 2014. Higher interest and depreciation expense also contributed to the increase in net loss.
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