– 2016 Total Revenues of $186.7 Million up 5% from $178.3 Million Last Year –
– 2016 Adjusted EBITDA Increased 12% to $47.3 Million –
– J.B. Hunt to Equip 90,000-Unit Fleet with End-to-End Tracking Solution –
- February 28, 2017
The following financial highlights are in thousands of dollars.
Three months ended |
Twelve months ended |
||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||
Service Revenues | $ | 29,427 | $ | 27,140 | $ | 112,881 | $ | 99,973 | |||||||||||
Product Sales | $ | 17,405 | $ | 17,856 | $ | 73,863 | $ | 78,320 | |||||||||||
Total Revenues | $ | 46,832 | $ | 44,996 | $ | 186,744 | $ | 178,293 | |||||||||||
Net Income (Loss) attributable |
($3,208 | ) | $ | 230 | ($23,525 | ) | ($13,287 | ) | |||||||||||
Net Income (Loss) – Ex-Items, |
($2,757 | ) | $ | 972 | ($11,215 | ) | $ | 4,264 | |||||||||||
Basic EPS | ($0.05 | ) | $ | 0.00 | ($0.33 | ) | ($0.19 | ) | |||||||||||
Basic EPS – Ex-Items (2,5) | ($0.04 | ) | $ | 0.01 | ($0.16 | ) | $ | 0.06 | |||||||||||
EBITDA (3,5) | $ | 10,453 | $ | 9,535 | $ | 28,516 | $ | 19,443 | |||||||||||
Adjusted EBITDA (4,5) | $ | 12,477 | $ | 11,895 | $ | 47,253 | $ | 42,307 | |||||||||||
(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 |
“In 2016 we continued to introduce innovative solutions for
transportation, logistics and heavy equipment, which we expect will
continue to positively impact the business in 2017 and beyond. These
include several new products, customers, partners, and geographic
territories,” said
“In the fourth quarter Service Revenues increased 8.4% to
Recent Highlights:
Financial Highlights
-
For Q4 of 2016, Total Revenues of
$46.8 million were up 4% year-over-year. Service Revenues increased 8% over the prior year period to$29.4 million . Product Sales of$17.4 million were($0.5) million or 2.5% lower than the prior year period. For the full year 2016, Total Revenues of$186.7 million grew approximately 5%, reflecting 13% growth of Service Revenues and 6% decline of Product Sales. -
For Q4 of 2016, Adjusted EBITDA improved 5% (
$0.6 million ) over the prior year period to$12.5 million and 26.6% of Total Revenues. Full year 2016 Adjusted EBITDA totaled$47.3 million , up$4.9 million or 12% compared to the prior year. Full year Adjusted EBITDA margin improved 157 basis points to 25.3% of Total Revenues. -
Net Income (Loss) for the fourth quarter of 2016 was a
($3.2) million Net Loss, compared to Net Income of$0.2 million for the fourth quarter of 2015, due to an increase in Depreciation and Amortization, higher direct Costs of Revenue, and higher Interest Expense. For the full year 2016 the Net Loss of($23.5) million includes higher Depreciation and Amortization of($16.2) million and($3.8) million more in Interest Expense. 2016 results also reflect a satellite impairment charge of($10.7) million , which is$2.1 million lower than the impairment charge incurred in 2015. -
Net subscriber communicator additions for
ORBCOMM were 37,000 in Q4 of 2016, increasing the total billable subscriber communicators to 1,724,000 atDecember 31, 2016 , which compares to 1,569,000 at the end of last year; a 9.8% increase year-over-year.
Customer and Product Highlights
-
On
February 27, 2017 ,ORBCOMM announced that it was selected byJ.B. Hunt Transport Services, Inc. , a leading global provider of Machine-to-Machine andInternet of Things communication solutions, to equip its 90,000-plus intermodal and over-the-road (OTR) trailing fleets with end-to-end tracking and monitoring. -
On
February 8, 2017 ,ORBCOMM announced that it was selected byChristenson Transportation, Inc. to provide an industry-leading logistics solution for their trailer fleet. ORBCOMM’s end-to-end solution will provide wireless connectivity through its proprietary hardware and a web-based reporting platform for optimal fleet management. -
On
January 6, 2017 ,ORBCOMM announced that it has completed regulatory approvals and thorough compatibility testing for its GT 1100-LTE devices, which are now certified compliant for use on theAT&T andT-Mobile networks. ORBCOMM’s new devices are the IoT industry’s first dual-mode LTE-enabled devices targeted for asset tracking applications.ORBCOMM began volume production shipments of the GT 1100-LTE devices in December. -
On
December 28, 2016 ,ORBCOMM announced that it was selected byCovenant Transportation Group (CTG), one of the top truckload providers inthe United States , to provide its industry-leading cold chain telematics solution to track, monitor and control its fleet of refrigerated trailers at Covenant Transport and Southern Refrigerated Transport.ORBCOMM will provide cellular connectivity, state-of-the-art hardware, wireless fuel and door sensors, along with a web-based reporting platform for optimal fleet management.
For more information on recent highlights, please visit www.orbcomm.com.
Financial Results and Highlights
Revenues
For the fourth quarter ended
Product Sales during the fourth quarter of 2016 were
Total Revenues of
Cost of Revenues and Operating Expenses
Total Cost of Revenues and Operating Expenses for the fourth quarter of
2016 were
Operating Expenses for the full year were higher primarily due to higher
Depreciation and Amortization and non-labor related SG&A expenses. For
the full year, Selling, general and administrative expense and Product
development expenses increased 4.5% to
Total Cost of Revenues and Operating Expenses for the full year 2016
were
Impairment Loss-satellite network
Fiscal 2016 results include an impairment charge of
Income (Loss) Before Income Taxes, Net Income (Loss), and Earnings Per Share
Income (Loss) Before Income Taxes for the fourth quarter of 2016 was a
Net (Loss) Income attributable to
Net Income (Loss) – Ex-Items, attributable to
EBITDA and Adjusted EBITDA
EBITDA for the fourth quarter of 2016 was
Adjusted EBITDA of
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
Investment Community Conference Call
About
With close to two decades of innovation and expertise in M2M,
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, as well as projections, business trends and other
statements that are not historical facts. Such forward-looking
statements are subject to known and unknown risks and uncertainties,
some of which are beyond the Company’s control, which 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: demand for
and market acceptance of our products and services and our ability to
successfully implement our business plan; our dependence on our
subsidiary companies (Market Channel Affiliates (MCAs)) and third party
product and service developers and providers, distributors and resellers
(
ORBCOMM Inc. | |||||||||||
Consolidated Balance Sheets | |||||||||||
(in thousands, except par value and share data) | |||||||||||
(Unaudited) | |||||||||||
December 31, | |||||||||||
2016 | 2015 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 25,023 | $ | 27,077 | |||||||
Accounts receivable, net of allowance for doubtful accounts of $1,057 and $1,233, | |||||||||||
respectively | 31,937 | 29,816 | |||||||||
Inventories | 23,217 | 20,712 | |||||||||
Prepaid expenses and other current assets | 8,031 | 5,646 | |||||||||
Restricted cash - current | - | 1,000 | |||||||||
Total current assets | 88,208 | 84,251 | |||||||||
Satellite network and other equipment, net | 215,841 | 229,970 | |||||||||
Goodwill | 114,033 | 112,425 | |||||||||
Intangible assets, net | 82,545 | 93,172 | |||||||||
Other assets | 5,447 | 3,121 | |||||||||
Deferred income taxes | 80 | 80 | |||||||||
Total assets | $ | 506,154 | $ | 523,019 | |||||||
LIABILITIES AND EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 12,481 | $ | 13,895 | |||||||
Accrued expenses | 30,431 | 24,058 | |||||||||
Current portion of deferred revenue | 7,414 | 7,652 | |||||||||
Total current liabilities | 50,326 | 45,605 | |||||||||
Note payable - related party | 1,195 | 1,241 | |||||||||
Note payable, net of unamortized deferred issuance costs | 147,458 | 146,548 | |||||||||
Deferred revenue, net of current portion | 2,978 | 6,024 | |||||||||
Deferred tax liabilities | 18,645 | 18,140 | |||||||||
Other liabilities | 3,684 | 5,705 | |||||||||
Total liabilities | 224,286 | 223,263 | |||||||||
Commitments and contingencies | |||||||||||
Equity: | |||||||||||
ORBCOMM Inc. stockholders' equity | |||||||||||
Series A Convertible Preferred Stock, par value $0.001; 1,000,000 shares authorized; | |||||||||||
36,466 and 35,759 shares issued and outstanding | 364 | 357 | |||||||||
Common stock, par value $0.001; 250,000,000 share authorized; 71,111,863 and | |||||||||||
70,613,642 shares issued at December 31, 2016 and December 31, 2015 | 71 | 71 | |||||||||
Additional paid-in capital | 386,920 | 381,659 | |||||||||
Accumulated other comprehensive (loss) | (1,089 | ) | (1,174 | ) | |||||||
Accumulated deficit | (104,949 | ) | (81,424 | ) | |||||||
Less treasury stock, at cost; 29,990 shares at December 31, 2016 and December 31, | |||||||||||
2015, respectively | (96 | ) | (96 | ) | |||||||
Total ORBCOMM Inc. stockholders' equity | 281,221 | 299,393 | |||||||||
Noncontrolling interest | 647 | 363 | |||||||||
Total equity | 281,868 | 299,756 | |||||||||
Total liabilities and equity | $ | 506,154 | $ | 523,019 | |||||||
ORBCOMM Inc. | ||||||||||||||||||||||
Consolidated Statements of Operations | ||||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||
Quarters Ended December 31, | Years Ended December 31, | |||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||||||||
Revenues: | ||||||||||||||||||||||
Service revenues | $ | 29,427 | $ | 27,140 | $ | 112,881 | $ | 99,973 | ||||||||||||||
Product sales | 17,405 | 17,856 | 73,863 | 78,320 | ||||||||||||||||||
Total revenues | 46,832 | 44,996 | 186,744 | 178,293 | ||||||||||||||||||
Cost of revenues, exclusive of depreciation and | ||||||||||||||||||||||
amortization shown below: | ||||||||||||||||||||||
Cost of services | 9,583 | 9,321 | 37,913 | 34,109 | ||||||||||||||||||
Cost of product sales | 13,169 | 12,251 | 55,037 | 56,413 | ||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||
Selling, general and administrative | 12,072 | 11,261 | 46,915 | 44,395 | ||||||||||||||||||
Product development | 1,126 | 1,841 | 6,252 | 6,469 | ||||||||||||||||||
Impairment charges - satellite network | - | 0 | 10,680 | 12,748 | ||||||||||||||||||
Depreciation and amortization | 11,135 | 7,145 | 42,803 | 26,571 | ||||||||||||||||||
Acquisition-related and integration costs | 451 | 742 | 1,630 | 4,803 | ||||||||||||||||||
(Loss) income from operations | (704 | ) | 2,435 | (14,486 | ) | (7,215 | ) | |||||||||||||||
Other (expense) income : | ||||||||||||||||||||||
Interest income | 95 | 98 | 378 | 344 | ||||||||||||||||||
Other income | 149 | 32 | 484 | 339 | ||||||||||||||||||
Interest expense | (2,470 | ) | (1,336 | ) | (9,085 | ) | (5,242 | ) | ||||||||||||||
Total other (expense) | (2,226 | ) | (1,206 | ) | (8,223 | ) | (4,559 | ) | ||||||||||||||
Income before income taxes | (2,930 | ) | 1,229 | (22,709 | ) | (11,774 | ) | |||||||||||||||
Income taxes | 148 | 913 | 517 | 1,225 | ||||||||||||||||||
Net (loss) income | (3,078 | ) | 316 | (23,226 | ) | (12,999 | ) | |||||||||||||||
Less: Net income attributable to the noncontrolling | ||||||||||||||||||||||
interests | 127 | 77 | 285 | 252 | ||||||||||||||||||
Net (loss) income attributable to ORBCOMM Inc. | $ | (3,205 | ) | $ | 239 | $ | (23,511 | ) | $ | (13,251 | ) | |||||||||||
Net (loss) income attributable to ORBCOMM Inc. | ||||||||||||||||||||||
common stockholders | $ | (3,208 | ) | $ | 230 | $ | (23,525 | ) | $ | (13,287 | ) | |||||||||||
Per share information-basic: | ||||||||||||||||||||||
Net (loss) income attributable to ORBCOMM Inc. | ||||||||||||||||||||||
common stockholders | $ | (0.05 | ) | $ | 0.00 | $ | (0.33 | ) | $ | (0.19 | ) | |||||||||||
Per share information-diluted: | ||||||||||||||||||||||
Net (loss) income attributable to ORBCOMM Inc. | ||||||||||||||||||||||
common stockholders | $ | (0.05 | ) | $ | 0.00 | $ | (0.33 | ) | $ | (0.19 | ) | |||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||||
Basic | 71,032 | 70,546 | 70,907 | 70,419 | ||||||||||||||||||
Diluted | 71,032 | 72,209 | 70,907 | 70,419 | ||||||||||||||||||
ORBCOMM Inc. | |||||||||||||||||
Consolidated Statements of Cash Flows | |||||||||||||||||
(in thousands) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2016 | 2015 | ||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||
Net (loss) | $ | (23,226 | ) | $ | (12,999 | ) | |||||||||||
Adjustments to reconcile net (loss) to net cash provided by operating activities: | |||||||||||||||||
Change in allowance for doubtful accounts | 310 | 676 | |||||||||||||||
Depreciation and amortization | 42,803 | 26,571 | |||||||||||||||
Impairment loss - satellite network | 10,680 | 12,748 | |||||||||||||||
Change in the fair values of acquisition-related contingent consideration | (360 | ) | (1,606 | ) | |||||||||||||
Amortization of the fair value adjustment related to StarTrak warranty liabilities | (57 | ) | (12 | ) | |||||||||||||
Amortization and write off of deferred debt fees | 835 | 464 | |||||||||||||||
Stock-based compensation | 5,023 | 4,620 | |||||||||||||||
Foreign exchange (gains) losses | (106 | ) | (413 | ) | |||||||||||||
Deferred income taxes | 256 | 825 | |||||||||||||||
Changes in operating assets and liabilities, net of acquisition: | |||||||||||||||||
Accounts receivable | (1,702 | ) | 8,045 | ||||||||||||||
Inventories | (1,950 | ) | (7,953 | ) | |||||||||||||
Prepaid expenses and other assets | (4,574 | ) | (449 | ) | |||||||||||||
Accounts payable and accrued liabilities | 4,893 | (2,995 | ) | ||||||||||||||
Deferred revenue | (3,332 | ) | (1,126 | ) | |||||||||||||
Other liabilities | (567 | ) | (313 | ) | |||||||||||||
Net cash provided by operating activities | 28,926 | 26,083 | |||||||||||||||
Cash flows from investing activities: | |||||||||||||||||
Acquisition of businesses, net of cash acquired | (3,452 | ) | (141,575 | ) | |||||||||||||
Capital expenditures | (28,424 | ) | (70,017 | ) | |||||||||||||
Cash held for acquisition | - | 123,000 | |||||||||||||||
Changes in restricted cash | 1,000 | - | |||||||||||||||
Other | (198 | ) | - | ||||||||||||||
Net cash used in investing activities | (31,074 | ) | (88,592 | ) | |||||||||||||
Cash flows from financing activities | |||||||||||||||||
Proceeds received from issuance of long-term debt | - | 10,000 | |||||||||||||||
Cash paid for debt issuance costs | - | (942 | ) | ||||||||||||||
Proceeds received from exercise of stock options | - | 244 | |||||||||||||||
Proceeds received from employee stock purchase plan | 345 | - | |||||||||||||||
Principal payment of long-term debt | - | (10,000 | ) | ||||||||||||||
Payment of deferred purchase consideration | (342 | ) | (1,106 | ) | |||||||||||||
Net cash provided by (used in) financing activities | 3 | (1,804 | ) | ||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 91 | (175 | ) | ||||||||||||||
Net (decrease) increase in cash and cash equivalents | (2,054 | ) | (64,488 | ) | |||||||||||||
Beginning of year | 27,077 | 91,565 | |||||||||||||||
End of year | $ | 25,023 | $ | 27,077 | |||||||||||||
Supplemental disclosures of cash flow information: | |||||||||||||||||
Cash paid for | |||||||||||||||||
Interest | $ | 8,787 | $ | 9,005 | |||||||||||||
Income taxes | $ | (94 | ) | $ | 723 | ||||||||||||
The following table reconciles our Net Income attributable to
Quarters ended | Years ended | |||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
(In thousands) | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
Adjustments to EBITDA |
||||||||||||||||||||
Net Income (Loss) attributable to ORBCOMM Inc. | ($3,205 | ) | $ | 239 | ($23,511 | ) | ($13,251 | ) | ||||||||||||
Income tax expense | 148 | 913 | 517 | 1,225 | ||||||||||||||||
Interest income | (95 | ) | (98 | ) | (378 | ) | (344 | ) | ||||||||||||
Interest expense | 2,470 | 1,336 | 9,085 | 5,242 | ||||||||||||||||
Depreciation and amortization | 11,135 | 7,145 | 42,803 | 26,571 | ||||||||||||||||
EBITDA | $ | 10,453 | $ | 9,535 | $ | 28,516 | $ | 19,443 | ||||||||||||
Adjustments to Adjusted EBITDA |
||||||||||||||||||||
Stock-based compensation | 1,199 | 1,405 | 5,023 | 4,620 | ||||||||||||||||
Noncontrolling interests | 127 | 77 | 285 | 252 | ||||||||||||||||
Acquisition-related and integration costs | 451 | 742 | 1,630 | 4,803 | ||||||||||||||||
In-orbit insurance | 247 | 136 | 1,119 | 441 | ||||||||||||||||
Impairment loss – satellite network | 0 | 0 | 10,680 | 12,748 | ||||||||||||||||
Adjusted EBITDA | $ | 12,477 | $ | 11,895 | $ | 47,253 | $ | 42,307 | ||||||||||||
EBITDA is defined as earnings attributable to
The Company also believes that Adjusted EBITDA, 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, is useful to investors to evaluate the Company’s core operating results and financial performance 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.
The following table reconciles our Net Income (Loss) attributable to
Quarters ended | Years ended | ||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||
(in thousands except per share data) | 2016 | 2015 | 2016 | 2015 | |||||||||||||||
Net Income (Loss) attributable to ORBCOMM Inc.
Common Stockholders |
($3,208 | ) | $ | 230 | ($23,525 | ) | ($13,287 | ) | |||||||||||
Impairment Loss – satellite network | - | - | 10,680 | 12,748 | |||||||||||||||
Acquisition-related and integration costs | 451 | 742 | 1,630 | 4,803 | |||||||||||||||
Net Income (Loss) – Ex-items attributable to ORBCOMM |
$(2,757 | ) | $ | 972 | $ | (11,215 | ) | $ | 4,264 | ||||||||||
Basic EPS | $ (0.05 | ) | $ | 0.00 | $ | (0.33 | ) | $ | (0.19 | ) | |||||||||
Impact of Adjustments on Basic EPS | $ 0.01 | $ | 0.01 | $ | 0.17 | $ | 0.25 | ||||||||||||
Basic EPS – Ex-Items | $ (0.04 | ) | $ | 0.01 | $ | (0.16 | ) | $ | 0.06 | ||||||||||
Net Income (Loss) – Ex-Items attributable to
Contacts
For Investors:
Michelle Ferris
Director of Corporate Communications
ORBCOMM Inc.
+703-433-6516
ferris.michelle@orbcomm.com
Financial and Trade Media:
Alan Oshiki
Executive Vice President
The Abernathy MacGregor Group
212-371-5999
aho@abmac.com