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Globalstar Announces First Quarter 2017 ResultsCOVINGTON, La., May 04, 2017 (GLOBE NEWSWIRE) -- Globalstar, Inc. (NYSE MKT:GSAT) today announced its financial results for the quarter ended March 31, 2017. Jay Monroe, Chairman and Chief Executive Officer of Globalstar, commented, “In March 2017, our SPOT business reached a significant milestone, enabling the 5,000th rescue since its launch in 2007. SPOT is currently being used by customers to initiate approximately two rescues per day, proving how essential our technology is to saving lives. Our core operations also produced meaningful financial growth with a 13% increase in total revenue as we continue to improve ARPU across all of our major types of revenue. Duplex ARPU was up 26% during the first quarter, contributing significantly to the reduction in net loss and increase in Adjusted EBITDA. We also continue to focus on product and business development through expanding our one-way and two-way product portfolio. Our efforts involve a strong group of internal engineers as well as strategic partners, such as Carmanah, who is currently designing and manufacturing a new solar powered M2M satellite product. Finally, as discussed a couple of months ago, we have initiated requests for authority to provide terrestrial services over our 16.5 MHz of licensed 2.4 GHz spectrum in several international jurisdictions. While we cannot discuss the specific countries we are pursuing, we have a strategy and we will update you as we reach milestones towards our goal." FIRST QUARTER FINANCIAL REVIEW Revenue Total revenue for the first quarter of 2017 increased by $2.9 million, or 13%, from the first quarter of 2016. This increase was driven primarily by higher service revenue resulting from increased ARPU in all major service lines. A slight increase in revenue from subscriber equipment sales also contributed to the increase in total revenue due a higher volume of SPOT units sold during the quarter. Service revenue increased $2.8 million, or 15%, in the first quarter of 2017 compared to the first quarter of 2016. This increase was driven by growth in both SPOT and Duplex service revenue, which each increased $1.3 million. Higher ARPU propelled this growth, with fluctuations in average subscribers contributing less to the quarter over quarter variances. The 26% and 10% increases in Duplex and SPOT ARPU, respectively, were due primarily to rate plan increases implemented throughout 2016 and the first quarter of 2017 for certain legacy plans to align rates with our service levels. The increase in Duplex ARPU also is attributed to continued popularity of our valuable annual, usage-based plans. These plans result in higher service revenue recognized when unused minutes expire on the anniversary date of the customer's contract. Also contributing to the increase in service revenue was a $0.4 million increase in revenue generated from services performed under a recently awarded government contract. Subscriber equipment sales revenue increased $0.1 million, or 3%, due primarily to a higher volume of SPOT units sold during the quarter, which resulted in a $0.3 million increase in SPOT equipment sales revenue. Offsetting this increase was a $0.2 million decrease in equipment sales revenue from product sales to our IGOs, which can fluctuate between periods based on demand in their respective international territories. Loss from Operations Loss from operations decreased $0.5 million, or 3%, from $15.7 million in the first quarter of 2016 to $15.2 million in the first quarter of 2017 due primarily to a $2.9 million increase in total revenue (for the reasons discussed above), offset partially by a $2.4 million increase in operating expenses. The increase in operating expenses was due in part to a higher cost of services, which was elevated due to expenses to support new product development and our second-generation ground network. Higher management, general and administrative (MG&A) costs also contributed to the increase in operating expenses due to the timing of certain items, including stock compensation expense, subscriber acquisition costs to support sales promotions, and fluctuations in bad debt recoveries and expense between the periods. Net Loss Net loss decreased $6.7 million from $26.9 million in the first quarter of 2016 compared to $20.2 million in the first quarter of 2017. The primary reason for this decrease was a $4.6 million fluctuation in non-cash derivative valuation adjustments from a derivative loss in the first quarter of 2016 to a derivative gain in the first quarter of 2017. These fluctuations were driven primarily by changes in certain valuation inputs, including stock price, stock price volatility and the remaining estimated term of the instruments. Changes in other non-cash items, such as gain on equity issuance and foreign exchange gains/losses, also contributed to the decrease in net loss. Adjusted EBITDA Adjusted EBITDA increased 23% during the first quarter of 2017 driven primarily by a $2.9 million, or 13%, increase in total revenue, offset partially by a $1.8 million increase in total operating expenses (excluding EBITDA adjustments). The increase in operating expenses during the first quarter of 2017 resulted primarily from higher cost of services and MG&A expenses, offset partially by a slight decrease in cost of subscriber equipment sales. The $1.4 million increase in cost of services was due primarily to higher research and development costs of $0.7 million driven by new products and technology being developed internally and through external partners. Additionally, support costs related to our second-generation ground network increased $0.4 million as the Company accepted the work performed to upgrade its gateways during the fourth quarter 2016. The $0.5 million increase in MG&A expenses (excluding non-cash compensation) resulted primarily from a bad debt recovery being recorded in the first quarter of 2016 that did not recur in 2017. CONFERENCE CALL The Company will conduct an investor conference call on May 4, 2017 at 8:30 a.m. ET to discuss its first quarter 2017 financial results.
About Globalstar, Inc. Globalstar is a leading provider of mobile satellite voice and data services. Customers around the world in industries such as government, emergency management, marine, logging, oil & gas and outdoor recreation rely on Globalstar to conduct business smarter and faster, maintain peace of mind and access emergency personnel. Globalstar data solutions are ideal for various asset and personal tracking, data monitoring, SCADA and IoT applications. The Company's products include mobile and fixed satellite telephones, the innovative Sat-Fi satellite hotspot, Simplex and Duplex satellite data modems, tracking devices and flexible service packages. Note that all SPOT products described in this press release are the products of SPOT LLC, a subsidiary of Globalstar, which is not affiliated in any manner with Spot Image of Toulouse, France or Spot Image Corporation of Chantilly, Virginia. For more information, visit www.globalstar.com. Investor contact information: [email protected] Safe Harbor Language for Globalstar Releases
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