Globalstar Reports Financial Results for First Quarter
Friday, May 11, 2018 | Comments

Globalstar announced its financial results for the quarter ended March 31.

Total revenue for the first quarter increased by $4 million, or 17 percent, from the first quarter of 2017. This increase resulted primarily from higher service revenue across all core revenue streams, driven by growth in average revenue per user (ARPU). Partially offsetting this increase was a decrease in subscriber equipment sales. Service revenue increased $4.5 million, or 21 percent, in the first quarter of 2018 compared with the first quarter of 2017.

Loss from operations decreased $2.1 million, or 14 percent, from $15.1 million in the first quarter of 2017 to $13 million in the first quarter of 2018 due primarily to a $4 million increase in total revenue. Higher operating expenses partially offset this increase due primarily to a 20 percent increase in marketing, general and administrative (MG&A) costs; cost of services were flat and cost of subscriber equipment sales increased 5 percent. The increase in MG&A was driven by the addition of personnel, both internal and external, to support strategic initiatives, including spectrum-related activities and other technology opportunities, such as our internet of things (IoT) and connected car product development.

Net income fluctuated from a loss of $20.2 million in the first quarter of 2017 to income of $87.9 million in the first quarter of 2018. The primary reason for this change was a higher non-cash derivative gain, up from $3.2 million in the first quarter of 2017 to $108.9 million in the first quarter of 2018. The gain recorded during the first quarter of 2018 resulted from variations in several valuation inputs, including the decline in the company's stock price from Dec. 31, 2017, to March 31, 2018, as well as shorter remaining estimated term of the instruments.

On April 25, Globalstar announced it signed a merger agreement with Thermo Acquisitions.

“In late April, after our quarter ended, we announced a transformative transaction to merge Globalstar with FiberLight and almost $400 million of other assets to create a diversified telecom company with assets spanning satellite, spectrum and fiber,” said Jay Monroe, chairman and CEO of Globalstar. “We expect that the combined company will have a fortified balance sheet, generate significant cash flow and will be well positioned for the evolution of next-generation networks. We look forward to closing the transaction in the third quarter.”

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