Globalstar Announces Quarterly Financials, Terminates Proposed Merger
Friday, August 03, 2018 | Comments

Globalstar announced its financial results for the quarter ended June 30 and said it terminated its proposed merger with Thermo.

“While I believe that this merger would have positioned Globalstar more strongly for the future, this transaction is no longer the path forward,” said Jay Monroe, chairman and CEO of Globalstar. “Instead, we will continue to run the satellite business on a stand-alone basis while we remain focused on Globalstar's satellite business and spectrum. If the opportunity to strengthen the company and enhance shareholder value through a strategic transaction arises, we will consider it.”

Total revenue for the second quarter of 2018 increased by $5.6 million, or 20 percent, from the second quarter of 2017. This increase resulted primarily from higher service revenue and subscriber equipment sales across all core revenue streams. Service revenue increased $3.7 million, or 15 percent, in the second quarter of 2018 compared with the second quarter of 2017.

Subscriber equipment sales revenue increased $1.9 million, or 50 percent, following the introduction of new products during 2018, including the launch of a new commercial internet of things (IoT) simplex product that alone contributed $2 million to equipment revenue during the second quarter. As anticipated, sales of certain legacy products, particularly in the duplex and SPOT channels, declined during the quarter following the launch of next-generation devices largely offsetting the revenue generated from these product introductions.

Operating loss improved $14.4 million from a loss of $12.4 million in the second quarter of 2017 to income of $2 million in the second quarter of 2018. This change was primarily because of a $5.6 million increase in total revenue and an $8.8 million decrease in operating expenses. A decrease in expense of $20.5 million was recorded during the quarter relating to a previously recorded contract termination charge.

Net loss decreased $91.7 million during the second quarter of 2018 primarily because of a lower non-cash derivative loss of $75 million. Changes in the company's stock price and volatility assumptions were the primary factors of the derivative adjustments recorded during the respective quarters. Also contributing to the decrease in net loss was an accrual for the settlement of a business economic loss claim reached during the second quarter of 2018 and expected to be paid in equal installments in January 2019 and 2020.

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