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ORBCOMM Inc. (Nasdaq: ORBC), a global satellite data communications company specializing in two-way Machine-to-Machine (M2M) communications, today announced financial results for the fourth quarter and full year ended December 31, 2012.
The following financial highlights are in thousands of dollars, except per share amounts.
Three months ended
Twelve months ended
Net Income (loss) attributable to ORBCOMM Inc. Common Stockholders
Net Income (loss) per Common Share - basic
Adjusted EBITDA (2,3)
(1) EBITDA is defined as earnings attributable to ORBCOMM Inc. before interest income (expense), provision for income taxes and depreciation and amortization.
(2) Adjusted EBITDA is defined as EBITDA, adjusted for stock-based compensation expense, loss on disposition of other investment in Alanco, noncontrolling interests, impairment loss and insurance recovery.
(3) A table presenting EBITDA and Adjusted EBITDA, reconciled to GAAP Net Income (Loss), is among other financial tables at the end of this release.
Adjusted EBITDA for the quarter was $4.2 million, up 51% from $2.8 million during the same three months last year. Adjusted EBITDA for the full year was $16.7 million, up 108% from $8.0 million last year. ORBCOMM reported basic EPS of $0.05 for the fourth quarter of 2012 compared to EPS of $0.01 for the comparable period last year, and EPS of $0.19 for the full year 2012 versus breakeven of ($0.00) for 2011.
For the fourth quarter of 2012, Service Revenues increased 14% year-over-year to $12.4 million and were $49.0 million for the full year 2012, a 31% increase over the full year 2011. For the fourth quarter of 2012, net subscriber additions were 15,000. ORBCOMM had 759,000 billable subscriber communicators at December 31, 2012, compared to 648,000 at the end of the fourth quarter last year. The base of billable subscribers increased 17% year-over-year.
The company’s initiative to develop end-to-end solutions within key vertical markets continues to build momentum.
New Products: StarTrak introduced an enhancement of its refrigerated product, which is now capable of monitoring and controlling heated assets. In the first quarter of 2013, the largest rail network in Canada began the first broad deployment using this capability. Including StarTrak’s two-way GenTrak TM and ReeferTrak ® telematics management systems, we are now providing temperature-controlled services for refrigerated and heated containers. Together, these solutions will allow the customer to monitor multiple shipping conditions to verify temperature compliance.
Strategic Acquisitions: In the first quarter of 2013, ORBCOMM took steps to expand its end-to-end solutions portfolio in heavy equipment and transportation.On March 13, 2013, ORBCOMM entered into a definitive purchase agreement to acquire substantially all of the assets of MobileNet, a leader of satellite and cellular-based telematics solutions for monitoring heavy equipment and assets that support the rail industry as well as being a long-time ORBCOMM value-added reseller. The acquisition of the MobileNet business supports ORBCOMM’s growth strategy of expanding its end-to-end solutions portfolio in key vertical markets. Integrating MobileNet’s unique products and services will allow ORBCOMM to directly address opportunities within the heavy equipment industry through Original Equipment Manufacturers (OEM’s), dealers and fleet owners. Some of MobileNet’s current customers include Doosan North America, a world-class construction equipment company, and leading rail companies Union Pacific, CSX, and BNSF.On March 13, 2013, ORBCOMM entered into a definitive purchase agreement to acquire substantially all of the assets of GlobalTrak, a division of System Planning Corp. GlobalTrak is an information services company that utilizes satellite and cellular communications networks, sensors and proprietary software platforms to provide real-time situational awareness and intelligence to improve logistics and security processes and operations on a global basis. GlobalTrak’s customer base includes military, international, government, and commercial customers. The acquisition of GlobalTrak enables ORBCOMM to expand its end-to-end solutions offerings for mobile asset applications and expand distribution into the government sector and into new geographic regions, including the Middle East and Asia.
The company added two new heavy equipment OEM partners to expand its leadership position as a leading supplier of M2M network connectivity for the telematics market.
In the first quarter of 2013, Sumitomo, one of Japan's leading manufacturers of excavators, asphalt pavers and other construction equipment, selected ORBCOMM to provide global satellite communications services to deliver vital telematics data to Sumitomo and its customers.
A premier European manufacturer and supplier of mining and construction equipment will utilize ORBCOMM’s dual-mode satellite and cellular service for its global OEM telematics application. The robust solution will offer its customers the ability to track and monitor their heavy surface drilling equipment worldwide.
On January 7, 2013, ORBCOMM announced a $45 million Term Loan financing with AIG Asset Management (U.S.), LLC. The loan will primarily be used to facilitate growth opportunities such as new services, product offerings, geographic distribution and potential strategic acquisitions into key vertical markets.
On February 19, 2013, Boeing Corporation (Boeing) delivered the first production payload to Sierra Nevada Corporation (SNC) for ORBCOMM's OG2 next generation constellation. Designed to enhance data throughput of ORBCOMM's OG2 satellites, Boeing’s state-of-the-art, versatile communications payload will provide enhanced operational capabilities, including faster communications speeds, to support mission-critical communications for ORBCOMM customers. SNC will begin integration and environmental performance testing of the OG2 satellite in preparation for the planned launch later this year.
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“2012 was a record year for ORBCOMM and we are starting to see the transformative effect of our strategic growth initiatives,” said Marc Eisenberg, Chief Executive Officer of ORBCOMM. “Over the past 18 months, we have made strides in not only growing our core M2M network connectivity business, but also in expanding our focus on end-to-end solutions within key vertical markets, which enable us to capture a significantly larger portion of the value chain.” He continued, “We are also making solid progress on OG2, which is ORBCOMM’s second generation satellite constellation, scheduled to begin launching later in 2013.”