ORBCOMM Announces Third Quarter 2013 Results

ORBCOMM Inc. (Nasdaq:ORBC), a global provider of Machine-to-Machine (M2M) solutions, today announced financial results for the third quarter ended September 30, 2013.

The following financial highlights are in thousands of dollars, except per share amounts.
Three months ended September 30,

Nine months ended

September 30,
  2013     2012 2013 2012
Service Revenues $ 13,767 $ 12,708 $41,174 $ 36,657
Product Sales $ 5,926 $ 3,386 $13,798 $ 11,635
Total Revenues $ 19,693 $ 16,094 $54,972 $ 48,292

Net Income attributable to

ORBCOMM Inc. Common

$ 971 $ 2,307 $3,734 $ 6,562
Net Income per Common Share - basic $ 0.02 $ 0.05 $0.08 $ 0.14
EBITDA (1,3) $ 2,824 $ 3,887 $8,617 $ 11,146
Adjusted EBITDA (2,3) $ 3,511 $ 4,277 $10,658 $ 12,508

(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 and noncontrolling interests.

(3) A table presenting EBITDA and Adjusted EBITDA, reconciled to GAAP Net Income, is among other financial tables at the end of this release.

Recent Highlights:
  • For the third quarter of 2013, Total Revenues increased 22.4% year-over-year to $19.7 million. Service Revenues increased 8.3% over the prior year period to $13.8 million with increases in organic Service Revenues and from acquisitions. Product Sales of $5.9 million were 75.0% higher than prior year, driven by an increase in organic sales at our Japanese subsidiary, at StarTrak, and from the new acquisitions - GlobalTrak and MobileNet. Revenues in Japan were impacted by a less favorable U.S.$/Yen exchange rate this year compared to last year.
  • Adjusted EBITDA for the third quarter of 2013 was $3.5 million, and includes $0.8 million in Acquisition-related costs. ORBCOMM’s basic EPS is $0.02 for the third quarter of 2013 compared to $0.05 for the comparable period last year. ORBCOMM’s Acquisition-Related costs equal $0.02 per share in the third quarter of 2013 compared to nil per share in the comparable period last year.
  • Net subscriber communicator additions were 27,000 in the third quarter of 2013, bringing the total billable subscriber communicators to 827,000 at September 30, 2013, compared to 744,000 at the end of the third quarter last year. Billable subscriber communicators increased 11% year-over-year. SENS acquisition in October 2013 is expected to add over 20,000 subscriber communicators in the fourth quarter of 2013.
  • On September 4, 2013, ORBCOMM announced that Doosan Infracore Co. Ltd. (Doosan) has selected ORBCOMM to deliver an end-to-end telematics solution tailored for Doosan as well as their customers and dealers for global deployment. ORBCOMM’s solution will provide global satellite data service combined with cellular connectivity through ORBCOMM’s wireless partners, along with state-of-the-art hardware and a robust web-based analytics platform for asset management. Shipments are expected to begin in the first quarter of 2014.
  • On September 12, 2013, ORBCOMM announced that Ryder System, Inc. (Ryder) has selected ORBCOMM to deliver a comprehensive telematics systems solution tailored for Ryder’s fleet of more than 30,000 dry van, refrigerated and flatbed trailers. ORBCOMM’s solution will provide connectivity through ORBCOMM’s state-of-the-art hardware and web-based analytics platform for fleet management. Ryder will utilize the ORBCOMM solution in both its lease and rental trailer fleets in response to customer demand for a tracking and monitoring solution.
  • On September 19, 2013, ORBCOMM announced that its StarTrak division has been selected by John Christner Trucking, LLC (John Christner) to provide a two-way tracking and monitoring solution for its nationwide fleet of refrigerated rail and over-the-road (OTR) trailers. Based in Sapulpa, OK, John Christner will use ORBCOMM’s RT6000+, a powerful two-way reefer telematics device that provides comprehensive temperature, fuel management, maintenance, and logistical applications services for its temperature-controlled cargo. ORBCOMM will also provide a robust web application with advanced data reporting and analytics capabilities to increase in-transit visibility and efficiency of John Christner’s refrigerated transport operations.
  • On October 1, 2013, ORBCOMM announced that it has completed the acquisition of Comtech Mobile Datacom Corporation’s (Comtech) Sensor Enabled Notification System (SENS) operation, which includes satellite enabled hardware, network technology and web platforms. SENS is a market leader in providing one-way satellite products and services utilizing the Globalstar network to more than 20,000 subscribers worldwide. SENS provides secure tracking and messaging products and services to the government, defense, transportation, logistics, and oil & gas industries, all of which are key vertical markets for ORBCOMM.
  • On October 10, 2013, ORBCOMM and Savi Technology (Savi), a leading provider of sensor-based analytics and radio-frequency identification (RFID) solutions, announced a strategic relationship to provide advanced location-based monitoring solutions to government and commercial markets. ORBCOMM and Savi have submitted a proposal in response to the U.S. Army RFID IV project, which will provide both ISO18000-7 RFID tags and a suite of satellite solutions for military logistics support. ORBCOMM’s GlobalTrak division has been a leading player in providing military Enhanced-In-Transit-Visibility (EITV) solutions to the government market since 2008, and Savi is a market leader in military RFID solutions, enabling them to offer vast market experience with the right blend of technology platforms for this proposal.
  • On November 4, 2013, ORBCOMM and Inmarsat, a leading provider of global mobile satellite communications services, announced a strategic alliance to collaborate on joint product development and distribution to address the needs of the rapidly growing satellite M2M market. Additionally, the two companies will investigate opportunities for future satellite network expansion and integration.

For more information on recent highlights, please visit www.orbcomm.com.

“We are excited about the strong momentum, accelerating ORBCOMM’s growth in both the transportation and heavy equipment markets with the addition of new industry leaders like Ryder and Doosan to our customer base. We will continue to look for new opportunities to leverage powerful M2M technologies and infrastructure and infuse them across the existing ORBCOMM platform to increase our service value to the global marketplace,” said Marc Eisenberg, ORBCOMM’s Chief Executive Officer. “Our recent acquisition of the SENS operation, which utilizes the Globalstar one-way satellite network, as well as our newly formed alliance with Inmarsat builds on ORBCOMM’s multi-network operator strategy and strengthens our position as the leading provider of satellite and cellular communications services for the M2M industry.”

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