ORBCOMM Inc. announced financial results for
the second quarter ended June 30, 2014.
“With the successful launch of our first OG2 mission,
the reception we are receiving on our comprehensive
portfolio of M2M products and services, and our campaign
to aggressively market through our new and expanded
global distribution channels, the energy and momentum at
ORBCOMM is greater than ever before,” said Marc
Eisenberg, ORBCOMM’s Chief Executive Officer. “Our hard
work and innovation over the last several years is
starting to pay off as seen in the second quarter and
should continue into the future.”
“ORBCOMM had a strong second quarter with Total
Revenues of $24.3 million and Adjusted EBITDA of $5.1
million,” said Robert Costantini, Chief Financial
Officer of ORBCOMM. “With the successful launch of our
first 6 OG2 satellites, we are looking for an uptick in
recurring Service Revenues for the remainder of 2014,
after putting the satellites in service. Product Sales
were robust in Q2, and we have strong momentum heading
into the third quarter.”
Financial Results and
Highlights
Revenues
For the second quarter ended June 30, 2014, Service
Revenues increased 10.2% to $14.9 million over the prior
year period in 2013. The increase in Service Revenues in
Q2 of 2014 was driven by core network revenues including
AIS, and from higher revenues from solutions services.
Product Sales during the second quarter of 2014 were
$9.4 million compared to $5.0 million during the same
period last year, an increase of $4.4 million or 86.4%.
The quarterly year-over-year increase in Product Sales
was driven by customer deployments in solutions
augmented by sales from Euroscan.
Total Revenues for the quarter ended June 30, 2014
were $24.3 million compared to $18.6 million during the
same period of 2013, an increase of 30.9%.
Direct Costs and Operating Expenses
Total direct costs and operating expenses for the
second quarter of 2014 were $22.5 million compared to
$17.0 million during the same period in 2013. Direct
costs, exclusive of depreciation and amortization,
increased year-over-year due to increases in Service
Revenues and Product Sales, as well as costs to operate
the companies acquired. Gross Profit increased by $3.1
million or 30.7% to $13.1 million for the quarter ended
June 30, 2014 compared to $10.0 million for the prior
year quarter due to the increase in Service Revenues and
Product Sales. Operating Expenses were higher primarily
due to operating costs from the acquisitions, including
additional employees and higher depreciation and
amortization from acquired intangible assets. Higher
Operating Expenses also reflect costs incurred in
anticipation of the OG2 launch that occurred in July
2014, and investments in opportunities that are expected
to lead to future growth. Acquisition-related costs were
$0.2 million in the second quarter and up slightly from
the prior year, reflecting costs incurred in connection
with our Euroscan Acquisition.
Income Before Income Taxes, Net Income, and
Earnings Per Share
Income Before Income Taxes for the second quarter of
2014 was $1.9 million compared to $2.0 million for the
second quarter of 2013.
Net Income attributable to ORBCOMM Inc. Common
Stockholders was $1.4 million for the three months ended
June 30, 2014 compared to $1.7 million for the similar
three-month period in 2013. Basic Earnings Per Share
were $0.03 for the second quarter of 2014 versus $0.04
for the second quarter of 2013.
EBITDA and Adjusted EBITDA
EBITDA for the second quarter of 2014 was $4.0
million compared to $3.3 million in the second quarter
of 2013 and includes $0.2 million in Acquisition-related
costs. Adjusted EBITDA was $5.1 million for the second
quarter of 2014 compared to $4.1 million in the second
quarter of 2013, an increase of 23.8%.
EBITDA and Adjusted EBITDA are non-GAAP financial
measures used by the Company. Please see the financial
tables at the end of the release for a reconciliation of
EBITDA and Adjusted EBITDA.
Balance Sheet & Cash Flow
At June 30, 2014, Cash and Cash Equivalents and
Restricted Cash were $50.9 million, compared to $76.9
million at March 31, 2014, decreasing $26.0 million
largely due to Capital Expenditures and insurance
expense related to the OG2 launch.
Cash provided by operating activities was $1.4
million year to date as of June 30, 2014. Total ORBCOMM
Inc. Stockholders’ Equity was $234.9 million at June 30,
2014.
