Annual Meeting of Stockholders. May 16, 2017

Transcription

1 Annual Meeting of Stockholders May 16, 2017

2 Safe Harbor Language This presentation contains certain statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Forward-looking statements, such as the statements regarding our expectations with respect to future increases in our revenue and profitability, including our ability to monetize our spectrum rights and other statements contained in this presentation regarding matters that are not historical facts, involve predictions. Any forward-looking statements made in this presentation are accurate as of the date made and are not guarantees of future performance. Actual results or developments may differ materially from the expectations expressed or implied in the forward-looking statements, and we undertake no obligation to update any such statements. Additional information on factors that could influence our financial results is included in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. 1

3 Major Highlights 46% INCREASE IN ADJUSTED EBITDA VS U.S. TERRESTRIAL AUTHORITY OBTAINED MSS GEOGRAPHICAL EXPANSION: CENTRAL & SOUTH AMERICA AND AFRICA $96.9M REVENUE RECORD HIGH SINCE 2007 SECOND-GENERATION GROUND UPGRADES COMPLETE 25X INCREASE IN SPEEDS SINGLE NATIONWIDE TERRESTRIAL AUTHORITY 5,000+ WORLDWIDE RESCUES AND COUNTING; 2 DEVELOPMENT OF INEXPENSIVE, SMALLER NEW PRODUCTS NO BUILD OUT REQUIREMENTS SEEKING INTERNATIONAL TERRESTRIAL AUTHORIZATIONS AFFECTING ON AVERAGE 2 PEOPLE PER RESCUE

4 2016 Financial Review Adjusted EBITDA (1) Revenue $25.0 $20.0 $15.0 $10.0 $5.0 $0.0 ($ in millions) ($ in millions) $ % 46% $20.5 $95.0 $90.1 $90.5 $96.9 $16.9 $85.0 $14.1 $75.0 $65.0 $55.0 $45.0 $ $ Duplex Service Revenue Duplex ARPU $35.0 ($ in millions) $40.00 $30.0 $27.0 $ % $31.8 $35.00 $ % $34.96 $25.0 $30.00 $29.69 $ $ (1) Adjusted EBITDA excludes non-cash compensation expense, reduction in the value of assets, foreign exchange (gains)/losses, and certain other non-recurring charges as applicable. See reconciliation to GAAP Net income (loss) on Annex A. 3

5 Continued International Expansion 44% of Globalstar customer base resides outside United States Average Subscriber Compositions: Duplex, SPOT & Simplex % 44% 59% 56% U.S. Rest of the World 4

6 World-wide Data Coverage Primary Service Area: % completion rate Fringe Service Area: 80-90% completion rate 5

7 Core MSS Addressable Market No terrestrial network Failure of terrestrial network Existing terrestrial network Areas outside cellular networks Critical mobile satellite services during disasters Asset tracking / low cost alternative to international roaming Connectivity to two billion people who live, work and/or play in areas not covered by cellular service Over 150 million adventure trips taken annually (1) 75% world s land mass is without terrestrial coverage (2) Provides alternative network access in areas prone to natural disasters Provides public safety with needed connectivity when cellular service is down due to overloaded / failed infrastructure Enables basic services, NGOs, emergency response and business continuity Provides the ability to track anything, anywhere, anytime globally Provides low cost alternative to international roaming when traveling abroad $2-$3 per minute with traditional cellular companies vs. $0.50 per minute on Globalstar s high volume usage plans (3) (1) Adventure Tourism Market Report by George Washington University, Adventure Travel Trade Association, Xola Consulting. Statistic based on survey conducted with participants in Latin America, North America, and Europe. (2) CIA World Factbook. (3) Based on plan Orbit Unlimited at $ / month assuming 400 minutes per month of usage. 6

8 Globalstar s Select Product Portfolio Globalstar has a full product suite supporting both one-way and two-way communications beyond the range of traditional cellular services Duplex SPOT Simplex GSP 1700 / SPOT Global Phone Sat-Fi SPOT Gen3 SPOT Trace STX3 SmartOne B Image Features Portable two-way satellite phone with full voice and data capabilities While the GSP targets the commercial market segment, the SPOT Global phone is consumer-focused Connects any Wi- Fi enabled device to Globalstar s satellite network for voice and data services beyond the range of cellular networks Targets boaters, emergency responders, oil & gas workers, miners, ranchers etc. Later version will be targeted towards the mass consumer market Flexibility to outdoor enthusiasts to send pre-defined messages & GPS coordinates while off the grid Battery life 2x SPOT 2 enhanced customization features smaller form factor USB for line power eliminates need for battery replacement Traces the path of anything, anytime, anywhere for consumer assets Key applications include theft prevention Extreme Tracking offered at $99.99 per year World s smallest M2M transmitter Enables VARs and OEMs to develop smaller, more efficient M2M solutions Applications include wide range of assets including LPG tanks, water tanks, vehicles, etc. Designed for the intelligent management of powered and nonpowered fixed and movable assets Provides solution for engine runtime reporting and major fault monitoring for portable construction equipment as well as tracking intermediate bulk containers, vehicles and boats 7

9 8 5,000+ Initiated Rescues Worldwide

10 Next-Generation SPOT Two-way messaging device with SPOT Tracking and SOS functionality Next-Generation SPOT Features & Benefits First-of-its-kind qwerty keyboard SPOT device that allows subscribers to send and receive SMS messages along with the traditional tracking and SOS functionalities Will leverage the brand equity of SPOT vast network of retail + wholesale distribution targets consumer, enterprise and government markets Provides an inexpensive alternative method of communication to users who work, live or play outside the boundaries of terrestrial coverage One-way Communications First-Generation SPOT Devices Two-way Communications Next-Generation SPOT Two-way SPOT Device SPOT Gen 3 SPOT 2 SPOT Personal Tracker 9

11 Next-Generation Sat-Fi Satellite communications device that turns any smartphone, laptop or tablet into a satellite phone / global data device Wi-Fi Next-Generation Sat-Fi An inexpensive Hughes-based mass market product that connects any Wi-Fi enabled device to Globalstar s satellite network for full voice and data services beyond the range of cellular networks Next Generation Sat-Fi Features and Benefits Extends wireless beyond cellular and allows for coverage in any targeted territory while providing high quality connectivity for voice and data Provides alternative to international terrestrial roaming Targets the mass market consumer + enterprise market leveraging Globalstar s existing network of retail & wholesale distribution channels with plans for new B2B distribution Leverages Globalstar s second-generation ground infrastructure higher speeds, enhanced capacity, improved performance 10

12 Next-Generation Simplex During the third quarter of 2016, Globalstar and Carmanah signed a strategic agreement under which Carmanah will collaborate on the design and manufacture of new solar powered M2M satellite solutions for Globalstar as well as utilize Globalstar s low earth orbiting satellite constellation for remote connectivity of all strategic Carmanah products. Solar Powered SmartOne B Globalstar s SmartOne B Benefits of Solar Powered SmartOne B New solar powered devices will support larger and more frequent data transmission capabilities Enables a much longer field life than Globalstar s current M2M devices Strategic Partnership with Carmanah: Globalstar s low orbit satellite network to provide remote monitoring to each Carmanah LED infrastructure product Globalstar s Role in IoT Expandable Capacity: Globalstar s satellite network can support over 10 billion (1) telematics, M2M or IoT transmissions, or over 10 million voice or data minutes per day. Network architecture supports capacity increases through infrastructure upgrades. Future Opportunities: Globalstar is actively pursuing additional opportunities such as the one with Carmanah and believes that the Company is well positioned to provide reliable connectivity as IoT and satellite technologies converge (1) Assumes average message size of 90 characters. 11

13 FCC Report & Order Summary Report & Order Highlights Single nationwide terrestrial authority No build out requirements satellite network satisfies Commercial OOBE limits at edges of 11.5 MHz terrestrial band to protect adjacent licensed / unlicensed services Flexibility in deploying air interface / wireless protocol for terrestrial service offerings Active Parties Helping to Enable Approval 12

14 Globalstar International Terrestrial Plans Globalstar seeks terrestrial authority over its entire S-band spectrum in multiple jurisdictions worldwide. Company has already initiated the process in certain countries representing a combined population of 375 million. ~375 million pops; 6.2 billion MHz-POPs Process initiated in international jurisdictions 320 million pops; 3.7 billion MHz-POPs U.S. terrestrial authority obtained 695 million pops; 9.9 billion MHz-POPs Pro forma pops / MHz-POPs (1) Terrestrial authority obtained Opportunity to seek terrestrial authority (1) Process in international jurisdictions to include the request for approval of 16.5 MHz including the 5 MHz from

15 Worldwide Spectrum Applications (Non-satellite uses) Globalstar represents the only globally uniform spectrum position of this size in the world. Below are current and prospective uses of its spectrum holdings. Proprietary, secure IoT transport layer possible L-Band ( MHz) Future LAA control channel for small cell S-Band ( MHz) 20% small cell implementation produces 400x macro cellular capacity LAA control layer from MHz; control LTE-U in both 2.4 GHz and 5 GHz C-Band ( MHz) ~60 MHz from GHz not part of U-NII-1 band 100 MHz from GHz is now Globalstar and U-NII-1, using S and L bands provides differentiated LAA / LTE-U solutions Future 5G development and IoT Air to ground aircraft data solution C-Band ( MHz) 180 MHz above 6 GHz Future 5G development and IoT Air to ground aircraft data solution 14

16 Key Value Drivers MSS Operations Diverse product and service offerings across consumer, commercial and government markets Operational focus expanded to include new territories such as Central & South America and Southern Africa New product offerings inexpensive consumer mass market Sat-Fi, Next-Generation SPOT and Simplex devices Second-Generation Upgrades Second-Generation upgrades materially improve data speeds and applications Significant reduction in product cost continued ability to develop low-cost products for the mass consumer marketplace Improves call quality with built-in redundancies Spectrum Domestic terrestrial authority received on 11.5 MHz of S-band spectrum 3.7 billion MHz-POPs Unique globally harmonized position across multiple frequency bands Opportunity to deploy terrestrial services globally 15

17 Annex A: Reconciliation of Net Income (Loss) to Adjusted EBITDA ($ in millions) Net income (loss) ($462.9) $72.3 ($132.6) Interest income and expense, net Derivative (gain) loss (181.9) 41.5 Income tax expense (benefit) (6.5) Depreciation, amortization, and accretion EBITDA ($46.6) $5.0 $15.7 Reduction in the value of inventory $21.7 $0.0 $0.0 Reduction in the value of long-lived assets Non-cash compensation Foreign exchange and other (3.8) (3.2) 0.4 Loss on extinguishment of debt Non-cash adjustment related to Int'l operations (Gain) loss on equity issuance (2.4) Brazil Legal settlement paid in stock Adjusted EBITDA $16.9 $14.1 $