ORBCOMM Announces Second Quarter 2021 Results

Boca Raton, Florida, UNITED STATES


Total Revenues of $65.9 Million, Up 16% from Prior Year Period
90,000 Devices Shipped Drives Product Sales Growth
Product Sales of $28.4 Million, Up 55% from Prior Year Period

ROCHELLE PARK, N.J., Aug. 03, 2021 (GLOBE NEWSWIRE) -- ORBCOMM Inc. (NASDAQ: ORBC), a global provider of Internet of Things (IoT) solutions, today announced financial results for the second quarter ended June 30, 2021.

The following financial highlights are in thousands of dollars and unaudited.

 Three Months Ended  Six Months Ended 
 June 30,  June 30, 
 2021  2020  2021  2020 
Recurring Service Revenues$36,355  $37,006  $72,596  $76,859 
Other Service Revenues 1,187   1,423   2,696   2,094 
Total Service Revenues 37,542   38,429   75,292   78,953 
Product Sales 28,386   18,303   54,331   43,958 
Total Revenues 65,928   56,732   129,623   122,911 
Net Loss Attributable to ORBCOMM Inc.
Common Stockholders
 (7,658)  (6,670)  (18,232)  (13,645)
Basic EPS (0.10)  (0.09)  (0.23)  (0.17)
EBITDA (1) 6,890   10,330   11,214   22,102 
Adjusted EBITDA (1)$11,062  $11,941  $24,562  $25,621 

(1) Non-GAAP financial measure. See “Non-GAAP Financial Measures” for a reconciliation of GAAP to Non-GAAP financial measures included with the financial tables at the end of this release.

“We’re pleased with our revenues returning to pre-pandemic levels and Product Sales growing significantly compared to the prior year period. We shipped 90 thousand devices in the quarter despite a challenging environment due to the continued global component shortage, which resulted in higher product costs impacting product margins. Demand for our products remains strong, and we enter Q3 with a robust pipeline of orders,” said Marc Eisenberg, ORBCOMM’s Chief Executive Officer. “We are still on track to close the transaction with GI Partners in the second half of 2021, pending receipt of the remaining regulatory approvals, which are proceeding as anticipated.”

Financial Results

Revenues

Total Revenues for the second quarter of 2021 were $65.9 million compared to $56.7 million in the prior year period. 

Service Revenues were $37.5 million in the second quarter of 2021 compared to $38.4 million in the same period last year. Recurring Service Revenues were $36.4 million in the second quarter of 2021 compared to $37.0 million in the prior year period. Other Service Revenues, comprised of installation services, professional services, and software licenses, were $1.2 million in the quarter. The Company added over 60,000 net billable subscribers in the second quarter bringing the total billable subscriber communicators to approximately 2.34 million as of June 30, 2021. We expect Service Revenues to recover and trend higher based on the increasing levels of hardware shipments and subsequent subscriber growth.

Product Sales were $28.4 million in the second quarter of 2021, an increase of 55.1% compared to the prior year period and up 9.4% sequentially from the first quarter of 2021 as hardware shipments to customers continued to improve.

Gross Margin (1)

GAAP Service Gross Margin, inclusive of depreciation and amortization expense, was 55.6% in the second quarter of 2021 compared to 56.4% in the prior year period. Non-GAAP Service Gross Margin, excluding depreciation and amortization expense, was 66.0% in the second quarter of 2021 compared to 67.3% in the prior year period. The year-over-year decline was primarily due to $0.9 million of non-recurring low margin installation service revenue recognized in the second quarter of 2021 compared to $0.2 million of installation service revenue in the prior year period.

GAAP Product Gross Margin, inclusive of depreciation and amortization expense, was 19.3% in the second quarter of 2021 compared to 25.0% in the prior year period. Non-GAAP Product Gross Margin, excluding depreciation and amortization expense, was 20.6% in the second quarter of 2021 compared to 27.8% in the same period last year. The year-over-year decline was largely due to higher component costs as a result of the global electronic component supply shortage and higher shipping costs, and to a lesser extent a mix of lower margin Product sales. We expect this component shortage pressure to ease over the upcoming quarters and product margins to return to normalized levels.

Operating Expenses

Operating Expenses for the second quarter of 2021 were $35.3 million compared to $32.8 million for the same period in 2020. The $2.5 million year-over-year increase was primarily due to Acquisition-related costs of $2.7 million in the second quarter of 2021, compared to $0.1 million in the prior year period. Excluding the Acquisition-related costs, operating expenses improved $0.1 million compared to the prior year period.

Net Income (Loss) and Earnings Per Share (1)

Net Loss Attributable to ORBCOMM Inc. Common Stockholders for the second quarter of 2021 was $7.7 million, or $0.10 per share, compared to a Net Loss Attributable to ORBCOMM Inc. Common Stockholders of $6.7 million, or $0.09 per share in the second quarter of 2020. Excluding the Acquisition-related costs, Adjusted Net Loss Attributable to ORBCOMM Inc. Common Stockholders for the second quarter of 2021 was $5.0 million, or $0.06 per share.

EBITDA and Adjusted EBITDA (1)

EBITDA for the second quarter of 2021 was $6.9 million compared to $10.3 million in the prior year period. This was predominantly driven by Acquisition-related costs relating to the merger with GI Partners that were recorded in this year’s quarter.

Adjusted EBITDA for the second quarter of 2021 was $11.1 million compared to $11.9 million in the prior year period. The Company’s Adjusted EBITDA Margin decreased to 16.8% in the second quarter of 2021, a decrease of 420 basis points over the prior year on a comparable basis driven largely by lower Product margins and a higher mix of Product revenues compared to Service revenues.

Balance Sheet & Cash Flow

As of June 30, 2021, Cash and Cash Equivalents totaled $29.6 million and Debt outstanding totaled $205.0 million, a $45.0 million decrease from June 30, 2020. Cash Flow from Operations for the first six months of 2021 totaled $16.6 million and Capital Expenditures were $12.6 million in the quarter, inclusive of $2.4 million associated with subscription model investments.

Proposed Merger Agreement

The transaction is expected to close in the second half of 2021 following the satisfaction of customary closing conditions, including the receipt of required regulatory approvals. The waiting period under the Hart-Scott-Rodino Act expired at 11:59 p.m. EST on June 14, 2021. Various other regulatory approvals – including CFIUS approval, approval by the FCC and certain applicable foreign telecommunications regulatory entities, and approvals from applicable investment and national security regulatory entities in foreign jurisdictions – remain in process. These are proceeding as anticipated, and we continue to expect the remaining approvals to be granted sometime in the second half of 2021.   ORBCOMM’s shareholders approved the merger on July 8, 2021. Additional information, including the definitive merger agreement filed and the proxy statement filed with the Securities and Exchange Commission in connection with the vote of ORBCOMM’s shareholders, are available in the Investors section of the Company’s website at http://investors.orbcomm.com.

ORBCOMM WILL NOT HOST A SECOND QUARTER 2021 EARNINGS CONFERENCE CALL OR PROVIDE A FINANCIAL OUTLOOK.

About ORBCOMM Inc.

ORBCOMM (Nasdaq: ORBC) is a global leader and innovator in the industrial Internet of Things industry, providing solutions that connect businesses to their assets to deliver increased visibility and operational efficiency. The Company offers a broad set of asset monitoring and control solutions, including seamless satellite and cellular connectivity, unique hardware, and powerful applications, all backed by end-to-end customer support, from installation to deployment to customer care. ORBCOMM has a diverse customer base including premier OEMs, solutions customers and channel partners spanning transportation, supply chain, warehousing and inventory, heavy equipment, maritime, natural resources, and government. For more information, visit www.orbcomm.com.

Forward-Looking Statements

Certain statements discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to our plans, estimates, objectives, and expectations for future events, as well as projections, business trends and other statements that are not historical facts. Such forward-looking statements are subject to known and unknown risks and uncertainties, some of which are beyond our control, which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. With respect to the business and operations of ORBCOMM, these risks and uncertainties include but are not limited to: demand for and market acceptance of our products and services and our ability to successfully implement our business plan; our dependence on our subsidiary companies (Market Channel Affiliates (“MCAs”)) and third-party product and service developers and providers, distributors and resellers (Market Channel Partners (“MCPs”)) to develop, market and sell our products and services, especially in markets outside the United States; substantial losses we have incurred and may continue to incur; substantial competition in the telecommunications, Automatic Identification Service (“AIS”) data and industrial Internet of Things (“IoT”) industries; the inability to effect suitable investments, alliances and acquisitions or the inability to successfully integrate acquired businesses and systems; defects, errors or other insufficiencies in our products or services; failure to meet minimum service level commitments to certain of our customers; our dependence on significant customers for a substantial portion of our revenues, including key customers such as JB Hunt Transport Services, Inc., Caterpillar Inc., Komatsu Ltd., Carrier Corporation and Satlink S.L.; our ability to expand our business outside the United States and risks related to the economic, political and other conditions in foreign countries in which we do business; unanticipated domestic or foreign tax or fee liabilities; the possibility we will be required to collect certain taxes in jurisdictions where we have not historically done so; economic, political and other conditions; extreme events such as man-made or natural disasters, earthquakes, severe weather or other climate change-related events; our dependence on a limited number of manufacturers for many of our products and services; interruptions, discontinuations, slowdown or loss of the supply of subscriber communicators from our vendor Sanmina Corporation; legal proceedings; our reliance on intellectual property; increased regulatory restrictions and oversight; lack of in-orbit or other insurance for our ORBCOMM Generation 1 or ORBCOMM Generation 2 satellites; our reliance on third-party wireless network service providers to deliver existing and developing services in certain areas of our business; significant interruptions, discontinuation or loss of services provided by Inmarsat plc; risks related to the novel coronavirus (“COVID-19”) pandemic; inaccurate estimates in accounting or incorrect financial assumptions; significant operating risks related to our satellites due to various types of potential anomalies and potential impacts of space debris or other spacecrafts; the failure of our systems or reductions in levels of service due to technological malfunctions or deficiencies or other events outside of our control; difficulty upgrading or replacing aging hardware and software we use in operating our gateway earth stations and our customers’ subscriber communicators; technical or other difficulties with our gateway earth stations; security risks related to our networks, data processing systems and software systems and those of our third-party service providers; liabilities or additional costs as a result of laws, governmental regulations and evolving views of personal privacy rights; failure of our information technology systems; cybersecurity risks; the level of our indebtedness and the terms of the credit agreement for our $200.0 million term loan facility and our $50.0 million revolving credit facility, that could restrict our business activities or our ability to execute our strategic objectives or adversely affect our financial performance; risks related to an investment in our common stock, including volatility due to our quarterly performance; and the other risks described in our filings with the Securities and Exchange Commission (“SEC”). With respect to our pending merger transaction with GI Partners, these risks and uncertainties include but are not limited to: the risk that the merger transaction may not be consummated in a timely manner, if at all; the risk that the merger transaction may not be consummated as a result of buyer’s failure to comply with its covenants and that, in certain circumstances, we may not be entitled to a termination fee; the risk that the definitive merger agreement may be terminated in circumstances that require us to pay the buyer a termination fee; risks related to the diversion of management’s attention from our ongoing business operations; risks regarding the failure of the buyer to obtain the necessary financing to complete the merger transaction; the effect of the announcement of the merger transaction on our business relationships (including, without limitation, customers), operating results and business generally; risks related to obtaining the requisite consents to the merger transaction, including, without limitation, the timing (including possible delays) and receipt of regulatory approvals from governmental entities (including any conditions, limitations or restrictions placed on these approvals); and the risk that one or more governmental entities may deny approval. For more detail on these and other risks, please see our Annual Report on Form 10-K for the year ended December 31, 2020, and other documents we file with the SEC. We undertake no obligation to publicly revise any forward-looking statements or cautionary factors, except as required by law.

Contact

Media Inquiries: 
Michelle Ferris 
Senior Director, Corporate Communications 
ORBCOMM Inc. 
703-462-3894 
ferris.michelle@orbcomm.com 


ORBCOMM Inc. 
Condensed Consolidated Statements of Operations 
(In thousands, except per share data) 
(Unaudited) 
                 
  Three Months Ended June 30,  Six Months Ended June 30, 
  2021  2020  2021  2020 
Revenues:                
Service revenues $37,542  $38,429  $75,292  $78,953 
Product sales  28,386   18,303   54,331   43,958 
Total revenues  65,928   56,732   129,623   122,911 
Cost of revenues, exclusive of depreciation and amortization
shown below:
                
Cost of services  12,783   12,559   25,469   25,640 
Cost of product sales  22,525   13,211   42,135   30,492 
Operating expenses:                
Selling, general and administrative  17,706   17,474   34,971   37,204 
Product development  3,218   2,784   6,609   6,604 
Depreciation and amortization  11,728   12,409   23,960   25,773 
Impairment loss - satellite network        6,656    
Acquisition-related and integration costs  2,653   111   3,241   202 
Loss from operations  (4,685)  (1,816)  (13,418)  (3,004)
Other income (expense):                
Interest income  167   265   404   681 
Other (expense) income  (121)  (234)  875   (500)
Interest expense  (2,192)  (5,410)  (4,420)  (10,656)
Total other expense  (2,146)  (5,379)  (3,141)  (10,475)
Loss before income taxes  (6,831)  (7,195)  (16,559)  (13,479)
Income tax expense (benefit)  778   (554)  1,441   (1)
Net loss  (7,609)  (6,641)  (18,000)  (13,478)
Less: Net income attributable to noncontrolling
interests
  32   29   203   167 
Net loss attributable to ORBCOMM Inc. $(7,641) $(6,670) $(18,203) $(13,645)
Net loss attributable to ORBCOMM Inc.
common stockholders
 $(7,658) $(6,670) $(18,232) $(13,645)
Per share information-basic:                
Net loss attributable to ORBCOMM Inc.
common stockholders
 $(0.10) $(0.09) $(0.23) $(0.17)
Per share information-diluted:                
Net loss attributable to ORBCOMM Inc.
common stockholders
 $(0.10) $(0.09) $(0.23) $(0.17)
Weighted average common shares outstanding:                
Basic  79,547   78,071   79,311   78,192 
Diluted  79,547   78,071   79,311   78,192 


ORBCOMM Inc. 
Condensed Consolidated Balance Sheets 
(In thousands, except par value and share data) 
  
 June 30,     
 2021  December 31, 
 (Unaudited)  2020 
ASSETS       
Current assets:       
Cash and cash equivalents$29,646  $40,384 
Accounts receivable, net of allowance for doubtful accounts of $7,041
and $8,209, respectively
 48,627   51,199 
Inventories 26,283   29,987 
Prepaid expenses and other current assets 15,303   14,592 
Total current assets 119,859   136,162 
Satellite network and other equipment, net 116,254   127,537 
Goodwill 166,129   166,129 
Intangible assets, net 54,336   60,559 
Other assets 21,722   20,200 
Deferred income taxes 256   258 
Total assets$478,556  $510,845 
LIABILITIES AND EQUITY       
Current liabilities:       
Accounts payable$15,588  $14,323 
Accrued liabilities 29,012   31,907 
Current portion of notes payable 12,500   10,000 
Current portion of deferred revenue 5,470   5,238 
Total current liabilities 62,570   61,468 
Note payable - related party 1,352   1,400 
Notes payable, net of unamortized deferred issuance costs 189,713   206,897 
Deferred revenue, net of current portion 4,636   4,158 
Deferred tax liabilities 12,731   13,413 
Other liabilities 13,729   14,094 
Total liabilities 284,731   301,430 
Commitments and contingencies       
Equity:       
ORBCOMM Inc. stockholders' equity       
Series A Convertible Preferred Stock, par value $0.001; 1,000,000 shares
authorized; 43,530 and 40,624 shares issued and outstanding at
June 30, 2021 and December 31, 2020, respectively
 435   406 
Common stock, par value $0.001; 250,000,000 shares authorized; 79,650,953
and 78,183,806 shares issued and outstanding at June 30, 2021 and
December 31, 2020, respectively
 80   78 
Additional paid-in capital 455,325   451,327 
Accumulated other comprehensive (loss) income (538)  1,021 
Accumulated deficit (263,114)  (244,882)
Total ORBCOMM Inc. stockholders' equity 192,188   207,950 
Noncontrolling interests 1,637   1,465 
Total equity 193,825   209,415 
Total liabilities and equity$478,556  $510,845 


ORBCOMM Inc. 
Condensed Consolidated Statements of Cash Flows 
(In thousands) 
(Unaudited) 
  Six Months Ended June 30, 
  2021  2020 
Cash flows from operating activities:        
Net loss $(18,000) $(13,478)
Adjustments to reconcile net loss to net cash provided by operating activities:        
Change in allowance for doubtful accounts  (45)  3,033 
Amortization and write-off of deferred financing fees  316   388 
Depreciation and amortization  23,960   25,773 
Impairment loss - satellite network  6,656    
Stock-based compensation  3,248   3,150 
Foreign exchange (gain) loss  (1,017)  338 
Deferred income taxes  (637)  (464)
Other  1,266   1,109 
Changes in operating assets and liabilities, net of acquisitions:        
Accounts receivable  2,453   9,345 
Inventories  3,706   1,592 
Prepaid expenses and other assets  (2,940)  1,840 
Accounts payable and accrued liabilities  (1,715)  (9,416)
Deferred revenue  715   (1,313)
Other liabilities  (1,331)  (1,113)
Net cash provided by operating activities  16,635   20,784 
Cash flows from investing activities:        
Capital expenditures  (10,242)  (10,517)
Capital expenditures associated with the subscription model  (2,376)  (217)
Net cash used in investing activities  (12,618)  (10,734)
Cash flows from financing activities:        
Purchases of common stock under share repurchase program     (2,527)
Principal payments of long-term debt  (5,000)   
Payments under revolving credit facility  (10,000)  (15,000)
Proceeds from revolving credit facility     15,000 
Payments under the Paycheck Protection Program     (7,588)
Proceeds from the Paycheck Protection Program     7,588 
Proceeds from issuance of common stock under employee stock purchase plan  533   430 
Net cash used in financing activities  (14,467)  (2,097)
Effect of exchange rate changes on cash and cash equivalents  (288)  144 
Net (decrease) increase in cash and cash equivalents  (10,738)  8,097 
Beginning of period  40,384   54,258 
End of period $29,646  $62,355 
Supplemental disclosures of cash flow information:        
Cash paid for:        
Interest $4,093  $10,000 
Income taxes $1,728  $2,745 

The following table reconciles Net Loss Attributable to ORBCOMM Inc. to EBITDA and Adjusted EBITDA for the periods shown:

 Three Months Ended  Six Months Ended 
 June 30,  June 30, 
(In thousands)2021  2020  2021  2020 
Adjustments to EBITDA               
Net loss attributable to ORBCOMM Inc.$(7,641) $(6,670) $(18,203) $(13,645)
Income tax expense 778   (554)  1,441   (1)
Interest income (167)  (265)  (404)  (681)
Interest expense 2,192   5,410   4,420   10,656 
Depreciation and amortization 11,728   12,409   23,960   25,773 
EBITDA$6,890  $10,330  $11,214  $22,102 
Adjustments to Adjusted EBITDA               
Stock-based compensation 1,487   1,471   3,248   3,150 
Noncontrolling interests 32   29   203   167 
Impairment loss - satellite network -   -   6,656   - 
Acquisition-related and integration costs 2,653   111   3,241   202 
Adjusted EBITDA$11,062  $11,941  $24,562  $25,621 

The following table reconciles Net Loss Attributable to ORBCOMM Inc. Common Stockholders to Adjusted Net Loss Attributable to ORBCOMM Inc. Common Stockholders for the periods shown:

 Three Months
Ended June 30,
  Six Months Ended
June 30,
 
 2021 2020  2021 2020 
(in thousands except per share data)             
Net Loss Attributable to ORBCOMM Inc. Common Stockholders$(7,658)$(6,670) $(18,232)$(13,645)
Impairment loss - satellite network      6,656   
Acquisition-related and integration costs 2,653  111   3,241  202 
Net Loss – Ex-Items Attributable to ORBCOMM Inc. Common Stockholders$(5,005)$(6,559) $(8,335)$(13,443)
Basic EPS$(0.10)$(0.09) $(0.23)$(0.17)
Impact of Adjustments listed above on Basic EPS$0.04 $  $0.12 $ 
Basic EPS – Ex-Items$(0.06)$(0.09) $(0.11)$(0.17)

The following tables reconcile GAAP Service Gross Margin to Non-GAAP Service Gross Margin and GAAP Product Gross Margin to Non-GAAP Product Gross Margin for the periods shown:

  Three Months Ended June 30,  Six Months Ended June 30, 
  2021  2020  2021  2020 
(In thousands, except margin data and unaudited)      
Service revenues $37,542  $38,429  $75,292  $78,953 
Minus - Cost of services, including depreciation
and amortization expense
  16,678   16,747   33,751   34,107 
GAAP Service gross profit $20,864  $21,682  $41,541  $44,846 
Plus - Depreciation and amortization expense  3,895   4,188   8,282   8,467 
Non-GAAP Service gross profit $24,759  $25,870  $49,823  $53,313 
GAAP Service gross margin  55.6%  56.4%  55.2%  56.8%
Non-GAAP Service gross margin  66.0%  67.3%  66.2%  67.5%


  Three Months Ended June 30,  Six Months Ended June 30, 
  2021  2020  2021  2020 
(In thousands, except margin data and unaudited)      
Product sales $28,386  $18,303  $54,331  $43,958 
Minus - Cost of product sales, including depreciation
and amortization expense
  22,898   13,732   42,859   31,522 
GAAP Product gross profit $5,488  $4,571  $11,472  $12,436 
Plus - Depreciation and amortization expense  373   521   724   1,030 
Non-GAAP Product gross profit $5,861  $5,092  $12,196  $13,466 
GAAP Product gross margin  19.3%  25.0%  21.1%  28.3%
Non-GAAP Product gross margin  20.6%  27.8%  22.4%  30.6%

ORBCOMM publicly reports its financial information in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). To facilitate external analysis of the Company’s operating performance, ORBCOMM also presents financial information that are considered “non-GAAP financial measures” under Regulation G and related reporting requirements promulgated by the U.S. Securities and Exchange Commission. Non-GAAP measures should be considered in addition to, and not as substitutes for, or superior to, Net Income or other measures of financial performance prepared in accordance with GAAP and may be different than those presented by other companies. EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Non-GAAP Service Gross Margin and Non-GAAP Product Gross Margin are not performance measures calculated in accordance with GAAP and are therefore considered non-GAAP measures. Reconciliation tables are presented above.

EBITDA is defined as earnings attributable to ORBCOMM Inc. before interest income (expense), provision for income taxes, depreciation and amortization, and loss on debt extinguishment. ORBCOMM believes EBITDA is useful to its management and investors in evaluating operating performance because it is one of the primary measures used to evaluate the economic productivity of the Company’s operations, including its ability to obtain and maintain its customers, its ability to operate its business effectively, the efficiency of its employees and the profitability associated with their performance. It also helps ORBCOMM’s management and investors to meaningfully evaluate and compare the results of the Company’s operations from period to period on a consistent basis by removing the impact of its financing transactions and the depreciation and amortization impact of capital investments from its operating results. In addition, ORBCOMM management uses EBITDA in presentations to its Board of Directors to enable it to have the same measurement of operating performance used by management and for planning purposes, including the preparation of the annual operating budget.

The Company also believes that Adjusted EBITDA, defined as EBITDA adjusted for stock-based compensation expense, noncontrolling interests, impairment loss, and acquisition-related and integration costs, is useful to investors to evaluate the Company’s core operating results and financial performance because it excludes items that are significant non-cash or non-recurring expenses reflected in the Condensed Consolidated Statements of Operations. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by Total Revenues.

Non-GAAP Service Gross Margin is defined as Non-GAAP Service gross profit divided by Service Revenues. Non-GAAP Service gross profit is defined as Service Revenues, minus cost of services (including depreciation and amortization expense) plus depreciation and amortization expense. Non-GAAP Product Gross Margin is defined as Non-GAAP Product gross profit divided by Product Sales. Non-GAAP Product gross profit is defined as Product Sales, minus cost of product sales (including depreciation and amortization expense) plus depreciation and amortization expense. The Company believes that Non-GAAP Service Gross Margin and Non-GAAP Product Gross Margin are useful to evaluate and compare the results of the Company’s operations from period to period on a consistent basis by removing the depreciation and amortization impact of capital investments from its operating results.

Adjusted Net Loss attributable to ORBCOMM Inc. Common Stockholders is defined as Net Loss Attributable to ORBCOMM Inc. Common Stockholders, excluding Impairment loss – satellite network. Adjusted Basic EPS is defined as Basic EPS excluding Impairment loss – satellite network. Adjusted Net Loss attributable to ORBCOMM Inc. Common Stockholders and Adjusted Basic EPS are non-GAAP financial measures used by the Company. These non-GAAP financial measures are used as a means to evaluate period-to-period comparisons. These non-GAAP measures are presented in this press release as management believes that they will provide investors with a means of evaluating, and an understanding of how management evaluates, the Company’s performance and results on a comparable basis that is not otherwise apparent on a GAAP basis, since many non-recurring, infrequent or non-cash items that management believes are not indicative of the core performance of the business may not be excluded when preparing financial measures under GAAP. These non-GAAP measures should not be considered in isolation from, as substitutes for, or superior to financial measures prepared in accordance with GAAP or may be different from similarly titled measures reported by other companies.