– GAAP Product Gross Margin Increases 690 Basis Points Over Prior Year –
– GAAP Service Gross Margin 58.6%, Non-GAAP Service Gross Margin Record 69% –– Cash Flow from Operations of $10 Million –ROCHELLE PARK, N.J., Oct. 30, 2019 (GLOBE NEWSWIRE) — ORBCOMM Inc. (NASDAQ: ORBC), a global provider of Machine-to-Machine (M2M) and Internet of Things (IoT) solutions, today announced financial results for the third quarter ended September 30, 2019.The following financial highlights are in thousands of dollars and unaudited. (1) 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.
(2) Adjusted EBITDA is defined as EBITDA, adjusted for stock-based compensation expense, noncontrolling interests, impairment loss, non-capitalized satellite launch and in-orbit insurance, and acquisition-related and integration costs.
(3) EBITDA and Adjusted EBITDA are non-GAAP financial measures used by the Company to measure operating performance and the quality of earnings. A table presenting EBITDA and Adjusted EBITDA, reconciled to GAAP Net Income (Loss), is among other financial tables at the end of this release.“In the third quarter we continued to ship greater quantities of the new cost-reduced, feature-rich products and made great progress in significantly raising Product Margin and Service Margin, increasing cash flow from operations,” said Marc Eisenberg, ORBCOMM’s Chief Executive Officer. “We have several high-profile opportunities across our markets that are starting to fall in line, and I’m confident that we’ll be able to build on this momentum, setting the stage for a strong start to 2020.”Financial ResultsRevenuesTotal Revenues for the third quarter of 2019 were $69.2 million compared to $71.0 million in the prior year period. Product Sales were $28.6 million in the third quarter of 2019 compared to $32.6 million in the third quarter of 2018. The prior year period included $4.4 million of hardware shipments to large customers, JB Hunt and Savi on behalf of the Defense Logistics Agency, that did not recur in the third quarter this year. Service Revenues were $40.5 million in the third quarter of 2019, up $2.1 million or 5.4% compared to the same period last year. Recurring Service Revenues increased to $39.2 million in the third quarter, up 5.3% compared to $37.2 million in the prior year quarter, as the Company grew its subscriber base. As of September 30, 2019, total billable subscriber communicators (including units under the AT&T container contract expiring at the end of 2019) grew to approximately 2.6 million, an increase of 12% compared to the 2.3 million in the prior year. Other Service Revenues, which are comprised of installation services, professional services and software licenses, were $1.4 million in the quarter.Gross Margin (4,5,6)
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