Exhibit 99
[ORBCOMM LOGO]
ORBCOMM REPORTS STRONG REVENUE GROWTH FOR THIRD QUARTER
AND FIRST NINE MONTHS OF 2006
- Company Posts 207% Year-Over-Year Increase in Billable Subscriber
Communicators -
- IPO Proceeds Primarily for Capital Expenditures -
Fort Lee, NJ, November 21, 2006 - ORBCOMM Inc. (Nasdaq: ORBC), a global
satellite data communications company focused on two-way Machine-to-Machine
(M2M) communications, today announced financial results for the third quarter
and nine months ended September 30, 2006.
Revenues for the third quarter of 2006 increased 51.5% to $5.6 million from $3.7
million in the third quarter of 2005. The company added 29,115 net billable
subscriber communicators to its data communications system, which represents an
increase of 193.9% compared to the third quarter of 2005.
Revenues for the first nine months 2006 increased 80.6% to $18.2 million from
$10.1 million in the comparable period of 2005. At September 30, 2006, ORBCOMM
reported 199,082 billable subscriber communicators, representing net additions
of 86,098, or an increase of 207.6% over the first nine months of 2005.
"We believe the fundamentals of ORBCOMM's business are excellent and our target
markets are significant and growing," said Jerome Eisenberg, Chief Executive
Officer. "The company has an established global network and proven technology,
which our more than 130 resellers continue to select for their fixed and mobile
asset applications. Our strong third quarter results demonstrate continued
momentum for the remainder of 2006, and we successfully completed our initial
public offering earlier this month. We are uniquely positioned within the
industry to capitalize on market demand and will be using the majority of the
net proceeds from the initial public offering to execute our strategic growth
plans, beginning with replenishing our existing satellite constellation by
deploying our "quick-launch" and next-generation satellites."
"We believe that ORBCOMM is the only company in the satellite industry that
offers customers a combination of cellular price points and satellite coverage,"
added Marc Eisenberg, ORBCOMM's Chief Marketing Officer. "We are focused on
two-way M2M data communications, which enable our customers and end-users to
send and receive information to and from anywhere in the world using low cost
subscriber communicators and paying airtime costs that we believe are the lowest
in the industry for global connectivity. We believe there is
- more -
no other satellite or terrestrial network currently in operation that offers
comparable technology, coverage and cost."
Business Highlights
- -------------------
Selected recent business highlights include:
o ORBCOMM's subsidiary, Stellar Satellite Communications, Ltd., entered
into an agreement with GE Asset Intelligence, LLC (AI) to supply up to
412,000 units of in-production and future models of Stellar's
subscriber communicators to support AI's applications utilizing
ORBCOMM's M2M data communications system.
o Volvo Trucks North America announced that it will make its Volvo Link
Sentry monitoring application, which utilizes ORBCOMM's M2M data
communications system, standard for all Volvo trucks with its US'07
engines, which are expected to go on sale beginning in the first
quarter of 2007.
o The U.S. Postal Service and GE Equipment Services division, Trailer
Fleet Services, agreed to a new six-year contract for trailers to
transport mail between distribution centers and local post offices,
worth approximately $100 million to GE through July 2012. The agreement
includes installation of GE's VeriWise Asset Intelligence system on the
4,752 dry van trailers, a tracking system which utilizes ORBCOMM's
products and satellite services that tracks and monitors trailer
location and condition.
o US Express Enterprises, Inc, the fifth largest publicly owned truckload
carrier in the US measured by revenue, announced a significant rollout
of the DriverTech DT 4000 on-board computer, an in-cab tri-mode
communications system (satellite, cellular and Wi-Fi) that uses
ORBCOMM's satellite data communication services. The DT 4000 is a
solution offered by DriverTech, an ORBCOMM value-added reseller.
Financial Results
- -----------------
Revenues
Revenues in the third quarter of 2006 were $5.6 million, an increase of $1.9
million or 51.5% over the prior year period. Service Revenues and Product Sales
increased over the prior year period by 52.7% to $3.2 million and by 50.0% to
$2.3 million, respectively.
Revenues for the nine month period in 2006 were $18.2 million, an increase of
$8.1 million or 80.6% over the comparable prior year period. Service Revenues
increased 43.2% to $8.2 million and Product Sales increased 129.5% to $10.0
million from the sale of subscriber communicators and peripheral equipment. As
sales of subscriber communicators are a strong predictor of future Service
Revenues, it is expected that Service Revenues will increase in future periods
when these additional units are put into service on the ORBCOMM data
communications system.
Billable Subscriber Communicators
Billable subscriber communicators are defined as subscriber communicators
activated and currently billing or expected to be billing within 30 to 90 days.
Billable subscriber communicator net additions for the third quarter of 2006
were 29,115 units, an increase of 19,207 units or 193.9%, over the third quarter
2005 net additions of 9,908 units.
As of September 30, 2006, there were a total of 199,082 billable subscriber
communicators on the ORBCOMM data communications system, compared to 103,178
billable subscriber communicators as of September 30, 2005. Billable subscriber
net additions of 86,098 units for the first nine months of 2006 increased 207.6%
over the first nine months of 2005.
Costs and Expenses
Costs and Expenses increased 38.9% or $2.2 million to $8.0 million for the third
quarter of 2006, compared to the same period in the prior year. This was due
primarily to increases in costs of products sold resulting from higher product
sales volume, expenses related to achieving proper staffing levels, stock-based
compensation expenses and costs related to activities for complying with Section
404 of Sarbanes-Oxley. The 38.9% rate of growth in Costs and Expenses in the
third quarter of 2006 moderated from the growth rate in Costs and Expenses of
69.9% for the first nine months ended September 30, 2006.
For the first nine month period of 2006, Costs and Expenses increased $11.2
million to $27.1 million. The primary reasons for the increase in the nine
months are the same as described above, but also included product development
expenses, repair and maintenance costs, and legal fees.
Loss From Operations and Net Loss
Loss from operations as a percentage of revenues for the three and nine month
periods of 2006 narrowed to 44.3% and 48.9% from 57.4% and 58.3%, respectively,
for the comparable periods in 2005. The company reported a net loss of $1.9
million for the third quarter 2006, an 11.1% improvement over a net loss $2.1
million in the prior year period. Net loss for the first nine months of 2006 was
$7.3 million, up 24.2%, from a net loss of $5.8 million in 2005, as a result of
the increases in Costs and Expenses as described above.
EBITDA
ORBCOMM believes that EBITDA, when presented in conjunction with comparable GAAP
measures, is useful to investors to evaluate the company's operations,
management execution and operational and financial performance from period to
period on a consistent basis. EBITDA is not a performance measure calculated in
accordance with accounting principles generally accepted in the United States,
or GAAP. While we consider EBITDA to be an important measure of operating
performance, it should be considered in addition to, and not as a substitute
for, or superior to, net loss or other measures of financial performance
prepared in accordance with GAAP and may be different than EBITDA measures
presented by other companies. A reconciliation table is presented among other
financial charts at the end of this release.
EBITDA for the third quarter 2006 was a loss of $1.8 million compared to a loss
of $1.6 million in the third quarter 2005. EBITDA for the first nine months 2006
was a loss of $6.8 million,
compared to a loss of $4.5 million for the comparable period last year, due
primarily to the increases in Costs and Expenses described above.
Growth Strategy
- ---------------
The company intends to gain market share by leveraging its business strengths
and key competitive advantages to increase the number of subscriber
communicators activated on its M2M data communications system, both in existing
and new markets. ORBCOMM utilizes a cost-effective sales and marketing strategy
of partnering with more than 130 resellers that provide expertise in specific
industries.
Management is focused on expanding into additional international markets,
expanding ORBCOMM's low cost, multi-channel marketing and distribution network
of resellers and deploying the company's next-generation satellite program.
Additional strategic objectives include further reducing subscriber communicator
costs, reducing network latency, introducing new features and services and
continuing to provide comprehensive technical support, customer service and
quality control.
Full-Year 2006 Guidance
- -----------------------
The company expects billable subscriber communicator net additions to be in the
range of 19,000 to 25,000 units in the fourth quarter of 2006. Based on recent
increases in VAR activity, we anticipate being at the high end of the range.
Investment Community Conference Call
- ------------------------------------
ORBCOMM will host a conference call and webcast for the investment community
this morning at 11:00 AM ET. Senior management will review the results, discuss
ORBCOMM's business strategy and address questions from the investment community.
Domestic participants should dial 800-683-1525 at least ten minutes prior to the
start of the call. International callers should dial 973-872-3197. The
conference call identification number is 8132607. A replay of the call will be
available from approximately 12:00 PM ET on Tuesday, November 21, through 11:59
PM ET on Tuesday, November 28, 2006. To access the replay, please dial
877-519-4471 domestically or 973-341-3080 internationally and enter
identification number 8132607.
Alternatively, to access the live webcast, please visit the company's website at
www.orbcomm.com, click on 'Investor Relations' and select 'Presentations and
Webcasts.' An archive of the webcast will be available following the call for
one week.
About ORBCOMM Inc.
ORBCOMM is a leading global satellite data communications company, focused
exclusively on Machine-to-Machine (M2M) communications. Its customers include
General Electric, Caterpillar Inc., Volvo Group and Komatsu Ltd. among other
industry leaders. By means of a global network of 30 low-earth orbit (LEO)
satellites and accompanying ground infrastructure, ORBCOMM's low-cost and
reliable two-way data communications products and services track,
monitor and control mobile and fixed assets in four core markets: commercial
transportation; heavy equipment; industrial fixed assets; and marine/homeland
security. The company's products are installed on trucks, containers, marine
vessels, locomotives, backhoes, pipelines, oil wells, utility meters, storage
tanks and other assets. ORBCOMM is headquartered in Fort Lee, New Jersey and has
a Network Control Center in Dulles, Virginia. 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, objectives
and expectations for future operations and are based upon management's current
estimates and projections of future results or trends. Although we believe that
our plans and objectives reflected in or suggested by these forward-looking
statements are reasonable, we may not achieve these plans or objectives. Our
actual results may differ materially from those projected as a result of certain
risks and uncertainties. These risks and uncertainties include, but are not
limited to: the substantial losses we have incurred and expect to continue to
incur; demand for and market acceptance of our products and services and the
applications developed by our resellers; technological change; pricing pressures
and other competitive factors; the inability of our international resellers to
develop markets outside the United States; satellite launch failures, satellite
launch and construction delays and in-orbit satellite failures or reduced
performance; the failure of our system or reductions in levels of service due to
technological malfunctions or deficiencies or other events; our inability to
renew or expand our satellite constellation; financial market conditions and the
results of financing efforts; political, legal regulatory, governmental,
administrative and economic conditions and developments in the United States and
other countries and territories in which we operate; changes in our business
strategy; and the other risks described in our filings with the Securities and
Exchange Commission. Unless required by law, we undertake no obligation to
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
Contacts
Investor Inquiries:
Robert Costantini
Chief Financial Officer, ORBCOMM Inc.
703-433-6305
Costantini.robert@orbcomm.com
Media Inquiries:
Gillian Angstadt
The Abernathy MacGregor Group
212-371-5999
gda@abmac.com
[FINANCIAL TABLES FOLLOW]
ORBCOMM INC.
Consolidated statements of operations
(unaudited)
Three months ended Nine months ended
September 30, September 30,
------------------ ------------------
2006 2005 2006 2005
-------- -------- -------- --------
(in thousands, except per share data)
Revenues:
Service revenues $ 3,220 $ 2,109 $ 8,165 $ 5,703
Product sales 2,334 1,556 10,030 4,370
-------- -------- -------- --------
Total revenues 5,554 3,665 18,195 10,073
-------- -------- -------- --------
Costs and expenses(1):
Costs of services 2,209 1,493 6,375 4,192
Costs of product sales 2,285 1,628 9,615 4,706
Selling, general and administrative 3,105 2,161 9,653 6,178
Product development 413 487 1,455 869
-------- -------- -------- --------
Total cost and expenses 8,012 5,769 27,098 15,945
-------- -------- -------- --------
Loss from operations (2,458) (2,104) (8,903) (5,872)
Other income (expense):
Interest income 595 5 1,636 20
Other income 58 -- 198 9
Interest expense (62) -- (189) --
-------- -------- -------- --------
Total other income 591 5 1,645 29
-------- -------- -------- --------
Net loss $ (1,867) $ (2,099) $ (7,258) $ (5,843)
======== ======== ======== ========
Net loss applicable to common shares $ (4,305) $ (3,361) $(14,559) $ (9,674)
======== ======== ======== ========
Net loss per common share:
Basic and diluted $ (0.71) $ (0.59) $ (2.50) $ (1.70)
======== ======== ======== ========
Weighted average common shares outstanding:
Basic and diluted 6,085 5,690 5,823 5,680
======== ======== ======== ========
(1)Stock-based compensation included in costs and expenses:
Costs of services $ 7 $ 2 $ 24 $ 6
Selling, general and administrative 114 26 514 156
Product development 5 2 15 9
-------- -------- -------- --------
$ 126 $ 30 $ 553 $ 171
======== ======== ======== ========
The following table reconciles our Net Loss to EBITDA for the periods shown:
Three months ended Nine months ended
September 30, September 30,
------------------ ------------------
2006 2005 2006 2005
-------- -------- -------- --------
(in thousands)
Net loss $ (1,867) $ (2,099) $ (7,258) $ (5,843)
Interest income (595) (5) (1,636) (20)
Interest expense 62 -- 189 --
Depreciation and amortization 620 475 1,904 1,355
-------- -------- -------- --------
EBITDA $ (1,780) $ (1,629) $ (6,801) $ (4,508)
======== ======== ======== ========