2015 Q3 Form 10-Q Financial Statement

#000136686815000081 Filed on November 05, 2015

View on sec.gov

Income Statement

Concept 2015 Q3 2014 Q3
Revenue $23.68M $23.44M
YoY Change 1.01% 3.96%
Cost Of Revenue $7.761M $7.868M
YoY Change -1.36% -3.83%
Gross Profit $15.92M $15.57M
YoY Change 2.21% 8.39%
Gross Profit Margin 67.22% 66.43%
Selling, General & Admin $9.675M $8.783M
YoY Change 10.16% -3.26%
% of Gross Profit 60.78% 56.4%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $19.30M $20.65M
YoY Change -6.56% -13.7%
% of Gross Profit 121.25% 132.62%
Operating Expenses $9.675M $8.783M
YoY Change 10.16% -3.26%
Operating Profit -$16.09M -$18.09M
YoY Change -11.08% -19.85%
Interest Expense -$9.019M -$9.067M
YoY Change -0.53% -46.35%
% of Operating Profit
Other Income/Expense, Net $40.30M $147.6M
YoY Change -72.69% -180.96%
Pretax Income $24.21M $129.5M
YoY Change -81.3% -163.21%
Income Tax $115.0K $89.00K
% Of Pretax Income 0.47% 0.07%
Net Earnings $24.10M $129.4M
YoY Change -81.38% -163.13%
Net Earnings / Revenue 101.77% 551.98%
Basic Earnings Per Share $0.02 $0.13
Diluted Earnings Per Share $0.02 $0.11
COMMON SHARES
Basic Shares Outstanding 1.031B shares 987.7M shares
Diluted Shares Outstanding 1.235B shares 1.189B shares

Balance Sheet

Concept 2015 Q3 2014 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $28.00M $27.20M
YoY Change 2.94% 312.12%
Cash & Equivalents $27.97M $27.22M
Short-Term Investments
Other Short-Term Assets $5.700M $7.700M
YoY Change -25.97% 1.32%
Inventory $12.08M $29.28M
Prepaid Expenses
Receivables $14.05M $16.22M
Other Receivables $0.00 $0.00
Total Short-Term Assets $59.82M $80.37M
YoY Change -25.56% 17.92%
LONG-TERM ASSETS
Property, Plant & Equipment $1.084B $1.120B
YoY Change -3.27% -5.65%
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $113.0M $104.8M
YoY Change 7.82% -17.48%
Total Long-Term Assets $1.207B $1.240B
YoY Change -2.59% -6.21%
TOTAL ASSETS
Total Short-Term Assets $59.82M $80.37M
Total Long-Term Assets $1.207B $1.240B
Total Assets $1.267B $1.320B
YoY Change -3.99% -5.02%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $9.653M $12.20M
YoY Change -20.84% -53.88%
Accrued Expenses $29.12M $25.87M
YoY Change 12.57% -21.21%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00
YoY Change
Long-Term Debt Due $19.64M $7.271M
YoY Change 170.14%
Total Short-Term Liabilities $103.6M $90.20M
YoY Change 14.9% -36.76%
LONG-TERM LIABILITIES
Long-Term Debt $618.8M $623.8M
YoY Change -0.79% -7.68%
Other Long-Term Liabilities $11.00M $13.99M
YoY Change -21.38% -9.24%
Total Long-Term Liabilities $900.6M $1.244B
YoY Change -27.62% 26.9%
TOTAL LIABILITIES
Total Short-Term Liabilities $103.6M $90.20M
Total Long-Term Liabilities $900.6M $1.244B
Total Liabilities $1.004B $1.334B
YoY Change -24.75% 18.81%
SHAREHOLDERS EQUITY
Retained Earnings -$1.323B -$1.514B
YoY Change -12.63% 109.04%
Common Stock
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $263.1M -$14.53M
YoY Change
Total Liabilities & Shareholders Equity $1.267B $1.320B
YoY Change -3.99% -5.02%

Cashflow Statement

Concept 2015 Q3 2014 Q3
OPERATING ACTIVITIES
Net Income $24.10M $129.4M
YoY Change -81.38% -163.13%
Depreciation, Depletion And Amortization $19.30M $20.65M
YoY Change -6.56% -13.7%
Cash From Operating Activities $8.570M $4.530M
YoY Change 89.18% 8.89%
INVESTING ACTIVITIES
Capital Expenditures -$7.540M -$1.270M
YoY Change 493.7% -88.15%
Acquisitions
YoY Change
Other Investing Activities $0.00
YoY Change -100.0%
Cash From Investing Activities -$7.540M -$1.270M
YoY Change 493.7% -88.08%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 15.01M 320.0K
YoY Change 4590.62% -95.14%
NET CHANGE
Cash From Operating Activities 8.570M 4.530M
Cash From Investing Activities -7.540M -1.270M
Cash From Financing Activities 15.01M 320.0K
Net Change In Cash 16.04M 3.580M
YoY Change 348.04% 3480.0%
FREE CASH FLOW
Cash From Operating Activities $8.570M $4.530M
Capital Expenditures -$7.540M -$1.270M
Free Cash Flow $16.11M $5.800M
YoY Change 177.76% -61.02%

Facts In Submission

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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">BASIS OF PRESENTATION</font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Globalstar, Inc. (&#8220;Globalstar&#8221; or &#8220;the Company&#8221;) provides Mobile Satellite Services (&#8220;MSS&#8221;) including voice and data communications services through its global satellite network. Thermo Capital Partners LLC, through its affiliates, (&#8220;Thermo&#8221;) is Globalstar&#8217;s principal owner and largest stockholder. Globalstar&#8217;s Executive Chairman and Chief Executive Officer controls Thermo and its affiliates. Two other members of Globalstar&#8217;s Board of Directors are also directors, officers or minority equity owners of various Thermo entities.</font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company has prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with generally accepted accounting principles (&#8220;GAAP&#8221;) in the United States of America for interim financial information. Certain information and footnote disclosures normally in financial statements have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission; however, management believes the disclosures made are adequate to make the information presented not misleading. These financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in Globalstar, Inc.&#8217;s Annual Report on Form 10-K for the year ended December 31, 2014, as filed with the Securities and Exchange Commission (the "SEC") on March 2, 2015 (the "2014 Annual Report"), and Management's Discussion and Analysis of Financial Condition and Results of Operations herein.&#160;</font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company evaluates estimates on an ongoing basis. Significant estimates include the value of derivative instruments, the allowance for doubtful accounts, the net realizable value of inventory, the useful life and value of property and equipment, income taxes and the value of stock-based compensation. Actual results could differ from these estimates.&#160;Certain reclassifications have been made to prior period condensed consolidated financial statements to conform to current period presentation.</font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">These unaudited interim condensed consolidated financial statements include the accounts of Globalstar and its majority owned or otherwise controlled subsidiaries. All significant intercompany transactions and balances have been eliminated in the consolidation. In the opinion of management, the information included herein includes all adjustments, consisting of normal recurring adjustments, that are necessary for a fair presentation of the Company&#8217;s condensed consolidated statements of operations and comprehensive loss, condensed consolidated balance sheets, and condensed consolidated statements of cash flows for the periods presented. The results of operations for the </font><font style="font-family:inherit;font-size:10pt;">three and nine</font><font style="font-family:inherit;font-size:10pt;"> months ended </font><font style="font-family:inherit;font-size:10pt;">September&#160;30, 2015</font><font style="font-family:inherit;font-size:10pt;"> are not necessarily indicative of the results that may be expected for the full year or any future period.</font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company evaluates events that occur after the balance sheet date but before the financial statements are issued for potential recognition or disclosure. Based on this evaluation, the Company determined that there were no material subsequent events for recognition or disclosure other than those disclosed herein.&#160;</font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Recently Issued Accounting Pronouncements</font><font style="font-family:inherit;font-size:10pt;font-weight:bold;">&#160;</font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In January 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-01, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Income Statement - Extraordinary and Unusual Items</font><font style="font-family:inherit;font-size:10pt;">. This ASU eliminates the separate presentation of extraordinary items, net of tax and the related earnings per share, but does not affect the requirement to disclose material items that are unusual in nature or infrequently occurring. ASU 2015-01 was issued to simplify income statement classification by removing the concept of extraordinary items from U.S. GAAP and more closely align U.S. GAAP with International Financial Reporting Standards ("IFRS"). This standard is effective for periods beginning after December 15, 2015. Early adoption is permitted, but only as of the beginning of the fiscal year of adoption. Upon adoption, a reporting entity may elect prospective or retrospective application. If adopted prospectively, both the nature and amount of any subsequent adjustments to previously reported extraordinary items must be disclosed. The Company does not expect this ASU to have a material effect on its consolidated financial statements and related disclosures.</font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In February 2015, the FASB issued ASU No. 2015-02, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Consolidation - Amendments to the Consolidation Analysis</font><font style="font-family:inherit;font-size:10pt;">. ASU 2015-02 was issued in response to concerns that current GAAP might require a reporting entity to consolidate another legal entity in situations in which the reporting entity&#8217;s contractual rights do not give it the ability to act primarily on its own behalf, the reporting entity does not hold a majority of the legal entity&#8217;s voting rights, or the reporting entity is not exposed to a majority of the legal entity&#8217;s economic benefits or obligations. The amendments included in ASU 2015-02 are intended to improve targeted areas in the consolidation guidance, which includes legal entities such as limited partnerships and limited liability companies and the evaluation of fees paid to a decision maker. </font><font style="font-family:Arial;font-size:9pt;">T</font><font style="font-family:inherit;font-size:10pt;">his ASU is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The Company is currently evaluating the impact this standard will have on its consolidated financial statements and related disclosures. The Company has not yet determined the effect of the standard on its ongoing reporting.</font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In April 2015, the FASB issued ASU No. 2015-03, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Interest - Imputation of Interest - Simplifying the Presentation of Debt Issue Costs</font><font style="font-family:inherit;font-size:10pt;">. ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the consolidated balance sheets as a reduction in the carrying amount of the related debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by this ASU. This ASU is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Upon adoption, if applicable, this ASU will be applied on a retrospective basis, wherein the consolidated balance sheet of each period presented will be adjusted to reflect the effects of applying the new guidance. The Company would be required to comply with the applicable disclosures for a change in an accounting principle, including the nature of and reason for the change in accounting principle, the transition method, a description of the prior-period information that has been retrospectively adjusted, and the effect of the change on the financial statement line items (that is, the previously reported debt issuance cost asset and the adjusted debt liability). The Company is currently evaluating the impact this standard will have on its consolidated financial statements and related disclosures. </font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In August 2015, the FASB decided to delay the effective date of ASU No. 2014-09, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Revenue from Contracts with Customers</font><font style="font-family:inherit;font-size:10pt;">. ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. This ASU requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. With the one-year deferral, ASU 2014-09 is now effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Additionally, early adoption is now permitted. However, entities reporting under U.S. GAAP are not permitted to adopt the standard earlier than the original effective date of December 15, 2016. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is currently evaluating the impact this standard will have on its financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing reporting.</font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"><br clear="none"/></font></div><div style="line-height:120%;text-align:justify;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In July 2015, the FASB issued ASU No. 2015-11, </font><font style="font-family:inherit;font-size:10pt;font-style:italic;">Simplifying the Measurement of Inventory</font><font style="font-family:inherit;font-size:10pt;">. ASU 2015-11 requires that inventory within the scope of the guidance be measured at the lower of cost and net realizable value. Inventory measured using last-in, first-out (LIFO) and retail inventory method (RIM) are excluded from this new guidance. This ASU replaces the concept of market with the single measurement of net realizable value and is intended to create efficiencies for preparers and more closely aligns U.S. GAAP with IFRS. This ASU is effective for public business entities in fiscal years beginning after December 15, 2016, including interim periods within those years. Prospective application is required and early adoption is permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the impact this standard will have on its financial statements and related disclosures, but does not expect this ASU to have a material effect on its consolidated financial statements and related disclosures.</font></div></div>

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