ORBCOMM Reports Results for Third Quarter 2009

http://www.businesswire.com/news/home/20091109005776/en

- Service Revenues of $6.9 million Up 10% -

- Adjusted EBITDA of $1.0 million Up 58% Over the Prior Year -

- ORBCOMM Surpasses 500,000 Total Subscriber Communicators in the Third Quarter
-
FORT LEE, N.J.--(Business Wire)--
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 ended September 30, 2009.

The following financial highlights are in thousands of dollars, except per
share.

Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008
Total Revenues $7,031 $7,530 $20,528 $19,248
Service Revenues $6,939 $6,336 $20,281 $16,948
Product Sales $92 $1,194 $247 $2,300
Net Loss attributable to ORBCOMM Inc. $(1,237) $(1,001) $(10,734) $(2,514)
Net Loss per Common Share $(0.03) $(0.02) $(0.25) $(0.06)
Average Shares Outstanding (basic and diluted) 42,442,000 42,070,000 42,386,000 41,945,000
EBITDA (1) (3) $7,688 $(436) $821 $(1,662)
Adjusted EBITDA (2) (3) $1,023 $646 $2,065 $1,414

(1) EBITDA is defined as earnings attributable to ORBCOMM Inc. before interest
income (expense), provision for income taxes and depreciation and amortization.

(2) Adjusted EBITDA is defined as EBITDA, adjusted for stock-based compensation
expense for continued and discontinued operations, Noncontrolling Interests and
Pre-control Earnings of Consolidated Subsidiary, and Impairment Charges net of
Insurance Recovery.

(3) A table presenting EBITDA and Adjusted EBITDA, reconciled to GAAP Net Loss,
is among other financial tables at the end of this release.

Service Revenues for the third quarter of 2009 increased 9.5% to $6.9 million
from the comparable period of 2008 due primarily to increases in billable
subscriber communicators and revenue from Automatic Identification System (AIS)
service. Total Revenues for the quarter ended September 30, 2009 were $7.0
million. Total revenues declined 6.6% from the third quarter of 2008, due
primarily to a decline in Product Sales of $1.1 million versus the prior year at
our Japanese subsidiary. Product Sales from our subsidiary Stellar is not
included in Product Sales as it has been classified as discontinued operations.
Total revenues for the nine months ended September 30, 2009 were up 6.7% driven
by a 19.7% increase in service revenues, or $3.3 million, which was partially
offset by a $2.1 million decline in Product Sales in Japan.

Costs and Expenses decreased in the third quarter of 2009 to $7.6 million, a
decrease of $0.5 million or 5.8% compared to the same period in the prior year.
Third quarter Costs and Expenses had three large offsetting factors.
Depreciation associated with the shorter useful life of the remaining Quick
Launch satellites was $7.5 million, which was offset by Insurance Recovery net
of Impairment Charges of $7.0 million. Cost of Service, Selling General, &
Administrative and Product Development Costs, excluding Depreciation and
Amortization decreased 12.2% or $0.8 million from the prior year period. The
lower costs were driven by a 21.0% decline in Selling, General, and
Administrative expense on lower employee costs and professional fees.

Operating loss for the third quarter ended September 30, 2009 was $0.6 million
compared to a $0.5 million loss in the third quarter of 2008. Net Loss during
the third quarter was $1.2 million compared to a Net Loss of $1.0 million in the
prior year period. The Insurance Recovery is a receivable that offsets the
Impairment Charges to date, and any collection of insurance proceeds above the
receivable will be recognized as a gain when collected.

At September 30, 2009, there were 509,000 billable subscriber communicators, a
15.3% increase over the third quarter of 2008. Net satellite subscriber
additions during the quarter were approximately 2,000, while terrestrial
subscribers increased by 24,000 driven by a large Value Added Reseller`s (VAR)
conversion to ORBCOMM`s system.

"Our subscriber growth slowed this quarter due to continued weakness in the
economy. The slow growth was driven by exceptionally high disconnects from a few
of our VARs, which we do not expect to continue in the fourth quarter" said Marc
Eisenberg, ORBCOMM`s Chief Executive Officer. "This quarter also saw the
completion of the Launch Services Agreement with SpaceX, a key milestone for the
company as we progress toward the launch of our next generation satellite
constellation."

"Expenses related to the service business are being actively managed. We had a
12.2% decline in the third quarter comparing Cost of Service, Selling General, &
Administrative and Product Development Costs, excluding Depreciation and
Amortization, while Service Revenues continue to rise, lifting Adjusted EBITDA
to $1.0 million, a 58% increase over the third quarter of 2008," said Robert
Costantini, ORBCOMM`s Chief Financial Officer. "In addition, we continue to
generate positive cash flow from operations and expect to increase our cash
balances with the satellite insurance recovery."

Business Highlights

Selected recent business highlights include:

* Space Exploration Technologies Corp. (SpaceX) has agreed to launch 18 ORBCOMM
Generation 2 (OG2) satellites to begin as early as the fourth quarter of 2010
through 2014. SpaceX will deliver ORBCOMM`s second-generation satellites into
low Earth orbit (LEO) for the purpose of supporting ORBCOMM`s existing
constellation of satellites, adding new features, and growing its global M2M and
AIS offerings.
* ORBCOMM and General Electric Asset Intelligence (GEAI) completed the
conversion of the GEAI terrestrial subscribers over to ORBCOMM, which drove
terrestrial subscriber communicator growth during the quarter. Additionally,
ORBCOMM ended the quarter with more than 500,000 total subscriber communicators.

* In an effort to further tie together the ORBCOMM dual-mode offering and
provide an easier interface for ORBCOMM subscribers, ORBCOMM and Sierra Wireless
entered into an agreement to integrate capabilities of Sierra Wireless's M2M
services platform within ORBCOMM's web services portal, which is expected to be
available in the first quarter of 2010, to increase customer control of their
M2M services, devices, and communications. ORBCOMM's web services portal will
combine comprehensive subscriber management functions with many innovative
capabilities for device management.

Financial Results and Highlights

Revenue

Service Revenues for the third quarter were $6.9 million, an increase of 9.5%
over the prior year due primarily to increases in billable subscriber
communicators and AIS revenue. Product Sales decreased in the third quarter by
$1.1 million due primarily to a decline in Product Sales at our Japanese
subsidiary. Total Revenues for the third quarter of 2009 were $7.0 million, a
decrease of 6.6% from the third quarter of 2008.

Billable Subscriber Communicators

As of September 30, 2009, there were 509,000 billable subscriber communicators,
compared to approximately 442,000 billable subscriber communicators, an increase
of 15.3% over last year.

Costs and Expenses & Discontinued Operations

Costs and Expenses decreased in the third quarter of 2009 to $7.6 million, a
decrease of $0.5 million or 5.8% compared to the same period in the prior year.
Third quarter Costs and Expenses had three large offsetting factors.
Depreciation associated with the shorter useful life of the remaining Quick
Launch satellites was $7.5 million, which was offset by Insurance Recovery net
of Impairment Charges of $7.0 million. Cost of Service, Selling General, &
Administrative and Product Development Costs, excluding Depreciation and
Amortization of $8.9 million and $0.9 million for the third quarter of 2009 and
2008, respectively, decreased 12.2% or $0.8 million from the prior year period.
The lower costs were driven by a 21.0% decline in Selling, General, and
Administrative expense on lower employee costs and professional fees. The
financial results of the Stellar hardware business have been classified as
discontinued operations.

Net Loss

Net Loss was $1.2 million for the third quarter 2009 compared to a Net Loss of
$1.0 million in the prior year period.

Net Loss per Common Share from continuing operations was $0.02 for the three
months ended September 30, 2009 compared to Net Loss per Common Share from
continuing operations of $0.01 for the prior year quarter. Net Loss attributable
to ORBCOMM Inc. was $0.03 for the three months ended September 30, 2009 compared
to Net Loss attributable to ORBCOMM Inc. of $0.02 for the prior year quarter.

Adjusted EBITDA and EBITDA

Adjusted EBITDA for the third quarter of 2009 was $1.0 million, compared to an
Adjusted EBITDA of $0.6 million in the third quarter of 2008.

EBITDA for the third quarter of 2009 was positive $7.7 million, compared to an
EBITDA of negative $0.4 million in the third quarter of 2008. EBITDA benefited
from the Insurance Recovery that offset the Impairment Charge incurred in the
first quarter of 2009.

EBITDA and Adjusted EBITDA are non-GAAP financial measures used by the company.
Please see the financial tables at the end of the release for a reconciliation
of EBITDA and Adjusted EBITDA.

Balance Sheet

Cash, Cash Equivalents, and Restricted Cash as of September 30, 2009 decreased
$10.4 million to $58.2 million from $68.6 million at June 30, 2009. The decline
is attributable to $11.8 million in capital expenditures mainly related to
payments on the next generation satellite contracts, which was partially offset
by $1.3 million in positive Cash Flow from Operations during the quarter. The
increase in Receivable from Insurance Recovery reflects the offset to the
Impairment Charges and may not reflect the full potential recovery.

Investment Community Conference Call

ORBCOMM will host a conference call and webcast for the investment community
this morning at 10:30 AM ET. Senior management will review the results, discuss
ORBCOMM`s business, and address questions.

Domestic participants should dial 877-941-8609 at least ten minutes prior to the
start of the call. International callers should dial 480-629-9818. The
conference call identification number is 4179722. To hear a live web simulcast
or to listen to the archived webcast following completion of the call, please
visit the company`s web site at www.orbcomm.com, click on investor relations
tab, then select "Presentations and Webcasts," to access the link to the call.
To listen to a telephone replay of the conference call, please dial 800-406-7325
domestically or 303-590-3030 internationally and enter reservation
identification number 4179722. The replay will be available from approximately
12:00 PM ET on Monday, November 9, 2009, through 11:59 PM ET on Monday, November
16, 2009.

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 on
Machine-to-Machine (M2M) communications. Its customers include Caterpillar Inc.,
Doosan Infracore America, General Electric, Hitachi Construction Machinery,
Hyundai Heavy Industries, Komatsu Ltd., Manitowoc Crane Companies, Inc., and
Volvo Construction Equipment among other industry leaders. By means of a global
network of low-earth orbit (LEO) satellites and accompanying ground
infrastructure, ORBCOMM`s low-cost and reliable two-way data communication
services track, monitor and control mobile and fixed assets in four core
markets: commercial transportation; heavy equipment; industrial fixed assets;
and marine/homeland security. ORBCOMM based 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 its 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 events and include statements about our
expectations, beliefs, plans, objectives, intentions, assumptions and other
statements that are not historical facts. Such forward-looking statements,
including those concerning the Company`s expectations, are subject to known and
unknown risks and uncertainties, which could cause actual results to differ
materially from the results, projected, expected or implied by the
forward-looking statements, some of which are beyond the Company`s control, that
may cause the Company`s 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. These
risks and uncertainties include but are not limited to: the impact of global
recession and continued worldwide credit and capital constraints; 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; loss or decline or slowdown in the growth in business from the Asset
Intelligence division of General Electric Company ("GE" or "General Electric" or
"GEAI"), other value-added resellers or VARs and international value-added
resellers or IVARs; loss or decline or slowdown in growth in business of any of
the specific industry sectors the Company serves, such as transportation, heavy
equipment, fixed assets and maritime; litigation proceedings; technological
changes, pricing pressures and other competitive factors; the inability of our
international resellers to develop markets outside the United States; market
acceptance and success of our AIS business; the in-orbit satellite failure of
the two remaining quick-launch satellites, satellite launch and construction
delays and cost overruns 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; political, legal regulatory,
government administrative and economic conditions and developments in the United
States and other countries and territories in which we operate; and 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. For more detail on these
and other risks, please see our "Risk Factors" section in our annual report on
Form 10-K for the year ended December 31, 2008.

ORBCOMM Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share data)
(Unaudited)

September 30, December 31,
2009 2008

ASSETS

Current assets:
Cash and cash equivalents $ 52,216 $ 75,370
Restricted cash 3,000 2,000
Accounts receivable, net of allowances for doubtful accounts of $584 and $101 3,516 3,412
Inventories 90 158
Receivables from insurance recoveries 31,354 2,450
Prepaid expenses and other current assets 899 1,690
Current assets held for sale 1,247 1,621
Total current assets 92,322 86,701

Satellite network and other equipment, net 73,921 92,772
Intangible assets, net 2,972 4,086
Restricted cash 2,980 3,680
Other assets 1,358 1,484
Long term assets held for sale 2,427 2,644
Total assets $ 175,980 $ 191,367

LIABILITIES AND EQUITY

Current liabilities:
Accounts payable $ 3,067 $ 8,428
Accrued liabilities 7,334 7,168
Current portion of deferred revenue 3,792 3,543
Current liabilities related to assets held for sale 454 326
Total current liabilities 14,647 19,465
Note payable - related party 1,400 1,244
Deferred revenue, net of current portion 6,652 7,607
Total liabilities 22,699 28,316

Commitments and contingencies

Equity:
ORBCOMM Inc. stockholders' equity
Common stock, par value $0.001; 250,000,000 shares authorized; 42,455,531 and 42,101,834 shares issued and outstanding
42 42
Additional paid-in capital 230,150 229,001
Accumulated other comprehensive income 17 381
Accumulated deficit (78,710 ) (67,976 )
Total ORBCOMM Inc. stockholders' equity 151,499 161,448
Noncontrolling interests in ORBCOMM Japan 1,782 1,603
Total equity 153,281 163,051

Total liabilities and equity $ 175,980 $ 191,367

ORBCOMM Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)

Three months ended Nine months ended
September 30, September 30,
2009 2008 2009 2008

Revenues:
Service revenues $ 6,939 $ 6,336 $ 20,281 $ 16,948
Product sales 92 1,194 247 2,300
Total revenues 7,031 7,530 20,528 19,248

Costs and expenses (1):
Costs of services 10,796 2,624 17,309 6,786
Costs of product sales 42 801 138 1,392
Selling, general and administrative 3,609 4,570 12,810 14,162
Product development 191 187 532 459
Gain on customer claims settlements - (125 ) - (1,368 )
Impairment charges-satellite network 21,859 - 28,904 -
Insurance recovery-satellite network (28,904 ) - (28,904 ) -
Total costs and expenses 7,593 8,057 30,789 21,431

Loss from operations (562 ) (527 ) (10,261 ) (2,183 )

Other income (expense):
Interest income 7 375 71 1,497
Other income (expense) (115 ) (259 ) 224 (236 )
Interest expense (48 ) (48 ) (144 ) (146 )
Total other income (expense) (156 ) 68 151 1,115

Loss from continuing operations before pre-control
earnings of consolidated subsidiary (718 ) (459 ) (10,110 ) (1,068 )

Less: Pre-control earnings of consolidated subsidiary - - - 128

Loss from continuing operations (718 ) (459 ) (10,110 ) (1,196 )

Loss from discontinued operations (489 ) (353 ) (529 ) (1,088 )

Net loss (1,207 ) (812 ) (10,639 ) (2,284 )

Less: Net income attributable to the noncontrolling interests 30 189 95 230

Net loss attributable to ORBCOMM Inc. $ (1,237 ) $ (1,001 ) $ (10,734 ) $ (2,514 )

Net loss attributable to ORBCOMM Inc.:
Loss from continuing operations $ (748 ) $ (648 ) $ (10,205 ) $ (1,426 )
Loss from discontinued operations (489 ) (353 ) (529 ) (1,088 )
Net loss attributable to ORBCOMM Inc. $ (1,237 ) $ (1,001 ) $ (10,734 ) $ (2,514 )

Per share information-basic and diluted:
Loss from continuing operations $ (0.02 ) $ (0.01 ) $ (0.24 ) $ (0.03 )
Loss from discontinued operations (0.01 ) (0.01 ) (0.01 ) (0.03 )
Net loss attributable to ORBCOMM Inc. $ (0.03 ) $ (0.02 ) $ (0.25 ) $ (0.06 )

Weighted average common shares outstanding:
Basic and diluted 42,442 42,070 42,386 41,945

(1) Stock-based compensation included in costs and expenses:
Costs of services $ 14 $ 22 $ 48 $ 71
Selling, general and administrative 336 852 1,093 2,557
Product development - 12 8 42
$ 350 $ 886 $ 1,149 $ 2,670

ORBCOMM Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)

Nine months ended
September 30,
2009 2008
Cash flows from operating activities:
Net loss $ (10,639 ) $ (2,284 )
Adjustments to reconcile net loss to net cash provided
by operating activities:
Change in allowance for doubtful accounts 475 (162 )
Depreciation and amortization 11,463 2,160
Accretion on note payable - related party 98 98
Stock-based compensation 1,149 2,670
Foreign exchange (gains) losses (223 ) 243
Non-cash portion of gain on customer claims settlements - (882 )
Pre-control earnings of consolidated subsidiary - 128
Expiration of gateway purchase option - (325 )
Impairment charges-satellite network 28,904 -
Insurance recovery receivable-satellite network (28,904 ) -
Changes in operating assets and liabilities:
Accounts receivable (457 ) 870
Inventories 66 28
Prepaid expenses and other assets 855 153
Accounts payable and accrued liabilities 304 1,080
Deferred revenue (707 ) 924
Net cash provided by operating activities of continuing operations 2,384 4,701
Net cash provided by (used in) operating activities of discontinued operations 927 (150 )
Net cash provided by operating activities 3,311 4,551

Cash flows from investing activities:
Capital expenditures (25,825 ) (26,503 )
Change in restricted cash (300 ) (5,680 )
Cash from the step acquisition of subsidiary - 366
Net cash used in investing activities of continuing operations (26,125 ) (31,817 )
Net cash used in investing activities of discontinued operations (208 ) (244 )
Net cash used in investing activities (26,333 ) (32,061 )

Cash flows from financing activities:
Proceeds from exercise of warrants and options - 322
Payment of offering costs in connection with secondary public offering - (40 )
Net cash provided by financing activities from continuing operations - 282
Net cash provided by financing activities - 282

Effect of exchange rate changes on cash and cash equivalents (132 ) 112

Net decrease in cash and cash equivalents (23,154 ) (27,116 )

Cash and cash equivalents:
Beginning of period 75,370 115,587

End of period $ 52,216 $ 88,471

The following table reconciles our Net Income (Loss) attributable to ORBCOMM
Inc. to EBITDA and Adjusted EBITDA for the periods shown:

Three months ended Nine months ended
September 30, September 30,
(in thousands) 2009 2008 2009 2008
Net Income (Loss) attributable to ORBCOMM Inc. $ (1,237 ) $ (1,001 ) $ (10,734 ) $ (2,514 )
Net interest (income) expense 41 (327 ) 73 (1,351 )
Provision for income taxes - - - -
Depreciation and amortization 8,884 892 11,482 2,203

EBITDA 7,688 (436 ) 821 (1,662 )
Stock-based compensation 350 893 1,149 2,718
Insurance Recovery, net of Impairment Charges - Satellite Network (7,045 ) - - -
Noncontrolling interests and pre-control earnings of consolidated subsidiary 30 189 95 358

Adjusted EBITDA $ 1,023 $ 646 $ 2,065 $ 1,414

EBITDA is defined as earnings attributable to ORBCOMM Inc. before interest
income (expense), provision for income taxes and depreciation and amortization.
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 EBITDA, adjusted for stock-based compensation expense for
continued and discontinued operations, Noncontrolling Interests and Pre-control
Earnings of Consolidated Subsidiary, and Impairment Charges, net of Insurance
Recovery (Adjusted EBITDA), is useful to investors to evaluate the Company`s
core operating results and financial performance and its capacity to fund
capital expenditures, because it excludes items that are significant non-cash
expenses reflected in the Condensed Consolidated Statements of Operations.
EBITDA and Adjusted EBITDA are not performance measures calculated in accordance
with accounting principles generally accepted in the United States, or GAAP.
While ORBCOMM considers EBITDA and Adjusted EBITDA to be important measures of
operating performance, they 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
and Adjusted EBITDA measures presented by other companies. A reconciliation
table is presented above.

Investor Inquiries:
ORBCOMM Inc.
Lucas Binder, 703-433-6505
VP, Business Development and Investor Relations
binder.lucas@orbcomm.com
or
Media Inquiries:
The Abernathy MacGregor Group
Jennifer Lattif, 212-371-5999
Senior Account Executive
jcl@abmac.com

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