Globalstar, Inc. (GSAT)
Q1 2008 Earnings Call
May 7, 2008 5:00 pm ET
Dean Hirasawa – Director, Investor Relations
Jay Monroe – Chairman of the Board and Chief Executive Officer
Fuad Ahmad – Vice President and Chief Financial Officer
Anthony Navarra – President, Global Operations
Jonathan Chaplin – JP Morgan
Joel Miller - Merrion Group
Kipling Peterson – CVC
Previous Statements by GSAT
» Globalstar Inc. Q3 2008 (Qtr End 9/30/2008) Earnings Call Transcript
» Globalstar, Inc. Q2 2008 Earnings Call Transcript
» Globalstar Q3 2007 Earnings Call Transcript
Thank you for joining us for today’s conference call to discuss the results for Globalstar, Inc. for the quarter ended March 31, 2008. Before we begin please note the following.
This call may contain forward-looking statements within the meaning of Federal securities law. Factors that could cause results to differ materially are described in the Safe Harbor section of today’s press release and in Globalstar’s SEC filings including the quarterly report on form 10-Q for the three months ended March 31, 2008 which will be filed in the next few days.
Both the press release and this conference call include discussions of certain non-GAAP financial measures as defined under SEC rules. We have provided a reconciliation of each of those non-GAAP measures to the most comparable GAAP measure in the press release. Please note that the information in this call is accurate only as of the date of this live teleconference which is Wednesday, May 7, 2008. Today’s press release containing certain financial information is available on the company’s website at www.GlobalStar.com.
Later this afternoon an audio recording of this conference call will be available via telephone dial in and a web cast recording will also be made available on the company’s website.
On the call we are joined today by Jay Monroe, Chairman and CEO of Globalstar, Inc.; Tony Navarra, President of Global Operations; and Fuad Ahmad, Vice President and CFO. Each of these gentlemen will be presenting this afternoon and all three will be available following the prepared remarks to take questions as time allows.
At this time I would like to turn the call over to Jay Monroe.
Thank you for joining Globalstar’s quarterly earnings call. Before beginning I’d like to welcome our new stockholders and thank all investors for their long-term commitment to Globalstar.
We completed the quarter with about 22,000 more subscribers than we had at the end of the same period in 2007. With this net increase we finished the month of March with just over 293,000 subscribers and maintained our position as the largest North American provider of mobile satellite voice and data services.
During the first three months of the year Globalstar’s average monthly retail churn rate decreased from 2% in the fourth quarter of 2007 to 1.3% in this quarter. Fuad will go through our detailed three-month financials shortly.
Following the quarter we completed a convertible note offer which combined with the over allotment options exercised by the underwriters has provided a total of $150 million in funding before offering expenses. Despite being pleased by the completion of this financing and the fact that our business financials remain strong as a stockholder I must also acknowledge my dissatisfaction with the company’s current stock price, more about this later.
As I stated before, during the next year I will update four areas which are key to Globalstar’s long-term business success. First, the design, manufacture and launch of the Second gen Satellite Constellation. Second, the utilization of our spectrum for the provision of ATC services in the United States and abroad. Third, new Simplex data products and services including the progress of the award-winning SPOT satellite Messenger. Fourth, Globalstar’s numerous international initiatives.
Here are the latest updates regarding our Second generation space segment. During the first quarter we continued prep for the launch of the Second generation Constellation. The initial assembly and test of the first of our Second gen satellites is now less than a year away and we remain on schedule to begin launching the Second generation satellites in the second half of next year.
Thales Alenia Space and Arianespace continue to complete their design, testing and delivery of major subsystems to meet this launch schedule. We mentioned in previous calls that six of the new eight satellites which were launched in 2007 were now in service. The seventh satellite has just gone into service with the eighth expected to become operational very shortly. Tony will provide a more complete update regarding our space segment in a few seconds.
The second key area of our business which I update quarterly concerns ATC Spectrum and our worldwide spectrum opportunity. On March 10, the FCC granted Globalstar expanded authority to use up to approximately 20 MHz of our L and S-band spectrums for ATC in the U.S. This expanded ATC capability enables Globalstar to partner with a number of industry service providers for a broad range of new communications services to unserved or underserved customers.
In its decision, the FCC specifically acknowledged that this action will allow greater capacity and flexibility for MSS ATC and will allow Globalstar to provide improved service to customers particularly in urban and under-served rural market areas of the United States. This decision provides potential Globalstar ATC partners with both the ability and the incentive to proceed with plans to develop and offer innovative ATC wireless services in conjunction with our satellite system.