Globalstar Offering Presentation April 2008 Safe Harbor Statement
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Globalstar Offering Presentation April 2008 Safe Harbor Statement This presentation contains certain statements that are, or may deemed to be, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control, including demand for our products and services, including commercial acceptance of our new Simplex products, including our SPOT™ Satellite Messenger, and the ability to retain and migrate our two-way communications services subscribers to our second-generation constellation when it is deployed; problems relating to the construction, launch or in-orbit performance of our existing and future satellites, including the effects of the degrading ability of our first-generation satellite constellation to support two-way communication; problems relating to the ground-based facilities operated by us or by independent gateway operators; our ability to attract sufficient additional funding to meet our future capital requirements including procurement and deployment of our second-generation constellation; our competitiveness vis-a-vis other providers of satellite and ground- based communications products and services; the pace and effects of industry consolidation; the continued availability of launch insurance on commercially reasonable terms, and the effects of any insurance exclusions; changes in technology; our ability to continue to attract and retain qualified personnel; worldwide economic, geopolitical and business conditions and risks associated with doing business on a global basis; and legal, regulatory, and tax developments, including changes in domestic and international government regulation. Any forward-looking statements made in this presentation speak as of the date made and are not guarantees of future performance. Actual results or developments may differ materially from the expectations expressed or implied in the forward-looking statements, and we undertake no obligation to update any such statements. Additional information on factors that could influence our financial results is included in our filings with the Securities and Exchange Commission (the “SEC”), including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. We have filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents we have filed with the SEC for more complete information about us and this offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov . Alternatively, we can arrange to send you the prospectus if you request it by calling Merrill Lynch, Pierce, Fenner & Smith Incorporated toll-free at 1-800-248-3580 or Deutsche Bank Securities Inc. toll free at 1-800-503-4611. 1 Table of Contents 1. Offering Summary 2. Company Overview 3. Network and Spectrum Assets 4. Financial Summary Appendix 2 Offering Summary Offering Summary Common Stock Offering Convertible Senior Unsecured Notes Offering (Pursuant to Share Lending Agreement) Issuer: Globalstar, Inc. Offering Size: Approximately 15 to 20 million shares Offering Size: $135 million (plus $15 million greenshoe) Merrill Lynch will use shares borrowed from Globalstar and offered in registered Maturity: 20 Years stock offering to facilitate the Use of Proceeds: establishment of hedge positions by Optional Redemption investors in the notes. Globalstar will Callable at any time after Year 5 not receive any proceeds from common Issuer: stock sales Investor: Putable on every 5th anniversary The stock loan facility will be outstanding Term of Stock Loan until the notes are retired. At Coupon: 5.25% to 5.75% Facility: termination, Merrill Lynch will return shares borrowed to Globalstar [ ]% of proceeds placed in escrow Coupon account with trustee to fund first six semi- Collateralization: Sole Bookrunner: Merrill Lynch & Co. annual interest payments Conversion 45% to 50% Premium: Incremental Share Equals 45% to 50% of the base Refer to Appendix for more details Factor: conversion rate To fund escrow account and portion of the cost of the build-out and launch of Use of Proceeds: Second-Generation satellite constellation and ground infrastructure and for general corporate purposes Joint Bookrunners: Merrill Lynch & Co. and Deutsche Bank Securities 3 Senior Management Team Jay Monroe Chairman and Chief Executive Officer Tony Navarra President, Global Operations Fuad Ahmad Vice President and Chief Financial Officer 4 Company Overview Investment Highlights OperationalOperational GlobalGlobal WirelessWireless andand SatelliteSatellite CommunicaCommunicationstions BusinessBusiness Industry-LeadingIndustry-Leading Second-GenerationSecond-Generation SatelliteSatellite ConsteConstellationllation inin ConstructionConstruction SignificantSignificant GrowthGrowth OpportunitiesOpportunities throughthrough SPOT™SPOT™ Satel Satellitelite MessengerMessenger AttractiveAttractive SpectrumSpectrum AssetsAssets withwith RoadmapRoadmap toto UnlockUnlock VValuealue ExperiencedExperienced ManagementManagement TeamTeam andand CommittedCommitted PrincipalPrincipal StockholderStockholder 5 Experienced Management Team Also Stakeholders ThermoThermo / / PublicPublic andand ManagementManagement QualcommQualcomm 62% 38% PremierPremier Management Management TeamTeam ThermoThermo CommitmentCommitment Years of Industry Name Title Experience Experience Long-term investment philosophy Jay Chairman, CEO 25 Invested ~$400 million to date Monroe $200 million of purchases conducted President, Tony at $16.17 / share Global 35 Navarra Operations Fuad Vice President, Transworld 18 Ahmad CFO Telecommunications 6 Operational Wireless Business with Unique Spectrum Assets GlobalGlobal WirelessWireless andand SatelliteSatellite U.S.U.S. SpectrumSpectrum OpportunityOpportunity CommunicationsCommunications CompanyCompany A leading global provider of mobile satellite 25.225 MHz of contiguous spectrum in two voice and data services blocks at L-band and S-band Services being used for various 19.275 MHz available for ATC applications 11 MHz approved and licensed SPOT™ global satellite messenger presents immense growth opportunity 8.275 MHz expected near-term Rapidly growing asset tracking services First-Generation constellation is ATC capable as demonstrated by Open Approximately 284k subscribers as of 12/31/07 Range agreement 2007 Adjusted Revenue and Adjusted EBITDA of (1) $102.2 million and $21.8 million respectively InternationalInternational SpectrumSpectrum OpportunityOpportunity First-Generation LEO constellation currently consisting of approximately 48 satellites Up to 27.85 MHz available internationally Second-Generation constellation to be launched European Conference of Postal and beginning in the second half of 2009 Telecommunications Administrations (CEPT) licensed its first hybrid ATC system Canada currently considering ATC-like implementation (1) 2007 GAAP Revenue and GAAP EBITDA of $98.4 million and ($2.8) million respectively. EBITDA adjustment of $24.7 million includes non-cash items for impairment of assets, stock compensation, foreign exchange gain, annual compensation plan adjustments and other one-time non-recurring charges. 7 Blue Chip Customer Base with Longstanding Relationships DiversifiedDiversified CustomerCustomer BaseBase (1)(1) GlobalGlobal RevenueRevenue byby ProductProduct TypeType Other (3) Uncategorized Government IGO Simplex 7% 20% 4% 5% 26% Satellite Data Modem Transportation 2% 2% Construction 3% Fixed 8% Mobile Voice Utilities 3% and Data 4% (2) 16% Other 4% 74% 5% 8% 9% Natural Resources Recreation & Personal Oil & Gas Telecommunications Maritime & Fishing CustomersCustomers (1) Based on North American customers. (2) Includes aviation, education, entertainment and financial. (3) Includes engineering services, accessories and other miscellaneous items. 8 Why Customers Choose and Remain With Globalstar Only satellite network operator to use Qualcomm CDMA technology, which Superior Voice permits the dynamic selection of the strongest signal available and produces a Quality superior audio quality No noticeable latency compared to competitors’ systems Retaining customers and expanding addressable market through attractive pricing Attractive Unlimited minutes for a low monthly fee vs. per-minute pricing plans offered by Pricing competition Low handset acquisition cost leads to lower retail pricing OSAT (Optimum Satellite Availability Tool) allows customers to determine when to reliably use their Globalstar phones Customer- Focused Tools 95%+ call success rate when customers use OSAT Store and forward capabilities allow customers to develop their own duplex data solutions to send data over the Globalstar network Senior management focus on customer retention incentives and programs Industry-Leading Customer Service Strategic priority to retain core network of duplex voice and data customers 9 Innovative Products and Services Mobile and Fixed Voice and Data SPOT™ Satellite Messenger Focused Consumer First Responders and Asset Tracking Aviation and Maritime Solutions Focused Business Commercial/Industrial 10 Established Distribution Channels DuplexDuplex VoiceVoice / / DataData ExtensiveExtensive DistributionDistribution NetworkNetwork andand SimplexSimplex DistributionDistribution Targeted,