Globalstar Announces Results for First Quarter 2012 — Reports Continued Growth in Adjusted EBITDA

Globalstar, Inc., yesterday announced its financial results for the three-month period ended March 31, 2012. Key highlights include:

• Globalstar reports positive Adjusted EBITDA for the second consecutive quarter and a substantial increase over the same period in 2011.
• SPOT service revenue increases approximately 27 percent from the first quarter of 2011 to the first quarter of 2012.
• Globalstar continues deployment of new satellites and expects call connection rates for key markets to reach more than 80 percent this summer as four additional second-generation satellites are scheduled to be placed into service from May through July.

Revenue Globalstar reported revenue of $16.7 million in the first quarter of 2012 compared to $18.3 million in the first quarter of 2011. Excluding one-time nonrecurring revenue of $2.0 million from the termination of the Company’s Open Range partnership recognized in the first quarter of 2011, revenue increased by $0.5 million, or 3 percent, in the first quarter of 2012. The primary driver of the revenue increase in 2012 was SPOT service revenue, which grew by $1.1 million, or 27 percent, in the first quarter of 2012 compared to 2011. As expected, Duplex service revenue was lower in the first quarter of 2012 compared to the same period in 2011, but was in line with revenue in the last quarter of 2011. The Company anticipates Duplex revenue growth later this year as additional second-generation satellites are scheduled to be placed into service. The Company expects call connection rates in key markets to increase substantially in the near-term as four new second-generation satellites are scheduled to be placed into service over the next three months. With these additional satellites in operation, call connection rates are anticipated to increase to over 80 percent by August. The Company projects further increases as additional satellites are placed into service throughout the remainder of the year. The Company expects increasing service levels to drive both usage and new subscriber additions. Revenue from subscriber equipment sales in the first quarter of 2012 was $4.1 million, substantially unchanged from the same period in 2011. Adjusted EBITDA Globalstar reported positive Adjusted EBITDA of $1.4 million for the first quarter of 2012 compared to negative Adjusted EBITDA of $2.5 million in the same period in 2011. This represented an increase of $3.9 million over the first quarter of 2011. The improvement in Adjusted EBITDA resulted from an increase in revenue of $0.5 million (excluding the one-time nonrecurring revenue from the termination of the Company’s Open Range partnership) and a decrease in operating expenses of $3.4 million (excluding EBITDA adjustments). The decrease of approximately 21 percent in operating expenses was due largely to the implementation of a more focused business strategy, as well as the continuation of operational improvements and streamlining initiatives introduced in late 2011. The Company reported expense reductions in the quarter throughout its major operating areas. Net Loss The Company reported a net loss of $24.5 million for the current quarter, compared to a net loss of $6.5 million in the first quarter of 2011, primarily due to an increase of $4.1 million in depreciation expense and a noncash derivative loss of $6.5 million compared to a derivative gain of $6.4 million in the same period in 2011. The higher depreciation charges resulted from the Company placing additional second-generation satellites into service over the last 12 months. The derivative loss resulted primarily from an increase in the Company’s stock price in the first quarter of 2012. Interest expense was also higher in the first quarter of 2012 compared to the same period in 2011 due to a reduction in capitalized interest.

“Overall we are pleased with the results for the quarter. Revenue for the quarter was in line with our expectations, while Adjusted EBITDA exceeded our internal forecasted results” said Jay Monroe, Chairman and CEO of Globalstar, Inc. “We are working hard to translate our significantly improved service quality into Duplex sales growth and improved margins, while maintaining the cost discipline we put in place in late 2011. We continue to believe that we will experience positive revenue growth in the second half of the year.”

Operations and Other Matters Other items of interest in the quarter include the following:

• SPOT service revenue during the first quarter was approximately $5.3 million, an increase of approximately 27 percent compared to the same period in 2011. Due to the continued success of Globalstar’s SPOT Satellite GPS Messenger™and related consumer products since their introduction in November 2007, Globalstar has received orders to ship over 370,000 SPOT retail devices to over 10,000 points of distribution in North America, Europe, Latin America, Australia and Southeast Asia. The award-winning devices have also been responsible for the initiation of more than 1,800 rescues around the world.
• During the quarter Globalstar solidified its long-term supply chain for its SPOT and Simplex data-based asset tracking devices by completing the transition to new contract manufacturers. Previously announced shipment delays of SPOT devices, which negatively impacted hardware revenue early in the quarter, were largely resolved by the end of March.
• During the first quarter, Globalstar continued to deploy its second-generation satellites and witnessed increased voice and data traffic on the network. Subscribers can expect further significant improvements in network coverage and service reliability throughout the remainder of 2012 as additional satellites are placed into service. The Company anticipates the fourth launch of the last six satellites for the second half of 2012, as Globalstar remains on track to become the first MSS provider to launch, deploy and utilize a second-generation constellation of LEO satellites to service new and existing customers around the world.
• As announced in March 2012, Globalstar obtained an amendment to its COFACE Facility Agreement which, among other things, deferred the beginning of the repayment period by approximately one year to the second quarter of 2013. This amendment significantly improves the Company’s liquidity position in 2012 and beyond.
• During the quarter, ADS-B Technologies, LLC (ADS-B Tech) continued development of its ALAS Next Generation Air Traffic Surveillance product (ALAS). ALAS utilizes the Globalstar satellite network to provide real-time aircraft surveillance data from remote areas where a conventional line of sight connection to a terrestrial ADS-B ground station is not possible or impractical. In April, ADS-B Tech successfully demonstrated the capability of the system verifying the feasibility of space-based air traffic surveillance using Globalstar’s constellation of LEO satellites. Globalstar is pleased with the recent test results and the global revenue opportunity such an air traffic management system represents. Globalstar’s unique “bent-pipe” architecture and global network of ground stations provides the only satellite network that can handle the air traffic surveillance data both reliably and with no latency concerns.
• Globalstar enthusiastically supported recommended actions by the U.S. Federal Communications Commission (FCC) regarding the proposed development of terrestrial broadband services utilizing the MSS 2 GHz band. The FCC further stated that it intends to address issues pertaining to the ATC rules for Globalstar’s Big LEO band in a separate proceeding at a later date. Mr. Monroe added, “As Globalstar completes the launch and deployment of its second-generation constellation, we look forward to participating in that future proceeding and anticipate receiving similar flexibility to offer terrestrial services within the Big LEO spectrum band.”