ORBCOMM 8-K 2014
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): January 15, 2014
(Exact Name of Registrant as Specified in Charter)
395 W. Passaic Street
Rochelle Park, New Jersey 07662
(Address of Principal Executive Offices) (Zip Code)
(Registrants telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
INFORMATION TO BE INCLUDED IN THE REPORT
ORBCOMM Inc. (ORBCOMM or the Company) is providing in conjunction with an underwritten registered public offering of its shares (the Offering) its preliminary unaudited estimates of financial results of the Company, including the Companys expected Service Revenues, Product Sales and Adjusted EBITDA for the fourth quarter of 2013 and is furnishing such preliminary unaudited estimates of financial results to the Securities and Exchange Commission under Item 2.02 of this Current Report on Form 8-K.
For the fourth quarter of 2013, the Company expects to report Service Revenues in the range of $14.6 to $14.9 million, as compared to $12.4 million for the fourth quarter of 2012, Product Sales in the range of $4.4 to $4.6 million, as compared to $3.8 million for the fourth quarter of 2012, and Adjusted EBITDA in the range of $4.0 to $4.6 million, as compared to $4.2 million for the fourth quarter of 2012.
Management has prepared the estimates for the quarter ended December 31, 2013 presented above in good faith based upon the most recent information available to management from the Companys internal reporting procedures as of the date of this report. These estimated ranges are preliminary, unaudited, subject to further completion, reflect the Companys current good faith estimates, are subject to additional financial closing procedures and may be revised as a result of managements further review of the Companys results, and any adjustments that may result from the completion of the audit of the fiscal 2013 consolidated financial statements. The Company and its auditors have not completed the Companys normal quarterly review or annual audit procedures as of and for the quarter and year ended December 31, 2013, and there can be no assurance that the Companys final results for this quarterly period will not differ from these estimates. Any such changes could be material. During the course of the preparation of the Companys consolidated financial statements and related notes as of and for the quarter and year ended December 31, 2013 and their audit, the Company may identify items that would require it to make material adjustments to the preliminary financial information presented above. The Company assumes no duty to update these preliminary estimates except as required by law.
The Companys consolidated financial statements and related notes as of and for the year ended December 31, 2013 are not expected to be filed with the SEC until after the Offering is completed. The Companys actual results may differ materially from the fourth quarter estimates above. Accordingly, you should not place undue reliance on these preliminary estimates. These estimates should not be viewed as a substitute for full audited or interim financial statements prepared in accordance with GAAP. In addition, these preliminary estimates as of and for the quarter ended December 31, 2013 are not necessarily indicative of the results to be achieved for any future period.
The following table reconciles the Companys Net Income attributable to ORBCOMM Inc. to Adjusted EBITDA for the periods shown:
EBITDA is defined as earnings attributable to the Company before interest income (expense), provision for income taxes and depreciation and amortization. The Company believes EBITDA is useful to its management and investors in evaluating operating performance because it is one of the primary measures used by the Company to evaluate the economic productivity of its 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 the Companys management and investors to meaningfully evaluate and compare the results of its 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, the Companys management uses EBITDA in presentations to the Companys 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 Companys annual operating budget. The Company also believes that EBITDA, adjusted for stock-based compensation expense, noncontrolling interests, impairment charges and insurance recovery (Adjusted EBITDA), is useful to investors to evaluate the Companys 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 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 the Company 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 income (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.
The information contained under Item 2.02 of this Current Report on Form 8-K shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Amendment to Senior Secured Note Agreement
On January 15, 2014, ORBCOMM entered into Amendment No. 1 (the Note Agreement Amendment) to the Senior Secured Note Agreement, dated as of January 4, 2013, with AIG Asset Management (U.S.), LLC. The Note Agreement Amendment increases the maximum amount of cash or cash equivalents that may be used for permitted acquisitions from the aggregate amount of $35,000,000 to $35,000,000 plus the net proceeds of any equity contribution to or equity issuance by ORBCOMM made after the date of the Note Agreement.
On January 16, 2014, the Company issued a press release announcing a public offering of shares, a copy of which is attached as Exhibit 99 to this Current Report on Form 8-K.
The risk factors described in Part I, Item 1A, Risk Factors included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2012, as amended, are supplemented by the following additional risk factors:
Our success depends, in part, on our ability to effect suitable investments, alliances and acquisitions.
On an ongoing basis, we review investment, alliance and acquisition prospects that would complement our existing product offerings, augment our market coverage or enhance our technological capabilities. However, we cannot assure you that we will be able to identify and consummate suitable investment, alliance or acquisition transactions in the future.
We may have difficulty integrating companies we acquire.
Our consummation of acquisition transactions could result in:
Additionally, in periods subsequent to an acquisition, we must evaluate goodwill and acquisition-related intangible assets for impairment. When such assets are found to be impaired, they will be written down to estimated fair value, with a charge against earnings.
Integrating acquired organizations and their products and services may be expensive, time-consuming and a strain on our resources. We could face several challenges integrating acquisitions, including:
We cannot assure you that we will be able to address these challenges successfully.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.