Globalstar Announces First Quarter 2019 Results

Globalstar, Inc. (NYSE American: GSAT) today announced its financial
results for the quarter ended March 31, 2019.

Dave Kagan, Chief Executive Officer, commented, “We continued to
penetrate the commercial IoT market during the first quarter, evidenced
by a 16% increase in this subscriber base which has grown to over
390,000 customers at the end of the quarter. While our newest
solar-powered IoT device drove the growth, sales of our legacy devices,
which more than doubled from the prior year’s first quarter, also
contributed meaningfully to a strong increase in total revenue. The
success across our product portfolio demonstrates our ability to address
various use cases and applications that are required by our customers in
the rapidly growing IoT market. We have a robust pipeline of small bit
data solutions that align well with our satellite network. During the
first quarter, our elevated operating expenses reflected our investment
in this area of the business with many of our current initiatives
focused on expanding our IoT products and technology. Our traction to
date is an excellent indication that this focus is well-founded as we
continue to support growth through development efforts.”

Kagan continued, “Our strategy at Globalstar has been and remains to
maximize utilization of our unique combination of satellite assets and
terrestrial spectrum rights. We are continuously evaluating
opportunities to do just that, exploring new products, solutions,
distribution agreements, wholesale arrangements, licensing agreements
and partnerships. We also remain focused on strengthening our balance
sheet to best position us to capitalize on these opportunities.”

OPERATIONAL HIGHLIGHTS

Spectrum Update

The first Band 53 industrial user terminals were received from certain
of our partners, including Nokia and Airspan and terrestrial trials are
ongoing. We are continuing the pursuit of regulatory approvals around
the world and have added terrestrial authorizations for our S-band
spectrum licenses in several African nations, including one in March for
approximately 30 million POPs. We also continue to make progress toward
authorizations in additional geographies.

Financing Update

Together with our financial advisors, we are exploring various financing
alternatives to address our funding requirements for June 2019 and
future periods, including, but not limited to, a financing and an
amendment to our existing debt obligations. We intend to complete this
process in a manner that is in the best interest of our Company and its
shareholders, while taking into account the requirements of our senior
lenders.

FINANCIAL REVIEW

Revenue

Total revenue for the first quarter of 2019 increased $1.3 million, or
5%, from the first quarter of 2018 due to a $1.2 million increase in
revenue generated from subscriber equipment sales and a $0.1 million
increase in service revenue.

Success in the simplex (“Commercial IoT”) market contributed $1.8
million to the increase in total revenue during the first quarter. In
March 2018, we launched SmartOne Solar™, our most successful product
introduction to date measured by the number of units sold in the first
year following launch. Sales of SmartOne Solar™ devices represented
nearly 70% of the $1.2 million increase in Commercial IoT equipment
revenue. As the total addressable market expands, we continue to see
demand from both current and prospective customers. In addition to
leveraging our existing network of value-added resellers, we have also
recently completed our own back office solution allowing our sales team
to sell direct to end users. The $0.6 million increase in service
revenue generated by Commercial IoT customers was driven by higher ARPU
and 16% growth in average subscribers, with Commercial IoT subscribers
now representing over 50% of total subscribers.

Duplex service revenue decreased 2%, while SPOT service revenue
increased 1%, each due to lower average subscribers offset by higher
ARPU. Lower activations over the last twelve months, compared to the
prior year period, contributed to a 13% and 2% decline in average Duplex
and SPOT subscribers, respectively. Duplex and SPOT ARPU increased 13%
and 3%, respectively, due to the impact of price increases initiated
over the past several quarters as well as subscribers activating on rate
plans higher than our previous blended ARPU. Finally, a $0.5 million
decline in other service revenue resulted primarily from lower revenue
recognized from engineering service contracts during the first quarter
of 2019 compared to the same quarter in 2018 due to the inherently
episodic nature of government contracts.

Revenue generated from subscriber equipment sales for Duplex and SPOT
products was also generally flat quarter over quarter with Duplex down
$0.2 million and SPOT up $0.1 million. While a higher volume of sales of
the products launched in 2018 (Sat-Fi2^TM and SPOT X^TM)
increased subscriber equipment revenue during the first quarter of 2019,
lower selling prices and volume of legacy Duplex and SPOT products
declined, offsetting the contribution from new product sales.

Operating Loss

Operating loss increased $5.4 million during the first quarter of 2019.
This increase was due to higher operating expenses of $6.7 million,
offset partially by a $1.3 million increase in total revenue (for
reasons previously discussed). Contributing to the increase in operating
expenses was a $4.6 million increase in depreciation, amortization and
accretion expense resulting from upgraded ground infrastructure placed
into service during 2018. The cost of subscriber equipment sales
increased $1.0 million, consistent with the increase in equipment
revenue. Additionally, marketing, general and administrative (MG&A) and
cost of services increased $0.3 million and $0.8 million, respectively.
Higher cost of services was driven by an increase in R&D costs, which
were focused primarily on the development of Commercial IoT products and
derivatives of our existing Sat-Fi2^TM Duplex device as well
as lower capitalized labor in the first quarter of 2019 due to the
timing and scope of capital projects. Contributing to the increase in
MG&A costs during the first quarter of 2019 was a $0.6 million write-off
of an aged receivable from one of our independent gateway operators
(IGO), which was determined to be uncollectible. Increases in occupancy
and subscriber acquisition costs were offset by lower consultant and
adviser costs during the quarter.

Net Income

Net income decreased $62.1 million during the first quarter of 2019 due
primarily to a lower non-cash derivative gain of $51.9 million. Changes
in the Company’s stock price and volatility assumptions were the primary
drivers of the derivative adjustments recorded during the respective
quarters. An increase in operating loss of $5.4 million (as discussed
above) as well as a $5.5 million increase in interest expense resulting
from lower capitalized interest recorded during the quarter also
contributed to the decline in net income.

Adjusted EBITDA

Adjusted EBITDA decreased slightly to $7.2 million during the first
quarter of 2019 compared to $7.5 million during the first quarter of
2018. A $1.6 million increase in total operating expenses (excluding
EBITDA adjustments) was offset partially by a $1.3 million increase in
total revenue.

CONFERENCE CALL

The Company will conduct an investor conference call on May 2, 2019 at
8:30 a.m. ET to discuss its first quarter 2019 financial results.

About Globalstar, Inc.

Globalstar is a leading provider of customizable satellite IoT solutions
for customers around the world in industries such as government, oil and
gas, emergency management, transportation, maritime and outdoor
recreation. As a pioneer of mobile satellite voice and data services,
Globalstar allows businesses to streamline operations via the Globalstar
Satellite Network by connecting people to their devices, supplying
personal safety and communication and automating data to more easily
monitor and manage mobile assets. The Company’s product portfolio
includes the industry-acclaimed SmartOne asset tracking products,
Commercial IoT satellite transmitters and Duplex satellite data modems,
the innovative Sat-Fi2 satellite wireless IP hotspot and the SPOT®
product line of personal safety, asset and communication devices, all
offered with a variety of data service plans. Learn more at
Globalstar.com

Note that all SPOT products described in this press release are the
products of SPOT LLC, a subsidiary of Globalstar, which is not
affiliated in any manner with Spot Image of Toulouse, France or Spot
Image Corporation of Chantilly, Virginia.

Safe Harbor Language for Globalstar Releases

This press release contains certain statements that are “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are based on
current expectations and assumptions that are subject to risks and
uncertainties which may cause actual results to differ materially from
the forward-looking statements. Forward-looking statements, such as the
statements regarding our expectations with respect to the pursuit of
terrestrial spectrum authorities globally, future increases in our
revenue and profitability and other statements contained in this release
regarding matters that are not historical facts, involve predictions.
Any forward-looking statements made in this press release are believed
to be accurate 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,
including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q
and Current Reports on Form 8-K.

(1) EBITDA represents earnings before interest, income taxes,
depreciation, amortization, accretion and derivative (gains)/losses.
Adjusted EBITDA excludes non-cash compensation expense, reduction in the
value of assets, foreign exchange (gains)/losses and certain other
non-recurring charges as applicable. Management uses Adjusted EBITDA in
order to manage the Company’s business and to compare its results more
closely to the results of its peers. EBITDA and Adjusted EBITDA do not
represent and should not be considered as alternatives to GAAP
measurements, such as net income/(loss). These terms, as defined by us,
may not be comparable to similarly titled measures used by other
companies.

The Company uses Adjusted EBITDA as a supplemental measurement of its
operating performance. The Company believes it best reflects changes
across time in the Company’s performance, including the effects of
pricing, cost control and other operational decisions. The Company’s
management uses Adjusted EBITDA for planning purposes, including the
preparation of its annual operating budget. The Company believes that
Adjusted EBITDA also is useful to investors because it is frequently
used by securities analysts, investors and other interested parties in
their evaluation of companies in similar industries. As indicated,
Adjusted EBITDA does not include interest expense on borrowed money or
depreciation expense on our capital assets or the payment of income
taxes, which are necessary elements of the Company’s operations. Because
Adjusted EBITDA does not account for these expenses, its utility as a
measure of the Company’s operating performance has material limitations.
Because of these limitations, the Company’s management does not view
Adjusted EBITDA in isolation and also uses other measurements, such as
revenue and operating profit, to measure operating performance.

(1) Average monthly revenue per user (ARPU) measures service revenues
per month divided by the average number of subscribers during that
month. Average monthly revenue per user as so defined may not be similar
to average monthly revenue per unit as defined by other companies in the
Company’s industry, is not a measurement under GAAP and should be
considered in addition to, but not as a substitute for, the information
contained in the Company’s statement of operations. The Company believes
that average monthly revenue per user provides useful information
concerning the appeal of its rate plans and service offerings and its
performance in attracting and retaining high value customers.

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