 Cash Flow from Operations up 11 Million Over Prior Year Total Revenue, Adjusted EBITDA and Earnings per Share Exceed Analyst Expectations Company Nears Completion of Integration Plan and Pivots Focus to Long-Term Growth ROCHELLE PARK, N.J., July 30, 2020 GLOBE NEWSWIRE -- ORBCOMM Inc. NASDAQ: ORBC, a global provider of Internet of Things IoT solutions, today announced financial results for the second quarter ended June 30, 2020.The following financial highlights are in thousands of dollars and unaudited. Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Recurring Service Revenues37,006 38,506 76,859 76,035 Other Service Revenues 1,423 1,232 2,094 2,710 Total Service Revenues 38,429 39,738 78,953 78,745 Product Sales 18,303 27,365 43,958 54,393 Total Revenues 56,732 67,103 122,911 133,138 Net Loss Attributable to ORBCOMM Inc. Common Stockholders 6,670 6,419 13,645 11,909 Basic EPS 0.09 0.08 0.17 0.15 EBITDA 1 10,330 11,997 22,102 24,744 Adjusted EBITDA 111,941 14,165 25,621 29,303 1 Non-GAAP financial measure. See Non-GAAP Financial Measures for a reconciliation of GAAP to Non-GAAP financial measures included with the financial tables at the end of this release.Were pleased with our second quarter results as revenues came in as anticipated, while Adjusted EBITDA margin exceeded expectations in a challenging macro environment, said Marc Eisenberg, ORBCOMMs Chief Executive Officer. Our integration plan and disciplined focus on cash management led to an improved Adjusted EBITDA margin of 21 and an 11 million increase in cash flow from operations over the prior year. Weve added several new customers and expanded long-standing relationships, while building a pipeline of opportunities. Our integration plan is nearing completion, and were pivoting our innovation to focus on long-term growth. With stable recurring service revenues, a solid liquidity position and a diverse base of customers, were confident we will come out stronger as markets begin to stabilize and momentum grows in the back half of the year. Financial ResultsRevenuesTotal Revenues for the second quarter of 2020 were 56.7 million compared to 67.1 million in the prior year period. Service Revenues were 38.4 million in the second quarter of 2020 compared to 39.7 million in the same period last year. Recurring Service Revenues decreased 1.5 million to 37 million in the second quarter compared to 38.5 million in the prior year quarter primarily due to the ATTMaersk revenues from 2019 that did not recur this year. Excluding revenues from ATTMaersk, Recurring Service Revenues were 99 of prior year despite headwinds from foreign exchange, dormant assets and a weak oil and gas environment. The Company added nearly 18,000 net subscriber additions in the second quarter bringing the total billable subscriber communicators to approximately 2.22 million as of June 30, 2020.Product Sales were 18.3 million in the second quarter of 2020 compared to 27.4 million in the prior year, as impacts from COVID-19 affected customer deployment schedules and resulted in many temporary customer facility closures.Gross Margin 1GAAP Service Gross Margin, inclusive of depreciation and amortization expense, was 56.4 in the second quarter of 2020 compared to 55.3 in the prior year period. Non-GAAP Service Gross Margin, excluding depreciation and amortization expense, was 67.3 in the second quarter of 2020 compared to 66 in the prior year period. The year-over-year improvement was primarily driven by lower direct service costs achieved through the Companys cost reduction plan.GAAP Product Gross Margin, inclusive of depreciation and amortization expense, was 25 in the second quarter of 2020 compared to 25.8 in the prior year period. Non-GAAP Product Gross Margin, excluding depreciation and amortization expense, was 27.8 in the second quarter of 2020 compared to 28.4 in the same period last year. The year-over-year decline was primarily due to lower product revenue on approximately 2 million of fixed costs.Operating ExpensesOperating Expenses for the second quarter of 2020 were 32.8 million compared to 34.2 million for the same period in 2019. The 1.4 million decrease was primarily driven by reductions in professional services, labor, travel and entertainment expenses, as well as lower product development costs.Net Income Loss and Earnings Per ShareNet Loss Attributable to ORBCOMM Inc. Common Stockholders for the second quarter of 2020 was 6.7 million, or 0.09 per share, compared to a Net Loss of 6.4 million, or 0.08 per share in the second quarter of 2019.EBITDA and Adjusted EBITDA 1EBITDA for the second quarter of 2020 was 10.3 million compared to 12.0 million in the prior year period.Adjusted EBITDA for the second quarter of 2020 was 11.9 million compared to 14.2 million in the prior year period. The year-over-year decline was primarily due to the flow-through impact from lower revenue, mainly product sales, partially offset by a greater mix of high-margin service revenues and reduced operating expenses. The Companys Adjusted EBITDA Margin in the second quarter of 2020 was 21, relatively flat to the prior year period.Balance Sheet and Cash FlowAs of June 30, 2020, Cash and Cash Equivalents totaled 62.4 million, a decrease of 7.8 million in the quarter, which included a repayment of 15 million on the Companys revolving credit facility, and a 10 million-dollar interest payment on the Companys debt. Cash Flow from Operations totaled 12.6 million for the second quarter of 2020, an increase of 10.7 million over the prior year period primarily driven by improvements in working capital and margins. Capital Expenditures were 5.7 million in the second quarter of 2020.Outlook 2As the spread of the COVID-19 pandemic continues to be unpredictable, a high degree of uncertainty remains as to the level of business disruption across the multiple markets ORBCOMM serves. That being said, ORBCOMM believes the largest impact of the pandemic to financial results will most likely have occurred in the second quarter of 2020, and anticipates improvement in the third quarter. The Company expects Total Revenues in the third quarter will be between 59 million and 62 million and anticipates Adjusted EBITDA margin in the third quarter to be approximately 21.5. The Company intends to provide fourth quarter guidance during the earnings conference call in late October.2 The Companys outlook includes non-GAAP measures, such as Adjusted EBITDA and Adjusted EBITDA Margin, which exclude charges or credits not indicative of core operations, which may include but not be limited to stock-based compensation expense, acquisition-related and integration costs, impairment loss, and other significant items that currently cannot be predicted. The exact amount of these charges or credits are not currently determinable, but may be significant. Accordingly, the Company is unable to provide equivalent reconciliations from GAAP to non-GAAP for these financial measures.Investment Community Conference CallORBCOMM will host a conference call and webcast for the investment community this morning at 8:30 AM ET. Senior management will review the results, discuss ORBCOMMs business, and address questions. To access the call, U.S. participants should dial 1-844-735-3762 at least ten minutes prior to the start of the call. International participants should dial 1-412-317-5710. To hear a live web simulcast or to listen to the archived webcast following completion of the call, please visit the Companys investor relations website at and then select News Events to access the link to the webcast. To listen to a replay of the conference call, please dial 1-877-344-7529 or 1-412-317-0088 for International callers using access code 10146215. The audio replay will be available from approximately 11:00 AM ET on July 30, 2020 through August 13, 2020. About ORBCOMM Inc.ORBCOMM Nasdaq: ORBC is a global leader and innovator in the industrial Internet of Things, providing solutions that connect businesses to their assets to deliver increased visibility and operational efficiency. The company offers a broad set of asset monitoring and control solutions, including seamless satellite and cellular connectivity, unique hardware and powerful applications, all backed by end-to-end customer support, from installation to deployment to customer care. ORBCOMM has a diverse customer base including premier OEMs, solutions customers and channel partners spanning transportation, supply chain, warehousing and inventory, heavy equipment, maritime, natural resources, and government. For more information, visit StatementsCertain statements discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally relate to our plans, estimates, objectives and expectations for future events, as well as projections, business trends, and other statements that are not historical facts. Such forward-looking statements are subject to known and unknown risks and uncertainties, some of which are beyond our control, which may cause our actual results, performance or achievements, or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. 