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ORBCOMM Investor Overview


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ORBCOMM (Nasdaq: ORBC) is committed to maximizing shareholder value. We continue to increase the number of subscriptions activated on our dedicated industrial IoT and M2M satellite constellation. We have an established global network and proven technology, a low-cost structure as well as key distribution and OEM customer relationships. We also have a comprehensive subscriber management platform that will further enhance our value to our customers and provide new ongoing revenue streams.

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ORBCOMM Investor Overview

  1. 1. SAFE HARBOR STATEMENT Certain 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. These risks and uncertainties include but are not limited to: the impact of the novel coronavirus (COVID-19) pandemic; demand for and market acceptance of our products and services and our ability to successfully implement our business plan; our dependence on our subsidiary companies (Market Channel Affiliates (“MCAs”)) and third-party product and service developers and providers, distributors and resellers (Market Channel Partners (“MCPs”)) to develop, market and sell our products and services, especially in markets outside the United States; substantial losses we have incurred and may continue to incur; substantial competition in the telecommunications, AIS data and industrial IoT industries; the inability to effect suitable investments, alliances and acquisitions or the inability to successfully integrate acquired businesses and systems; defects, errors or other insufficiencies in our products or services; failure to meet minimum service level commitments to certain of our customers; our dependence on significant customers for a substantial portion of our revenues, including key customers such as JB Hunt Transport Services, Inc., Caterpillar Inc., Komatsu Ltd., Carrier Transicold and Satlink S.L.; our ability to expand our business outside the United States and risks related to the economic, political and other conditions in foreign countries in which we do business; fluctuations in foreign currency exchange rates; unanticipated domestic or foreign tax or fee liabilities; the possibility we will be required to collect certain taxes in jurisdictions where we have not historically done so; economic, political and other conditions; extreme events such as a man-made or natural disasters, earthquakes, severe weather or other climate change-related events; our dependence on a limited number of manufacturers for many of our products and services; interruptions, discontinuations, slowdown or loss of the supply of subscriber communicators from our vendor Sanmina Corporation; legal proceedings; our reliance on intellectual property; increased regulatory restrictions and oversight; lack of in-orbit or other insurance for our ORBCOMM Generation 1 or ORBCOMM Generation 2 satellites; our reliance on third-party wireless network service providers to deliver existing and developing services in certain areas of our business; significant interruptions, discontinuation or loss of services provided by Inmarsat plc; failure to maintain proper and effective internal controls; inaccurate estimates in accounting or incorrect financial assumptions; significant operating risks related to our satellites due to various types of potential anomalies and potential impacts of space debris or other spacecrafts; the failure of our systems or reductions in levels of service due to technological malfunctions or deficiencies or other events outside of our control; difficulty upgrading or replacing aging hardware and software we use in operating our gateway earth stations and our customers’ subscriber communicators; technical or other difficulties with our gateway earth stations; security risks related to our networks and data networks, data processing systems and software systems and those of our third-party service providers; liabilities or additional costs as a result of laws, governmental regulations and evolving views of personal privacy rights; failure of our information technology systems; cybersecurity risks; the level of our indebtedness and the terms of our $250.0 million 8.0% senior secured note indenture and our revolving credit agreement, under which we may borrow up to $25.0 million, that could restrict our business activities or our ability to execute our strategic objectives or adversely affect our financial performance; and risks related to an investment in our common stock, including volatility due to our quarterly performance or our recently announced stock repurchase program. For more detail on these and other risks, please see our Annual Report on Form 10-K for the year ended December 31, 2019 (“Annual Report”), and other documents we file with the SEC. We undertake no obligation to publicly revise any forward-looking statements or cautionary factors, except as required by law.
  2. 2. ORBCOMM AT A GLANCE FINANCIAL $272M Total Revenue $63M Adjusted EBITDA $30M Operating Cash Flow $54M Cash SERVICE REVENUE 60% PRODUCT SALES 40% PEOPLE ~790 Employees 390 Engineering resources 15 Global offices Founded in 1993 USA 42% INDIA 21% CANADA 15% EUROPE 13% AFRICA 5% ASIA 2% LATIN AMERICA 2% BUSINESS 2.1M Subscribers 56% Satellite/44% Cellular 51% U.S./49% International 100+ Technology patents TRANSPORTATION 62% HEAVY EQUIPMENT 15% MARINE 11% NATURAL RESOURCES 7% GOVERNMENT/ OTHER 5% Amounts and figures are for the full year 2019 or as of 12/31/19
  3. 3. COMPONENTS TO COMPLETE IOT SOLUTIONS ORBCOMM has the broadest array of capabilities in the industry, with leading-edge hardware, multiple network connectivity options and applications that deliver advanced asset analytics. Devices and sensors to track, monitor and control assets 11 networks for satellite and cellular connectivity offering flexibility and seamless device and subscriber management SaaS and mobile applications for remote asset monitoring and management including advanced analytics
  4. 4. TRANSPORTATION • Optimize multi-asset visibility & utilization • Enable two-way temperature control • Improve driver safety & productivity • Reduce fuel costs and cycle times • Ensure regulatory compliance • Prevent cargo and trailer theft ORBCOMM VERTICAL MARKETS HEAVY EQUIPMENT • Track engine hours and performance • Enable preventive maintenance • Prevent equipment theft and loss • Reduce equipment downtime • Optimize asset utilization • Monitor fuel costs and consumption NATURAL RESOURCES • Increase oil and gas fleet efficiency and driver safety • Monitor pipeline, pumps and tank • Ensure continuous operations of SCADA systems • Enable smart grid monitoring • Automate water meter readings and utility management MARINE • Track containers for complete visibility • Reduce spoilage costs and claims • Decrease pre-trip inspection costs • Provide remote vessel tracking • Improve maritime safety & awareness • Support fisheries and environmental monitoring GOVERNMENT • Track mission- critical assets • Enhance cargo security • Continue vital communication during emergencies • Monitor essential public services • Provide warning systems for vehicles • Improve supply chain visibility
  5. 5. GLOBAL ADDRESSABLE MARKET 10M Construction Machines 90M Commercial Fleet Vehicles 1.3M Refrigerated Trailers/Trucks 29M Dry Containers 4.5M Rail Cars 2.2M Dry Vans 2M Refrigerated Containers 2M Chassis 35M Heavy Duty Trucks Source: 2018 Berg Insight and ORBCOMM estimates
  7. 7. THE ORBCOMM ADVANTAGE With a comprehensive range of integrated capabilities, ORBCOMM is uniquely equipped to deliver complete, single-source industrial IoT solutions. • Over 25 years of industrial IoT experience • Deep industry knowledge and expertise • Technologically advanced and patent-protected products • Unique cellular, satellite and dual-mode connectivity • Robust, integrated solution for multiple asset classes • Global footprint with large international distribution network • Diverse, world-class customer base • Proven track record in fulfilling large customer deployments
  8. 8. ERP Consolidation 13 systems to 1 ORBCOMM’S TRANSFORMATION 13 acquisitions in 7 years resulted in: • Redundant hardware • Overlapping web platforms • Multiple accounting systems • High levels of inventory • Rising SG&A expenses • Slowdown in innovation • Various billing platforms • Diminishing margins Transformation plan: Product Re-Engineering 160 SKUs to 40 Platform Consolidation 25 platforms to 2 Improved Distribution 13 channels to 1 Initiatives leading to: • Higher product margins • Lower inventory levels • Fewer components to source globally • Faster monthly accounting close process • Simplified billing • Improved inventory turns • Scalable platforms built for the future • Monitor more asset types with real- time visibility and advanced analytics • Greater processing power and data bandwidth to meet evolving IoT needs • Greater cross-selling opportunities • “Double-play” and “triple-play” advantages • Stronger and more unified sales force
  9. 9. -$10 -$5 $0 $5 $10 $15 $20 $25 $30 $35 2017 2018 2019 0x 1x 2x 3x 4x 5x 2017 2018 2019 17.6% 20.7% 23.2% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% $0 $10 $20 $30 $40 $50 $60 $70 2017 2018 2019 FINANCIAL TRENDS ($ in Millions) Improving margins, net debt position and increasing cash flow generation NET DEBT LEVERAGE RATIO OPERATING CASH FLOWADJUSTED EBITDA AND MARGIN +10% CAGR
  10. 10. FOCUS ON FUTURE GROWTH • Emerge from the transformation as a fully integrated, better scaled and more productive company • Grow subscriber base through pipeline of opportunities • Expand in key vertical markets and geographic regions • Improve product portfolio with innovative technology and new product launches • Strengthen financial profile, liquidity position and cash flow generation • Expand market share and deliver shareholder value
  11. 11. COVID-19 UPDATE • ORBCOMM is deemed an essential business with most employees working remotely to facilitate business as usual. • Our manufacturing facility in Mexico continues to build products as needed and we continue to ship from our distribution center in McAllen, TX. • We had positive Free Cash Flow in 2019, and currently have additional liquidity available from our $25M revolver credit facility. • The majority of our customers run essential businesses in the transportation, marine and heavy equipment markets, which play critical roles in sustaining the world during this crisis.