Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

ORBCOMM Investor Overview


Published on

ORBCOMM 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.

Published in: Technology
  • Be the first to comment

  • Be the first to like this

ORBCOMM Investor Overview

  1. 1. INVESTOR OVERVIEW November 2017
  2. 2. 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, including those concerning our expectations, are subject to known and unknown risks and uncertainties, some of which are beyond ORBCOMM’s control, which may cause ORBCOMM’s 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: 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; the inability to effect suitable investments, alliances and acquisitions, and even if we are able to make acquisitions, the failure to integrate and effectively operate the acquired businesses and the exposure to additional risks, such as unexpected costs, contingent or other liabilities, or weaknesses in internal controls, and issues related to non-compliance with domestic and foreign laws, particularly in acquisitions of foreign businesses; our dependence on significant customers for a substantial portion of our revenues, including key customers such as Caterpillar Inc., Komatsu Ltd., Hub Group, Onixsat and Satlink S.L.; our ability to expand our business outside the United States, including risks related to the economic, political and other conditions in foreign countries in which we do business, including fluctuations in foreign currency exchange rates; our dependence on a few significant vendors, service providers or suppliers, as well as the loss or disruption or slowdown in the supply of products and services from these key vendors, such as our SkyWave business’s dependence on its commercial relationship with Inmarsat plc and the services provided by Inmarsat plc, including the continued availability of Inmarsat plc’s satellites, the supply of subscriber communicators from Sanmina Corporation and Quake Global, or the supply of application specific integrated circuits (ASICs) from S3 Group; competition from existing and potential telecommunications competitors, including terrestrial-based and satellite-based network providers, some of which provide wireless network services to our customers in connection with our products and services; our reliance on intellectual property rights and the risk that we, our MCAs, our MCPs and our customers may infringe on the intellectual property rights of others; inability to operate due to changes or restrictions in the political, legal, regulatory, government, administrative and economic conditions and developments in the United States and other countries and territories in which we provide our services; legal proceedings; the failure of our system or reductions in levels of service due to technological malfunctions or deficiencies or other events, such as in-orbit satellite failures, reduced performance of our existing satellites, or man-made or natural disasters and other extreme events; rapid and significant technological changes, pricing pressures and other competitive factors; cybersecurity risks; our substantial indebtedness, currently $250 million, including the restrictive covenants under the indenture governing our notes, and other terms that could restrict our business activities or our ability to execute our strategic objectives, limit our operating flexibility or adversely affect our financial performance, all of which could be exacerbated if we incur additional indebtedness; and the other risks described in our filings with the Securities and Exchange Commission (“SEC”). For more detail on these and other risks, please see our Annual Report on Form 10-K, including Part I, Item 1A. “Risk Factors” and Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in our Annual Report on Form 10-K, and other documents, on file with the SEC. ORBCOMM undertakes no obligation to publicly revise any forward-looking statements or cautionary factors, except as required by law.
  3. 3. Who is ORBCOMM? Global Provider of Internet of Things (IoT) Solutions & Services • Solutions Provider: Full Turn-key Solutions • Connectivity Provider: Providing All Key Satellite and Terrestrial Networks The Broadest Assortment of Capabilities in the Industry CONNECTIVITY 7 terrestrial and 4 satellite networks DEVICE MANAGEMENT ORBCOMMconnect (MVNO1) subscriber management HARDWARE 30+ SKUs designed for multiple vertical markets APPLICATIONS 8 applications for asset command and control 1 Mobile Virtual Network Operator
  4. 4. ORBCOMM’s Multiple Offerings Meet Customers’ Needs CONNECTIVITY DEVICE MANAGEMENT HARDWARE APPLICATIONS ORBCOMMconnect subscriber management portal, ORBCOMMmobile GT 2300 GT 1100 RT 6000 X3 Modems NETWORK MOBILE VIRTUAL NETWORK OPERATOR FULL END-TO-END SOLUTIONS PT 6000 Pro-400
  5. 5. ORBCOMM Today – One of the Largest in Industrial IoT 800+ Employees and full-time contractors in 18 countries 100+ Technology patents 400 Engineers and technical experts across 15 disciplines 120 Customer care staff providing 24x7 support 135 Sales account managers and support with vertical expertise $47.3 Million Adjusted EBITDA in 2016, at +25% Margins to Revenues 2 Million Global subscriber communicators $113 Million Service Revenue growth of 13% in 2016 $187 Million Total Revenue in 2016
  6. 6. Recent Updates Rolling Out Large Volume Orders Est. Total Units 90,000+ 35,000+ 12,000+ Revenues Actual Estimates Chg. Vs PY Q3-2017 Service – Actual $35M +13% Q3-2017 Product – Actual $34M +33% Q3-2017 Total – Actual $69M +22% Q4-2017 Total – Estimate ~ over $70 M ~ +55% FY 2017 Total – Estimate ~ $245-$250M ~ +30% Over 105,000 Devices Shipped in Q3 2017
  7. 7. More Than A Decade of Growth – Organic & Acquisition 2005 Q1 Q2 Q3 2006 Q1 Q2 Q3 2007 Q1 Q2 Q3 2008 Q1 Q2 Q3 2009 Q1 Q2 Q3 2010 Q1 Q2 Q3 2011 Q1 Q2 Q3 2012 Q1 Q2 Q3 2013 Q1 Q2 Q3 2014 Q1 Q2 Q3 2015 Q1 Q2 Q3 2016 Q1 Q2 Q3 QUARTERLY SUBSCRIBER COMMUNICATORS ~100k ~500k 1.9M
  8. 8. Diversified Customer Base: No Single Customer is 10% or Greater of Sales Serving a World-Class Customer Base: 2M Subscriber Communicators End-to-end telematics solution to track and monitor Doosan’s global fleet of construction equipment Container tracking solution to identify loading and unloading events to reduce idle time, improve utilization and information flow Dry van trailer tracking and cold chain management solution for trucks Cold chain monitoring and control solutions for SWIFT’s refrigerated intermodal fleet Marquee CustomersCustomer Success Stories
  9. 9. Customer Success Story Challenge: Efficiently manage a fleet of 29,000 intermodal containers in transit throughout North America across multiple touchpoints Solution: ORBCOMM developed a customized, end-to-end solution providing Hub real-time visibility into the status and location of its container fleet. Result: • Increased operational efficiency, reduced costs • Developed new revenue opportunities • Enhanced customer satisfaction • Achieved ROI within one year “We can actually be a lot more proactive... it should help reduce container dwell times by at least a half a day.” Dave Yeager, Chairman & CEO Hub Group, Inc. “We have estimated [savings]…at around $6 million on an annualized basis once the entire fleet is up and running.” Mark Yeager, Former Vice Chairman & COO Hub Group, Inc. Investing in Hub’s Solution Creates Opportunities with Larger Intermodal Operators
  10. 10. B2B IoT Market Is Taking Off Market is heavily driven by specific use case scenarios - track, control, monitor and communicate with fixed and mobile assets located throughout the world IoT Technology Layers$267B IoT Market by 20201 • 60% of growth by 2020 will come from applications/analytics and services. • All layers of technology stack will have at least 20% CAGR 2015-2020. • Companies are looking for end-to-end solutions to increase customer satisfaction, improve quality, support new business models (such as data-driven services), and reduce costs. • Predictive maintenance, track and trace, and fleet management are leading applications. • IoT has the potential to be ‘utterly transformative’ for non- technology companies. (1) Source: Boston Consulting Group (BCG), 2017 2015 2020 $63B $267B Global IoT Market Growth Transportation and Logistics, Utilities, and Discrete Manufacturing will be the three largest sectors. $- $20 $40 $60 $80 $100 IoT Backbone (Platform) Identity and Security Communications Connected Things (Devices) Services IoT Applications/Analytics Total IoT Spending in 2020 ($B)
  11. 11. The Race to Scale 2000 OG1 satellite network 2008 Entered AIS business 2011 Acquired StarTrak Long-haul cold chain 2012 Acquired LMS (PAR) Private fleet cold chain 2013 Acquired MobileNet, GlobalTrak & SENS Heavy equipment solutions & government security 2014 Built devices for trailer tracking and intermodal container monitoring 2014 - 2015 Launched OG2 satellites Acquired SkyWave IDP satellite products Built interchangeable modems 2015 Acquired WAM Sea containers Partner with AT&T 2004 Started opportunities with Caterpillar and GE BUILD • BUY • PARTNER 2016 Partner with Doosan and Carrier 2017 Acquired inthinc & Blue Tree Vehicle fleet management and truck in-cab
  12. 12.  Location  Temperature  Stop / Start  Alerts  Geofence  Door Open / Close  Asset Full / Empty  Fuel Level  Engine Hours  Diagnostics / Maintenance  Arrival / Departure Time  Dwell Time  Fuel Tax  Speed-by-Street  Driver Hours of Service  Driver Behavior Our Advantage – Serving All Transportation Asset Classes
  13. 13. Well-Positioned in Multiple Growth Categories to Capture the Future Top Opportunities to Grow Key Satellite & Terrestrial Networks AIS New Vertical Markets Strategic M&A New Products and Services New Geographic Markets
  14. 14. BUILD AND PARTNER: Network Agnostic Satellite Connectivity Only ORBCOMM offers the best combination of geographic coverage, regulatory authorizations, the fastest service, and the largest message payloads. Standard Platform Redundancy Complementary Regulatory Approvals LOW-EARTH ORBIT NETWORK • Urban canyon coverage • No line of sight • Lowest cost GEOSTATIONARY NETWORK • Sub-30 second latency • Regulatory approvals – China • Biggest payload • Significant marine advantage
  15. 15. ORBCOMM’s Strategy & Capabilities Enables TAM1 Expansion Trailers In-Cab, Trucks Rail Small Machines Large Machines Service Vehicles Pipelines Tanks Commercial Utility Metering Military Vehicles Containers Police/Fire/First Responders Commercial Buoys Commercial Ships Recreational Ships OG1 OG2 Dual Mode SkyWave Combined Transportation Heavy Equipment Energy Maritime Government& Security 1 Total Addressable Market
  16. 16. YEAR INVESTMENTS KEY VERTICALS SELECT CUSTOMER WINS POST-ACQUISITION 2011 Transportation (Cold Chain Management) 23,000 Subscriber Opportunity(1) 2012 Transportation (Cold Chain Management) 28,000 Subscriber Opportunity 2013 Heavy Equipment & Rail 50,000 Subscriber Opportunity(2) Government & Security $4.8M Opportunity 2014 Transportation 2015 Government, Maritime, Mining, Energy & Transportation Application Enablement Platform Sea, Cold Chain, Container, Genset 2017 Vehicle Fleet Management and Driver Safety BUY: Strategic Acquisitions Driving Opportunity Expansion (1) Shipments began in 4Q14 (2) 5-year agreement 200,000+ Subscribers 90,000 Subscriber Opportunity
  17. 17. Leader in Industrial IoT Communications and Solutions Delivering Significant Shareholder Value Successful Execution Growing Subscriber Base High Margin Recurring Revenues Strong Financial Discipline New Products & Services Large Recent Customer Wins Growth and Innovation Recurring Service Revenue Significant Operating Leverage Cost Control, Expand Margins New Markets & Geographies Expand Market Share