This document provides an overview of ORBCOMM Inc., including:
- ORBCOMM has transformed through consolidating platforms, products, and systems following acquisitions to improve margins and efficiency.
- The company provides integrated IoT solutions including devices, connectivity, and applications to track assets for transportation, heavy equipment, and other markets.
- ORBCOMM has a global customer base and addresses a large potential market for asset tracking and monitoring.
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ORBCOMM Investor Overview
1.
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 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.
3. 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
4. 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
5. 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
6. 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
8. 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
9. 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
11. 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
12. 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.