Orbcomm Seeks New AIS Deals After Completing Coast Guard Contract
Orbcomm’s 2010 third quarter total revenues jumped 97.9 percent from the same period in 2009 due to a boost in deferred U.S. Coast Guard AIS service revenue, the company announced in its latest results, issued Nov. 10.
Orbcomm reported revenues of $13.9 million in the most recent three-month period, which included $5.9 million in revenue from the Coast Guard. Orbcomm said it completed its agreement with the Coast Guard for the AIS service and determined that the remaining unamortized deferred AIS services revenue under the contract should be recognized in the third quarter. Even without the AIS service recognition, Orbcomm’s revenues still increased by 13.9 percent from its previous third-quarter totals.
“The prepaid deferred revenue primarily represents one deliverable under the agreement to design, develop, launch and operate a single satellite equipped with the capability to receive, process and forward AIS data for the purpose of demonstrating that low-Earth orbit satellites are able to receive and process AIS signals. We are pursuing new AIS agreements with agencies within the U.S. government,” Orbcomm CEO Marc Eisenberg said in a statement.
The company’s expenses totaled $14.3 million for the second straight quarter. Eisenberg said the company was stuck with a $6.5 million impairment charge for its Quick-Launch 6 satellite during the third quarter. “This impairment charge … was to write-off Quick-Launch 6 after entering into a settlement agreement with OHB. Quick-Launch 6, which was not launched in June 2008 as part of our earlier agreement, was expected to be retained for future deployment. All of the Quick-Launch and concept demonstration satellites have now been fully depreciated or impairment charges have been taken for the cost of these satellites,” Eisenberg said.
Increased sales at Orbcomm’s Japanese subsidiary helped push product sales from $92,000 in the third quarter of 2009 to $937,000 in 2010. Orbcomm’s billable subscribers also increased 9.2 percent to 556,000. Total net additions during the quarter were 16,000, with net satellite subscriber additions of about 13,000 and terrestrial subscribers increasing more than 3,000.