ORBCOMM — Investor Presentation (November 2014)
29 slides from ORBCOMM's investor presentation, Nov 6, 2014
Slide 1: Investor Overview
Exhibit 99.3 Investor Overview November 2014
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements discussed in this presentation 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, objectives and expectations for future events and
Slide 3: Offering Summary
Offering Summary Listing: NASDAQ: ORBC Offering Amount: Approximately $72 Million (All primary) (1) Use of Proceeds: For the acquisition of SkyWave and general corporate purposes Underwriter’s Option: 15% Lock-up: 75 Days Expected Pricing: Late in the Week of 11/3 Bookrunners: Raymond James (Active)
Slide 4: ORBCOMM: We Are the M2M Solutions Leader
ORBCOMM: We Are the M2M Solutions Leader Transportation Heavy Equipment Satellite, Cellular, Dual-Mode & AIS Network Services Energy Maritime Device Management Government Security Broad Portfolio of Devices Applications and Benefits Applications (Analytics, Reports, etc.) • Asset Tracking & Geolocat
Slide 5: ORBCOMM's End-to-End M2M Solutions
ORBCOMM’s End-to-End M2M Solutions DEVICE CONNECTIVITY MANAGEMENT HARDWARE APPLICATIONS Subscriber Satellite Offerings Management Portal AssetView GT 1100 & GT 2300 FleetEdge Cellular Partnerships RT 6000 + & X1 CargoWatch ® ReeferTrak ® ORBCOMM, Inmarsat & Globalstar Modems 5
Slide 6: World Class Customer Base
World Class Customer Base Customer Success Stories Marquee Customers 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
Slide 7: Large, Growing M2M Market Opportunity
Large, Growing M2M Market Opportunity Increasingly, businesses and governments face the need to track, control, monitor and communicate with fixed and mobile assets located throughout the world Demand for M2M M2M Ecosystem (1) • Estimated more than 270M M2M units globally • Companies are seeking to
Slide 8: ORBCOMM's Path to Becoming the M2M Leader
ORBCOMM’S Path to Becoming the M2M Leader Acquisition of . (1) 16,000 Subscriber Large . ~ 1,200k Acquisition of . National Opportunity . Retailer Launch Six OG2 . . Acquisition of . Phase I Agreement Satellites . Adjusted EBITDA . Wins Global Account Breakeven . ORBC Listed on . ~ 500k ~ 100k 8 (1)
Slide 9: ORBCOMM at an Inflection Point
ORBCOMM at an Inflection Point NEW CAPABILITIES STRATEGIC GROWTH New Satellite Constellation Automated New Identification Vertical System Markets (AIS) New Products M&A & Services Growth Drivers Growing Regulation Distribution Driven Network Demand New Geographies BROADENING REACH NEW OPPORTUNITIES
Slide 10: OG2 Expands Our Network Capabilities
OG2 Expands Our Network Capabilities First six OG2 satellites launched in July; Remaining eleven to launch in 2015 CapEx holiday following completion of the OG2 program Upgrades Satellite-based M2M Technology • Increased M2M data capabilities driving new sales opportunities Faster messaging Larger m
Slide 11: Strategic Acquisitions Driving Opportunity Expansion
Strategic Acquisitions Driving Opportunity Expansion KEY SELECT CUSTOMER WINS YEAR INVESTMENTS VERTICALS POST-ACQUISITION 16,000 (1) Transportation Subscriber Opportunity with a 2011 (Cold Chain Management) Large National Retailer 28,000 2012 Transportation Subscriber Opportunity (Cold Chain Managem
Slide 12: Creating the Satellite M2M Industry Standard
Creating the Satellite M2M Industry Standard ORBCOMM’s standardized platform unifies three of the top four satellite M2M networks ORBCOMM has the deepest experience in the industry with satellite M2M MAPP TM interoperability solutions Identical device footprints, connectors, programming environment,
Slide 13: Acquisition of SkyWave
Acquisition of SkyWave SkyWave is the largest provider of M2M services over Inmarsat’s network and is the developer of IDP, the next-generation M2M service SkyWave Statistics COMBINED TECHNOLOGY Headquarters: Ottawa, Large Messages Canada Dual Mode (1) Subscribers : Over 250,000 Terrestrial Partners
Slide 14: SkyWave Provides Geographic Expansion
SkyWave Provides Geographic Expansion Expanding Addressable Market Through SkyWave Acquisition ORBCOMM Authorized Incremental SkyWave/Inmarsat Authorized • SkyWave has access to valuable incremental markets • SkyWave has a strong Asian presence - Asian share of satellite M2M market poised to increas
Slide 15: Expanding Our TAM: Increased Opportunity
Expanding Our TAM: Increased Opportunity OG1 OG2 Dual Mode SkyWave Combined Transportation Trailers In-Cab, Trucks Rail Heavy Equipment Small Machines Large Machines Energy Service Vehicles Pipelines Tanks Commercial Utility Metering Maritime Recreational Ships Commercial Ships Commercial Buoys Gove
Slide 16: Transaction Opportunities and Benefits
Transaction Opportunities and Benefits SkyWave creates numerous post-deal opportunities for ORBCOMM (1) : • A leader in satellite-based M2M • Global geographic coverage Adds • Over $150M combined revenue (2) ; • Broadest product distribution Significant over 1.2M combined subs . Scale • Nearly 200 c
Slide 17: Financial Overview
FINANCIAL OVERVIEW ORBCGMM
Slide 18: Transaction Summary
Transaction Summary (1) Net Transaction Value: $122.5 million • Macquarie debt facility expansion Financing Sources: • Equity offering proceeds (2) Estimated Synergies: Approximately $2-$4 million of annualized cost synergies (3) Estimated Transaction 9x Pre-synergy SkyWave 2015E EBITDA Contribution
Slide 19: SkyWave Financial Overview
SkyWave Financial Overview • Long-term track record of consistent revenue growth • Historically over 50% of total revenue has been recurring in nature • Opportunity for EBTIDA margin expansion and strong synergy realization Revenue (1)(2) Adjusted EBITDA (2)(3) (in $Ms) (in $Ms) $62-63 $12-13 $56 $9
Slide 20: ORBC Highlights and Developments: Q3 & Q4
ORBC Highlights and Developments: Q3 & Q4 • Phase I Launch of second generation constellation OG2 completed • Approximately 20,000 subscriber additions expected over the next 75 days from the Large National following three customers: , & Retailer – 20,000 compares to 600 subscriber additions in 3Q14
Slide 21: ORBCOMM 3Q14 Preliminary Results
ORBCOMM 3Q14 Preliminary Results (1) (in $Ms) 3Q14 • 3Q14 Total Revenues increased 17% YoY to $23.1M Preliminary Results • 3Q14 Adjusted EBITDA of $3.7M Service Revenues $ 15.2 • 3Q14 Adjusted EBITDA includes non-recurring one-time costs associated with: – refinancing long-term debt; Product Sales 7
Slide 22: Forward Outlook
Forward Outlook (1) • 2015E Pro Forma Revenue is expected to be $170-190 million (2)(3) • 2015E Pro Forma Adjusted EBITDA is expected to be $40-45 million (2)(3)(5) (2) (in $Ms) Pro Forma ORBCOMM (3) (3) 2013A 2014E 2015E (4) Total Revenues $ 131 $ 157-160 $ 170-190 (5) (6) (6) Adjusted EBITDA $ 26
Slide 23: Our Target Model Post-Acquisition
Our Target Model Post-Acquisition Our business model is characterized by high operating leverage and we are investing to accelerate growth Historical Pro Forma (1) (2) 1H 2014 Five Year Goal Annual Service Revenue Growth Rate 10% ~20% $350 - 400M Total Revenue Service % of Total Revenue 63% 65 – 70%
Slide 24: Leader in M2M communications and solutions
• Leader in M2M communications and solutions • Growing world class customer base includes large recent wins • Accretive SkyWave acquisition provides access to new opportunities • Deepening Inmarsat relationship creates a satellite M2M standard • Full deployment of OG2 in 2015 sets stage for extended
Slide 25: Appendix
APPENDIX ORBCGMM
Slide 26: Pro Forma Capitalization
(1) Pro Forma Capitalization (in $Ms) June 30, 2014 Adjusted As Further Pro Forma as Actual As Adjusted for Adjusted for this Further Adjusted 6/30/14 Refinancing Offering for the Acquisition Cash (2) $ 48.7 $ 81.8 $ 149.6 $ 85.6 (5) Debt: (3) Term & Revolving Loan 80.0 80.0 150.0 Note payable 45.0
Slide 27: Preliminary Results
Preliminary Results Management has prepared the estimates for the quarter ended September 30, 2014 presented in this Investor Overview in good faith based upon the most recent information available to management from our internal reporting procedures as of the date of this Investor Overview. These e
Slide 28: Adjusted EBITDA
Adjusted EBITDA EBITDAis definedasearningsattributableto us beforeinterestincome(expense),provisionfor incometaxes and depreciation and amortization. We believe EBITDA is useful to our management and investors in evaluating operating performance because it is one of the primary measures used by us t
Slide 29: Adjusted EBITDA
Adjusted EBITDA The following is a reconciliation of Adjusted EBITDA to net income (loss) attributable to ORBCOMM Inc. for the year ended December 31, 2013 and the preliminary results for the quarter ended September 30, 2014. (In $Ms) Fiscal Year 3Q14 (1) 2013 Preliminary Estimated Net Income (Loss)