ORBCOMM — Proxy Contest (April 2009)
25 slides from ORBCOMM's proxy contest presentation, Apr 20, 2009
Slide 1: ORBCOMM: Global M2M Connecting the World's Assets
ORBCOMM Global M2M Connecting the World's Assets
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: Right Strategy to Deliver Value for Shareholders
Right Strategy to Deliver Value for Shareholders ORBCOMM's Board and Management Team have the right strategy to deliver value for all shareholders ORBCOMM believes it has the funding necessary to launch the second generation satellite constellation and operate the business going forward, without the
Slide 4: Leading global satellite data communications company focused on M2M
Leading global satellite data communications company, focused on Machine-to-Machine (M2M) communications TransportationIndustrial & Fixed Assets Heavy Equipment Marine & Homeland Security User Benefits: Lower operational cost Enhanced security Increased efficiency Asset protection "Green" Benefits G
Slide 5: ORBCOMM's Market Opportunity
ORBCOMM's Market Opportunity Intelligent Machines are Becoming Connected Machines Heavy Equipment 19.8% 24.5% ^ 63.4% 8.5 million Commercial Transport 32.6% 5.6% ^ 26.9% 90.8 million Industrial Fixed Assets 39.7% 5.3% ^ 34.2% 73.6 million Marine/Homeland Security 31.0% 4.2% ^18.8% 248.0 million Sour
Slide 6: Catalysts For Growth
Catalysts For Growth OEM Standardization and VAR model is most cost efficient and effective way to grow subscribers Caterpillar, Doosan Infracore America, Hitachi, Hyundai Heavy Industries, Komatsu, and Volvo have standardized product rollouts New OEMS in the pipeline More models and regions from cu
Slide 7: Growing Base of Industry-Leading VARs
Growing Base of Industry-Leading VARs Highly scalable global sales network includes many well-known brands selling and servicing large end users directly Innovative industry leaders provide valuable expertise, application development Government and Homeland Security Fixed Assets Commercial Transport
Slide 8: Dual-Mode and Terrestrial Agreements
Agreements with T-Mobile, AT&T, Telenor Connexion, and Rogers to resell terrestrial wireless data services and dual-mode services. Pursuing additional network and hardware relationships for dual-mode Opportunity for ORBCOMM ORBCOMM Dual-Mode Offering High bandwidth messaging Data and voice capabilit
Slide 9: Automatic Identification System (AIS) Satellite Program
Automatic Identification System (AIS) Satellite Program ORBCOMM is the only commercial space-based system capable of receiving AIS signals Above images are snapshots of traffic from one satellite 7/22 to 7/26
Slide 10: AIS Tracking of Sirius Star
AIS Tracking of Sirius Star This is the AIS trail from the hijacked Sirius Star
Slide 11: Model Provides High Operating Leverage
Model Provides High Operating Leverage Subscriber Revenue Recurring Revenue from growing base of subscribers Subscriber Communicators growth - Up 31.0% in 2008 over 2007, 3-year CAGR of 60% Relatively low churn / long asset life-cycles Attractive subscriber economics Our VARs bear costs related to s
Slide 12: Subscriber Growth (4Q06-4Q08)
Subscriber Growth (4Q06-4Q08) Subscribers grew 31% year over year in 2008
Slide 13: Service Revenue Trends (4Q06-4Q08)
Service Revenue Trends (4Q06-4Q08) On a trailing 12-month basis, ORBCOMM has grown Service Revenues by 106% over the last two years. ($ in 000s)
Slide 14: Adjusted EBITDA (4Q06-4Q08)
Adjusted EBITDA1 (4Q06-4Q08) Adjusted EBITDA1 has hit the inflection point to positive territory ($ in 000s) 1 Adjusted EBITDA is defined as Earnings before Interest Income (Expense), Provision for Income Taxes and Depreciation and Amortization, adjusted for Stock-Based Compensation Expense, Pre-Con
Slide 15: Strong Balance Sheet
Strong Balance Sheet SELECTED ITEMS ON THE BALANCE SHEET CASH AND CASH EQUIVALENTS $75,370 $115,587 LONG-TERM DEBT $1,200 $1,200 SHAREHOLDER'S EQUITY $161,605 $160,849 Significant cash position, negligible debt December 31, 2008 December 31, 2007 ($ in 000s)
Slide 16: CAPEX - Expected Funding Sources
CAPEX - Expected Funding Sources Plans for Capital Spending In 2009 of between $25-$30 million mostly for Next Generation Satellites Cash on Hand, plus investment returns $81.0 million cash, cash equivalents, $ restricted cash* Internally Generated Cash Flow from Operations Positive adjusted EBITDA
Slide 17: Meeting With Dissident Nominees
Meeting With Dissident Nominees In December 2008, two independent members of our Board, one a member of the Nominating and Governance Committee, met with Messrs. Miron and Chrust to discuss their ideas and proposals. After this meeting, the entire Board determined that none of the operational change
Slide 18: Juniper Content Corporation
Juniper Content Corporation Juniper Content Corporation declines 98% following Mr. Chrust's addition to the board, the only other public company board position he holds. (JNPC.OB - $112,000* market cap) * Source: www.bloomberg.com
Slide 19: Why Chrust/Miron Plan is Flawed
Why Chrust/Miron Plan is Flawed $25 million is supposed to fund additional capital expenditures and get ORBCOMM into the VAR business ORBCOMM believes it is fully funded ORBC has $81 million in cash and cash equivalents and effectively no debt (as of 12/31/2008) Anticipated CapEx in 2009 and 2010 of
Slide 20: Why Chrust/Miron Plan is Flawed (Continued)
Why Chrust/Miron Plan is Flawed (Continued) Management Changes are already being implemented Current CEO was promoted just one year ago Despite historically poor economic conditions, ORBCOMM achieved its financial guidance Management is focused on long-term success and shareholder value, not transac
Slide 21: The Real Motivation: $$$ at Shareholder Expense
The Real Motivation: $$$ at Shareholder Expense Messrs. Levinson, Nayden, and Chrust are all members of or affiliated with Centripetal Capital Partners, LLC Michael Miron is obligated to use best efforts to cause ORBC to pay financing fees associated with the proposed $25 million equity raise of $75
Slide 22: Our Plan for Enhancing Shareholder Value
Our Plan for Enhancing Shareholder Value Conserve Cash through difficult economic environment Continue toward launch of new satellites, space out the timing if necessary Save shareholders from massive dilution Continue positive trend of growing Adjusted EBITDA and Cash Flow From Operations Take adva
Slide 23: Corporate Governance and Nominated Directors
Corporate Governance and Nominated Directors Majority of directors on our Board are independent Officers and Directors represent 18.0% of the outstanding shares and therefore have a vested interest in making the company successful and driving shareholder value Incumbent Board members - Two industry
Slide 24: Vote For ORBCOMM Management
Vote For ORBCOMM Management Despite a difficult economic environment, the management team achieved its key financial objectives in 2008 Current management and Board members, representing 18.0% of shares outstanding, have been the drivers of growth at ORBCOMM The dissident group has limited industry
Slide 25: Appendix
Appendix The following table reconciles our Net Income (Loss) to EBITDA and Adjusted EBITDA for the periods shown: