INVESTOR OVERVIEW November 2017

Transcription

1 INVESTOR OVERVIEW November 2017

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 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 forwardlooking 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 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 DEVICE MANAGEMENT HARDWARE APPLICATIONS 7 terrestrial and 4 satellite networks ORBCOMMconnect (MVNO 1 ) subscriber management 30+ SKUs designed for multiple vertical markets 8 applications for asset command and control 1 Mobile Virtual Network Operator

4 ORBCOMM s Multiple Offerings Meet Customers Needs NETWORK MOBILE VIRTUAL NETWORK OPERATOR FULL END-TO-END SOLUTIONS CONNECTIVITY DEVICE MANAGEMENT HARDWARE APPLICATIONS GT 1100 GT 2300 ORBCOMMconnect subscriber management portal, ORBCOMMmobile RT 6000 PT 6000 X3 Modems Pro-400

5 ORBCOMM Today One of the Largest in Industrial IoT 2 Million Global subscriber communicators Employees and full-time contractors in 18 countries $187 Million Total Revenue in Engineers and technical experts across 15 disciplines $47.3 Million Adjusted EBITDA in 2016, at +25% Margins to Revenues $113 Million Service Revenue growth of 13% in Customer care staff providing 24x7 support Sales account managers and support with vertical expertise Technology patents

6 Recent Updates Rolling Out Large Volume Orders Est. Total Units 90, , ,000+ Revenues Actual Estimates Chg. Vs PY Service Actual $35M +13% Product Actual $34M +33% Total Actual $69M +22% Q Total Estimate ~ over $70 M ~ +55% FY 2017 Total Estimate ~ $245-$250M ~ +30% Over 105,000 Devices Shipped in 2017

7 More Than A Decade of Growth Organic & Acquisition 1.9M QUARTERLY SUBSCRIBER COMMUNICATORS ~500k ~100k

8 Serving a World-Class Customer Base: 2M Subscriber Communicators 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 Dry van trailer tracking and cold chain management solution for trucks Cold chain monitoring and control solutions for SWIFT s refrigerated intermodal fleet Diversified Customer Base: No Single Customer is 10% or Greater of Sales

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 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. 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. Investing in Hub s Solution Creates Opportunities with Larger Intermodal Operators

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 $267B IoT Market by % of growth by 2020 will come from applications/analytics and services. All layers of technology stack will have at least 20% CAGR 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 nontechnology companies. Global IoT Market Growth IoT Technology Layers IoT Applications/Analytics Services Connected Things (Devices) Communications Identity and Security IoT Backbone (Platform) $- $20 $40 $60 $80 $100 Total IoT Spending in 2020 ($B) $267B $63B Transportation and Logistics, Utilities, and Discrete Manufacturing will be the three largest sectors (1) Source: Boston Consulting Group (BCG), 2017

11 The Race to Scale BUILD BUY PARTNER 2016 Partner with Doosan and Carrier 2014 Built devices for trailer tracking and intermodal container monitoring 2017 Acquired inthinc & Blue Tree Vehicle fleet management and truck in-cab 2004 Started opportunities with Caterpillar and GE 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 2015 Acquired WAM Sea containers Partner with AT&T Launched OG2 satellites Acquired SkyWave IDP satellite products Built interchangeable modems 2008 Entered AIS business 2000 OG1 satellite network

12 Our Advantage Serving All Transportation Asset Classes 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

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 BUILD AND PARTNER: Network Agnostic Satellite Connectivity Standard Platform Redundancy Complementary Regulatory Approvals GEOSTATIONARY NETWORK Sub-30 second latency Regulatory approvals China Biggest payload Significant marine advantage LOW-EARTH ORBIT NETWORK Urban canyon coverage No line of sight Lowest cost Only ORBCOMM offers the best combination of geographic coverage, regulatory authorizations, the fastest service, and the largest message payloads.

15 ORBCOMM s Strategy & Capabilities Enables TAM 1 Expansion 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 Government& Security Police/Fire/First Responders Containers Military Vehicles OG1 OG2 Dual Mode SkyWave Combined 1 Total Addressable Market

16 BUY: Strategic Acquisitions Driving Opportunity Expansion YEAR 2011 INVESTMENTS KEY VERTICALS Transportation (Cold Chain Management) SELECT CUSTOMER WINS POST-ACQUISITION 23,000 Subscriber Opportunity (1) 90,000 Subscriber Opportunity 2012 Transportation (Cold Chain Management) 28,000 Subscriber Opportunity 2013 Heavy Equipment & Rail Government & Security 50,000 Subscriber Opportunity(2) $4.8M Opportunity 2014 Transportation 2015 Government, Maritime, Mining, Energy & Transportation Application Enablement Platform Sea, Cold Chain, Container, Genset 200,000+ Subscribers 2017 Vehicle Fleet Management and Driver Safety (1) Shipments began in 44 (2) 5-year agreement

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