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Technology Stocks : Orbital science (ORB)

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To: nigel bates who wrote (1473)	4/21/1998 3:01:00 PM
From: Mohan Marette	Read Replies (4) of 2394

Orbcomm Global to go public. [news from conference call] Nigel and everyone: Since I listened to the conference call I thought I keep you guys informed in case you haven't listened to it or if you did I would appreciate if you guys put your thoughts down as well as the notes I have taken is rather sketchy. Some highlights. There were a total of approx. 5-7 participants such as: 1.Tom/ Merrill Lynch 2.J.P/Morgan Stanley or was it some one from J.P.Morgan? 3.B.J-Didn't catch the name of the company. 4.Ottis/Gillford Securities 5.Melinda/don't know which company. 6.Gary-Private Investor. I may have missed one or two. The best questions came from Ottis from Gillford Securities. Important facts I gathered from the conference call. 1.Orbcomm Global to go public. 2.Orbital already booked in Q1 50% of targeted infrastructure business for the year. 3.Magellan division has turned the corner with significant progress. 4.Debt to equity reduced to 25% with the recent secondary offering. 5.Orbcomm is the final 3 months of the countdown.... 6.Orbcomm has already deployed 15,000 subscriber units 7.500 people attended the recent Orbcomm conference,including customers,resellers,service providers etc from 25 countries. 8.SG&A-Target was to limit this expense to 15% and the company was able to reduce it to 14% for Q1 a 1% savings. In reply to Tom's question from Merrill Lynch about the gross margins of Access products and other related questions about Magellan Thompson replied that the gross margin is approx.35% and that overall sales of Magellan is good representing units sales of entry level Pioneer Class 2 channel unit at $99.00 and the 12 channel unit at about $120.00. Also Mr.Thompson said Orbcomm service is now available for 12 hrs a day with the 12 satellites and subscriber ramp up in next 3-4 months. J.P from Morgan Stanley asked about the units sales of the Access Products and also about the revenue.Mr.Thompson replies the average revenue/unit is little over 80.00. Approx. 80,000 units of access products were sold and this does not include products from Ashtech or Driver information systems.Thomson didn't have an accurate break down of all the various access products but he said they are working on establishing a system where this could be achieved etc. When pressed about a ball park number for Ashtech contribution Thomson said approx.11-12 million dollars. B.J (didn't get the name of the company) in reply to his question about Orbimmage Thompson said Orbimmage satellites are performing beautifully particularly the Obri sat 2. There are a total of 50 boats now using Orbimmage's Fish Map Service.The Orbimmage service will be expanded in to the Indian Ocean region and Eastern Pacific region by end of Q2 as now the service is available in the Western Pacific region. For Orbimmages Land Applications, Orbimmage is very close to signing on new customers for crop assessment etc. Otis/Gilfor Securities: Asked whether Magellan will be profitable in Q2 and for the year,Mr.Thompson replied that the division will start making profits or at least break even in Q2 and will be profitable for the year. He also asked whether he can assume that the infrastructure business will be at least 4 times as profitable for the year from Q1 and Thompson he didn't want to touch that question but he could say that the infrastructure business was looking good with the confirmed backlog etc. Ottis also asked whether Q1 represented any extra ordinary revenue or anything unusual or one time items but Mr.Thomson said that there was no unusual items in Q1 numbers. He also asked about a break down on the Orbcomm/Orbimmage losses on a per share basis and Thompson said .18/share was Orbcomm's and .06/share was for Orbimmage. Launch reserve still a little over 17 million dollars and it will continue to increase according to the CFO.(I think that is what he said). Melinda asked about the backlog and she wanted to know there were any significant ones that one should pay particular attention to,Mr.Thompson said the most significant contract was the one from the Canadian Space agency for Radarsat as it provides additional opportunities for similar businesses for Orbi. Another one he mentioned as significant was the military contract.etc etc Gary the private investor wanted to know about the public offering of Orbcomm Global and enquired about who is going to be offering the stocks whether it would be Orbital,Teleglobe etc. Mr.Thompson said he could say anything at this moment but he did say Orbital and Telegloble do not plan to sell off their interest. That is all folks. [Ps:pardon the spelling and grammar etc, no time to check]

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