EchoStar Announces First Quarter of 2018 Results
EchoStar Announces First Quarter of 2018 Results
ENGLEWOOD, Co., May 10, 2018 /PRNewswire/ -- EchoStar Corporation (NASDAQ: SATS) today announced its financial results for the quarter ended March 31, 2018.
First Quarter 2018 Financial Highlights:
-- Consolidated revenues of $501.8 million.
-- Consolidated net loss from continuing operations of $21.2 million,
consolidated net loss attributable to EchoStar common stock of $21.6
million, and diluted losses per share of $0.22. Included in these
amounts are net losses on investments of $36.7 million. Excluding these
net losses, diluted earnings per share would have been $0.16.
-- Consolidated EBITDA of $165.7 million, including net losses on
investments of $36.7 million. Excluding these net losses, EBITDA would
have been $202.4 million (see discussion and the reconciliation of GAAP
to this non-GAAP measure below).
Additional Highlights:
-- Approximately 1,267,000 Hughes broadband subscribers as of March 31,
2018.
-- Cash, cash equivalents and current marketable investment securities of
$3.3 billion as of March 31, 2018
On January 1, 2018, we adopted two new accounting pronouncements:
-- Topic 606 relating to revenue recognition and the related costs from
contracts with customers. The adoption decreased our revenue by $1.2
million and increased our net income by $1.1 million for the three
months ended March 31, 2018.
-- Topic 321 relating to accounting for investments. The adoption decreased
our net losses on investments by $19.1 million and correspondingly
increased our net income by $19.1 million.
Set forth below is a table highlighting certain of EchoStar's segment results for the three months ended March 31, 2018 and 2017:
For the three months ended March
31,
---------------------------------
2018 2017
---- ----
(Dollars in Thousands)
Revenue
Hughes $400,818 $329,320
EchoStar Satellite Services 96,753 100,326
Corporate & Other 4,221 3,505
----- -----
Total $501,792 $433,151
======== ========
EBITDA
Hughes $136,713 $100,852
EchoStar Satellite Services 84,150 83,063
Corporate & Other:
Corporate overhead, operating and other (17,870) (18,952)
Equity in earnings (losses) of unconsolidated affiliates, net (1,009) 6,408
Gains (losses) on investments, net (36,268) 11,943
------- ------
Sub-total (55,147) (601)
------- ----
Total $165,716 $183,314
======== ========
Net income (loss) from continuing operations $(21,171) $30,775
======== =======
Net income from discontinued operations $ - $6,577
Net income (loss) $(21,171) $37,352
Expenditures for property and equipment from continuing
operations $50,982 $89,950
======= =======
The following table reconciles GAAP to non-GAAP measurements.
For the three months ended
March 31,
---------------------------
2018 2017
---- ----
(Dollars in Thousands)
Net income (loss) $(21,171) $37,352
Interest income and expense,
net 47,116 37,105
Income tax benefit, net (5,403) (12)
Depreciation and
amortization 145,554 115,083
Net income from discontinued
operations - (6,577)
Net (income) loss
attributable to
noncontrolling interests (380) 363
---- ---
EBITDA $165,716 $183,314
======== ========
Note on Use of Non-GAAP Financial Measures
EBITDA is defined as "Net income (loss)" excluding "Interest income and expense, net," "Income tax provision (benefit), net," "Depreciation and amortization," "Net income (loss) from discontinued operations," and "Net income (loss) attributable to noncontrolling interests." This measure is not determined in accordance with US GAAP. EBITDA is reconciled to "Net income (loss)" in the table above and should not be considered in isolation or as a substitute for operating income, net income or any other measure determined in accordance with GAAP. Our management uses this non-GAAP measure as a measure of our operating efficiency and overall operating financial performance for benchmarking against our peers and competitors. Management believes that this non-GAAP measure provides meaningful supplemental information regarding the underlying operating performance of our business and is appropriate to enhance an overall understanding of our financial performance. Management also believes that EBITDA is useful to investors because it is frequently used by securities analysts, investors, and other interested parties to evaluate the performance of companies in our industry.
The consolidated financial statements of EchoStar for the periods ended March 31, 2018 and 2017 are attached to this press release. Detailed financial data and other information are available in EchoStar's Quarterly Report on Form 10-Q for the period ended March 31, 2018 filed today with the Securities and Exchange Commission.
EchoStar will host its earnings conference call on Thursday, May 10, 2018 at 11:00 a.m. Eastern Time. The call-in numbers are (877) 815-1625 (toll-free) and (716) 247-5178 (international), Conference ID # 8292996.
About EchoStar Corporation
EchoStar Corporation (NASDAQ: SATS) is a premier global provider of satellite communications solutions. Headquartered in Englewood, Colo., and conducting business around the globe, EchoStar is a pioneer in secure communications technologies through its Hughes Network Systems and EchoStar Satellite Services business segments.
Safe Harbor Statement under the US Private Securities Litigation Reform Act of 1995
This press release may contain statements that are forward looking, as that term is defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's beliefs, as well as assumptions made by, and information currently available to, management. When used in this release, the words "believe," "anticipate," "estimate," "expect," "intend," "project," "plans," and similar expressions and the use of future dates are intended to identify forward?looking statements. Although management believes that the expectations reflected in these forward?looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made. We assume no responsibility for the accuracy of forward-looking statements or information or for updating forward-looking information or statements. These statements are subject to certain risks, uncertainties, and assumptions. See "Risk Factors" in EchoStar's Annual Report on Form 10-K for the period ended December 31, 2017 and Quarterly Report on Form 10-Q for the period ended March 31, 2018, as filed with the Securities and Exchange Commission and in the other documents EchoStar files with the Securities and Exchange Commission from time to time.
ECHOSTAR CORPORATION
Consolidated Balance Sheets
As of
March 31, 2018 December 31, 2017
-------------- -----------------
Assets (unaudited) (audited)
Current Assets:
Cash and cash equivalents $2,239,591 $2,431,456
Marketable investment securities, at fair value 1,060,733 814,161
Trade accounts receivable and contract assets, net (Note 3) 166,182 196,840
Trade accounts receivable - DISH Network, net 56,861 43,295
Inventory 85,995 83,595
Prepaids and deposits 59,751 54,533
Other current assets 13,163 91,671
Total current assets 3,682,276 3,715,551
--------- ---------
Noncurrent Assets:
Property and equipment, net 3,461,004 3,465,471
Regulatory authorizations, net 536,548 536,936
Goodwill 504,173 504,173
Other intangible assets, net 55,273 58,955
Investments in unconsolidated entities 173,601 161,427
Other receivables - DISH Network 93,287 92,687
Other noncurrent assets, net 255,582 214,814
Total noncurrent assets 5,079,468 5,034,463
--------- ---------
Total assets $8,761,744 $8,750,014
========== ==========
Liabilities and Stockholders' Equity
Current Liabilities:
Trade accounts payable $103,785 $108,406
Trade accounts payable - DISH Network 3,742 4,753
Current portion of long-term debt and capital lease obligations 41,424 40,631
Contract liabilities 65,333 65,959
Accrued interest 57,297 47,616
Accrued compensation 32,905 47,756
Accrued expenses and other 105,291 98,769
Total current liabilities 409,777 413,890
------- -------
Noncurrent Liabilities:
Long-term debt and capital lease obligations, net 3,585,972 3,594,213
Deferred tax liabilities, net 433,174 436,023
Other noncurrent liabilities 127,306 128,503
Total noncurrent liabilities 4,146,452 4,158,739
--------- ---------
Total liabilities 4,556,229 4,572,629
--------- ---------
Commitments and contingencies (Note 15)
Stockholders' Equity:
Preferred stock, $.001 par value, 20,000,000 shares authorized, none issued and outstanding at each of March 31, 2018 and - -
December 31, 2017
Common stock, $.001 par value, 4,000,000,000 shares authorized:
Class A common stock, $.001 par value, 1,600,000,000 shares authorized, 53,932,336 shares issued and 48,400,018 shares 54 54
outstanding at March 31, 2018 and 53,663,859 shares issued and 48,131,541 shares outstanding at December 31, 2017
Class B convertible common stock, $.001 par value, 800,000,000 shares authorized, 47,687,039 shares issued and 48 48
outstanding at each of March 31, 2018 and December 31, 2017
Class C convertible common stock, $.001 par value, 800,000,000 shares authorized, none issued and outstanding at each of - -
March 31, 2018 and December 31, 2017
Class D common stock, $.001 par value, 800,000,000 shares authorized, none issued and outstanding at each of March 31, - -
2018 and December 31, 2017
Additional paid-in capital 3,685,577 3,669,461
Accumulated other comprehensive loss (111,413) (130,154)
Accumulated earnings 714,423 721,316
Treasury stock, at cost (98,162) (98,162)
------- -------
Total EchoStar Corporation stockholders' equity 4,190,527 4,162,563
Other noncontrolling interests 14,988 14,822
------ ------
Total stockholders' equity 4,205,515 4,177,385
--------- ---------
Total liabilities and stockholders' equity $8,761,744 $8,750,014
========== ==========
ECHOSTAR CORPORATION
Consolidated Statements of Operations
(In thousands)
For the three months ended March 31,
2018 2017
---- ----
Revenue:
Services and other revenue - DISH Network $103,805 $114,955
Services and other revenue - other 355,040 269,791
Equipment revenue 42,947 48,405
Total revenue 501,792 433,151
------- -------
Costs and expenses:
Cost of sales - services and other (exclusive of depreciation and amortization) 143,793 131,783
Cost of sales - equipment (exclusive of depreciation and amortization) 44,023 43,938
Selling, general and administrative expenses 103,275 82,991
Research and development expenses 7,137 7,705
Depreciation and amortization 145,554 115,083
Total costs and expenses 443,782 381,500
------- -------
Operating income 58,010 51,651
------ ------
Other income (expense):
Interest income 15,635 8,291
Interest expense, net of amounts capitalized (62,751) (45,396)
Gains (losses) on investments, net (36,663) 12,035
Other-than-temporary impairment loss on available-for-sale securities - (3,298)
Equity in earnings (losses) of unconsolidated affiliates, net (1,009) 6,408
Other, net 204 1,072
--- -----
Total other expense, net (84,584) (20,888)
------- -------
Income (loss) from continuing operations before income taxes (26,574) 30,763
Income tax benefit, net 5,403 12
----- ---
Net income (loss) from continuing operations (21,171) 30,775
Net income from discontinued operations - 6,577
Net income (loss) (21,171) 37,352
Less: Net loss attributable to noncontrolling interest in HSS Tracking Stock (Note 1) - (655)
Less: Net income attributable to other noncontrolling interests 380 292
--- ---
Net income (loss) attributable to EchoStar Corporation (21,551) 37,715
Less: Net loss attributable to Hughes Retail Preferred Tracking Stock (Note 1) - (1,209)
--- ------
Net income (loss) attributable to EchoStar Corporation common stock $(21,551) $38,924
======== =======
Amounts attributable to EchoStar Corporation common stock:
Net income (loss) from continuing operations $(21,551) $32,347
Net income from discontinued operations - 6,577
Net income (loss) attributable to EchoStar Corporation common stock $(21,551) $38,924
======== =======
Weighted-average common shares outstanding - Class A and B common stock:
Basic 95,888 94,745
====== ======
Diluted 95,888 95,893
====== ======
Earnings (losses) per share - Class A and B common stock:
Basic:
Continuing operations $(0.22) $0.34
Discontinued operations - 0.07
----
Total basic earnings (losses) per share $(0.22) $0.41
====== =====
Diluted:
Continuing operations $(0.22) $0.34
Discontinued operations - 0.07
Total diluted earnings (losses) per share $(0.22) $0.41
====== =====
ECHOSTAR CORPORATION
Consolidated Statements of Cash Flows
(In thousands)
For the three months ended March 31,
2018 2017
---- ----
Cash flows from operating activities:
Net income (loss) $(21,171) $37,352
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and amortization 145,554 126,742
Amortization of debt issuance costs 1,936 1,790
Equity in (earnings) losses of unconsolidated affiliates, net 1,009 (5,249)
Loss (gain) and impairment on investments, net 36,673 (8,737)
Stock-based compensation 2,765 956
Deferred tax (benefit) provision (7,036) 343
Dividend received from unconsolidated entity - 7,500
Changes in current assets and current liabilities, net (13,313) (13,857)
Changes in noncurrent assets and noncurrent liabilities, net (13,982) (6,003)
Other, net 2,840 518
----- ---
Net cash flows from operating activities 135,275 141,355
------- -------
Cash flows from investing activities:
Purchases of marketable investment securities (562,611) (45,905)
Sales and maturities of marketable investment securities 298,596 209,923
Expenditures for property and equipment (128,506) (102,463)
Refunds and other receipts related to capital expenditures 77,524 -
Sale of investment in unconsolidated entity - 17,781
Expenditures for externally marketed software (7,148) (10,832)
Net cash flows from investing activities (322,145) 68,504
-------- ------
Cash flows from financing activities:
Repayment of debt and capital lease obligations (9,368) (8,736)
Net proceeds from Class A common stock options exercised 3,481 26,325
Net proceeds from Class A common stock issued under the Employee Stock Purchase Plan 2,636 2,409
Cash exchanged for Tracking Stock (Note 1) - (651)
Other, net (1,508) (1,475)
------ ------
Net cash flows from financing activities (4,759) 17,872
------ ------
Effect of exchange rates on cash and cash equivalents (242) 715
---- ---
Net increase (decrease) in cash and cash equivalents, including restricted amounts (191,871) 228,446
Cash and cash equivalents, including restricted amounts, beginning of period 2,432,249 2,571,866
--------- ---------
Cash and cash equivalents, including restricted amounts, end of period $2,240,378 $2,800,312
========== ==========
Supplemental disclosure of cash flow information:
Cash paid for interest (including capitalized interest) $55,172 $54,053
======= =======
Capitalized interest $4,099 $21,824
====== =======
Cash paid for income taxes $839 $1,035
==== ======
Employee benefits paid in Class A common stock $7,605 $11,199
====== =======
Property and equipment financed under capital lease obligations $38 $7,485
=== ======
Increase (decrease) in capital expenditures included in accounts payable, net $585 $(6,315)
==== =======
Capitalized in-orbit incentive obligations $ - $31,000
=== === =======
Non-cash net assets exchanged for Tracking Stock (Note 1) $ - $299,425
=== === ========
CONTACT: EchoStar Investor Relations, Deepak V. Dutt, Phone: +1 301-428-1686, Email: deepak.dutt@echostar.com; EchoStar Media Relations, Dan Brown, Phone: +1 301-601-7216, Email: dan.brown@echostar.com
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SOURCE EchoStar Corporation
