EchoStar Announces Financial Results for Three and Six Months Ended June 30, 2018
ENGLEWOOD, Colo., Aug. 7, 2018 /PRNewswire/ -- EchoStar Corporation (NASDAQ: SATS) today announced its financial results for the three and six months ended June 30, 2018.
Three Months Ended June 30, 2018 Financial Highlights:
-- Consolidated revenues of $526.0 million.
-- Consolidated net income from continuing operations of $77.7 million,
consolidated net income attributable to EchoStar common stock of $77.2
million, and diluted earnings per share of $0.80. Included in these
amounts are net gains on investments of $65.4 million. Excluding these
net gains, diluted earnings per share would have been $0.12.
-- Consolidated EBITDA of $285.8 million, including net gains on
investments of $65.4 million. Excluding these net gains, EBITDA would
have been $220.4 million (see discussion and the reconciliation of GAAP
to this non-GAAP measure below).
Six Months Ended June 30, 2018 Financial Highlights:
-- Consolidated revenues of $1,027.7 million.
-- Consolidated net income from continuing operations of $56.5 million,
consolidated net income attributable to EchoStar common stock of $55.7
million, and diluted earnings per share of $0.57. Included in these
amounts are net gains on investments of $28.7 million. Excluding these
net gains, diluted earnings per share would have been $0.28.
-- Consolidated EBITDA of $451.5 million, including net gains on
investments of $28.7 million. Excluding these net gains, EBITDA would
have been $422.7 million (see discussion and the reconciliation of GAAP
to this non-GAAP measure below).
Additional Highlights:
-- Approximately 1,298,000 Hughes broadband subscribers as of June 30,
2018.
-- Cash, cash equivalents and current marketable investment securities of
$3.4 billion as of June 30, 2018.
Set forth below is a table highlighting certain of EchoStar's segment results for the three and six months ended June 30, 2018 and 2017:
For the three months For the six months
ended June 30, ended June 30,
2018 2017 2018 2017
---- ---- ---- ----
(Dollars in thousands)
Revenue
Hughes $426,306 $362,762 $827,124 $692,082
EchoStar Satellite Services 95,425 98,366 192,178 198,692
Corporate & Other 4,226 3,948 8,447 7,453
Total $525,957 $465,076 $1,027,749 $898,227
======== ======== ========== ========
EBITDA
Hughes $152,134 $110,024 $288,847 $210,876
EchoStar Satellite Services 82,483 80,465 166,633 163,528
Corporate & Other:
Corporate overhead, operating and other (11,695) (10,662) (29,565) (29,614)
Equity in earnings (losses) of unconsolidated (2,058) 4,831 (3,067) 11,239
affiliates, net
Gains (losses) on investments, net 64,891 205 28,622 12,148
------ --- ------ ------
Sub-total 51,137 (5,626) (4,010) (6,227)
Total $285,754 $184,863 $451,470 $368,177
======== ======== ======== ========
Net income from continuing operations $77,684 $6,591 $56,513 $37,366
Net income from discontinued operations - 531 - 7,108
Net income $77,684 $7,122 $56,513 $44,474
======= ====== ======= =======
Expenditures for property and equipment from $119,592 $128,064 $170,574 $218,014
continuing operations
The following table reconciles GAAP to non-GAAP measurements.
For the three months For the six months
ended June 30, ended June 30,
2018 2017 2018 2017
---- ---- ---- ----
(Dollars in thousands)
Net income (loss) $77,684 $7,122 $56,513 $44,474
Interest income and expense, net 42,281 45,417 89,397 82,522
Income tax provision, net 17,802 3,003 12,399 2,991
Depreciation and amortization 148,449 130,034 294,003 245,117
Net income from discontinued operations - (531) - (7,108)
Net (income) loss attributable to noncontrolling (462) (182) (842) 181
interests
EBITDA 285,754 184,863 451,470 368,177
======= ======= ======= =======
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." EBITDA 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 US 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 June 30, 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 June 30, 2018 filed today with the Securities and Exchange Commission.
EchoStar will host its earnings conference call on Tuesday, August 7, 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 # 8252368.
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 June 30, 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
June 30, 2018 December 31, 2017
------------- -----------------
Assets (Unaudited) (Audited)
Current assets:
Cash and cash equivalents $1,793,053 $2,431,456
Marketable investment securities, at fair value 1,640,776 814,161
Trade accounts receivable and contract assets, net (Note 3) 186,962 196,840
Trade accounts receivable - DISH Network, net 26,126 43,295
Inventory 81,388 83,595
Prepaids and deposits 58,911 54,533
Other current assets 15,889 91,671
Total current assets 3,803,105 3,715,551
--------- ---------
Noncurrent assets:
Property and equipment, net 3,396,616 3,465,471
Regulatory authorizations, net 528,346 536,936
Goodwill 504,173 504,173
Other intangible assets, net of accumulated amortization of $309,690 and $302,345, respectively 51,593 58,955
Investments in unconsolidated entities 156,022 161,427
Other receivables - DISH Network 93,893 92,687
Other noncurrent assets, net 258,237 214,814
Total noncurrent assets 4,988,880 5,034,463
--------- ---------
Total assets $8,791,985 $8,750,014
========== ==========
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable $100,235 $108,406
Trade accounts payable - DISH Network 1,393 4,753
Current portion of long-term debt and capital lease obligations 1,028,119 40,631
Contract liabilities 72,776 65,959
Accrued interest 45,857 47,616
Accrued compensation 42,612 47,756
Accrued taxes 15,719 16,122
Accrued expenses and other 68,195 82,647
Total current liabilities 1,374,906 413,890
--------- -------
Noncurrent liabilities:
Long-term debt and capital lease obligations, net 2,592,174 3,594,213
Deferred tax liabilities, net 456,401 436,023
Other noncurrent liabilities 124,252 128,503
Total noncurrent liabilities 3,172,827 4,158,739
--------- ---------
Total liabilities 4,547,733 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 June 30, 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, 54,006,419 shares issued and 48,474,101 54 54
shares outstanding at June 30, 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 June 30, 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 June 30, 2018 and December 31, 2017
Class D common stock, $.001 par value, 800,000,000 shares authorized, none issued and outstanding at each of June 30, - -
2018 and December 31, 2017
Additional paid-in capital 3,689,180 3,669,461
Accumulated other comprehensive loss (154,011) (130,154)
Accumulated earnings 792,278 721,316
Treasury stock, at cost (98,162) (98,162)
------- -------
Total EchoStar Corporation stockholders' equity 4,229,387 4,162,563
Other noncontrolling interests 14,865 14,822
------ ------
Total stockholders' equity 4,244,252 4,177,385
--------- ---------
Total liabilities and stockholders' equity $8,791,985 $8,750,014
========== ==========
ECHOSTAR CORPORATION
Consolidated Statements of Operations
(In thousands)
For the three months For the six months
ended June 30, ended June 30,
2018 2017 2018 2017
---- ---- ---- ----
Revenue:
Services and other revenue - DISH Network $100,171 $113,734 $203,976 $228,689
Services and other revenue - other 375,445 285,053 730,485 554,844
Equipment revenue 50,341 66,289 93,288 114,694
Total revenue 525,957 465,076 1,027,749 898,227
------- ------- --------- -------
Costs and expenses:
Cost of sales - services and other (exclusive of depreciation and 151,157 138,227 299,902 273,415
amortization)
Cost of sales - equipment (exclusive of depreciation and amortization) 41,865 53,662 80,936 94,195
Selling, general and administrative expenses 103,074 89,826 206,349 172,817
Research and development expenses 6,647 7,437 13,784 15,142
Depreciation and amortization 148,449 130,034 294,003 245,117
------- -------
Total costs and expenses 451,192 419,186 894,974 800,686
------- ------- ------- -------
Operating income 74,765 45,890 132,775 97,541
------ ------ ------- ------
Other income (expense):
Interest income 19,253 10,039 34,888 18,330
Interest expense, net of amounts capitalized (61,534) (55,456) (124,285) (100,852)
Gains (losses) on investments, net 65,396 1,837 28,733 10,574
Equity in earnings (losses) of unconsolidated affiliates, net (2,058) 4,831 (3,067) 11,239
Other, net (336) 2,453 (132) 3,525
---- ----- ---- -----
Total other income (expense), net 20,721 (36,296) (63,863) (57,184)
------ ------- ------- -------
Income from continuing operations before income taxes 95,486 9,594 68,912 40,357
Income tax provision, net (17,802) (3,003) (12,399) (2,991)
------- ------ ------- ------
Net income from continuing operations 77,684 6,591 56,513 37,366
Net income from discontinued operations - 531 - 7,108
Net income 77,684 7,122 56,513 44,474
Less: Net loss attributable to noncontrolling interest in HSS - - - (655)
Tracking Stock (Note 1)
Less: Net income attributable to other noncontrolling interests 462 182 842 474
--- --- --- ---
Net income attributable to EchoStar Corporation 77,222 6,940 55,671 44,655
Less: Net loss attributable to Hughes Retail Preferred Tracking - - - (1,209)
Stock (Note 1)
Net income attributable to EchoStar Corporation common $77,222 $6,940 $55,671 $45,864
stock
Earnings per share - Class A and B common stock:
Basic earnings from continuing operations per share $0.80 $0.07 $0.58 $0.41
Total basic earnings per share $0.80 $0.07 $0.58 $0.48
Diluted earnings from continuing operations per share $0.80 $0.07 $0.57 $0.40
Total diluted earnings per share $0.80 $0.07 $0.57 $0.48
ECHOSTAR CORPORATION
Consolidated Statements of Cash Flows
(In thousands)
For the six months ended June 30,
2018 2017
---- ----
Cash flows from operating activities:
Net income $56,513 $44,474
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization 294,003 256,776
Equity in (earnings) losses of unconsolidated affiliates, net 3,067 (10,080)
Amortization of debt issuance costs 3,905 3,617
(Gains) losses and impairments on investments, net (28,674) (10,574)
Stock-based compensation 5,110 3,908
Deferred tax provision 10,231 673
Dividend received from unconsolidated entity 5,000 7,500
Proceeds from sale of trading securities - 8,922
Changes in current assets and current liabilities, net:
Trade accounts receivable, net (3,061) 4,496
Trade accounts receivable - DISH Network 17,262 184,077
Inventory 238 (24,330)
Other current assets (5,430) (6,193)
Trade accounts payable 2,364 (65,179)
Trade accounts payable - DISH Network (3,360) (3,061)
Accrued expenses and other 7,749 (2,505)
Changes in noncurrent assets and noncurrent liabilities, net (17,200) (11,763)
Other, net 5,822 2,121
----- -----
Net cash flows from operating activities 353,539 382,879
------- -------
Cash flows from investing activities:
Purchases of marketable investment securities (1,632,930) (46,533)
Sales and maturities of marketable investment securities 841,638 291,082
Expenditures for property and equipment (248,098) (230,530)
Refunds and other receipts related to property and equipment 77,524 -
Sale of investment in unconsolidated entity - 17,781
Expenditures for externally marketed software (15,000) (17,119)
Net cash flows from investing activities (976,866) 14,681
-------- ------
Cash flows from financing activities:
Repayment of debt and capital lease obligations (18,417) (17,718)
Net proceeds from Class A common stock options exercised 4,064 31,992
Net proceeds from Class A common stock issued under the Employee Stock Purchase Plan 4,886 4,540
Cash exchanged for Tracking Stock (Note 1) - (651)
Repayment of in-orbit incentive obligations (3,272) (3,194)
Other, net (401) 482
---- ---
Net cash flows from financing activities (13,140) 15,451
------- ------
Effect of exchange rates on cash and cash equivalents (1,941) 967
------ ---
Net increase (decrease) in cash and cash equivalents, including restricted amounts (638,408) 413,978
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 $1,793,841 $2,985,844
========== ==========
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amounts capitalized $122,017 $96,463
======== =======
Cash paid for income taxes $2,574 $9,369
====== ======
View original content with multimedia:http://www.prnewswire.com/news-releases/echostar-announces-financial-results-for-three-and-six-months-ended-june-30-2018-300692850.html
SOURCE EchoStar Corporation
