EchoStar Announces Financial Results for Three and Nine Months Ended September 30, 2018
ENGLEWOOD, Colo., Nov. 8, 2018 /PRNewswire/ -- EchoStar Corporation (NASDAQ: SATS) today announced its financial results for the three and nine months ended September 30, 2018.
Three Months Ended September 30, 2018 Financial Highlights:
-- Consolidated revenues of $533.0 million.
-- Consolidated net income from continuing operations of $16.5 million,
consolidated net income attributable to EchoStar common stock of $16.1
million, and diluted earnings per share of $0.17. Included in these
amounts are net gains on investments of $4.7 million. Excluding these
net gains, diluted earnings per share would have been $0.12.
-- Consolidated EBITDA of $220.2 million, including net gains on
investments of $4.7 million. Excluding these net gains, EBITDA would
have been $215.5 million (see discussion and the reconciliation of GAAP
to this non-GAAP measure below).
Nine Months Ended September 30, 2018 Financial Highlights:
-- Consolidated revenues of $1,560.7 million.
-- Consolidated net income from continuing operations of $73.0 million,
consolidated net income attributable to EchoStar common stock of $71.7
million, and diluted earnings per share of $0.74. Included in these
amounts are net gains on investments of $33.4 million. Excluding these
net gains, diluted earnings per share would have been $0.40.
-- Consolidated EBITDA of $671.7 million, including net gains on
investments of $33.4 million. Excluding these net gains, EBITDA would
have been $638.2 million (see discussion and the reconciliation of GAAP
to this non-GAAP measure below).
Additional Highlights:
-- Approximately 1,332,000 Hughes broadband subscribers as of September 30,
2018.
-- Cash, cash equivalents and current marketable investment securities of
$3.4 billion as of September 30, 2018.
Set forth below is a table highlighting certain of EchoStar's segment results for the three and nine months ended September 30, 2018 and 2017:
For the three months
For the nine months
ended September 30, ended September 30,
2018 2017 2018 2017
(Dollars in thousands)
Revenue
Hughes $
444,762 $
380,061 $
1,271,886 $
1,072,143
EchoStar Satellite Services 84,007 97,093 276,185 295,785
Corporate & Other 4,184 4,079 12,631 11,532
Total $
532,953 $
481,233 $
1,560,702 $
1,379,460
EBITDA
Hughes $
164,135 $
131,817 $
452,982 $
342,693
EchoStar Satellite Services 72,156 78,345 238,789 241,873
Corporate & Other:
Corporate overhead, operating and other (21,076) (14,772) (50,641) (44,386)
Equity in earnings (losses) of unconsolidated affiliates, net 416 4,381 (2,651) 15,620
Gains and losses on investments, net 4,549 20,090 33,171 32,238
Sub-total (16,111) 9,699 (20,121) 3,472
Total $
220,180 $
219,861 $
671,650 $
588,038
Net income from continuing operations $
16,502 $
35,855 $
73,015 $
73,221
Net income (loss) from discontinued operations (654) 6,454
Net income $
16,502 $
35,201 $
73,015 $
79,675
Expenditures for property and equipment from continuing operations $
167,155 $
192,131 $
337,729 $
410,145
The following table reconciles GAAP to non-GAAP measurements.
For the three months For the nine months
ended September 30, ended September 30,
2018 2017 2018 2017
(Dollars in thousands)
Net income $
16,502 $
35,201 $
73,015 $
79,675
Interest income and expense, net 40,737 43,634 130,134 126,156
Income tax provision, net 12,836 6,082 25,235 9,073
Depreciation and amortization 150,555 134,822 444,558 379,939
Net (income) loss from discontinued operations 654 (6,454)
Net income attributable to noncontrolling interests (450) (532) (1,292) (351)
EBITDA $
220,180 $
219,861 $
671,650 $
588,038
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 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 September 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 September 30, 2018 filed today with the Securities and Exchange Commission.
EchoStar will host its earnings conference call on Thursday, November 8, 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 # 1087737.
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 September 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
September 30, 2018 December 31, 2017
Assets (Unaudited) (Audited)
Current assets:
Cash and cash equivalents $
1,597,295 $
2,431,456
Marketable investment securities, at fair value 1,842,875 814,161
Trade accounts receivable and contract assets, net 217,524 196,840
Trade accounts receivable - DISH Network 11,065 43,295
Inventory 70,061 83,595
Prepaids and deposits 56,149 54,533
Other current assets 17,222 91,671
Total current assets 3,812,191 3,715,551
Noncurrent assets:
Property and equipment, net 3,442,537 3,465,471
Regulatory authorizations, net 525,595 536,936
Goodwill 504,173 504,173
Other intangible assets, net 47,912 58,955
Investments in unconsolidated entities 160,669 161,427
Other receivables - DISH Network 94,503 92,687
Other noncurrent assets, net 262,866 214,814
Total noncurrent assets 5,038,255 5,034,463
Total assets $
8,850,446 $
8,750,014
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable $
119,235 $
108,406
Trade accounts payable - DISH Network 1,411 4,753
Current portion of long-term debt and capital lease obligations 1,030,088 40,631
Contract liabilities 74,135 65,959
Accrued interest 57,589 47,616
Accrued compensation 41,341 47,756
Accrued taxes 16,681 16,122
Accrued expenses and other 72,464 82,647
Total current liabilities 1,412,944 413,890
Noncurrent liabilities:
Long-term debt and capital lease obligations, net 2,582,819 3,594,213
Deferred tax liabilities, net 471,259 436,023
Other noncurrent liabilities 124,694 128,503
Total noncurrent liabilities 3,178,772 4,158,739
Total liabilities 4,591,716 4,572,629
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value, 20,000,000 shares authorized, none issued and outstanding at each of September 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, 54,080,228 shares issued and 48,547,910 54 54
shares outstanding at September 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 September 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 September 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
September 30, 2018 and December 31, 2017
Additional paid-in capital 3,694,682 3,669,461
Accumulated other comprehensive loss (160,947) (130,154)
Accumulated earnings 808,330 721,316
Treasury stock, at cost (98,162) (98,162)
Total EchoStar Corporation stockholders' equity 4,244,005 4,162,563
Other noncontrolling interests 14,725 14,822
Total stockholders' equity 4,258,730 4,177,385
Total liabilities and stockholders' equity $
8,850,446 $
8,750,014
ECHOSTAR CORPORATION
Consolidated Statements of Operations
(In thousands)
For the three months For the nine months
ended September 30, ended September 30,
2018 2017 2018 2017
Revenue:
Services and other revenue - DISH Network $
87,859 $
111,135 $
291,835 $
339,824
Services and other revenue - other 388,248 310,973 1,118,733 865,817
Equipment revenue 56,846 59,125 150,134 173,819
Total revenue 532,953 481,233 1,560,702 1,379,460
Costs and expenses:
Cost of sales - services and other (exclusive of depreciation and 152,011 143,048 451,913 416,463
amortization)
Cost of sales - equipment (exclusive of depreciation and 46,318 47,644 127,254 141,839
amortization)
Selling, general and administrative expenses 107,490 91,003 313,839 263,820
Research and development expenses 6,544 8,302 20,328 23,444
Depreciation and amortization 150,555 134,822 444,558 379,939
Total costs and expenses 462,918 424,819 1,357,892 1,225,505
Operating income 70,035 56,414 202,810 153,955
Other income (expense):
Interest income 21,349 12,012 56,237 30,342
Interest expense, net of amounts capitalized (62,086) (55,646) (186,371) (156,498)
Gains and losses on investments, net 4,693 20,090 33,426 30,664
Equity in earnings (losses) of unconsolidated affiliates, net 416 4,381 (2,651) 15,620
Other, net (5,069) 4,686 (5,201) 8,211
Total other income (expense), net (40,697) (14,477) (104,560) (71,661)
Income from continuing operations before income taxes 29,338 41,937 98,250 82,294
Income tax provision, net (12,836) (6,082) (25,235) (9,073)
Net income from continuing operations 16,502 35,855 73,015 73,221
Net income (loss) from discontinued operations (654) 6,454
Net income 16,502 35,201 73,015 79,675
Less: Net income attributable to noncontrolling interests 450 532 1,292 351
Net income attributable to EchoStar Corporation 16,052 34,669 71,723 79,324
Less: Net loss attributable to Hughes Retail Preferred (1,209)
Tracking Stock
Net income attributable to EchoStar Corporation $
16,052 $
34,669 $
71,723 $
80,533
common stock
Earnings per share - Class A and B common stock:
Basic earnings from continuing operations per share $
0.17 $
0.37 $
0.75 $
0.78
Total basic earnings per share $
0.17 $
0.36 $
0.75 $
0.84
Diluted earnings from continuing operations per share $
0.17 $
0.36 $
0.74 $
0.77
Total diluted earnings per share $
0.17 $
0.36 $
0.74 $
0.83
ECHOSTAR CORPORATION
Consolidated Statements of Cash Flows
(In thousands)
For the nine months ended September 30,
2018 2017
Cash flows from operating activities:
Net income $
73,015 $
79,675
Adjustments to reconcile net income to
net cash flows from operating
activities:
Depreciation and amortization 444,558 391,598
Equity in (earnings) losses of
unconsolidated affiliates, net 2,651 (14,461)
Amortization of debt issuance costs 5,910 5,479
Gains and losses on investments, net (33,524) (30,664)
Stock-based compensation 7,771 7,169
Deferred tax provision 22,357 7,924
Dividends received from unconsolidated
entity 5,000 15,000
Proceeds from sale of trading securities 8,922
Changes in current assets and current
liabilities, net:
Trade accounts receivable, net (35,811) 5,088
Trade accounts receivable -DISH Network 32,323 225,963
Inventory 10,667 (26,231)
Other current assets (5,569) (11,392)
Trade accounts payable 2,536 (64,553)
Trade accounts payable -DISH Network (3,342) 2,534
Accrued expenses and other 19,450 13,268
Changes in noncurrent assets and
noncurrent liabilities, net (16,123) (23,474)
Other, net 12,043 91
Net cash flows from operating activities 543,912 591,936
Cash flows from investing activities:
Purchases of marketable investment
securities (2,323,090) (319,912)
Sales and maturities of marketable
investment securities 1,331,225 375,890
Expenditures for property and equipment (415,253) (422,661)
Refunds and other receipts related to
property and equipment 77,524
Sale of investment in unconsolidated
entity 1,558 17,781
Expenditures for externally marketed
software (24,568) (25,447)
Other (991)
Net cash flows from investing activities (1,353,595) (374,349)
Cash flows from financing activities:
Repayment of debt and capital lease
obligations (27,764) (26,394)
Net proceeds from Class A common stock
options exercised 4,424 33,156
Net proceeds from Class A common stock
issued under the Employee Stock
Purchase Plan 7,428 6,938
Cash exchanged for Tracking Stock (651)
Repayment of in-orbit incentive
obligations (4,601) (4,583)
Other, net (530) 201
Net cash flows from financing activities (21,043) 8,667
Effect of exchange rates on cash and
cash equivalents (3,449) 1,014
Net increase (decrease) in cash and cash
equivalents, including restricted
amounts (834,175) 227,268
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 $
1,598,074 $
2,799,134
Supplemental disclosure of cash flow
information:
Cash paid for interest, net of amounts
capitalized $
170,303 $
137,955
Cash paid for income taxes $
3,369 $
10,071
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SOURCE EchoStar Corporation
