EchoStar Announces Financial Results for Three and Twelve Months Ended December 31, 2018
ENGLEWOOD, Colo., Feb. 21, 2019 /PRNewswire/ -- EchoStar Corporation (NASDAQ: SATS) today announced its financial results for the three and twelve months ended December 31, 2018.
Three Months Ended December 31, 2018 Financial Highlights:
-- Consolidated revenues of $531 million.
-- Consolidated net loss from continuing operations of $112 million,
consolidated net loss attributable to EchoStar common stock of $112
million, and diluted loss per share of $1.17. Included in these amounts
are net losses on investments of $46 million and a non-recurring
impairment charge of $65 million. Excluding these items, diluted loss
per share would have been $0.01.
-- Consolidated EBITDA of $85 million, including net losses on investments
of $46 million and a non-recurring impairment charge of $65 million.
Excluding these items, EBITDA would have been $196 million (see
discussion and the reconciliation of GAAP to this non-GAAP measure
below).
Twelve Months Ended December 31, 2018 Financial Highlights:
-- Consolidated revenues of $2.1 billion.
-- Consolidated net loss from continuing operations of $39 million,
consolidated net loss attributable to EchoStar common stock of $40
million, and diluted loss per share of $0.42. Included in these amounts
are net losses on investments of $12 million and a non-recurring
impairment charge of $65 million. Excluding these items, diluted
earnings per share would have been $0.38.
-- Consolidated EBITDA of $757 million, including net losses on investments
of $12 million and a non-recurring impairment charge of $65 million.
Excluding these items, EBITDA would have been $834 million (see
discussion and the reconciliation of GAAP to this non-GAAP measure
below).
Additional Highlights:
-- Cash, cash equivalents and current marketable investment securities of
$3.2 billion as of December 31, 2018.
-- Approximately 1,361,000 Hughes broadband subscribers as of December 31,
2018.
Set forth below is a table highlighting certain of EchoStar's segment results for the three and twelve months ended December 31, 2018 and 2017:
For the Three Months
For the Years
Ended December 31, Ended December 31,
2018 2017 2018 2017
(In thousands)
Revenue
Hughes $
444,642 $
405,775 $
1,716,528 $
1,477,918
EchoStar Satellite Services 81,873 96,459 358,058 392,244
Corporate and Other 4,146 3,814 16,777 15,346
Total $
530,661 $
506,048 $
2,091,363 $
1,885,508
EBITDA
Hughes $
148,337 $
132,529 $
601,319 $
475,222
EchoStar Satellite Services 69,269 73,412 308,058 315,285
Corporate and Other:
Corporate overhead, operating and other (18,716) (18,782) (69,356) (63,168)
Equity in earnings (losses) of unconsolidated (3,303) 1,353 (5,954) 16,973
affiliates, net
Gains (losses) on investments, net (45,349) 22,789 (12,178) 55,027
Impairment of long lived assets (65,220) (4,762) (65,220) (4,762)
Sub-total (132,588) 598 (152,708) 4,070
Total $
85,018 $
206,539 $
756,669 $
794,577
Net income (loss) from continuing operations $
(111,648) $
311,759 $
(38,633) $
384,980
Net income from discontinued operations 2,055 8,509
Net income (loss) $
(111,648) $
313,814 $
(38,633) $
393,489
Expenditures for property and equipment $
139,888 $
156,239 $
477,617 $
566,384
from continuing operations
The following table reconciles GAAP to non-GAAP measurements.
For the Three Months
For the Years
Ended December 31, Ended December 31,
2018 2017 2018 2017
(In thousands)
Net income (loss) $
(111,648) $
313,814 $
(38,633) $
393,489
Interest income and expense, net 38,158 46,465 168,293 172,621
Income tax (benefit) provision, net 5,438 (293,359) 30,673 (284,286)
Depreciation and amortization 153,620 142,251 598,178 522,190
Net income from discontinued operations (2,055) (8,509)
Net income attributable to noncontrolling (550) (577) (1,842) (928)
interests
EBITDA $
85,018 $
206,539 $
756,669 $
794,577
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 a measure determined in accordance with U.S. 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 U.S. GAAP. Our management uses this non-GAAP measure as a measure of 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 December 31, 2018 and 2017 are attached to this press release. Detailed financial data and other information are available in EchoStar's Annual Report on Form 10-K for the period ended December 31, 2018 filed today with the Securities and Exchange Commission.
EchoStar will host its earnings conference call on Thursday, February 21, 2019 at 11:00 a.m. Eastern Time. The call-in numbers are (877) 815-1625 (toll-free) and (716) 247-5178 (international), Conference ID # 2185925.
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, 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
(In thousands, except per share amounts)
As of December 31,
2018 2017
Assets
Current assets:
Cash and cash equivalents $
928,306 $
2,431,456
Marketable investment securities, at fair value 2,282,152 814,161
Trade accounts receivable and contract assets, net 201,096 196,840
Trade accounts receivable - DISH Network 14,200 43,295
Inventory 75,379 83,595
Prepaids and deposits 61,177 54,533
Other current assets 18,539 91,671
Total current assets 3,580,849 3,715,551
Noncurrent assets:
Property and equipment, net 3,414,908 3,465,471
Regulatory authorizations, net 495,654 536,936
Goodwill 504,173 504,173
Other intangible assets, net 44,231 58,955
Investments in unconsolidated entities 262,473 161,427
Other receivables - DISH Network 95,114 92,687
Other noncurrent assets, net 263,892 214,814
Total noncurrent assets 5,080,445 5,034,463
Total assets $
8,661,294 $
8,750,014
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable $
121,437 $
108,406
Trade accounts payable - DISH Network 1,698 4,753
Current portion of long-term debt and capital lease obligations 959,577 40,631
Contract liabilities 72,284 65,959
Accrued interest 47,416 47,616
Accrued compensation 54,242 47,756
Accrued taxes 16,013 16,122
Accrued expenses and other 72,470 82,647
Total current liabilities 1,345,137 413,890
Noncurrent liabilities:
Long-term debt and capital lease obligations, net 2,573,204 3,594,213
Deferred tax liabilities, net 465,933 436,023
Other noncurrent liabilities 121,546 128,503
Total noncurrent liabilities 3,160,683 4,158,739
Total liabilities 4,505,820 4,572,629
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value, 20,000,000 shares authorized, none issued and outstanding at each of
December 31, 2018 and 2017
Common stock, $0.001 par value, 4,000,000,000 shares authorized:
Class A common stock, $0.001 par value, 1,600,000,000 shares authorized, 54,142,566 shares issued 54 54
and 47,657,645 shares outstanding at December 31, 2018 and 53,663,859 shares issued and
48,131,541 shares outstanding at December 31, 2017
Class B convertible common stock, $0.001 par value, 800,000,000 shares authorized, 47,687,039 48 48
shares issued and outstanding at each of December 31, 2018 and 2017
Class C convertible common stock, $0.001 par value, 800,000,000 shares authorized, none issued
and outstanding at each of December 31, 2018 and 2017
Class D common stock, $0.001 par value, 800,000,000 shares authorized, none issued and
outstanding at each of December 31, 2018 and 2017
Additional paid-in capital 3,702,522 3,669,461
Accumulated other comprehensive loss (125,100) (130,154)
Accumulated earnings 694,129 721,316
Treasury stock, at cost (131,454) (98,162)
Total EchoStar Corporation stockholders' equity 4,140,199 4,162,563
Other noncontrolling interests 15,275 14,822
Total stockholders' equity 4,155,474 4,177,385
Total liabilities and stockholders' equity $
8,661,294 $
8,750,014
ECHOSTAR CORPORATION
Consolidated Statements of Operations
(In thousands, except per share amounts)
For the years ended December 31,
2018 2017 2016
Revenue:
Services and other revenue - DISH Network $
378,694 $
445,698 $
463,442
Services and other revenue - other 1,507,259 1,200,321 1,100,828
Equipment revenue 205,410 239,489 246,196
Total revenue 2,091,363 1,885,508 1,810,466
Costs and expenses:
Cost of sales - services and other (exclusive of depreciation 604,305 563,346 536,568
and amortization)
Cost of sales - equipment (exclusive of depreciation and 176,600 195,151 188,617
amortization)
Selling, general and administrative expenses 436,247 366,007 325,044
Research and development expenses 27,570 31,745 31,170
Depreciation and amortization 598,178 522,190 432,904
Impairment of long-lived assets 65,220 10,762
Total costs and expenses 1,908,120 1,689,201 1,514,303
Operating income 183,243 196,307 296,163
Other income (expense):
Interest income 80,275 44,619 21,244
Interest expense, net of amounts capitalized (248,568) (217,240) (123,481)
Gains (losses) on investments, net (12,207) 53,453 9,767
Equity in earnings (losses) of unconsolidated affiliates, net (5,954) 16,973 10,802
Other, net (4,749) 6,582 2,131
Total other income (expense), net (191,203) (95,613) (79,537)
Income (loss) from continuing operations before income taxes (7,960) 100,694 216,626
Income tax benefit (provision), net (30,673) 284,286 (80,254)
Net income (loss) from continuing operations (38,633) 384,980 136,372
Net income from discontinued operations 8,509 44,320
Net income (loss) (38,633) 393,489 180,692
Less: Net income attributable to noncontrolling interests 1,842 928 762
Net income (loss) attributable to EchoStar Corporation (40,475) 392,561 179,930
Less: Net loss attributable to Hughes Retail Preferred Tracking Stock (1,209) (1,743)
Net income (loss) attributable to EchoStar Corporation common stock $
(40,475) $
393,770 $
181,673
Earnings per share - Class A and B common stock:
Basic earnings (loss) from continuing operations per share $
(0.42) $
4.04 $
1.46
Total basic earnings (loss) per share $
(0.42) $
4.13 $
1.94
Diluted earnings (loss) from continuing operations per share $
(0.42) $
3.98 $
1.45
Total diluted earnings (loss) per share $
(0.42) $
4.07 $
1.92
ECHOSTAR CORPORATION
Consolidated Statements of Cash Flows
(In thousands)
For the years ended December 31,
2018 2017 2016
Cash flows from operating activities:
Net income (loss) $
(38,633) $
393,489 $
180,692
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and amortization 598,178 533,849 495,068
Impairment of long-lived assets 65,220 10,762
Equity in earnings of unconsolidated affiliates, net 6,037 (15,814) (13,310)
Amortization of debt issuance costs 7,923 7,378 6,551
Gains and losses on investments, net 12,109 (53,453) (9,767)
Stock-based compensation 9,990 10,103 15,234
Deferred tax provision (benefit) 26,327 (288,577) 98,148
Dividends received from unconsolidated entities 10,000 19,000 15,000
Proceeds from sale of trading securities 8,922 7,140
Changes in current assets and current liabilities, net:
Trade accounts receivable, net (17,842) 421 (26,942)
Trade accounts receivable - DISH Network 29,188 235,227 (1,456)
Inventory 5,650 (19,291) (4,814)
Other current assets (16,261) (15,352) 2,263
Trade accounts payable 9,562 (78,419) (24,571)
Trade accounts payable - DISH Network (3,055) 731 (19,650)
Accrued expenses and other 23,105 11,993 55,998
Changes in noncurrent assets and noncurrent liabilities, net (5,070) (36,975) 9,459
Other, net 12,094 2,898 18,300
Net cash flows from operating activities 734,522 726,892 803,343
Cash flows from investing activities:
Purchases of marketable investment securities (2,973,254) (855,717) (921,247)
Sales and maturities of marketable investment securities 1,498,463 580,235 1,009,310
Expenditures for property and equipment (555,141) (583,211) (722,341)
Refunds and other receipts related to property and equipment 77,524 4,311 24,087
Sale of investment in unconsolidated entity 1,558 17,781
Expenditures for externally marketed software (31,639) (31,331) (23,252)
Investments in unconsolidated entities (115,991) (1,636)
Other, net 2,880
Net cash flows from investing activities (2,098,480) (867,932) (632,199)
Cash flows from financing activities:
Proceeds from issuance of long-term debt 1,500,000
Payments of debt issuance costs (414) (7,097)
Repurchase of the 2019 Senior Secured Notes (Note 12) (70,173)
Purchase of treasury shares (Note 14) (33,292)
Repayment of debt and capital lease obligations (41,019) (37,670) (40,364)
Net proceeds from Class A common stock options exercised 4,424 35,536 13,065
Net proceeds from Class A common stock issued under the Employee Stock Purchase Plan 9,368 8,758 14,367
Repayment of in-orbit incentive obligations (5,350) (5,487) (5,499)
Cash exchanged for Tracking Stock (Note 1) (651)
Other, net (521) 1,217
Net cash flows from financing activities (136,563) 72 1,475,689
Effect of exchange rates on cash and cash equivalents (2,233) 1,351 138
Net increase (decrease) in cash and cash equivalents (1,502,754) (139,617) 1,646,971
Cash and cash equivalents, including restricted amounts, beginning of period 2,432,249 2,571,866 924,895
Cash and cash equivalents, including restricted amounts, end of period $
929,495 $
2,432,249 $
2,571,866
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amounts capitalized $
240,596 $
207,617 $
78,312
Cash paid for income taxes $
5,209 $
11,033 $
11,700
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SOURCE EchoStar Corporation
