EchoStar Announces Financial Results for Three and Six Months Ended June 30, 2019
ENGLEWOOD, Colo., Aug. 8, 2019 /PRNewswire/ -- EchoStar Corporation (NASDAQ: SATS) today announced its financial results for the three and six months ended June 30, 2019.
Three Months Ended June 30, 2019 Financial Highlights:
-- Consolidated revenues of $537 million.
-- Consolidated net loss of $5 million, consolidated net loss attributable
to EchoStar common stock of $6 million, and diluted loss per share of
$0.06.
-- Consolidated Adjusted EBITDA of $199 million (see discussion and the
reconciliation of GAAP to this non-GAAP measure below).
Six Months Ended June 30, 2019 Financial Highlights:
-- Consolidated revenues of $1,068 million.
-- Consolidated net income of $10 million, consolidated net income
attributable to EchoStar common stock of $9 million, and diluted
earnings per share of $0.09.
-- Consolidated Adjusted EBITDA of $404 million (see discussion and the
reconciliation of GAAP to this non-GAAP measure below).
Additional Highlights:
-- Approximately 1,415,000 total Hughes broadband subscribers as of June
30, 2019 including approximately 169,000 subscribers in Central and
South America.
-- Cash, cash equivalents and current marketable investment securities of
$2.5 billion as of June 30, 2019.
Set forth below is a table highlighting certain of EchoStar's segment results for the three and six months ended June 30, 2019 and 2018 (amounts in thousands):
For the three months
For the six months
ended June 30, ended June 30,
2019 2018 2019 2018
Revenue
Hughes $
451,847 $
426,306 $
897,184 $
827,124
EchoStar Satellite Services 80,961 95,425 162,220 192,178
Corporate & Other 4,316 4,226 8,802 8,447
Total $
537,124 $
525,957 $
1,068,206 $
1,027,749
Adjusted EBITDA
Hughes $
156,298 $
151,628 $
318,161 $
288,737
EchoStar Satellite Services 68,174 82,483 136,891 166,633
Corporate & Other:
Corporate overhead, operating and other (22,336) (21,266) (42,968) (39,137)
Equity in earnings (losses) of (2,898) (2,058) (7,725) (3,067)
unconsolidated affiliates, net
Sub-total (25,234) (23,324) (50,693) (42,204)
Total $
199,238 $
210,787 $
404,359 $
413,166
Net income (loss) $
(5,060) $
77,684 $
9,948 $
56,513
Expenditures for property and equipment $
107,478 $
119,592 $
219,440 $
170,574
Reconciliation of GAAP to Non-GAAP Measurement (amounts in thousands):
For the three months For the six months
ended June 30, ended June 30,
2019 2018 2019 2018
Net income (loss) $
(5,060) $
77,684 $
9,948 $
56,513
Interest income and expense, net 36,950 42,281 72,403 89,397
Income tax provision, net 922 17,802 9,102 12,399
Depreciation and amortization 155,410 148,449 309,631 294,003
Net income attributable to noncontrolling (632) (462) (1,438) (842)
interests
EBITDA 187,590 285,754 399,646 451,470
(Gains) losses on investments, net (12,856) (65,396) (19,791) (28,733)
Litigation expense 24,504 24,504
Vendor settlement (9,571) (9,571)
Adjusted EBITDA $
199,238 $
210,787 $
404,359 $
413,166
Note on Use of Non-GAAP Financial Measures
Adjusted EBITDA is defined as "Net income (loss)" excluding "Interest income and expense, net," "Income tax provision (benefit), net," "Depreciation and amortization," "Net income (loss) attributable to noncontrolling interests," "Gains and losses on investments, net," and other non-recurring or non-operational items. Adjusted EBITDA is not a measure determined in accordance with US GAAP. Adjusted 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 Adjusted 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, 2019 and 2018 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, 2019 filed today with the Securities and Exchange Commission.
EchoStar will host its earnings conference call on Thursday, August 8, 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 6673307.
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 and Quarterly Report on Form 10-Q for the period ended June 30, 2019, 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
Condensed Consolidated Balance Sheets
(Amounts in thousands, except per share amounts)
As of
June 30, 2019 December 31, 2018
Assets (Unaudited) (Audited)
Current assets:
Cash and cash equivalents $
1,298,005 $
928,306
Marketable investment securities, at fair value 1,203,308 2,282,152
Trade accounts receivable and contract assets, net (Note 3) 201,561 201,096
Trade accounts receivable - DISH Network 13,943 14,200
Inventory 73,345 75,379
Prepaids and deposits 65,589 61,177
Other current assets 19,857 18,539
Total current assets 2,875,608 3,580,849
Noncurrent assets:
Property and equipment, net 3,329,794 3,414,908
Operating lease right-of-use assets 113,643
Goodwill 504,173 504,173
Regulatory authorizations, net 493,661 495,654
Other intangible assets, net 36,869 44,231
Investments in unconsolidated entities 225,582 262,473
Other receivables - DISH Network 96,733 95,114
Other noncurrent assets, net 274,028 263,892
Total noncurrent assets 5,074,483 5,080,445
Total assets $
7,950,091 $
8,661,294
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable $
105,929 $
121,437
Trade accounts payable - DISH Network 1,113 1,698
Current portion of long-term debt and finance lease obligations 42,682 959,577
Contract liabilities 106,308 72,284
Accrued interest 42,835 47,416
Accrued compensation 44,829 54,242
Accrued taxes 16,221 16,013
Accrued expenses and other 111,745 72,470
Total current liabilities 471,662 1,345,137
Noncurrent liabilities:
Long-term debt and finance lease obligations, net 2,553,352 2,573,204
Deferred tax liabilities, net 472,872 465,933
Operating lease liabilities 94,979
Other noncurrent liabilities 114,275 121,546
Total noncurrent liabilities 3,235,478 3,160,683
Total liabilities 3,707,140 4,505,820
Commitments and contingencies (Note 15)
Stockholders' equity:
Preferred stock, $0.001 par value, 20,000,000 shares authorized,
none issued and outstanding at each of June 30, 2019 and December 31, 2018
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, 56 54
56,189,672 shares issued and 49,704,751 shares outstanding at June 30, 2019
and 54,142,566 shares issued and 47,657,645 shares outstanding at December 31, 2018
Class B convertible common stock, $0.001 par value, 800,000,000 shares authorized, 48 48
47,687,039 shares issued and outstanding at each of June 30, 2019 and December 31, 2018
Class C convertible common stock, $0.001 par value, 800,000,000 shares authorized,
none issued and outstanding at each of June 30, 2019 and December 31, 2018
Class D common stock, $0.001 par value, 800,000,000 shares authorized, none issued
and outstanding at each of June 30, 2019 and December 31, 2018
Additional paid-in capital 3,777,499 3,702,522
Accumulated other comprehensive loss (119,500) (125,100)
Accumulated earnings 704,236 694,129
Treasury stock, at cost (131,454) (131,454)
Total EchoStar Corporation stockholders' equity 4,230,885 4,140,199
Noncontrolling interests 12,066 15,275
Total stockholders' equity 4,242,951 4,155,474
Total liabilities and stockholders' equity $
7,950,091 $
8,661,294
ECHOSTAR CORPORATION
Condensed Consolidated Statements of Operations
(Amounts in thousands, except per share amounts)
For the three months For the six months
ended June 30, ended June 30,
2019 2018 2019 2018
Revenue:
Services and other revenue - DISH Network $
85,057 $
100,171 $
170,945 $
203,976
Services and other revenue - other 394,422 375,445 787,902 730,485
Equipment revenue 57,645 50,341 109,359 93,288
Total revenue 537,124 525,957 1,068,206 1,027,749
Costs and expenses:
Cost of sales - services and other (exclusive of depreciation and 153,198 151,157 306,769 299,902
amortization)
Cost of sales - equipment (exclusive of depreciation and 46,549 41,865 91,556 80,936
amortization)
Selling, general and administrative expenses 152,629 103,074 264,763 206,349
Research and development expenses 6,388 6,647 13,276 13,784
Depreciation and amortization 155,410 148,449 309,631 294,003
Total costs and expenses 514,174 451,192 985,995 894,974
Operating income 22,950 74,765 82,211 132,775
Other income (expense):
Interest income 23,213 19,253 47,642 34,888
Interest expense, net of amounts capitalized (60,163) (61,534) (120,045) (124,285)
Gains (losses) on investments, net 12,856 65,396 19,791 28,733
Equity in losses of unconsolidated affiliates, net (4,754) (2,058) (11,107) (3,067)
Other, net 1,760 (336) 558 (132)
Total other income (expense), net (27,088) 20,721 (63,161) (63,863)
Income (loss) before income taxes (4,138) 95,486 19,050 68,912
Income tax provision, net (922) (17,802) (9,102) (12,399)
Net income (loss) (5,060) 77,684 9,948 56,513
Less: Net income attributable to noncontrolling interests 632 462 1,438 842
Net income (loss) attributable to EchoStar Corporation $
(5,692) $
77,222 $
8,510 $
55,671
common stock
Earnings per share - Class A and B common stock:
Basic earnings (loss) per share $
(0.06) $
0.80 $
0.09 $
0.58
Diluted earnings (loss) per share $
(0.06) $
0.80 $
0.09 $
0.57
ECHOSTAR CORPORATION
Condensed Consolidated Statements of Cash Flows
(Amounts in thousands, except per share amounts)
For the six months ended June 30,
2019 2018
Cash flows from operating activities:
Net income (loss) $
9,948 $
56,513
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization 309,631 294,003
Equity in losses of unconsolidated affiliates, net 11,107 3,067
Amortization of debt issuance costs 3,872 3,905
(Gains) losses on investments, net (19,791) (28,674)
Stock-based compensation 4,833 5,110
Deferred tax provision 7,014 10,231
Dividend received from unconsolidated entity 5,000
Changes in current assets and current liabilities, net:
Trade accounts receivable, net 167 (3,061)
Trade accounts receivable - DISH Network 257 17,262
Inventory 2,114 238
Other current assets (2,500) (5,430)
Trade accounts payable (225) 2,364
Trade accounts payable - DISH Network (585) (3,360)
Accrued expenses and other 51,409 7,749
Changes in noncurrent assets and noncurrent liabilities, net 1,374 (17,200)
Other, net 2,149 5,822
Net cash flows from operating activities 380,774 353,539
Cash flows from investing activities:
Purchases of marketable investment securities (504,264) (1,632,930)
Sales and maturities of marketable investment securities 1,621,481 841,638
Expenditures for property and equipment (219,440) (248,098)
Refunds and other receipts related to property and equipment 77,524
Expenditures for externally marketed software (15,329) (15,000)
Net cash flows from investing activities 882,448 (976,866)
Cash flows from financing activities:
Repayment of debt and finance lease obligations (21,180) (18,417)
Repurchase and maturity of debt (920,923)
Purchase of noncontrolling interest (7,313)
Repayment of in-orbit incentive obligations (3,778) (3,272)
Net proceeds from Class A common stock options exercised 61,503 4,064
Net proceeds from Class A common stock issued under the Employee Stock Purchase Plan 5,074 4,886
Other, net 905 (401)
Net cash flows from financing activities (885,712) (13,140)
Effect of exchange rates on cash and cash equivalents 121 (1,941)
Net increase (decrease) in cash and cash equivalents, including restricted amounts 377,631 (638,408)
Cash and cash equivalents, including restricted amounts, beginning of period 929,495 2,432,249
Cash and cash equivalents, including restricted amounts, end of period $
1,307,126 $
1,793,841
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amounts capitalized $
120,625 $
122,017
Cash paid for income taxes $
1,217 $
2,574
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SOURCE EchoStar Corporation
