EchoStar Announces Financial Results for Three and Six Months Ended June 30, 2019

August 8, 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.

EchoStar Corporation Logo. (PRNewsfoto/EchoStar Corporation)

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
ended June 30,


For the six months
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
unconsolidated affiliates, net


(2,898)



(2,058)



(7,725)



(3,067)


  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
ended June 30,


For the six months
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
interests


(632)



(462)



(1,438)



(842)


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,
56,189,672 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


56



54


Class B convertible common stock, $0.001 par value, 800,000,000 shares authorized,
47,687,039 shares issued and outstanding at each of June 30, 2019 and December 31, 2018


48



48


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
ended June 30,


For the six months
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
amortization)


153,198



151,157



306,769



299,902


Cost of sales - equipment (exclusive of depreciation and
amortization)


46,549



41,865



91,556



80,936


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
common stock


$

(5,692)



$

77,222



$

8,510



$

55,671











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

EchoStar Investor Relations, Deepak V. Dutt, Phone: +1 301-428-1686, Email: deepak.dutt@echostar.com or EchoStar Media Relations, Sharyn Nerenberg, Phone: +1 301-428-7124, Email: sharyn.nerenberg@echostar.com