EchoStar Announces Financial Results for Three Months Ended March 31, 2019

May 8, 2019

ENGLEWOOD, Colo., May 8, 2019 /PRNewswire/ -- EchoStar Corporation (NASDAQ: SATS) today announced its financial results for the three months ended March 31, 2019.

EchoStar Corporation Logo. (PRNewsfoto/EchoStar Corporation)

Financial Highlights:

  • Consolidated revenues of $531 million.
  • Consolidated net income of $15 million, consolidated net income attributable to EchoStar common stock of $14 million, and diluted earnings per share of $0.15.
  • Consolidated Adjusted EBITDA of $206 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).

Additional Highlights:

  • Approximately 1,388,000 total Hughes broadband subscribers as of March 31, 2019 including approximately 150,000 subscribers in Latin America.
  • Cash, cash equivalents and current marketable investment securities of $3.3 billion as of March 31, 2019.

Set forth below is a table highlighting certain of EchoStar's segment results for the three months ended March 31, 2019 and 2018:



For the three months
ended March 31,




2019


2018




(Dollars in thousands)

Revenue






Hughes


$

445,337



$

400,818



EchoStar Satellite Services



81,259




96,753



Corporate & Other



4,486




4,221



Total


$

531,082



$

501,792









Adjusted EBITDA






Hughes


$

161,864



$

137,108



EchoStar Satellite Services



68,717




84,150



Corporate & Other:






Corporate overhead, operating and other


(20,116)



(17,870)



Equity in earnings (losses) of unconsolidated affiliates, net


(4,827)



(1,009)



Sub-total



(24,943)




(18,879)



Total


$

205,638



$

202,379



















Net income (loss)


$

15,008



$

(21,171)



Expenditures for property and equipment


$

111,962



$

50,982























 

Reconciliation of GAAP to Non-GAAP Measurement:



For the three months
ended March 31,




2019


2018




(Dollars in thousands)











Net income (loss)


$

15,008



$

(21,171)



Interest income and expense, net


35,453



47,116



Income tax provision (benefit), net


8,180



(5,403)



Depreciation and amortization


154,221



145,554



Net income attributable to noncontrolling interests


(806)



(380)



(Gains) loss on investment, net


(6,418)



36,663



Adjusted EBITDA


$

205,638



$

202,379



 

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," and "Gains and losses on investments, net." 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 March 31, 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 March 31, 2019 filed today with the Securities and Exchange Commission.

EchoStar will host its earnings conference call on Wednesday, May 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 8058859.

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 March 31, 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

Consolidated Balance Sheets

(Dollars in thousands, except per share amounts)




As of



March 31, 2019


December 31, 2018

Assets


(Unaudited)


(Audited)

Current assets:





Cash and cash equivalents


$

1,349,724



$

928,306


Marketable investment securities, at fair value


1,925,108



2,282,152


Trade accounts receivable and contract assets, net (Note 3)


216,558



201,096


Trade accounts receivable - DISH Network


19,510



14,200


Inventory


76,114



75,379


Prepaids and deposits


66,119



61,177


Other current assets


24,508



18,539


Total current assets


3,677,641



3,580,849


Noncurrent assets:





Property and equipment, net


3,363,404



3,414,908


Operating lease right-of-use assets


115,647




Regulatory authorizations, net


494,253



495,654


Goodwill


504,173



504,173


Other intangible assets, net


40,550



44,231


Investments in unconsolidated entities


227,828



262,473


Other receivables - DISH Network


95,889



95,114


Other noncurrent assets, net


259,506



263,892


Total noncurrent assets


5,101,250



5,080,445


Total assets


$

8,778,891



$

8,661,294


Liabilities and Stockholders' Equity





Current liabilities:





Trade accounts payable


$

115,752



$

121,437


Trade accounts payable - DISH Network


2,826



1,698


Current portion of long-term debt and finance lease obligations


953,636



959,577


Contract liabilities


90,180



72,284


Accrued interest


55,552



47,416


Accrued compensation


35,161



54,242


Accrued taxes


17,455



16,013


Accrued expenses and other


75,443



72,470


Total current liabilities


1,346,005



1,345,137


Noncurrent liabilities:





Long-term debt and finance lease obligations, net


2,563,429



2,573,204


Deferred tax liabilities, net


475,464



465,933


Operating lease liabilities


95,215




Other noncurrent liabilities


119,242



121,546


Total noncurrent liabilities


3,253,350



3,160,683


Total liabilities


4,599,355



4,505,820


Commitments and contingencies





Stockholders' equity:





Preferred stock, $0.001 par value, 20,000,000 shares authorized, none issued and outstanding at each of March 31, 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, 54,514,833 shares issued and
48,029,912 shares outstanding at March 31, 2019 and 54,142,566 shares issued and 47,657,645 shares outstanding
at December 31, 2018


54



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 March 31, 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 March 31, 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
March 31, 2019 and December 31, 2018





Additional paid-in capital


3,713,777



3,702,522


Accumulated other comprehensive loss


(124,251)



(125,100)


Accumulated earnings


709,928



694,129


Treasury stock, at cost


(131,454)



(131,454)


Total EchoStar Corporation stockholders' equity


4,168,102



4,140,199


Other noncontrolling interests


11,434



15,275


Total stockholders' equity


4,179,536



4,155,474


Total liabilities and stockholders' equity


$

8,778,891



$

8,661,294


 

 

ECHOSTAR CORPORATION

Consolidated Statements of Operations

(Dollars in thousands, except per share amounts)




For the three months
ended March 31,



2019


2018

Revenue:





Services and other revenue - DISH Network


$

85,888



$

103,805


Services and other revenue - other


393,480



355,040


Equipment revenue


51,714



42,947


Total revenue


531,082



501,792







Costs and expenses:





Cost of sales - services and other (exclusive of depreciation and amortization)


153,571



148,745


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


45,007



39,071


Selling, general and administrative expenses


112,134



103,275


Research and development expenses


6,888



7,137


Depreciation and amortization


154,221



145,554


Total costs and expenses


471,821



443,782


Operating income


59,261



58,010







Other income (expense):





Interest income


24,429



15,635


Interest expense, net of amounts capitalized


(59,882)



(62,751)


Gains (losses) on investments, net


6,418



(36,663)


Equity in losses of unconsolidated affiliates, net


(6,353)



(1,009)


Other, net


(685)



204


Total other expense, net


(36,073)



(84,584)


Income (loss) before income taxes


23,188



(26,574)


Income tax benefit (provision), net


(8,180)



5,403


Net income (loss)


15,008



(21,171)


Less: Net income attributable to noncontrolling interests


806



380


Net income (loss) attributable to EchoStar Corporation common stock


$

14,202



$

(21,551)







Earnings per share - Class A and B common stock:





Basic earnings (loss) per share


$

0.15



$

(0.22)


Diluted earnings (loss) per share


$

0.15



$

(0.22)


 

 

ECHOSTAR CORPORATION

Consolidated Statements of Cash Flows

(Dollars in thousands, except per share amounts)




For the three months ended March 31,



2019


2018

Cash flows from operating activities:





Net income (loss)


$

15,008



$

(21,171)


Adjustments to reconcile net income to net cash flows from operating activities:





Depreciation and amortization


154,221



145,554


Equity in losses of unconsolidated affiliates, net


6,353



1,009


Amortization of debt issuance costs


2,010



1,936


(Gains) losses on investments, net


(6,418)



36,673


Stock-based compensation


2,628



2,765


Deferred tax (benefit) provision


6,455



(7,036)


Changes in current assets and current liabilities, net:





Trade accounts receivable, net


(19,231)



23,153


Trade accounts receivable - DISH Network


(5,310)



(13,473)


Inventory


(1,036)



(2,297)


Other current assets


(4,024)



(10,926)


Trade accounts payable


8,831



(6,471)


Trade accounts payable - DISH Network


1,128



(1,011)


Accrued expenses and other


6,854



(2,288)


Changes in noncurrent assets and noncurrent liabilities, net


5,563



(13,982)


Other, net


2,914



2,840


Net cash flows from operating activities


175,946



135,275


Cash flows from investing activities:





Purchases of marketable investment securities


(325,557)



(562,611)


Sales and maturities of marketable investment securities


712,666



298,596


Expenditures for property and equipment


(111,962)



(128,506)


Refunds and other receipts related to property and equipment




77,524


Expenditures for externally marketed software


(7,600)



(7,148)


Net cash flows from investing activities


267,547



(322,145)


Cash flows from financing activities:





Repayment of debt and finance lease obligations


(9,882)



(9,368)


Repurchase of debt


(8,046)




Net proceeds from Class A common stock options exercised


2,047



3,481


Net proceeds from Class A common stock issued under the Employee Stock Purchase Plan


2,749



2,636


Noncontrolling interest purchase


(7,313)




Repayment of in-orbit incentive obligations


(1,573)



(1,265)


Other, net


(131)



(243)


Net cash flows from financing activities


(22,149)



(4,759)


Effect of exchange rates on cash and cash equivalents


(133)



(242)


Net increase (decrease) in cash and cash equivalents, including restricted amounts


421,211



(191,871)


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


$

1,350,706



$

2,240,378







Supplemental disclosure of cash flow information:





Cash paid for interest, net of amounts capitalized


$

54,572



$

51,073


Cash paid for income taxes


$

772



$

839


 

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SOURCE EchoStar Corporation

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