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


August 8, 2019


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Englewood, CO, August 8, 2019—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
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)

 

 

Asof

 

 

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:

 

 

 

 

ClassA 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 December31, 2018

 

56

 

 

54

 

ClassB 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 December31, 2018

 

48

 

 

48

 

ClassC convertible common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at each of June 30, 2019 and December31, 2018

 

 

 

 

ClassD common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at each of June 30, 2019 and December31, 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