EchoStar Announces Financial Results for the Three and Six Months Ended June 30, 2021


August 3, 2021


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Englewood, CO, August 3, 2021—EchoStar Corporation (NASDAQ: SATS) today announced its financial results for the three and six months ended June 30, 2021.

Three Months Ended June 30, 2021 Financial Highlights:

  • Consolidated revenue of $499.8 million.
  • Net income of $35.0 million, consolidated net income attributable to EchoStar common stock of $37.3 million, and basic and diluted earnings per share of $0.41.
  • Consolidated Adjusted EBITDA of $186.7 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).

Six Months Ended June 30, 2021 Financial Highlights:

  • Consolidated revenue of $982.4 million.
  • Net income of $112.6 million, consolidated net income attributable to EchoStar common stock of $115.8 million, and basic and diluted earnings per share of $1.26 and $1.25, respectively.
  • Consolidated Adjusted EBITDA of $372.4 million (see discussion and the reconciliation of GAAP to this non-GAPP measure below).

“Our financial performance in the second quarter of 2021 was outstanding - a reflection of the ongoing commitment and drive of the EchoStar team to deliver solutions that connect the world,” commented Michael Dugan, CEO and President of EchoStar.  “We remain focused on increasing the yield on our existing assets and operating the business in an efficient manner while also building the ground network and operational processes to place our next satellite, EchoStar XXIV/JUPITER 3, into service as quickly as possible.  We continue to seek opportunities in pursuit of our strategy of being a global connectivity provider.” 

Three Months Ended June 30, 2021 - Additional Information:

  • Consolidated revenue increased 8.8% or $40.4 million year over year primarily driven by higher equipment sales of $26.1 million to our domestic and international enterprise customers and higher sales of broadband services of $12.4 million to our consumer customers.
  • Adjusted EBITDA increased 16.0% or $25.8 million year over year.
  • Hughes segment Adjusted EBITDA increased $21.0 million year over year.The increase was driven primarily by growth in revenue and higher Adjusted EBITDA margin.
  • ESS segment Adjusted EBITDA increased $0.7 million year over year.
  • Corporate and Other segment Adjusted EBITDA increased $4.1 million year over year.The increase was primarily due to decreased losses of unconsolidated affiliates, net, and dividends received from certain marketable investment securities.
  • Net income increased $49.9 million to $35.0 million.The increase was primarily due to higher operating income of $30.5 million and higher gains on investments, net, of $36.7 million, partially offset by higher losses in Other, net of $12.4 million that included litigation expense, and higher income tax expense, net, of $10.3 million.
  • Total Hughes broadband subscribers are approximately 1,542,000 as of June 30, 2021.Subscribers in the US decreased by 20,000 to approximately 1,144,000.In Latin America, subscribers increased by 9,000 to approximately 398,000.
  • For the three months ended June 30, 2021, approximately 67% of Hughes segment revenue was attributable to our consumer customers with approximately 33% attributable to our enterprise customers.
  • Cash, cash equivalents and current marketable investment securities were $1.6 billion as of June 30, 2021.
  • For the three months ended June 30, 2021, we purchased 2,374,452 shares of our Class A common stock in open market trades.
  • Repurchased or paid off the remaining $809.5 million of our 7 5/8% bonds which matured on June 15th, 2021.

Set forth below is a table highlighting certain of EchoStar’s segment results for the three and six months ended June 30, 2021 and 2020 (amounts in thousands) (all US GAAP amounts reference results from operations):

 

 

For the three months ended June 30,

 

For the six months ended June 30,

 

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

Hughes

 

$

492,276

 

 

$

453,172

 

 

$

968,136

 

 

$

911,654

 

EchoStar Satellite Services

 

4,283

 

 

4,179

 

 

8,372

 

 

8,831

 

Corporate and Other

 

3,275

 

 

2,115

 

 

5,908

 

 

4,647

 

Total revenue

 

$

499,834

 

 

$

459,466

 

 

$

982,416

 

 

$

925,132

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

 

 

 

 

 

 

 

Hughes

 

$

207,317

 

 

$

186,277

 

 

$

409,253

 

 

$

348,496

 

EchoStar Satellite Services

 

2,243

 

 

1,543

 

 

4,162

 

 

3,573

 

Corporate & Other:

 

 

 

 

 

 

 

 

Corporate overhead, operating and other

 

(20,497)

 

 

(22,252)

 

 

(41,964)

 

 

(42,375)

 

Equity in earnings (losses) of unconsolidated affiliates, net

 

(2,369)

 

 

(4,668)

 

 

984

 

 

(156)

 

Total Corporate & Other

 

(22,866)

 

 

(26,920)

 

 

(40,980)

 

 

(42,531)

 

Total Adjusted EBITDA

 

$

186,694

 

 

$

160,900

 

 

$

372,435

 

 

$

309,538

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

35,015

 

 

$

(14,843)

 

 

$

112,587

 

 

$

(72,580)

 

Expenditures for property and equipment

 

$

83,232

 

 

$

92,300

 

 

$

262,466

 

 

$

196,904

 

 

Reconciliation of GAAP to Non-GAAP Measurement (amounts in thousands):

 

 

For the three months ended June 30,

 

For the six months ended June 30,

 

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

35,015

 

 

$

(14,843)

 

 

$

112,587

 

 

$

(72,580)

 

Interest income, net

 

(5,240)

 

 

(10,760)

 

 

(11,189)

 

 

(26,343)

 

Interest expense, net of amounts capitalized

 

28,868

 

 

38,258

 

 

63,535

 

 

74,491

 

Income tax provision (benefit), net

 

21,152

 

 

10,851

 

 

43,299

 

 

3,359

 

Depreciation and amortization

 

118,982

 

 

129,887

 

 

248,268

 

 

262,255

 

Net loss (income) attributable to non-controlling interests

 

2,280

 

 

3,431

 

 

3,227

 

 

6,873

 

EBITDA

 

201,057

 

 

156,824

 

 

459,727

 

 

248,055

 

(Gains) losses on investments, net

 

(30,633)

 

 

6,090

 

 

(109,233)

 

 

52,762

 

Impairment of long-lived assets

 

15

 

 

 

 

245

 

 

 

Litigation Expense

 

16,800

 

 

 

 

16,800

 

 

 

License fee dispute - India, net of non-controlling interests

 

(236)

 

 

(454)

 

 

(446)

 

 

(563)

 

Loss on Debt Repurchase

 

356

 

 

 

 

1,938

 

 

 

Foreign currency transaction (gains) losses, net

 

(665)

 

 

(1,560)

 

 

3,404

 

 

9,284

 

Adjusted EBITDA

 

$

186,694

 

 

$

160,900

 

 

$

372,435

 

 

$

309,538

 

 

Note on Use of Non-GAAP Financial Measures

EBITDA is defined as “Net income (loss)” excluding “Interest income, net,” Interest expense, net of amounts capitalized,” “Income tax benefit (provision), net,” “Depreciation and amortization,” and “Net income (loss) attributable to non-controlling interests.”

Adjusted EBITDA is defined as EBITDA excluding Gains and losses on investments, net, Foreign currency transaction gains (losses), net, and other non-recurring or non-operational items.  EBITDA and Adjusted EBITDA are not measures determined in accordance with US GAAP. EBITDA and Adjusted EBITDA are 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 EBITDA and Adjusted EBITDA as measures of our operating efficiency and overall financial performance for benchmarking against our peers and competitors. Management believes that these non-GAAP measures provide meaningful supplemental information regarding the underlying operating performance of our business and are appropriate to enhance an overall understanding of our financial performance. Management also believes that EBITDA and Adjusted EBITDA are useful to investors because they are 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, 2021 and 2020 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, 2021 filed today with the Securities and Exchange Commission.

EchoStar will host a conference call to discuss its earnings on Tuesday, August 3, 2021 at 11:00 a.m. Eastern Time. The conference call will be broadcast live in listen-only mode on EchoStar’s investor relations website at ir.echostar.com.  To ask a question, the dial in numbers are (833) 562-0124 (toll-free) and (661) 567-1102 (international), Conference ID 9641157.

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,” “goal,” “seek,” “estimate,” “expect,” “intend,” “project,” “continue,” “future,” “will,” “would,” “can,” “may,” “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, 2020 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.

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Contact Information

EchoStar Investor Relations

EchoStar Media Relations

Terry Brown

Phone: +1 303-728-5179

Email: terry.brown@echostar.com

Sharyn Nerenberg

Phone: +1 301-428-7124

Email: sharyn.nerenberg@echostar.com

 

ECHOSTAR CORPORATION

Consolidated Balance Sheets

(Amounts in thousands, except share and per share amounts)

 

 

As of

 

 

June 30, 2021

 

December 31, 2020

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

716,522

 

 

$

896,005

 

Marketable investment securities

 

841,521

 

 

1,638,271

 

Trade accounts receivable and contract assets, net

 

186,945

 

 

183,989

 

Other current assets, net

 

194,095

 

 

189,821

 

Total current assets

 

1,939,083

 

 

2,908,086

 

Non-current assets:

 

 

 

 

Property and equipment, net

 

2,431,653

 

 

2,390,313

 

Operating lease right-of-use assets

 

131,931

 

 

128,303

 

Goodwill

 

511,886

 

 

511,597

 

Regulatory authorizations, net

 

474,770

 

 

478,762

 

Other intangible assets, net

 

14,773

 

 

18,433

 

Other investments, net

 

340,688

 

 

284,937

 

Other non-current assets, net

 

364,822

 

 

352,921

 

Total non-current assets

 

4,270,523

 

 

4,165,266

 

Total assets

 

$

6,209,606

 

 

$

7,073,352

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

Current liabilities:

 

 

 

 

Trade accounts payable

 

$

121,635

 

 

$

122,366

 

Current portion of long-term debt, net

 

 

 

898,237

 

Contract liabilities

 

127,820

 

 

104,569

 

Accrued expenses and other current liabilities

 

297,649

 

 

299,999

 

Total current liabilities

 

547,104

 

 

1,425,171

 

Non-current liabilities:

 

 

 

 

Long-term debt, net

 

1,495,619

 

 

1,495,256

 

Deferred tax liabilities, net

 

394,155

 

 

359,896

 

Operating lease liabilities

 

118,779

 

 

114,886

 

Other non-current liabilities

 

69,044

 

 

70,893

 

Total non-current liabilities

 

2,077,597

 

 

2,040,931

 

Total liabilities

 

2,624,701

 

 

3,466,102

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ECHOSTAR CORPORATION

Consolidated Balance Sheets

(Amounts in thousands, except share and per share amounts)

 

Stockholders' equity:

 

 

 

 

Preferred stock, $0.001 par value, 20,000,000 shares authorized, none issued and outstanding at both June30, 2021 and December31, 2020

 

 

 

 

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, 57,825,270 shares issued and 42,289,277 shares outstanding at June30, 2021 and 57,254,201 shares issued and 48,863,374 shares outstanding at December31, 2020

 

58

 

 

57

 

ClassB convertible common stock, $0.001 par value, 800,000,000 shares authorized, 47,687,039 shares issued and outstanding at both June30, 2021 and December31, 2020

 

48

 

 

48

 

ClassC convertible common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at both June30, 2021 and December31, 2020

 

 

 

 

ClassD common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at both June30, 2021 and December31, 2020

 

 

 

 

Additional paid-in capital

 

3,337,190

 

 

3,321,426

 

Accumulated other comprehensive income (loss)

 

(182,226)

 

 

(187,876)

 

Accumulated earnings (losses)

 

699,405

 

 

583,591

 

Treasury shares, at cost

 

(343,869)

 

 

(174,912)

 

Total EchoStar Corporation stockholders' equity

 

3,510,606

 

 

3,542,334

 

Non-controlling interests

 

74,299

 

 

64,916

 

Total stockholders' equity

 

3,584,905

 

 

3,607,250

 

Total liabilities and stockholders' equity

 

$

6,209,606

 

 

$

7,073,352

 

 

ECHOSTAR CORPORATION

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,

 

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

Services and other revenue

 

$

431,279

 

 

$

417,043

 

 

$

861,616

 

 

$

825,400

 

Equipment revenue

 

68,555

 

 

42,423

 

 

120,800

 

 

99,732

 

Total revenue

 

499,834

 

 

459,466

 

 

982,416

 

 

925,132

 

Costs and expenses:

 

 

 

 

 

 

 

 

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

 

139,547

 

 

141,019

 

 

272,336

 

 

286,271

 

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

 

54,503

 

 

32,542

 

 

99,654

 

 

78,450

 

Selling, general and administrative expenses

 

114,038

 

 

113,798

 

 

228,157

 

 

239,079

 

Research and development expenses

 

7,441

 

 

7,448

 

 

14,986

 

 

13,702

 

Depreciation and amortization

 

118,982

 

 

129,887

 

 

248,268

 

 

262,255

 

Impairment of long-lived assets

 

15

 

 

 

 

245

 

 

 

Total costs and expenses

 

434,526

 

 

424,694

 

 

863,646

 

 

879,757

 

Operating income (loss)

 

65,308

 

 

34,772

 

 

118,770

 

 

45,375

 

Other income (expense):

 

 

 

 

 

 

 

 

Interest income, net

 

5,240

 

 

10,760

 

 

11,189

 

 

26,343

 

Interest expense, net of amounts capitalized

 

(28,868)

 

 

(38,258)

 

 

(63,535)

 

 

(74,491)

 

Gains (losses) on investments, net

 

30,633

 

 

(6,090)

 

 

109,233

 

 

(52,762)

 

Equity in earnings (losses) of unconsolidated affiliates, net

 

(4,044)

 

 

(6,345)

 

 

(2,670)

 

 

(3,732)

 

Foreign currency transaction gains (losses), net

 

665

 

 

1,560

 

 

(3,404)

 

 

(9,284)

 

Other, net

 

(12,767)

 

 

(391)

 

 

(13,697)

 

 

(670)

 

Total other income (expense), net

 

(9,141)

 

 

(38,764)

 

 

37,116

 

 

(114,596)

 

Income (loss) before income taxes

 

56,167

 

 

(3,992)

 

 

155,886

 

 

(69,221)

 

Income tax benefit (provision), net

 

(21,152)

 

 

(10,851)

 

 

(43,299)

 

 

(3,359)

 

Net income (loss)

 

35,015

 

 

(14,843)

 

 

112,587

 

 

(72,580)

 

Less: Net loss (income) attributable to non-controlling interests

 

2,280

 

 

3,431

 

 

3,227

 

 

6,873

 

Net income (loss) attributable to EchoStar Corporation common stock

 

$

37,295

 

 

$

(11,412)

 

 

$

115,814

 

 

$

(65,707)

 

 

 

 

 

 

 

 

 

 

Earnings (losses) per share - ClassA and B common stock:

 

 

 

 

 

 

 

 

Basic

 

$

0.41

 

 

$

(0.12)

 

 

$

1.26

 

 

$

(0.67)

 

Diluted

 

$

0.41

 

 

$

(0.12)

 

 

$

1.25

 

 

$

(0.67)

 

ECHOSTAR CORPORATION

Consolidated Statements of Cash Flows

(Amounts in thousands)

 

 

For the six months ended June 30,

 

 

2021

 

2020

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

Net income (loss)

 

$

112,587

 

 

$

(72,580)

 

Adjustments to reconcile net income (loss) to cash flows provided by (used for) operating activities:

 

 

 

 

Depreciation and amortization

 

248,268

 

 

262,255

 

Impairment of long-lived assets

 

245

 

 

 

Losses (gains) on investments, net

 

(109,233)

 

 

52,762

 

Equity in losses (earnings) of unconsolidated affiliates, net

 

2,670

 

 

3,732

 

Foreign currency transaction losses (gains), net

 

3,404

 

 

9,284

 

Deferred tax provision (benefit), net

 

34,024

 

 

(2,452)

 

Stock-based compensation

 

3,825

 

 

4,509

 

Amortization of debt issuance costs

 

2,008

 

 

2,120

 

Other, net

 

6,198

 

 

(7,295)

 

Changes in assets and liabilities, net:

 

 

 

 

Trade accounts receivable and contract assets, net

 

(3,363)

 

 

(5,262)

 

Other current assets, net

 

(1,120)

 

 

(11,642)

 

Trade accounts payable

 

(9,631)

 

 

(11,701)

 

Contract liabilities

 

23,251

 

 

(11,229)

 

Accrued expenses and other current liabilities

 

621

 

 

27,050

 

Non-current assets and non-current liabilities, net

 

(5,114)

 

 

5,729

 

Net cash provided by (used for) operating activities

 

308,640

 

 

245,280

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

Purchases of marketable investment securities

 

(939,255)

 

 

(555,367)

 

Sales and maturities of marketable investment securities

 

1,824,332

 

 

977,532

 

Expenditures for property and equipment

 

(262,466)

 

 

(196,904)

 

Expenditures for externally marketed software

 

(16,835)

 

 

(19,237)

 

Purchase of other investments

 

(50,000)

 

 

(5,500)

 

Sales of other investments

 

10,516

 

 

 

Net cash provided by (used for) investing activities

 

566,292

 

 

200,524

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

Repurchase and maturity of the 2021 Senior Unsecured Notes

 

(901,818)

 

 

 

Payment of finance lease obligations

 

(476)

 

 

(421)

 

Payment of in-orbit incentive obligations

 

(1,431)

 

 

(1,021)

 

Net proceeds from ClassA common stock options exercised

 

 

 

436

 

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

 

4,815

 

 

5,300

 

Treasury share repurchase

 

(163,822)

 

 

(5,893)

 

Contribution by non-controlling interest holder

 

9,880

 

 

10,000

 

Other, net

 

(966)

 

 

674

 

Net cash provided by (used for) financing activities

 

(1,053,818)

 

 

9,075

 

 

 

 

 

 

Effect of exchange rates on cash and cash equivalents

 

(443)

 

 

(19,232)

 

Net increase (decrease) in cash and cash equivalents

 

(179,329)

 

 

435,647

 

Cash and cash equivalents, including restricted amounts, beginning of period

 

896,812

 

 

1,521,889

 

Cash and cash equivalents, including restricted amounts, end of period

 

$

717,483

 

 

$

1,957,536