SATS
$41.49
Echostar
$.40
.97%
Earnings Details
3rd Quarter September 2019
Thursday, November 7, 2019 6:00:00 AM
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Summary

Echostar (SATS) Recent Earnings

Echostar (SATS) reported a 3rd Quarter September 2019 loss of $0.21 per share on revenue of $472.3 million. The consensus estimate was a loss of $0.75 per share on revenue of $543.8 million. Revenue fell 11.4% compared to the same quarter a year ago.

EchoStar Corp designs, develops and distributes digital set-top boxes and related products. The Company also provides satellite operations, video delivery solutions, broadband satellite technologies and services for home and office.

Results
Reported Earnings
($0.21)
Earnings Whisper
-
Consensus Estimate
($0.75)
Reported Revenue
$472.3 Mil
Revenue Estimate
$543.8 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

EchoStar Announces Financial Results for Three and Nine Months Ended September 30, 2019

ENGLEWOOD, Colo., Nov. 7, 2019 /PRNewswire/ -- EchoStar Corporation (NASDAQ: SATS) today announced its financial results for the three and nine months ended September 30, 2019.

EchoStar Corporation Logo. (PRNewsfoto/EchoStar Corporation)

Three Months Ended September 30, 2019 Financial Highlights:

  • Consolidated revenues of $472.3 million.
  • Consolidated net loss of $21.1 million, consolidated net loss attributable to EchoStar common stock of $18.3 million, and diluted loss per share of $0.19.
  • Consolidated Adjusted EBITDA of $148.3 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).

Nine Months Ended September 30, 2019 Financial Highlights:

  • Consolidated revenues of $1.4 billion.
  • Consolidated net loss of $11.2 million, consolidated net loss attributable to EchoStar common stock of $9.8 million, and diluted loss per share of $0.10.
  • Consolidated Adjusted EBITDA of $422.7 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).

"I am pleased with our performance in the third quarter of 2019," commented Michael Dugan, CEO and President of EchoStar.  "On September 10th, we completed the spin-off to DISH of the BSS business and ancillary assets and liabilities in exchange for DISH shares that were distributed to EchoStar shareholders. As a result, the BSS business has been presented as discontinued operations in our current financial results.  We can now focus on the growing broadband market, additional satellite opportunities, and strategic investments.  We grew our consumer subscriber base by approximately 22,000 driven by our international markets and launched a consumer service in Mexico on October 1st.  Our North American capacity is relatively full with the EchoStar 24/J3 satellite scheduled for launch in 2021.  We continue to work to complete our previously announced JVs with Yahsat in Brazil and Bharti Airtel in India and also announced the acquisition of Helios Wire Corporation on October 25th.   The Helios acquisition lays the foundation for the creation of worldwide S-band capabilities."

Three Months Ended September 30, 2019 - Additional Information:

  • Consolidated revenue increased 4% or $16.0 million year over year.
  • An accrual of $20.7 million was booked during the quarter related to a license fee dispute with the Government of India. This impacted SG&A expenses by $7.1 million and Interest expense, net of amounts capitalized, by $13.6 million. Net income (loss) attributable to noncontrolling interests had a corresponding offset of $3.2 million. This fee dispute dates back over a decade and has affected the entire Indian Telecom industry.
  • Adjusted EBITDA decreased 4% or $6.0 million year over year.
    • Hughes segment Adjusted EBITDA increased by $1.9 million which includes the impact of the industry wide fee dispute with the Government of India.
    • ESS segment Adjusted EBITDA decreased by $2.9 million primarily due to lower revenue.
    • Corporate and Other segment Adjusted EBITDA decreased by $5.0 million driven primarily by transaction related legal costs and increased losses on equity in earnings of unconsolidated affiliates.
  • Net loss from continuing operations was $23.2 million, the loss increasing by $20.0 million from last year. The decline was primarily due to higher unrealized losses on foreign currency of $11.0 million, higher depreciation and amortization expense of $7.0 million, increased equity losses of unconsolidated affiliates of $3.6 million, partially offset by higher gains of investments of $5.4 million.
  • Hughes broadband subscribers are approximately 1,437,000 as of September 30, 2019 including approximately 192,000 subscribers in Central and South America.
  • Cash, cash equivalents and current marketable investment securities of $2.5 billion as of September 30, 2019.

Set forth below is a table highlighting certain of EchoStar's segment results for the three and nine months ended September 30, 2019 and 2018 (amounts in thousands):



For the three months
ended September 30,


For the nine months
ended September 30,



2019


2018


2019


2018










Revenue









Hughes


$

463,735



$

444,762



$

1,360,919



$

1,271,886


EchoStar Satellite Services


4,098



6,802



11,873



22,562


Corporate and Other


4,429



4,710



14,283



14,207


Total revenue


$

472,262



$

456,274



$

1,387,075



$

1,308,655











Adjusted EBITDA









Hughes


$

169,358



$

167,492



$

486,212



$

465,724


EchoStar Satellite Services


1,791



4,687



5,006



15,478


Corporate & Other:









Corporate overhead, operating and
other


(21,028)



(18,231)



(58,968)



(54,489)


Equity in earnings (losses) of
unconsolidated affiliates, net


(1,782)



416



(9,507)



(2,651)


Total Corporate & Other


(22,810)



(17,815)



(68,476)



(57,141)


Total Adjusted EBITDA


$

148,339



$

154,364



$

422,742



$

424,061











Net income (loss) from continuing
operations


$

(23,161)



$

(3,195)



$

(57,581)



$

(3,828)


Expenditures for property and
equipment


$

95,155



$

167,144



$

314,351



$

337,625


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



For the three months
ended September 30,


For the nine months
ended September 30,



2019


2018


2019


2018










Net income (loss)


$

(21,106)



$

16,502



$

(11,158)



$

73,015


Interest income and expense, net


32,690



33,529



91,996



107,801


Income tax provision, net


5,016



7,963



12,607



8,275


Depreciation and amortization


122,374



115,325



361,619



338,737


Net (income) loss from discontinued
operations


(2,055)



(19,697)



(46,423)



(76,843)


Net (income) loss attributable to
noncontrolling interests


2,797



(450)



1,359



(1,292)


EBITDA


139,716



153,172



410,000



449,693


(Gains) losses on investments, net


(8,295)



(2,873)



(28,087)



(31,606)


Litigation expense (1)


1,824





26,328




Vendor settlement








(9,571)


Unrealized (gains) losses on foreign
currency


15,094



4,065



14,501



15,545


Adjusted EBITDA


$

148,339



$

154,364



$

422,742



$

424,061











(1) Does not include license fee dispute with the Government of India.

Note on Use of Non-GAAP Financial Measures

EBITDA is defined as "Net income (loss)" excluding "Interest income and expense, net," "Income tax provision (benefit), net," "Depreciation and amortization," "Net income (loss) from discontinued operations," and "Net income (loss) attributable to noncontrolling interests."

Adjusted EBITDA is defined as EBITDA excluding "Gains and losses on investments, net," unrealized gains (losses) on foreign currency, 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 September 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 September 30, 2019 filed today with the Securities and Exchange Commission.

EchoStar will host its earnings conference call on Thursday, November 7, 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 3877704.

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 September 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



September 30, 2019


December 31, 2018

Assets





Current assets:





Cash and cash equivalents


$

1,547,162



$

928,306


Marketable investment securities, at fair value


1,000,165



2,282,152


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


200,779



201,096


Trade accounts receivable - DISH Network


16,125



14,200


Inventory


83,397



75,379


Prepaids and deposits


63,210



57,691


Other current assets


17,382



18,539


Current assets of discontinued operations


5,866



3,486


Total current assets


2,934,086



3,580,849


Noncurrent assets:





Property and equipment, net


2,444,157



2,534,666


Operating lease right-of-use assets


112,263




Goodwill


504,173



504,173


Regulatory authorizations, net


426,189



430,039


Other intangible assets, net


33,188



44,231


Investments in unconsolidated entities


225,908



262,473


Other receivables - DISH Network


93,321



95,114


Other noncurrent assets, net


264,465



247,316


Noncurrent assets of discontinued operations




962,433


Total noncurrent assets


4,103,664



5,080,445


Total assets


$

7,037,750



$

8,661,294


Liabilities and Stockholders' Equity





Current liabilities:





Trade accounts payable


$

122,319



$

121,437


Trade accounts payable - DISH Network


714



1,698


Current portion of long-term debt and finance lease obligations


407



919,582


Contract liabilities


109,557



72,284


Accrued interest


37,039



45,350


Accrued compensation


42,810



54,242


Accrued taxes


17,465



16,013


Accrued expenses and other


126,865



64,395


Current liabilities of discontinued operations


4,565



50,136


Total current liabilities


461,741



1,345,137


Noncurrent liabilities:





Long-term debt and finance lease obligations, net


2,388,931



2,386,202


Deferred tax liabilities, net


331,498



287,420


Operating lease liabilities


94,332




Other noncurrent liabilities


77,333



80,304


Noncurrent liabilities of discontinued operations




406,757


Total noncurrent liabilities


2,892,094



3,160,683


Total liabilities


3,353,835



4,505,820


Commitments and contingencies (Note 16)





Stockholders' equity:





Preferred stock, $0.001 par value, 20,000,000 shares authorized, none issued and outstanding at both September 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, 56,383,893 shares issued and
49,898,972 shares outstanding at September 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 both September 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 both of September 30, 2019 and December 31, 2018





Class D common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at both
September 30, 2019 and December 31, 2018





Additional paid-in capital


3,251,808



3,702,522


Accumulated other comprehensive loss


(131,664)



(125,100)


Accumulated earnings


685,927



694,129


Treasury stock, at cost


(131,454)



(131,454)


Total EchoStar Corporation stockholders' equity


3,674,721



4,140,199


Noncontrolling interests


9,194



15,275


Total stockholders' equity


3,683,915



4,155,474


Total liabilities and stockholders' equity


$

7,037,750



$

8,661,294


 

 

ECHOSTAR CORPORATION

Condensed Consolidated Statements of Operations

(Amounts in thousands, except per share amounts)




For the three months
ended September 30,


For the nine months
ended September 30,



2019


2018


2019


2018










Revenue:









Services and other revenue - DISH Network


$

13,232



$

17,054



$

42,532



$

57,410


Services and other revenue - other


393,305



382,374



1,169,459



1,101,111


Equipment revenue


65,725



56,846



175,084



150,134


Total revenue


472,262



456,274



1,387,075



1,308,655











Costs and expenses:









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


143,842



142,290



429,869



421,622


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


51,188



46,318



142,744



127,254


Selling, general and administrative expenses


122,676



107,540



384,152



314,040


Research and development expenses


6,136



6,544



19,411



20,328


Depreciation and amortization


122,374



115,325



361,619



338,737


Total costs and expenses


446,216



418,017



1,337,795



1,221,981


Operating income


26,046



38,257



49,280



86,674











Other income (expense):









Interest income


17,175



21,349



64,817



56,237


Interest expense, net of amounts capitalized


(49,865)



(54,878)



(156,813)



(164,038)


Gains (losses) on investments, net


8,295



2,873



28,087



31,606


Equity in earnings (losses) of unconsolidated affiliates, net


(3,209)



416



(14,317)



(2,651)


Other, net


(16,587)



(3,249)



(16,028)



(3,381)


Total other income (expense), net


(44,191)



(33,489)



(94,254)



(82,227)


Income (loss) from continuing operations before
income taxes


(18,145)



4,768



(44,974)



4,447


Income tax benefit (provision), net


(5,016)



(7,963)



(12,607)



(8,275)


Net loss from continuing operations


(23,161)



(3,195)



(57,581)



(3,828)


Net income from discontinued operations


2,055



19,697



46,423



76,843


Net income (loss)


(21,106)



16,502



(11,158)



73,015


Less: Net income (loss) attributable to
noncontrolling interests


(2,797)



450



(1,359)



1,292


Net income (loss) attributable to
EchoStar Corporation common stock


$

(18,309)



$

16,052



$

(9,799)



$

71,723











Earnings per share - Class A and B common stock:









Basic loss from continuing operations per share


$

(0.21)



$

(0.04)



$

(0.58)



$

(0.05)


Total basic earnings (loss) per share


$

(0.19)



$

0.17



$

(0.10)



$

0.75


Diluted loss from continuing operations per share


$

(0.21)



$

(0.04)



$

(0.58)



$

(0.05)


Total diluted earnings (loss) per share


$

(0.19)



$

0.17



$

(0.10)



$

0.75


 

 

ECHOSTAR CORPORATION

Condensed Consolidated Statements of Cash Flows

(Amounts in thousands, except per share amounts)






For the nine months ended September 30,



2019


2018






Cash flows from operating activities:





Net income (loss)


$

(11,158)



$

73,015


Adjustments to reconcile net income (loss) to net cash flows from operating activities:





Depreciation and amortization


459,054



444,558


Equity in losses of unconsolidated affiliates, net


14,317



2,651


Amortization of debt issuance costs


4,882



5,910


(Gains) losses on investments, net


(28,087)



(33,524)


Stock-based compensation


7,120



7,771


Deferred tax provision


22,949



22,357


Dividend received from unconsolidated entity


2,716



5,000


Changes in current assets and current liabilities, net:





Trade accounts receivable, net


(5,439)



(35,811)


Trade accounts receivable - DISH Network


(28,779)



32,323


Inventory


(8,661)



10,667


Other current assets


(3,716)



(5,569)


Trade accounts payable


18,180



2,536


Trade accounts payable - DISH Network


(984)



(3,342)


Accrued expenses and other


65,245



19,450


Changes in noncurrent assets and noncurrent liabilities, net


1,303



(16,123)


Other, net


24,118



12,043


Net cash flows from operating activities


533,060



543,912


Cash flows from investing activities:





Purchases of marketable investment securities


(655,265)



(2,323,090)


Sales and maturities of marketable investment securities


1,988,078



1,331,225


Expenditures for property and equipment


(314,861)



(415,253)


Refunds and other receipts related to property and equipment




77,524


Expenditures for externally marketed software


(21,364)



(24,568)


Investment in unconsolidated entities


(7,503)



(991)


Dividend received from unconsolidated entity


2,284




Sale of investment in unconsolidated entity




1,558


Net cash flows from investing activities


991,369



(1,353,595)


Cash flows from financing activities:





Repayment of debt and finance lease obligations


(29,135)



(27,764)


Repurchase and maturity of debt


(920,923)




Purchase of noncontrolling interest


(7,313)




Repayment of in-orbit incentive obligations


(5,269)



(4,601)


Net proceeds from Class A common stock options exercised


64,143



4,424


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


7,724



7,428


Other, net


758



(530)


Net cash flows from financing activities


(890,015)



(21,043)


Effect of exchange rates on cash and cash equivalents


(411)



(3,449)


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


634,003



(834,175)


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


$

1,563,498



$

1,598,074







Supplemental disclosure of cash flow information:





Cash paid for interest, net of amounts capitalized


$

161,766



$

170,303


Cash paid for income taxes


$

2,119



$

3,369


 

 

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SOURCE Hughes Network Systems, LLC