EchoStar Announces Financial Results for Three and Nine Months Ended September 30, 2020


November 5, 2020


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ENGLEWOOD, CO, November 5, 2020 - EchoStar Corporation (NASDAQ: SATS) today announced its financial results for the three and nine months ended September 30, 2020.

Three Months Ended September 30, 2020 Financial Highlights:

 

  1. Consolidated revenues of $473.5 million.

  2. Net income from continuing operations of $23.3 million, consolidated net income attributable to EchoStar common stock of $25.4 million, and diluted earnings per share of $0.26.

  3. Consolidated Adjusted EBITDA of $166.7 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).

     

    Nine Months Ended September 30, 2020 Financial Highlights:

     

  1. Consolidated revenues of $1,398.6 million.

  2. Net loss from continuing operations of $49.3 million, consolidated net loss attributable to EchoStar common stock of $40.3 million, and diluted loss per share of $(0.41).

  3. Consolidated Adjusted EBITDA of $476.2 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).

     

    “We had another outstanding quarter,” commented Michael Dugan, CEO and President of EchoStar.  “We increased our consumer subscriber base by approximately 38,000, driven by our international markets, and grew our Net income and Adjusted EBITDA from the same period last year.  The continued growth in demand for our service demonstrates the importance of our networks and services for businesses and families everywhere.  We will continue to focus on the needs of our customers as connectivity becomes a more vital part of business, entertainment, and communications.”

     

    Three Months Ended September 30, 2020 - Additional Information:

     

  1. Consolidated revenue was up $1.2 million year over year including an estimated negative foreign exchange impact of $10.9 million.

  2. Adjusted EBITDA increased 9% or $14.3 million year over year.

    1. Hughes segment Adjusted EBITDA increased $13.2 million year over year.  The increase was driven primarily by the higher margin associated with the growth in our consumer broadband service.

    2. ESS segment Adjusted EBITDA increased by $0.5 million year over year.

    3. Corporate and Other segment Adjusted EBITDA increased by $0.7 million.  The increase was primarily driven by lower equity losses in unconsolidated affiliates of $1.3 million compared to the same period last year.

  1. Net income from continuing operations was $23.3 million, an increase of $46.4 million from last year.  The change was primarily due to higher operating income of $10.9 million, improvement in foreign currency transactions, net, of $21.8 million, higher gains on investments, net, of $6.7 million, and lower income tax provision of $2.1 million.

  2. Hughes broadband subscribers are approximately 1,580,000 as of September 30, 2020 including approximately 364,000 subscribers in Latin America.

     

  1. For the three months ended September 30, 2020, approximately 71% of Hughes segment revenue was attributable to our consumer customers with approximately 29% attributable to our enterprise customers.

     

  2. Cash, cash equivalents and marketable investment securities were $2.5 billion as of September 30, 2020.

     

     

    Set forth below is a table highlighting certain of EchoStar’s segment results three and nine months ended September 30, 2020 and 2019 (amounts in thousands) from continuing operations (all US GAAP amounts reference results from continuing operations):

 

 

For the three months ended September 30,

 

For the nine months ended September 30,

 

 

2020

 

2019

 

2020

 

2019

Revenue

 

 

 

 

 

 

 

 

Hughes

 

$

466,762

 

 

$

463,735

 

 

$

1,378,416

 

 

$

1,360,919

 

EchoStar Satellite Services

 

4,402

 

 

4,098

 

 

13,233

 

 

11,873

 

Corporate and Other

 

2,338

 

 

4,429

 

 

6,985

 

 

14,283

 

Total revenue

 

$

473,502

 

 

$

472,262

 

 

$

1,398,634

 

 

$

1,387,075

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

 

 

 

 

 

 

 

Hughes

 

$

186,458

 

 

$

173,298

 

 

$

534,955

 

 

$

490,152

 

EchoStar Satellite Services

 

2,274

 

 

1,791

 

 

5,847

 

 

5,006

 

Corporate & Other:

 

 

 

 

 

 

 

 

Corporate overhead, operating and other

 

(21,572)

 

 

(20,981)

 

 

(63,948)

 

 

(58,769)

 

Equity in earnings (losses) of unconsolidated affiliates, net

 

(504)

 

 

(1,782)

 

 

(660)

 

 

(9,507)

 

Total Corporate & Other

 

(22,076)

 

 

(22,763)

 

 

(64,608)

 

 

(68,276)

 

Total Adjusted EBITDA

 

$

166,656

 

 

$

152,326

 

 

$

476,194

 

 

$

426,882

 

 

 

 

 

 

 

 

 

 

Expenditures for property and equipment

 

$

98,137

 

 

$

95,155

 

 

$

295,041

 

 

$

314,351

 

 

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

 

 

For the three months ended September 30,

 

For the nine months ended September 30,

 

 

2020

 

2019

 

2020

 

2019

Net income (loss)

 

$

23,273

 

 

$

(21,106)

 

 

(49,307)

 

 

(11,158)

 

Interest income, net

 

(7,364)

 

 

(17,175)

 

 

(33,707)

 

 

(64,817)

 

Interest expense, net of amounts capitalized

 

37,967

 

 

49,865

 

 

112,458

 

 

156,813

 

Income tax provision (benefit), net

 

2,950

 

 

5,016

 

 

6,309

 

 

12,607

 

Depreciation and amortization

 

129,822

 

 

122,374

 

 

392,077

 

 

361,619

 

Net loss (income) from discontinued operations

 

 

 

(2,008)

 

 

 

 

(46,223)

 

Net loss (income) attributable to non-controlling interests

 

2,167

 

 

2,797

 

 

9,040

 

 

1,359

 

EBITDA

 

188,815

 

 

139,763

 

 

436,870

 

 

410,200

 

(Gains) losses on investments, net

 

(14,998)

 

 

(8,295)

 

 

37,764

 

 

(28,087)

 

Litigation Expense

 

 

 

1,824

 

 

 

 

26,328

 

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

 

(480)

 

 

3,940

 

 

(1,043)

 

 

3,940

 

Foreign currency transaction (gains) losses, net

 

(6,681)

 

 

15,094

 

 

2,603

 

 

14,501

 

Adjusted EBITDA

 

$

166,656

 

 

$

152,326

 

 

$

476,194

 

 

$

426,882

 

 

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,” “Net income (loss) from discontinued operations,” 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 September 30, 2020 and 2019 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, 2020 filed today with the Securities and Exchange Commission.

 

EchoStar will host a conference call and webcast to discuss its earnings on Thursday, November 5, 2020 at 11:00 a.m. Eastern Time. The call-in numbers are (877) 815-1625 (US) and (716) 247-5178 (International), Conference ID 8263356.  The webcast will be available on EchoStar’s investor relations website at www.echostar.com.

 

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, 2019 and Quarterly Report on Form 10-Q for the period ended September 30, 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

Condensed Consolidated Balance Sheets

(Amounts in thousands, except per share amounts)

 

 

Asof

 

 

September 30, 2020

 

December 31, 2019

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

555,550

 

 

$

1,519,431

 

Marketable investment securities

 

1,950,804

 

 

940,623

 

Trade accounts receivable and contract assets, net

 

190,950

 

 

196,629

 

Other current assets, net

 

192,724

 

 

179,531

 

Total current assets

 

2,890,028

 

 

2,836,214

 

Non-current assets:

 

 

 

 

Property and equipment, net

 

2,372,594

 

 

2,528,738

 

Operating lease right-of-use assets

 

129,073

 

 

114,042

 

Goodwill

 

508,660

 

 

506,953

 

Regulatory authorizations, net

 

475,824

 

 

478,598

 

Other intangible assets, net

 

20,550

 

 

29,507

 

Other investments, net

 

284,238

 

 

325,405

 

Other non-current assets, net

 

344,569

 

 

334,841

 

Total non-current assets

 

4,135,508

 

 

4,318,084

 

Total assets

 

$

7,025,536

 

 

$

7,154,298

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

Current liabilities:

 

 

 

 

Trade accounts payable

 

$

111,099

 

 

$

124,080

 

Current portion of long-term debt, net

 

897,303

 

 

 

Contract liabilities

 

89,622

 

 

101,060

 

Accrued expenses and other current liabilities

 

276,703

 

 

270,879

 

Total current liabilities

 

1,374,727

 

 

496,019

 

Non-current liabilities:

 

 

 

 

Long-term debt, net

 

1,495,078

 

 

2,389,168

 

Deferred tax liabilities, net

 

352,948

 

 

351,692

 

Operating lease liabilities

 

115,376

 

 

96,941

 

Other non-current liabilities

 

74,271

 

 

74,925

 

Total non-current liabilities

 

2,037,673

 

 

2,912,726

 

Total liabilities

 

3,412,400

 

 

3,408,745

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

Preferred stock, $0.001 par value, 20,000,000 shares authorized, none issued and outstanding at both September 30, 2020 and December 31, 2019

 

 

 

 

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, 57,140,432 shares issued and 50,458,512 shares outstanding at September30, 2020 and 56,592,251 shares issued and 50,107,330 shares outstanding at December31, 2019

 

57

 

 

57

 

ClassB convertible common stock, $0.001 par value, 800,000,000 shares authorized, 47,687,039 shares issued and outstanding at both September30, 2020 and December31, 2019

 

48

 

 

48

 

ClassC convertible common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at both September30, 2020 and December31, 2019

 

 

 

 

ClassD common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at both September30, 2020 and December31, 2019

 

 

 

 

Additional paid-in capital

 

3,317,868

 

 

3,290,483

 

Accumulated other comprehensive income (loss)

 

(209,538)

 

 

(122,138)

 

Accumulated earnings (losses)

 

583,474

 

 

632,809

 

Treasury stock, at cost

 

(137,347)

 

 

(131,454)

 

Total EchoStar Corporation stockholders’ equity

 

3,554,562

 

 

3,669,805

 

Non-controlling interests

 

58,574

 

 

75,748

 

Total stockholders’ equity

 

3,613,136

 

 

3,745,553

 

Total liabilities and stockholders’ equity

 

$

7,025,536

 

 

$

7,154,298

 

 

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,

 

 

2020

 

2019

 

2020

 

2019

Revenue:

 

 

 

 

 

 

 

 

Services and other revenue

 

$

426,532

 

 

$

406,537

 

 

$

1,251,932

 

 

$

1,211,991

 

Equipment revenue

 

46,970

 

 

65,725

 

 

146,702

 

 

175,084

 

Total revenue

 

473,502

 

 

472,262

 

 

1,398,634

 

 

1,387,075