ENGLEWOOD, Colo., Nov. 9, 2021 /PRNewswire/ -- EchoStar
Corporation (NASDAQ: SATS) today announced its financial results
for the three and nine months ended September 30, 2021.
Three Months Ended September 30, 2021 Financial
Highlights:
- Consolidated revenue of $504.7
million.
- Net income of $30.2 million,
consolidated net income attributable to EchoStar common stock of
$33.4 million, and basic and diluted
earnings per share of $0.38.
- Consolidated Adjusted EBITDA of $187.0
million (see discussion and the reconciliation of GAAP to
this non-GAAP measure below).
Nine Months Ended September 30, 2021 Financial
Highlights:
- Consolidated revenue of $1,487.1
million.
- Net income of $142.8 million,
consolidated net income attributable to EchoStar common stock of
$149.2 million, and basic and diluted
earnings per share of $1.64.
- Consolidated Adjusted EBITDA of $559.4
million (see discussion and the reconciliation of GAAP to
this non-GAAP measure below).
"I am pleased with our financial performance in the third
quarter of 2021," commented Michael
Dugan, CEO and President of EchoStar. "We grew
revenue, net income, and Adjusted EBITDA from the same period last
year by managing all areas of the business prudently. Laying
a strategic foundation for the multi-orbit future, we announced
agreements with OneWeb to provide satellite connectivity solutions
in the US and India and fulfilled
the remaining ITU requirements to bring our Sirion-1 filing into
use which is a key milestone in the development of our global
S-band capabilities."
Three Months Ended September 30, 2021 - Additional
Information:
- Consolidated revenue increased 6.6% or $31.2 million year over year primarily driven by
higher equipment sales of $25.0
million to our domestic and international enterprise
customers.
- Adjusted EBITDA increased 12.2% or $20.3
million year over year.
-
- Hughes segment Adjusted EBITDA increased $16.5 million year over year. The
increase was driven primarily by higher revenue and lower cost of
services provided to our consumer customers.
- ESS segment Adjusted EBITDA was flat year over year.
- Corporate and Other segment Adjusted EBITDA increased
$3.7 million year over year.
- Net income increased $6.9 million
year over year. The increase was primarily due to higher
operating income of $25.6 million and lower net interest expense
of $20.0 million, partially offset by
higher income tax expense, net, of $16.8
million, unfavorable changes in foreign currency exchange
rates of $13.3 million, and lower
gains on investments, net, of $11.3
million.
- Total Hughes broadband subscribers were approximately
1,510,000, declining 32,000 from June
30, 2021. Subscribers in the US decreased by 24,000 as
compared to June 30, 2021 to
approximately 1,120,000. In the same period, subscribers in
Latin America decreased by 8,000
to approximately 390,000. Similar to the US, our Latin
American subscriber base has become capacity constrained in certain
areas. While the balancing of total subscribers relative to
capacity utilization resulted in lower subscribers, average revenue
per user increased in both regions from the second quarter of
2021.
- For the three months ended September 30, 2021,
approximately 66% of Hughes segment revenue was attributable to our
consumer customers with approximately 34% attributable to our
enterprise customers.
- Cash, cash equivalents and current marketable investment
securities were $1.6 billion as of
September 30, 2021.
- During the three months ended September 30, 2021, we
repurchased 2,592,885 shares of our Class A common stock in open
market trades.
Set forth below is a table highlighting certain of EchoStar's
segment results for the three and nine months ended
September 30, 2021 and 2020 (amounts in thousands) (all US
GAAP amounts reference results from operations):
|
|
For the three
months
ended September 30,
|
|
For the nine
months
ended September 30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
Hughes
|
|
$
|
496,937
|
|
|
$
|
466,762
|
|
|
$
|
1,465,073
|
|
|
$
|
1,378,416
|
|
EchoStar Satellite
Services
|
|
4,436
|
|
|
4,402
|
|
|
12,808
|
|
|
13,233
|
|
Corporate and
Other
|
|
3,287
|
|
|
2,338
|
|
|
9,195
|
|
|
6,985
|
|
Total
revenue
|
|
$
|
504,660
|
|
|
$
|
473,502
|
|
|
$
|
1,487,076
|
|
|
$
|
1,398,634
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
Hughes
|
|
$
|
202,997
|
|
|
$
|
186,458
|
|
|
$
|
612,251
|
|
|
$
|
534,955
|
|
EchoStar Satellite
Services
|
|
2,319
|
|
|
2,274
|
|
|
6,481
|
|
|
5,847
|
|
Corporate &
Other:
|
|
|
|
|
|
|
|
|
Corporate overhead,
operating and other
|
|
(19,974)
|
|
|
(21,572)
|
|
|
(61,940)
|
|
|
(63,948)
|
|
Equity in earnings
(losses) of unconsolidated affiliates, net
|
|
1,630
|
|
|
(504)
|
|
|
2,615
|
|
|
(660)
|
|
Total Corporate &
Other
|
|
(18,344)
|
|
|
(22,076)
|
|
|
(59,325)
|
|
|
(64,608)
|
|
Total Adjusted
EBITDA
|
|
$
|
186,972
|
|
|
$
|
166,656
|
|
|
$
|
559,407
|
|
|
$
|
476,194
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
30,217
|
|
|
$
|
23,273
|
|
|
$
|
142,804
|
|
|
$
|
(49,307)
|
|
Expenditures for
property and equipment
|
|
$
|
89,537
|
|
|
$
|
98,137
|
|
|
$
|
352,003
|
|
|
$
|
295,041
|
|
Reconciliation of GAAP to Non-GAAP Measurement (amounts in
thousands):
|
|
For the three
months
ended September 30,
|
|
For the nine
months
ended September 30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
30,217
|
|
|
$
|
23,273
|
|
|
$
|
142,804
|
|
|
$
|
(49,307)
|
|
Interest income,
net
|
|
(5,725)
|
|
|
(7,364)
|
|
|
(16,914)
|
|
|
(33,707)
|
|
Interest expense, net
of amounts capitalized
|
|
16,313
|
|
|
37,967
|
|
|
79,848
|
|
|
112,458
|
|
Income tax provision
(benefit), net
|
|
19,748
|
|
|
2,950
|
|
|
63,047
|
|
|
6,309
|
|
Depreciation and
amortization
|
|
120,596
|
|
|
129,822
|
|
|
368,864
|
|
|
392,077
|
|
Net loss (income)
attributable to non-controlling interests
|
|
3,192
|
|
|
2,167
|
|
|
6,419
|
|
|
9,040
|
|
EBITDA
|
|
184,341
|
|
|
188,815
|
|
|
644,068
|
|
|
436,870
|
|
(Gains) losses on
investments, net
|
|
(3,748)
|
|
|
(14,998)
|
|
|
(112,981)
|
|
|
37,764
|
|
Impairment of
long-lived assets
|
|
—
|
|
|
—
|
|
|
245
|
|
|
—
|
|
Litigation
Expense
|
|
—
|
|
|
—
|
|
|
16,800
|
|
|
—
|
|
License fee dispute -
India, net of non-controlling interests
|
|
(262)
|
|
|
(480)
|
|
|
(708)
|
|
|
(1,043)
|
|
Loss on Debt
Repurchase
|
|
—
|
|
|
—
|
|
|
1,938
|
|
|
—
|
|
Foreign currency
transaction (gains) losses, net
|
|
6,641
|
|
|
(6,681)
|
|
|
10,045
|
|
|
2,603
|
|
Adjusted
EBITDA
|
|
$
|
186,972
|
|
|
$
|
166,656
|
|
|
$
|
559,407
|
|
|
$
|
476,194
|
|
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 September 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 September 30, 2021 filed today with the
Securities and Exchange Commission.
EchoStar will host a conference call to discuss its earnings on
Tuesday, November 9, 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 1061358.
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.
ECHOSTAR
CORPORATION
Consolidated
Balance Sheets
(Amounts in
thousands, except share and per share amounts)
|
|
|
|
As
of
|
|
|
September 30,
2021
|
|
December 31,
2020
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
429,656
|
|
|
$
|
896,005
|
|
Marketable investment
securities
|
|
1,127,048
|
|
|
1,638,271
|
|
Trade accounts
receivable and contract assets, net
|
|
201,751
|
|
|
183,989
|
|
Other current assets,
net
|
|
195,993
|
|
|
189,821
|
|
Total current
assets
|
|
1,954,448
|
|
|
2,908,086
|
|
Non-current
assets:
|
|
|
|
|
Property and
equipment, net
|
|
2,374,080
|
|
|
2,390,313
|
|
Operating lease
right-of-use assets
|
|
140,739
|
|
|
128,303
|
|
Goodwill
|
|
511,266
|
|
|
511,597
|
|
Regulatory
authorizations, net
|
|
471,010
|
|
|
478,762
|
|
Other intangible
assets, net
|
|
14,378
|
|
|
18,433
|
|
Other investments,
net
|
|
351,884
|
|
|
284,937
|
|
Other non-current
assets, net
|
|
364,553
|
|
|
352,921
|
|
Total non-current
assets
|
|
4,227,910
|
|
|
4,165,266
|
|
Total
assets
|
|
$
|
6,182,358
|
|
|
$
|
7,073,352
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Trade accounts
payable
|
|
$
|
111,047
|
|
|
$
|
122,366
|
|
Current portion of
long-term debt, net
|
|
—
|
|
|
898,237
|
|
Contract
liabilities
|
|
134,635
|
|
|
104,569
|
|
Accrued expenses and
other current liabilities
|
|
241,615
|
|
|
299,999
|
|
Total current
liabilities
|
|
487,297
|
|
|
1,425,171
|
|
Non-current
liabilities:
|
|
|
|
|
Long-term debt,
net
|
|
1,495,805
|
|
|
1,495,256
|
|
Deferred tax
liabilities, net
|
|
407,650
|
|
|
359,896
|
|
Operating lease
liabilities
|
|
127,424
|
|
|
114,886
|
|
Other non-current
liabilities
|
|
135,737
|
|
|
70,893
|
|
Total non-current
liabilities
|
|
2,166,616
|
|
|
2,040,931
|
|
Total
liabilities
|
|
2,653,913
|
|
|
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 September 30, 2021 and December 31,
2020
|
|
—
|
|
|
—
|
|
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,
57,939,820 shares issued and 39,810,942 shares outstanding at
September 30, 2021 and 57,254,201 shares issued and 48,863,374
shares outstanding at December 31, 2020
|
|
58
|
|
|
57
|
|
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, 2021 and December 31, 2020
|
|
48
|
|
|
48
|
|
Class C
convertible common stock, $0.001 par value, 800,000,000 shares
authorized, none issued and outstanding at both September 30,
2021 and December 31, 2020
|
|
—
|
|
|
—
|
|
Class D common
stock, $0.001 par value, 800,000,000 shares authorized, none issued
and outstanding at both September 30, 2021 and
December 31, 2020
|
|
—
|
|
|
—
|
|
Additional paid-in
capital
|
|
3,341,751
|
|
|
3,321,426
|
|
Accumulated other
comprehensive income (loss)
|
|
(205,470)
|
|
|
(187,876)
|
|
Accumulated earnings
(losses)
|
|
732,814
|
|
|
583,591
|
|
Treasury shares, at
cost
|
|
(406,295)
|
|
|
(174,912)
|
|
Total EchoStar
Corporation stockholders' equity
|
|
3,462,906
|
|
|
3,542,334
|
|
Non-controlling
interests
|
|
65,539
|
|
|
64,916
|
|
Total stockholders'
equity
|
|
3,528,445
|
|
|
3,607,250
|
|
Total liabilities
and stockholders' equity
|
|
$
|
6,182,358
|
|
|
$
|
7,073,352
|
|
|
|
|
|
|
|
|
|
|
ECHOSTAR
CORPORATION
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,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
Services and other
revenue
|
|
$
|
432,739
|
|
|
$
|
426,532
|
|
|
$
|
1,294,355
|
|
|
$
|
1,251,932
|
|
Equipment
revenue
|
|
71,921
|
|
|
46,970
|
|
|
192,721
|
|
|
146,702
|
|
Total
revenue
|
|
504,660
|
|
|
473,502
|
|
|
1,487,076
|
|
|
1,398,634
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Cost of sales -
services and other (exclusive of depreciation and
amortization)
|
|
138,179
|
|
|
146,577
|
|
|
410,515
|
|
|
432,848
|
|
Cost of sales -
equipment (exclusive of depreciation and amortization)
|
|
62,328
|
|
|
37,079
|
|
|
161,982
|
|
|
115,529
|
|
Selling, general and
administrative expenses
|
|
112,986
|
|
|
115,358
|
|
|
341,143
|
|
|
354,437
|
|
Research and
development expenses
|
|
7,974
|
|
|
7,676
|
|
|
22,960
|
|
|
21,378
|
|
Depreciation and
amortization
|
|
120,596
|
|
|
129,822
|
|
|
368,864
|
|
|
392,077
|
|
Impairment of
long-lived assets
|
|
—
|
|
|
—
|
|
|
245
|
|
|
—
|
|
Total costs and
expenses
|
|
442,063
|
|
|
436,512
|
|
|
1,305,709
|
|
|
1,316,269
|
|
Operating income
(loss)
|
|
62,597
|
|
|
36,990
|
|
|
181,367
|
|
|
82,365
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Interest income,
net
|
|
5,725
|
|
|
7,364
|
|
|
16,914
|
|
|
33,707
|
|
Interest expense, net
of amounts capitalized
|
|
(16,313)
|
|
|
(37,967)
|
|
|
(79,848)
|
|
|
(112,458)
|
|
Gains (losses) on
investments, net
|
|
3,748
|
|
|
14,998
|
|
|
112,981
|
|
|
(37,764)
|
|
Equity in earnings
(losses) of unconsolidated affiliates, net
|
|
74
|
|
|
(2,134)
|
|
|
(2,596)
|
|
|
(5,866)
|
|
Foreign currency
transaction gains (losses), net
|
|
(6,641)
|
|
|
6,681
|
|
|
(10,045)
|
|
|
(2,603)
|
|
Other, net
|
|
775
|
|
|
291
|
|
|
(12,922)
|
|
|
(379)
|
|
Total other income
(expense), net
|
|
(12,632)
|
|
|
(10,767)
|
|
|
24,484
|
|
|
(125,363)
|
|
Income (loss) before
income taxes
|
|
49,965
|
|
|
26,223
|
|
|
205,851
|
|
|
(42,998)
|
|
Income tax benefit
(provision), net
|
|
(19,748)
|
|
|
(2,950)
|
|
|
(63,047)
|
|
|
(6,309)
|
|
Net income
(loss)
|
|
30,217
|
|
|
23,273
|
|
|
142,804
|
|
|
(49,307)
|
|
Less: Net loss
(income) attributable to non-controlling interests
|
|
3,192
|
|
|
2,167
|
|
|
6,419
|
|
|
9,040
|
|
Net income (loss)
attributable to EchoStar Corporation common stock
|
|
$
|
33,409
|
|
|
$
|
25,440
|
|
|
$
|
149,223
|
|
|
$
|
(40,267)
|
|
|
|
|
|
|
|
|
|
|
Earnings (losses)
per share - Class A and B common stock:
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings (losses) per share
|
|
$
|
0.38
|
|
|
$
|
0.26
|
|
|
$
|
1.64
|
|
|
$
|
(0.41)
|
|
ECHOSTAR
CORPORATION
Consolidated
Statements of Cash Flows
(Amounts in
thousands)
|
|
|
|
For the nine
months ended
September 30,
|
|
|
2021
|
|
2020
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
(loss)
|
|
$
|
142,804
|
|
|
$
|
(49,307)
|
|
Adjustments to
reconcile net income (loss) to cash flows provided by (used for)
operating activities:
|
|
|
|
|
Depreciation and
amortization
|
|
368,864
|
|
|
392,077
|
|
Impairment of
long-lived assets
|
|
245
|
|
|
—
|
|
Losses (gains) on
investments, net
|
|
(112,981)
|
|
|
37,764
|
|
Equity in losses
(earnings) of unconsolidated affiliates, net
|
|
2,596
|
|
|
5,866
|
|
Foreign currency
transaction losses (gains), net
|
|
10,045
|
|
|
2,603
|
|
Deferred tax provision
(benefit), net
|
|
45,950
|
|
|
4,474
|
|
Stock-based
compensation
|
|
5,913
|
|
|
6,887
|
|
Amortization of debt
issuance costs
|
|
2,192
|
|
|
3,212
|
|
Other, net
|
|
16,691
|
|
|
(9,145)
|
|
Changes in assets
and liabilities, net:
|
|
|
|
|
Trade accounts
receivable and contract assets, net
|
|
(20,894)
|
|
|
(9,157)
|
|
Other current assets,
net
|
|
(7,841)
|
|
|
(21,090)
|
|
Trade accounts
payable
|
|
(15,386)
|
|
|
(17,824)
|
|
Contract
liabilities
|
|
30,066
|
|
|
(11,438)
|
|
Accrued expenses and
other current liabilities
|
|
(103,457)
|
|
|
29,155
|
|
Non-current assets and
non-current liabilities, net
|
|
63,055
|
|
|
1,325
|
|
Net cash provided
by (used for) operating activities
|
|
427,862
|
|
|
365,402
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
Purchases of
marketable investment securities
|
|
(1,452,982)
|
|
|
(2,234,671)
|
|
Sales and maturities
of marketable investment securities
|
|
2,099,815
|
|
|
1,231,790
|
|
Expenditures for
property and equipment
|
|
(352,003)
|
|
|
(295,041)
|
|
Expenditures for
externally marketed software
|
|
(25,634)
|
|
|
(27,824)
|
|
Purchase of other
investments
|
|
(50,000)
|
|
|
(5,500)
|
|
Sales of other
investments
|
|
10,951
|
|
|
—
|
|
Net cash provided
by (used for) investing activities
|
|
230,147
|
|
|
(1,331,246)
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Repurchase and
maturity of the 2021 Senior Unsecured Notes
|
|
(901,818)
|
|
|
—
|
|
Payment of finance
lease obligations
|
|
(578)
|
|
|
(606)
|
|
Payment of in-orbit
incentive obligations
|
|
(1,800)
|
|
|
(1,268)
|
|
Proceeds from
Class A common stock options exercised
|
|
—
|
|
|
983
|
|
Proceeds from Class A
common stock issued under the Employee Stock Purchase
Plan
|
|
7,288
|
|
|
8,066
|
|
Treasury share
repurchase
|
|
(229,383)
|
|
|
(5,893)
|
|
Contribution by
non-controlling interest holder
|
|
9,880
|
|
|
14,268
|
|
Other, net
|
|
(966)
|
|
|
998
|
|
Net cash provided
by (used for) financing activities
|
|
(1,117,377)
|
|
|
16,548
|
|
|
|
|
|
|
Effect of exchange
rates on cash and cash equivalents
|
|
(3,114)
|
|
|
(8,348)
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
(462,482)
|
|
|
(957,644)
|
|
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
|
|
$
|
434,330
|
|
|
$
|
564,245
|
|
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SOURCE EchoStar Corporation