ENGLEWOOD, Colo., May 5, 2022
/PRNewswire/ -- EchoStar Corporation (NASDAQ: SATS) today announced
its financial results for the three months ended March 31,
2022.
Three Months Ended March 31, 2022 Financial
Highlights:
- Consolidated revenue of $501.5
million.
- Net income of $88.9 million,
consolidated net income attributable to EchoStar common stock of
$91.4 million, and basic and diluted
earnings per share of common stock of $1.07 and $1.06,
respectively.
- Consolidated Adjusted EBITDA of $165.9
million (see discussion and the reconciliation of GAAP to
this non-GAAP measure below).
"The EchoStar team turned in a solid performance in the first
quarter of this year, continuing a consistent track record of
fiscal responsibility," said Hamid
Akhavan, CEO and President of EchoStar. "As we take
stock of our strengths and begin to chart a new course for growth,
I could not ask for a more talented, technologically astute
organization to capture the great opportunities presented by the
rapid changes in our industry."
Three Months Ended March 31, 2022 - Additional
Information:
- Consolidated revenue increased 3.9% or $19.0 million year over year primarily driven by
higher equipment sales of $30.5
million to our domestic and international enterprise
customers, partially offset by lower service revenues of
$11.5 million primarily due to lower
broadband consumer customers.
- Adjusted EBITDA decreased 10.7% or $19.9
million year over year.
-
- Hughes segment Adjusted EBITDA decreased $17.7 million year over year. The decrease was
driven primarily by lower gross margin due to a change in revenue
mix as well as a non-recurring decrease in regulatory fees of
$4.5 million and bad debt recoveries
that occurred in the first quarter of 2021.
- ESS segment Adjusted EBITDA increased $0.8 million year over year.
- Corporate and Other segment Adjusted EBITDA decreased
$3.0 million year over year. The
decrease was primarily due to lower earnings of unconsolidated
affiliates, net.
- Net income increased $11.4
million year over year. The increase was primarily due to
lower net interest expense of $20.2
million and favorable gains on foreign exchange of
$10.5 million. These items were
partially offset by higher income tax expense of $10.6 million, lower operating income of 8.4
million, and an unfavorable change in equity earnings in
unconsolidated affiliates, net, of $3.1
million.
- Hughes broadband subscribers totaled approximately 1,406,000,
declining 56,000 from December 31,
2021. The decrease primarily reflects a balancing of
capacity utilization with subscriber levels in areas of high
bandwidth demand. In Latin
America, subscriber levels were also impacted by adverse
economic conditions, more selective customer screening, and
capacity allocation to community WiFi and enterprise
opportunities.
- For the three months ended March 31,
2022, approximately 64% of Hughes segment revenue was
attributable to our consumer customers with approximately 36%
attributable to our enterprise customers.
- Cash, cash equivalents and current marketable investment
securities were $1.5 billion as of
March 31, 2022.
- During the three months ended March 31,
2022, we purchased 1,462,094 shares of our Class A common
stock in open market trades.
- The Jupiter 3 / EchoStar XXIV satellite is expected to be
launched in the first quarter of 2023.
Set forth below is a table highlighting certain of EchoStar's
segment results for the three months ended March 31, 2022 and
2021 (amounts in thousands) (all US GAAP amounts reference results
from operations):
|
|
For the three months
ended
March 31,
|
|
|
2022
|
|
2021
|
|
|
|
|
|
Revenue
|
|
|
|
|
Hughes
|
|
$
494,106
|
|
$
475,859
|
EchoStar Satellite Services
|
|
4,474
|
|
4,089
|
Corporate and Other
|
|
2,954
|
|
2,634
|
Total revenue
|
|
$
501,534
|
|
$
482,582
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
Hughes
|
|
$
184,287
|
|
$
201,937
|
EchoStar Satellite Services
|
|
2,691
|
|
1,919
|
Corporate & Other:
|
|
|
|
|
Corporate overhead, operating
and other
|
|
(21,191)
|
|
(21,468)
|
Equity in earnings (losses) of
unconsolidated affiliates, net
|
|
102
|
|
3,353
|
Total Corporate &
Other
|
|
(21,089)
|
|
(18,115)
|
Total Adjusted
EBITDA
|
|
$
165,889
|
|
$
185,741
|
|
|
|
|
|
Net income
(loss)
|
|
$
88,945
|
|
$
77,572
|
Expenditures for
property and equipment
|
|
$
112,138
|
|
$
179,235
|
Reconciliation of GAAP
to Non-GAAP Measurement (amounts in thousands):
|
|
|
|
For the three months ended
March 31,
|
|
|
2022
|
|
2021
|
|
|
|
|
|
Net income
(loss)
|
|
$
88,945
|
|
$
77,572
|
Interest income, net
|
|
(6,422)
|
|
(5,949)
|
Interest expense, net of amounts capitalized
|
|
14,973
|
|
34,667
|
Income tax provision (benefit), net
|
|
32,782
|
|
22,147
|
Depreciation and amortization
|
|
120,436
|
|
129,286
|
Net
loss (income) attributable to non-controlling interests
|
|
2,488
|
|
947
|
EBITDA
|
|
253,202
|
|
258,670
|
(Gains) losses on investments,
net
|
|
(80,686)
|
|
(78,600)
|
Impairment of long-lived
assets
|
|
—
|
|
230
|
License fee dispute - India,
net of non-controlling interests
|
|
(233)
|
|
(210)
|
Loss on Debt
Repurchase
|
|
—
|
|
1,582
|
Foreign currency transaction
(gains) losses, net
|
|
(6,394)
|
|
4,069
|
Adjusted
EBITDA
|
|
$
165,889
|
|
$
185,741
|
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 March 31, 2022 and 2021 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 March 31, 2022 filed today with the Securities
and Exchange Commission.
EchoStar will host a conference call to discuss its earnings on
Thursday, May 5, 2022 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 6271168.
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, 2021 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
|
|
|
March 31,
2022
|
|
December 31,
2021
|
Assets
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
889,199
|
|
$
535,894
|
Marketable investment securities
|
|
634,593
|
|
1,010,496
|
Trade accounts receivable and contract assets, net
|
|
199,306
|
|
182,063
|
Other current assets, net
|
|
209,905
|
|
198,444
|
Total current assets
|
|
1,933,003
|
|
1,926,897
|
Non-current assets:
|
|
|
|
|
Property and equipment, net
|
|
2,376,143
|
|
2,338,285
|
Operating lease right-of-use assets
|
|
150,980
|
|
149,198
|
Goodwill
|
|
535,394
|
|
511,086
|
Regulatory authorizations, net
|
|
470,329
|
|
469,766
|
Other intangible assets, net
|
|
17,792
|
|
13,984
|
Other investments, net
|
|
350,318
|
|
297,747
|
Other non-current assets, net
|
|
335,794
|
|
338,241
|
Total non-current
assets
|
|
4,236,750
|
|
4,118,307
|
Total assets
|
|
$
6,169,753
|
|
$
6,045,204
|
|
|
|
|
|
Liabilities and Stockholders'
Equity
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Trade accounts payable
|
|
$
109,390
|
|
$
109,338
|
Contract liabilities
|
|
138,201
|
|
141,343
|
Accrued expenses and other current liabilities
|
|
176,083
|
|
209,442
|
Total current
liabilities
|
|
423,674
|
|
460,123
|
Non-current liabilities:
|
|
|
|
|
Long-term debt, net
|
|
1,496,185
|
|
1,495,994
|
Deferred tax liabilities, net
|
|
430,808
|
|
403,684
|
Operating lease liabilities
|
|
136,723
|
|
134,897
|
Other non-current liabilities
|
|
124,450
|
|
136,426
|
Total non-current
liabilities
|
|
2,188,166
|
|
2,171,001
|
Total
liabilities
|
|
2,611,840
|
|
2,631,124
|
|
|
|
|
|
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 March 31,
2022 and December 31, 2021
|
|
—
|
|
—
|
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,
58,441,449 shares issued and 37,646,656 shares
outstanding at
March 31, 2022 and 58,059,622 shares issued and
38,726,923 shares
outstanding at December 31, 2021
|
|
58
|
|
58
|
Class B convertible common
stock, $0.001 par value, 800,000,000
shares
authorized, 47,687,039 shares issued and outstanding at both
March 31,
2022 and December 31, 2021
|
|
48
|
|
48
|
Class C convertible common
stock, $0.001 par value, 800,000,000
shares
authorized, none issued and outstanding at both March 31,
2022 and
December 31, 2021
|
|
—
|
|
—
|
Class D common stock,
$0.001 par value, 800,000,000 shares
authorized, none
issued and outstanding at both March 31, 2022 and
December 31,
2021
|
|
—
|
|
—
|
Additional paid-in capital
|
|
3,343,056
|
|
3,345,878
|
Accumulated other comprehensive income (loss)
|
|
(173,280)
|
|
(212,102)
|
Accumulated earnings (losses)
|
|
747,899
|
|
656,466
|
Treasury shares, at cost
|
|
(471,582)
|
|
(436,521)
|
Total EchoStar Corporation
stockholders' equity
|
|
3,446,199
|
|
3,353,827
|
Non-controlling interests
|
|
111,714
|
|
60,253
|
Total stockholders'
equity
|
|
3,557,913
|
|
3,414,080
|
Total liabilities and
stockholders' equity
|
|
$
6,169,753
|
|
$
6,045,204
|
ECHOSTAR
CORPORATION Consolidated Statements of
Operations (Amounts in thousands, except per share
amounts)
|
|
|
|
For the three months ended
March 31,
|
|
|
2022
|
|
2021
|
|
|
|
|
|
Revenue:
|
|
|
|
|
Services and other revenue
|
|
$
418,811
|
|
$
430,337
|
Equipment revenue
|
|
82,723
|
|
52,245
|
Total revenue
|
|
501,534
|
|
482,582
|
Costs and expenses:
|
|
|
|
|
Cost of sales - services and other (exclusive of depreciation
and amortization)
|
|
141,129
|
|
132,789
|
Cost of sales - equipment (exclusive of depreciation and
amortization)
|
|
69,114
|
|
45,151
|
Selling, general and administrative expenses
|
|
118,170
|
|
114,119
|
Research and development expenses
|
|
7,617
|
|
7,545
|
Depreciation and amortization
|
|
120,436
|
|
129,286
|
Impairment of long-lived assets
|
|
—
|
|
230
|
Total costs and
expenses
|
|
456,466
|
|
429,120
|
Operating income
(loss)
|
|
45,068
|
|
53,462
|
Other income (expense):
|
|
|
|
|
Interest income, net
|
|
6,422
|
|
5,949
|
Interest expense, net of amounts capitalized
|
|
(14,973)
|
|
(34,667)
|
Gains (losses) on investments, net
|
|
80,686
|
|
78,600
|
Equity in earnings (losses) of unconsolidated affiliates,
net
|
|
(1,714)
|
|
1,374
|
Foreign currency transaction gains (losses), net
|
|
6,394
|
|
(4,069)
|
Other, net
|
|
(156)
|
|
(930)
|
Total other income (expense),
net
|
|
76,659
|
|
46,257
|
Income (loss) before
income taxes
|
|
121,727
|
|
99,719
|
Income tax benefit (provision), net
|
|
(32,782)
|
|
(22,147)
|
Net income
(loss)
|
|
88,945
|
|
77,572
|
Less: Net loss (income) attributable to non-controlling
interests
|
|
2,488
|
|
947
|
Net income (loss)
attributable to EchoStar Corporation common stock
|
|
$
91,433
|
|
$
78,519
|
|
|
|
|
|
Earnings (losses) per share - Class A and B
common stock:
|
|
|
|
|
Basic
|
|
$
1.07
|
|
$
0.84
|
Diluted
|
|
$
1.06
|
|
$
0.84
|
ECHOSTAR
CORPORATION Consolidated Statements of Cash
Flows (Amounts in thousands)
|
|
|
|
For the three months ended
March 31,
|
|
|
2022
|
|
2021
|
|
|
|
|
|
Cash flows from operating
activities:
|
|
|
|
|
Net
income (loss)
|
|
$
88,945
|
|
$
77,572
|
Adjustments to reconcile net
income (loss) to cash flows provided
by (used for) operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
120,436
|
|
129,286
|
Impairment of long-lived
assets
|
|
—
|
|
230
|
Losses (gains) on investments,
net
|
|
(80,686)
|
|
(78,600)
|
Equity in losses (earnings) of
unconsolidated affiliates, net
|
|
1,714
|
|
(1,374)
|
Foreign currency transaction
losses (gains), net
|
|
(6,394)
|
|
4,069
|
Deferred tax provision
(benefit), net
|
|
25,538
|
|
18,370
|
Stock-based
compensation
|
|
1,860
|
|
2,011
|
Amortization of debt issuance
costs
|
|
191
|
|
1,118
|
Other, net
|
|
(2,528)
|
|
11,551
|
Changes in assets and
liabilities, net:
|
|
|
|
|
Trade accounts
receivable and contract assets, net
|
|
(8,480)
|
|
(6,090)
|
Other current assets,
net
|
|
(3,340)
|
|
(1,736)
|
Trade accounts
payable
|
|
7,046
|
|
(18,375)
|
Contract
liabilities
|
|
(3,142)
|
|
7,938
|
Accrued expenses and
other current liabilities
|
|
(27,033)
|
|
(27,447)
|
Non-current assets and
non-current liabilities, net
|
|
(9,774)
|
|
(1,636)
|
Net cash provided by (used for) operating
activities
|
|
104,353
|
|
116,887
|
|
|
|
|
|
Cash flows from investing
activities:
|
|
|
|
|
Purchases of marketable investment securities
|
|
(88,578)
|
|
(389,071)
|
Sales and maturities of marketable investment
securities
|
|
492,812
|
|
1,361,632
|
Expenditures for property and equipment
|
|
(112,138)
|
|
(179,235)
|
Expenditures for externally marketed software
|
|
(5,093)
|
|
(7,846)
|
India JV formation
|
|
(7,892)
|
|
—
|
Purchase of other investments
|
|
—
|
|
(50,000)
|
Sales of other investments
|
|
—
|
|
1,500
|
Net cash provided by (used for) investing
activities
|
|
279,111
|
|
736,980
|
|
|
|
|
|
Cash flows from financing
activities:
|
|
|
|
|
Repurchase and maturity of the 2021 Senior Unsecured
Notes
|
|
—
|
|
(62,588)
|
Payment of finance lease obligations
|
|
(85)
|
|
(329)
|
Payment of in-orbit incentive obligations
|
|
(1,444)
|
|
(1,104)
|
Proceeds from Class A common stock issued under the Employee
Stock
Purchase Plan
|
|
2,367
|
|
2,486
|
Treasury share repurchase
|
|
(33,307)
|
|
(107,862)
|
Contribution by non-controlling interest holder
|
|
—
|
|
5,400
|
Other, net
|
|
—
|
|
(292)
|
Net cash provided by (used for) financing
activities
|
|
(32,469)
|
|
(164,289)
|
|
|
|
|
|
Effect of exchange
rates on cash and cash equivalents
|
|
3,480
|
|
(1,808)
|
Net increase (decrease)
in cash and cash equivalents
|
|
354,475
|
|
687,770
|
Cash and cash
equivalents, including restricted amounts, beginning of
period
|
|
536,874
|
|
896,812
|
Cash and cash
equivalents, including restricted amounts, end of period
|
|
$
891,349
|
|
$
1,584,582
|
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SOURCE EchoStar Corporation