ENGLEWOOD, Colo., Nov. 8, 2017 /PRNewswire/ -- EchoStar
Corporation (NASDAQ: SATS) today announced its financial results
for the three and nine months ending September 30, 2017.
Three Months Ending September 30,
2017 Financial Highlights:
- Consolidated revenues of $481
million.
- Consolidated net income from continuing operations of
$35.9 million, consolidated net
income attributable to EchoStar common stock of $34.7 million and diluted earnings per share of
$0.36.
- Consolidated EBITDA of $220
million (see reconciliation of this non-GAAP measure
below).
Nine Months Ended September 30,
2017 Financial Highlights:
- Consolidated revenue of $1.38
billion.
- Consolidated net income from continuing operations of
$73.2 million, consolidated net
income attributable to EchoStar common stock of $80.5 million and diluted earnings per share of
$0.83.
- Consolidated EBITDA of $588
million (see reconciliation of this non-GAAP measure
below).
Additional Highlights:
- Approximately 1,140,000 Hughes broadband subscribers as of
September 30, 2017.
- Cash, cash equivalents and current marketable investment
securities of $3.28 billion as of
September 30, 2017
Starting with the quarter that ended March 31, 2017, we changed the way we present our
segments. Previously, our business segments reflected an allocation
of the costs of our corporate functions. Under our new
presentation, these costs are no longer allocated to the operating
segments and are now reported as part of the Corporate and Other
segment (previously "All Other and Eliminations").
In addition, results of our EchoStar Technology segment, which
was transferred to DISH Network Corporation in the Share Exchange
transaction, are included in Discontinued Operations.
Set forth below is a table highlighting certain of EchoStar's
segment results for the three and nine months ended September 30, 2017 and 2016:
|
|
For the Three
Months
Ended September 30,
|
|
For the Nine
Months
Ended September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
(Dollars in
thousands)
|
Revenue
|
|
|
|
|
|
|
|
|
Hughes
|
|
$
|
380,061
|
|
|
$
|
355,876
|
|
|
$
|
1,072,143
|
|
|
$
|
1,021,451
|
|
EchoStar Satellite
Services
|
|
97,093
|
|
|
101,480
|
|
|
295,785
|
|
|
305,919
|
|
Corporate &
Other
|
|
4,079
|
|
|
2,690
|
|
|
11,532
|
|
|
7,308
|
|
Total
|
|
$
|
481,233
|
|
|
$
|
460,046
|
|
|
$
|
1,379,460
|
|
|
$
|
1,334,678
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
|
|
|
|
|
|
Hughes
|
|
$
|
131,817
|
|
|
$
|
125,522
|
|
|
$
|
342,693
|
|
|
$
|
353,505
|
|
EchoStar Satellite
Services
|
|
78,345
|
|
|
84,257
|
|
|
241,873
|
|
|
257,181
|
|
Corporate &
Other
|
|
9,699
|
|
|
(20,477)
|
|
|
3,472
|
|
|
(45,506)
|
|
Total
|
|
$
|
219,861
|
|
|
$
|
189,302
|
|
|
$
|
588,038
|
|
|
$
|
565,180
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to EchoStar
common stock
|
|
$
|
34,669
|
|
|
$
|
36,644
|
|
|
$
|
80,533
|
|
|
$
|
143,451
|
|
Diluted earnings
per share (in dollars)
|
|
$
|
0.36
|
|
|
$
|
0.39
|
|
|
$
|
0.83
|
|
|
$
|
1.52
|
|
Net income from
continuing operations
|
|
$
|
35,855
|
|
|
$
|
32,911
|
|
|
$
|
73,221
|
|
|
$
|
112,549
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures from continuing operations
|
|
$
|
192,131
|
|
|
$
|
139,574
|
|
|
$
|
410,145
|
|
|
$
|
477,818
|
|
The following table reconciles total consolidated Net income to
EBITDA.
|
|
For the Three
Months
Ended September 30,
|
|
For the Nine
Months
Ended September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
(Dollars in thousands)
|
Net income
|
|
$
|
35,201
|
|
|
$
|
37,410
|
|
|
$
|
79,675
|
|
|
$
|
141,762
|
|
|
|
|
|
|
|
|
|
|
Interest income and
expense, net
|
|
43,634
|
|
|
31,057
|
|
|
126,156
|
|
|
66,650
|
|
Income tax
provision
|
|
6,082
|
|
|
17,394
|
|
|
9,073
|
|
|
61,258
|
|
Depreciation and
amortization
|
|
134,822
|
|
|
108,549
|
|
|
379,939
|
|
|
324,743
|
|
Net (income) loss
from discontinued operations
|
|
654
|
|
|
(4,499)
|
|
|
(6,454)
|
|
|
(29,213)
|
|
Net income
attributable to noncontrolling
interests
|
|
(532)
|
|
|
(609)
|
|
|
(351)
|
|
|
(20)
|
|
EBITDA
|
|
$
|
219,861
|
|
|
$
|
189,302
|
|
|
$
|
588,038
|
|
|
$
|
565,180
|
|
Note on Use of Non-GAAP Financial Measures
EBITDA is defined as "Net income" excluding "Interest expense,
net of amounts capitalized," "Interest income", "Income tax
provision" and "Depreciation and amortization." EBITDA is not
a measure determined in accordance with US GAAP. This non-GAAP
measure is reconciled to net income in the table above. EBITDA
should not be considered in isolation or as a substitute for
operating income, net income or any other measure determined in
accordance with GAAP. EBITDA is used by our management as a measure
of operating efficiency and overall financial performance for
benchmarking against our peers and competitors. Management believes
EBITDA provides meaningful supplemental information regarding the
underlying operating performance of our business. Management also
believes that EBITDA is useful to investors because it is
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, 2017 and
2016 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, 2017 filed today with the Securities and Exchange
Commission.
EchoStar will host its earnings conference call on Wednesday, November 8, 2017 at 11:00 a.m. Eastern Time. The call-in numbers are
(877) 815-1625 (toll-free) and (716) 247-5178 (international),
Conference ID # 5279369.
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, 2016 and Quarterly
Report on Form 10-Q for the period ended
September 30, 2017, each 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
(Dollars in
thousands, except per-share amounts)
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
September 30,
2017
|
|
December 31,
2016
|
|
Assets
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
2,798,359
|
|
$
|
2,570,365
|
|
Marketable investment
securities, at fair value
|
|
485,035
|
|
522,516
|
|
Trade accounts
receivable, net of allowance for doubtful accounts of $13,211 and
$12,956, respectively
|
|
192,387
|
|
182,527
|
|
Trade accounts
receivable - DISH Network, net of allowance for doubtful accounts
of zero
|
|
52,512
|
|
19,417
|
|
Inventory
|
|
91,232
|
|
62,620
|
|
Prepaids and
deposits
|
|
53,536
|
|
43,456
|
|
Other current
assets
|
|
12,746
|
|
10,862
|
|
Current assets of
discontinued operations
|
|
145
|
|
311,524
|
|
Total current
assets
|
|
3,685,952
|
|
3,723,287
|
|
Noncurrent
Assets:
|
|
|
|
|
|
Restricted cash and
marketable investment securities
|
|
13,736
|
|
12,926
|
|
Property and
equipment, net of accumulated depreciation of $2,551,678 and
$2,598,492, respectively
|
|
3,530,459
|
|
3,398,195
|
|
Regulatory
authorizations, net
|
|
545,557
|
|
544,633
|
|
Goodwill
|
|
504,173
|
|
504,173
|
|
Other intangible
assets, net
|
|
62,635
|
|
80,734
|
|
Investments in
unconsolidated entities
|
|
165,290
|
|
171,016
|
|
Other receivable -
DISH Network
|
|
92,133
|
|
90,586
|
|
Other noncurrent
assets, net
|
|
207,221
|
|
166,385
|
|
Noncurrent assets of
discontinued operations
|
|
—
|
|
316,924
|
|
Total noncurrent
assets
|
|
5,121,204
|
|
5,285,572
|
|
Total
assets
|
|
$
|
8,807,156
|
|
$
|
9,008,859
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
Trade accounts
payable
|
|
$
|
120,436
|
|
$
|
170,297
|
|
Trade accounts
payable - DISH Network
|
|
6,556
|
|
1,072
|
|
Current portion of
long-term debt and capital lease obligations
|
|
38,407
|
|
32,984
|
|
Deferred revenue and
prepayments
|
|
56,285
|
|
59,989
|
|
Accrued
interest
|
|
57,837
|
|
46,487
|
|
Accrued
compensation
|
|
37,096
|
|
53,454
|
|
Accrued expenses and
other
|
|
110,872
|
|
95,726
|
|
Current liabilities
of discontinued operations
|
|
542
|
|
71,429
|
|
Total current
liabilities
|
|
428,031
|
|
531,438
|
|
Noncurrent
Liabilities:
|
|
|
|
|
|
Long-term debt and
capital lease obligations, net of unamortized debt issuance
costs
|
|
3,605,715
|
|
3,622,463
|
|
Deferred tax
liabilities, net
|
|
745,965
|
|
746,667
|
|
Other noncurrent
liabilities
|
|
131,626
|
|
90,785
|
|
Noncurrent
liabilities of discontinued operations
|
|
—
|
|
10,701
|
|
Total noncurrent
liabilities
|
|
4,483,306
|
|
4,470,616
|
|
Total
liabilities
|
|
4,911,337
|
|
5,002,054
|
|
Commitments and
Contingencies (Note 14)
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
|
|
Preferred stock,
$.001 par value, 20,000,000 shares authorized:
|
|
|
|
|
|
Hughes Retail
Preferred Tracking Stock, $.001 par value, zero authorized, issued
and outstanding at September 30, 2017 and 13,000,000
shares authorized and 6,290,499
issued and outstanding at December 31, 2016
|
|
—
|
|
6
|
|
Common stock, $.001
par value, 4,000,000,000 shares authorized:
|
|
|
|
|
|
Class A common
stock, $.001 par value, 1,600,000,000 shares authorized, 53,564,095
shares issued and 48,031,777 shares outstanding at
September 30, 2017 and 52,243,465
shares issued and 46,711,147 shares outstanding at
December 31, 2016
|
|
54
|
|
52
|
|
Class B common
stock, $.001 par value, 800,000,000 shares authorized, 47,687,039
shares issued and outstanding at each of September
30, 2017 and December 31,
2016
|
|
48
|
|
48
|
|
Class C common
stock, $.001 par value, 800,000,000 shares authorized, none issued
and outstanding at each of September 30, 2017 and
December 31, 2016
|
|
—
|
|
—
|
|
Class D common
stock, $.001 par value, 800,000,000 shares authorized, none issued
and outstanding at each of September 30, 2017 and
December 31, 2016
|
|
—
|
|
—
|
|
Additional paid-in
capital
|
|
3,660,696
|
|
3,828,677
|
|
Accumulated other
comprehensive loss
|
|
(88,732)
|
|
(124,803)
|
|
Accumulated
earnings
|
|
408,079
|
|
314,247
|
|
Treasury stock, at
cost
|
|
(98,162)
|
|
(98,162)
|
|
Total EchoStar
stockholders' equity
|
|
3,881,983
|
|
3,920,065
|
|
Noncontrolling
interest in HSS Tracking Stock
|
|
—
|
|
73,910
|
|
Other noncontrolling
interests
|
|
13,836
|
|
12,830
|
|
Total stockholders'
equity
|
|
3,895,819
|
|
4,006,805
|
|
Total liabilities and
stockholders' equity
|
|
$
|
8,807,156
|
|
$
|
9,008,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ECHOSTAR
CORPORATION
Condensed
Consolidated Statements of Operations
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months
Ended September 30,
|
|
For the Nine
Months
Ended September 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenue:
|
|
|
|
|
|
|
|
|
Services and other
revenue - DISH Network
|
|
$
|
111,135
|
|
$
|
115,127
|
|
$
|
339,824
|
|
$
|
347,440
|
Services and other
revenue - other
|
|
310,973
|
|
276,280
|
|
865,817
|
|
820,149
|
Equipment revenue -
DISH Network
|
|
126
|
|
2,138
|
|
175
|
|
7,008
|
Equipment revenue -
other
|
|
58,999
|
|
66,501
|
|
173,644
|
|
160,081
|
Total
revenue
|
|
481,233
|
|
460,046
|
|
1,379,460
|
|
1,334,678
|
Costs and
Expenses:
|
|
|
|
|
|
|
|
|
Cost of sales -
services and other (exclusive of depreciation and
amortization)
|
|
138,641
|
|
131,594
|
|
404,448
|
|
384,942
|
Cost of sales -
equipment (exclusive of depreciation and amortization)
|
|
52,051
|
|
53,599
|
|
153,854
|
|
143,252
|
Selling, general and
administrative expenses
|
|
91,003
|
|
80,672
|
|
263,820
|
|
240,454
|
Research and
development expenses
|
|
8,302
|
|
9,030
|
|
23,444
|
|
23,524
|
Depreciation and
amortization
|
|
134,822
|
|
108,549
|
|
379,939
|
|
324,743
|
Total costs and
expenses
|
|
424,819
|
|
383,444
|
|
1,225,505
|
|
1,116,915
|
Operating
income
|
|
56,414
|
|
76,602
|
|
153,955
|
|
217,763
|
|
|
|
|
|
|
|
|
|
Other Income
(Expense):
|
|
|
|
|
|
|
|
|
Interest
income
|
|
12,012
|
|
6,259
|
|
30,342
|
|
13,726
|
Interest expense, net
of amounts capitalized
|
|
(55,646)
|
|
(37,316)
|
|
(156,498)
|
|
(80,376)
|
Gains on investments,
net
|
|
20,090
|
|
230
|
|
33,962
|
|
8,179
|
Other-than-temporary
impairment loss on available-for-sale securities
|
|
—
|
|
—
|
|
(3,298)
|
|
—
|
Equity in earnings of
unconsolidated affiliates, net
|
|
4,381
|
|
4,166
|
|
15,620
|
|
8,984
|
Other, net
|
|
4,686
|
|
364
|
|
8,211
|
|
5,531
|
Total other expense,
net
|
|
(14,477)
|
|
(26,297)
|
|
(71,661)
|
|
(43,956)
|
Income from
continuing operations before income taxes
|
|
41,937
|
|
50,305
|
|
82,294
|
|
173,807
|
Income tax
provision
|
|
(6,082)
|
|
(17,394)
|
|
(9,073)
|
|
(61,258)
|
Net income from
continuing operations
|
|
35,855
|
|
32,911
|
|
73,221
|
|
112,549
|
Net income (loss)
from discontinued operations
|
|
(654)
|
|
4,499
|
|
6,454
|
|
29,213
|
Net income
|
|
35,201
|
|
37,410
|
|
79,675
|
|
141,762
|
Less: Net income
(loss) attributable to noncontrolling interest in HSS Tracking
Stock
|
|
—
|
|
85
|
|
(655)
|
|
(926)
|
Less: Net income
attributable to other noncontrolling interests
|
|
532
|
|
524
|
|
1,006
|
|
946
|
Net income
attributable to EchoStar
|
|
34,669
|
|
36,801
|
|
79,324
|
|
141,742
|
Less: Net income
(loss) attributable to Hughes Retail Preferred Tracking
Stock
|
|
—
|
|
157
|
|
(1,209)
|
|
(1,709)
|
Net income
attributable to EchoStar common stock
|
|
$
|
34,669
|
|
$
|
36,644
|
|
$
|
80,533
|
|
$
|
143,451
|
|
|
|
|
|
|
|
|
|
Amounts
attributable to EchoStar common stock:
|
|
|
|
|
|
|
|
|
Net income from
continuing operations
|
|
$
|
35,323
|
|
$
|
32,145
|
|
$
|
74,079
|
|
$
|
114,238
|
Net income (loss)
from discontinued operations
|
|
(654)
|
|
4,499
|
|
6,454
|
|
29,213
|
Net income
attributable to EchoStar common stock
|
|
$
|
34,669
|
|
$
|
36,644
|
|
$
|
80,533
|
|
$
|
143,451
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding - Class A and B common
stock:
|
|
|
|
|
|
|
|
|
Basic
|
|
95,656
|
|
93,898
|
|
95,316
|
|
93,661
|
Diluted
|
|
96,890
|
|
94,401
|
|
96,626
|
|
94,189
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
per share - Class A and B common stock:
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
0.37
|
|
$
|
0.34
|
|
$
|
0.78
|
|
$
|
1.22
|
Discontinued
operations
|
|
(0.01)
|
|
0.05
|
|
0.06
|
|
0.31
|
Total basic earnings
per share
|
|
$
|
0.36
|
|
$
|
0.39
|
|
$
|
0.84
|
|
$
|
1.53
|
Diluted:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
0.36
|
|
$
|
0.34
|
|
$
|
0.77
|
|
$
|
1.21
|
Discontinued
operations
|
|
—
|
|
0.05
|
|
0.06
|
|
0.31
|
Total diluted
earnings per share
|
|
$
|
0.36
|
|
$
|
0.39
|
|
$
|
0.83
|
|
$
|
1.52
|
ECHOSTAR
CORPORATION
Condensed
Consolidated Statements of Cash Flows
(In
thousands)
|
|
|
|
|
|
|
|
|
For the Nine
Months Ended September 30,
|
|
|
2017
|
|
2016
|
Cash Flows from
Operating Activities:
|
|
|
|
|
Net income
|
|
$
|
79,675
|
|
$
|
141,762
|
Adjustments to
reconcile net income to net cash flows from operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
391,598
|
|
370,872
|
Equity in earnings of
unconsolidated affiliates, net
|
|
(14,461)
|
|
(11,181)
|
Gain and impairment
on investments, net
|
|
(30,664)
|
|
(8,179)
|
Stock-based
compensation
|
|
7,169
|
|
11,953
|
Deferred tax
provision
|
|
7,924
|
|
71,422
|
Dividends received
from unconsolidated entities
|
|
15,000
|
|
15,000
|
Proceeds from sale of
trading securities
|
|
8,922
|
|
7,140
|
Changes in current
assets and current liabilities, net
|
|
144,677
|
|
(47,013)
|
Changes in noncurrent
assets and noncurrent liabilities, net
|
|
(23,474)
|
|
8,097
|
Other, net
|
|
5,570
|
|
14,836
|
Net cash flows from
operating activities
|
|
591,936
|
|
574,709
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
Purchases of
marketable investment securities
|
|
(319,912)
|
|
(883,288)
|
Sales and maturities
of marketable investment securities
|
|
376,648
|
|
643,865
|
Expenditures for
property and equipment
|
|
(422,661)
|
|
(533,669)
|
Refunds and other
receipts related to capital expenditures
|
|
—
|
|
24,087
|
Changes in restricted
cash and marketable investment securities
|
|
(810)
|
|
7,351
|
Investments in
unconsolidated entities
|
|
—
|
|
(1,636)
|
Sale of investment in
unconsolidated entity
|
|
17,781
|
|
—
|
Expenditures for
externally marketed software
|
|
(25,447)
|
|
(17,991)
|
Other, net
|
|
—
|
|
1,462
|
Net cash flows from
investing activities
|
|
(374,401)
|
|
(759,819)
|
Cash Flows from
Financing Activities:
|
|
|
|
|
Proceeds from
issuance of long-term debt
|
|
—
|
|
1,500,000
|
Payments of debt
issuance costs
|
|
(414)
|
|
(6,275)
|
Repayment of debt and
capital lease obligations
|
|
(26,394)
|
|
(30,615)
|
Net proceeds from
Class A common stock options exercised
|
|
33,156
|
|
4,679
|
Net proceeds from
Class A common stock issued under the Employee Stock Purchase
Plan
|
|
6,938
|
|
11,478
|
Cash exchanged for
Tracking Stock
|
|
(651)
|
|
—
|
Other, net
|
|
(3,968)
|
|
(3,373)
|
Net cash flows from
financing activities
|
|
8,667
|
|
1,475,894
|
Effect of exchange
rates on cash and cash equivalents
|
|
1,014
|
|
684
|
Net increase in cash
and cash equivalents
|
|
227,216
|
|
1,291,468
|
Cash and cash
equivalents, beginning of period
|
|
2,571,143
|
|
924,240
|
Cash and cash
equivalents, end of period
|
|
$
|
2,798,359
|
|
$
|
2,215,708
|
|
|
|
|
|
Supplemental
Disclosure of Cash Flow Information:
|
|
|
|
|
Cash paid for
interest (including capitalized interest)
|
|
$
|
183,451
|
|
$
|
97,044
|
Capitalized
interest
|
|
$
|
45,496
|
|
$
|
70,386
|
Cash paid for income
taxes
|
|
$
|
10,071
|
|
$
|
9,187
|
Employee benefits
paid in Class A common stock
|
|
$
|
11,200
|
|
$
|
11,126
|
Property and
equipment financed under capital lease obligations
|
|
$
|
8,423
|
|
$
|
7,172
|
Increase (decrease)
in capital expenditures included in accounts payable,
net
|
|
$
|
(3,494)
|
|
$
|
21,951
|
Capitalized in-orbit
incentive obligations
|
|
$
|
43,890
|
|
$
|
—
|
Noncash net assets
exchanged for Tracking Stock
|
|
$
|
299,425
|
|
$
|
—
|
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SOURCE EchoStar Corporation