ENGLEWOOD, Colo., Aug. 7, 2018 /PRNewswire/ -- EchoStar
Corporation (NASDAQ: SATS) today announced its financial results
for the three and six months ended June 30,
2018.
Three Months Ended June 30,
2018 Financial Highlights:
- Consolidated revenues of $526.0
million.
- Consolidated net income from continuing operations of
$77.7 million, consolidated net
income attributable to EchoStar common stock of $77.2 million, and diluted earnings per share of
$0.80. Included in these
amounts are net gains on investments of $65.4 million. Excluding these net gains, diluted
earnings per share would have been $0.12.
- Consolidated EBITDA of $285.8
million, including net gains on investments of $65.4 million. Excluding these net gains,
EBITDA would have been $220.4 million
(see discussion and the reconciliation of GAAP to this non-GAAP
measure below).
Six Months Ended June 30, 2018
Financial Highlights:
- Consolidated revenues of $1,027.7
million.
- Consolidated net income from continuing operations of
$56.5 million, consolidated net
income attributable to EchoStar common stock of $55.7 million, and diluted earnings per share of
$0.57. Included in these amounts are
net gains on investments of $28.7
million. Excluding these net gains, diluted earnings per
share would have been $0.28.
- Consolidated EBITDA of $451.5
million, including net gains on investments of $28.7 million. Excluding these net gains,
EBITDA would have been $422.7 million
(see discussion and the reconciliation of GAAP to this non-GAAP
measure below).
Additional Highlights:
- Approximately 1,298,000 Hughes broadband subscribers as of
June 30, 2018.
- Cash, cash equivalents and current marketable investment
securities of $3.4 billion as of
June 30, 2018.
Set forth below is a table highlighting certain of EchoStar's
segment results for the three and six months ended June 30, 2018 and 2017:
|
|
For the three
months
ended June 30,
|
|
For the six
months
ended June 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
(Dollars in
thousands)
|
Revenue
|
|
|
|
|
|
|
|
|
Hughes
|
|
$
|
426,306
|
|
|
$
|
362,762
|
|
|
$
|
827,124
|
|
|
$
|
692,082
|
|
EchoStar Satellite
Services
|
|
95,425
|
|
|
98,366
|
|
|
192,178
|
|
|
198,692
|
|
Corporate &
Other
|
|
4,226
|
|
|
3,948
|
|
|
8,447
|
|
|
7,453
|
|
Total
|
|
$
|
525,957
|
|
|
$
|
465,076
|
|
|
$
|
1,027,749
|
|
|
$
|
898,227
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
|
|
|
|
|
|
Hughes
|
|
$
|
152,134
|
|
|
$
|
110,024
|
|
|
$
|
288,847
|
|
|
$
|
210,876
|
|
EchoStar Satellite
Services
|
|
82,483
|
|
|
80,465
|
|
|
166,633
|
|
|
163,528
|
|
Corporate &
Other:
|
|
|
|
|
|
|
|
|
Corporate overhead,
operating and other
|
|
(11,695)
|
|
|
(10,662)
|
|
|
(29,565)
|
|
|
(29,614)
|
|
Equity in earnings
(losses) of unconsolidated
affiliates, net
|
|
(2,058)
|
|
|
4,831
|
|
|
(3,067)
|
|
|
11,239
|
|
Gains (losses) on
investments, net
|
|
64,891
|
|
|
205
|
|
|
28,622
|
|
|
12,148
|
|
Sub-total
|
|
51,137
|
|
|
(5,626)
|
|
|
(4,010)
|
|
|
(6,227)
|
|
Total
|
|
$
|
285,754
|
|
|
$
|
184,863
|
|
|
$
|
451,470
|
|
|
$
|
368,177
|
|
|
|
|
|
|
|
|
|
|
Net income from
continuing operations
|
|
$
|
77,684
|
|
|
$
|
6,591
|
|
|
$
|
56,513
|
|
|
$
|
37,366
|
|
Net income from
discontinued operations
|
|
—
|
|
|
531
|
|
|
—
|
|
|
7,108
|
|
Net
income
|
|
$
|
77,684
|
|
|
$
|
7,122
|
|
|
$
|
56,513
|
|
|
$
|
44,474
|
|
|
|
|
|
|
|
|
|
|
Expenditures for
property and equipment from
continuing operations
|
|
$
|
119,592
|
|
|
$
|
128,064
|
|
|
$
|
170,574
|
|
|
$
|
218,014
|
|
The following table reconciles GAAP to non-GAAP
measurements.
|
|
For the three
months
ended June 30,
|
|
For the six
months
ended June 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
(Dollars in thousands)
|
Net income
(loss)
|
|
$
|
77,684
|
|
|
$
|
7,122
|
|
|
$
|
56,513
|
|
|
$
|
44,474
|
|
|
|
|
|
|
|
|
|
|
Interest income and
expense, net
|
|
42,281
|
|
|
45,417
|
|
|
89,397
|
|
|
82,522
|
|
Income tax provision,
net
|
|
17,802
|
|
|
3,003
|
|
|
12,399
|
|
|
2,991
|
|
Depreciation and
amortization
|
|
148,449
|
|
|
130,034
|
|
|
294,003
|
|
|
245,117
|
|
Net income from
discontinued operations
|
|
—
|
|
|
(531)
|
|
|
—
|
|
|
(7,108)
|
|
Net (income) loss
attributable to noncontrolling
interests
|
|
(462)
|
|
|
(182)
|
|
|
(842)
|
|
|
181
|
|
EBITDA
|
|
285,754
|
|
|
184,863
|
|
|
451,470
|
|
|
368,177
|
|
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." EBITDA is not
determined in accordance with US GAAP. EBITDA is 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 this non-GAAP measure as a measure
of our operating efficiency and overall operating financial
performance for benchmarking against our peers and competitors.
Management believes that this non-GAAP measure provides meaningful
supplemental information regarding the underlying operating
performance of our business and is appropriate to enhance an
overall understanding of our financial performance. 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 June 30, 2018 and 2017
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 June 30,
2018 filed today with the Securities and Exchange
Commission.
EchoStar will host its earnings conference call on Tuesday, August 7, 2018 at 11:00 a.m. Eastern Time. The call-in numbers are
(877) 815-1625 (toll-free) and (716) 247-5178 (international),
Conference ID # 8252368.
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, 2017 and Quarterly
Report on Form 10-Q for the period ended June 30, 2018, 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
|
|
|
As of
|
|
|
June 30,
2018
|
|
December 31,
2017
|
Assets
|
|
(Unaudited)
|
|
(Audited)
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,793,053
|
|
|
$
|
2,431,456
|
|
Marketable investment
securities, at fair value
|
|
1,640,776
|
|
|
814,161
|
|
Trade accounts
receivable and contract assets, net (Note 3)
|
|
186,962
|
|
|
196,840
|
|
Trade accounts
receivable - DISH Network, net
|
|
26,126
|
|
|
43,295
|
|
Inventory
|
|
81,388
|
|
|
83,595
|
|
Prepaids and
deposits
|
|
58,911
|
|
|
54,533
|
|
Other current
assets
|
|
15,889
|
|
|
91,671
|
|
Total current
assets
|
|
3,803,105
|
|
|
3,715,551
|
|
Noncurrent
assets:
|
|
|
|
|
Property and
equipment, net
|
|
3,396,616
|
|
|
3,465,471
|
|
Regulatory
authorizations, net
|
|
528,346
|
|
|
536,936
|
|
Goodwill
|
|
504,173
|
|
|
504,173
|
|
Other intangible
assets, net of accumulated amortization of $309,690 and $302,345,
respectively
|
|
51,593
|
|
|
58,955
|
|
Investments in
unconsolidated entities
|
|
156,022
|
|
|
161,427
|
|
Other receivables -
DISH Network
|
|
93,893
|
|
|
92,687
|
|
Other noncurrent
assets, net
|
|
258,237
|
|
|
214,814
|
|
Total noncurrent
assets
|
|
4,988,880
|
|
|
5,034,463
|
|
Total
assets
|
|
$
|
8,791,985
|
|
|
$
|
8,750,014
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Trade accounts
payable
|
|
$
|
100,235
|
|
|
$
|
108,406
|
|
Trade accounts
payable - DISH Network
|
|
1,393
|
|
|
4,753
|
|
Current portion of
long-term debt and capital lease obligations
|
|
1,028,119
|
|
|
40,631
|
|
Contract
liabilities
|
|
72,776
|
|
|
65,959
|
|
Accrued
interest
|
|
45,857
|
|
|
47,616
|
|
Accrued
compensation
|
|
42,612
|
|
|
47,756
|
|
Accrued
taxes
|
|
15,719
|
|
|
16,122
|
|
Accrued expenses and
other
|
|
68,195
|
|
|
82,647
|
|
Total current
liabilities
|
|
1,374,906
|
|
|
413,890
|
|
Noncurrent
liabilities:
|
|
|
|
|
Long-term debt and
capital lease obligations, net
|
|
2,592,174
|
|
|
3,594,213
|
|
Deferred tax
liabilities, net
|
|
456,401
|
|
|
436,023
|
|
Other noncurrent
liabilities
|
|
124,252
|
|
|
128,503
|
|
Total noncurrent
liabilities
|
|
3,172,827
|
|
|
4,158,739
|
|
Total
liabilities
|
|
4,547,733
|
|
|
4,572,629
|
|
Commitments and
contingencies (Note 15)
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Preferred stock,
$.001 par value, 20,000,000 shares authorized, none issued and
outstanding at each of June 30, 2018 and
December 31, 2017
|
|
—
|
|
|
—
|
|
Common stock, $.001
par value, 4,000,000,000 shares authorized:
|
|
|
|
|
Class A common
stock, $.001 par value, 1,600,000,000 shares authorized, 54,006,419
shares issued and 48,474,101
shares outstanding at June 30, 2018 and 53,663,859
shares issued and 48,131,541 shares outstanding at
December 31,
2017
|
|
54
|
|
|
54
|
|
Class B
convertible common stock, $.001 par value, 800,000,000 shares
authorized, 47,687,039 shares issued and
outstanding at each of June 30, 2018 and
December 31, 2017
|
|
48
|
|
|
48
|
|
Class C
convertible common stock, $.001 par value, 800,000,000 shares
authorized, none issued and outstanding at each
of June 30, 2018 and December 31, 2017
|
|
—
|
|
|
—
|
|
Class D common
stock, $.001 par value, 800,000,000 shares authorized, none issued
and outstanding at each of June 30,
2018 and December 31, 2017
|
|
—
|
|
|
—
|
|
Additional paid-in
capital
|
|
3,689,180
|
|
|
3,669,461
|
|
Accumulated other
comprehensive loss
|
|
(154,011)
|
|
|
(130,154)
|
|
Accumulated
earnings
|
|
792,278
|
|
|
721,316
|
|
Treasury stock, at
cost
|
|
(98,162)
|
|
|
(98,162)
|
|
Total EchoStar
Corporation stockholders' equity
|
|
4,229,387
|
|
|
4,162,563
|
|
Other noncontrolling
interests
|
|
14,865
|
|
|
14,822
|
|
Total stockholders'
equity
|
|
4,244,252
|
|
|
4,177,385
|
|
Total liabilities and
stockholders' equity
|
|
$
|
8,791,985
|
|
|
$
|
8,750,014
|
|
|
|
|
|
|
|
|
|
|
|
ECHOSTAR
CORPORATION
|
Consolidated
Statements of Operations
|
(In
thousands)
|
|
|
|
For the three
months
ended June 30,
|
|
For the six
months
ended June 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenue:
|
|
|
|
|
|
|
|
|
Services and other
revenue - DISH Network
|
|
$
|
100,171
|
|
|
$
|
113,734
|
|
|
$
|
203,976
|
|
|
$
|
228,689
|
|
Services and other
revenue - other
|
|
375,445
|
|
|
285,053
|
|
|
730,485
|
|
|
554,844
|
|
Equipment
revenue
|
|
50,341
|
|
|
66,289
|
|
|
93,288
|
|
|
114,694
|
|
Total
revenue
|
|
525,957
|
|
|
465,076
|
|
|
1,027,749
|
|
|
898,227
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Cost of sales -
services and other (exclusive of depreciation and
amortization)
|
|
151,157
|
|
|
138,227
|
|
|
299,902
|
|
|
273,415
|
|
Cost of sales -
equipment (exclusive of depreciation and amortization)
|
|
41,865
|
|
|
53,662
|
|
|
80,936
|
|
|
94,195
|
|
Selling, general and
administrative expenses
|
|
103,074
|
|
|
89,826
|
|
|
206,349
|
|
|
172,817
|
|
Research and
development expenses
|
|
6,647
|
|
|
7,437
|
|
|
13,784
|
|
|
15,142
|
|
Depreciation and
amortization
|
|
148,449
|
|
|
130,034
|
|
|
294,003
|
|
|
245,117
|
|
Total costs and
expenses
|
|
451,192
|
|
|
419,186
|
|
|
894,974
|
|
|
800,686
|
|
Operating
income
|
|
74,765
|
|
|
45,890
|
|
|
132,775
|
|
|
97,541
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Interest
income
|
|
19,253
|
|
|
10,039
|
|
|
34,888
|
|
|
18,330
|
|
Interest expense, net
of amounts capitalized
|
|
(61,534)
|
|
|
(55,456)
|
|
|
(124,285)
|
|
|
(100,852)
|
|
Gains (losses) on
investments, net
|
|
65,396
|
|
|
1,837
|
|
|
28,733
|
|
|
10,574
|
|
Equity in earnings
(losses) of unconsolidated affiliates, net
|
|
(2,058)
|
|
|
4,831
|
|
|
(3,067)
|
|
|
11,239
|
|
Other, net
|
|
(336)
|
|
|
2,453
|
|
|
(132)
|
|
|
3,525
|
|
Total other income
(expense), net
|
|
20,721
|
|
|
(36,296)
|
|
|
(63,863)
|
|
|
(57,184)
|
|
Income from
continuing operations before income taxes
|
|
95,486
|
|
|
9,594
|
|
|
68,912
|
|
|
40,357
|
|
Income tax provision,
net
|
|
(17,802)
|
|
|
(3,003)
|
|
|
(12,399)
|
|
|
(2,991)
|
|
Net income from
continuing operations
|
|
77,684
|
|
|
6,591
|
|
|
56,513
|
|
|
37,366
|
|
Net income from
discontinued operations
|
|
—
|
|
|
531
|
|
|
—
|
|
|
7,108
|
|
Net income
|
|
77,684
|
|
|
7,122
|
|
|
56,513
|
|
|
44,474
|
|
Less: Net loss
attributable to noncontrolling interest in HSS
Tracking Stock (Note 1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(655)
|
|
Less: Net income
attributable to other noncontrolling interests
|
|
462
|
|
|
182
|
|
|
842
|
|
|
474
|
|
Net income
attributable to EchoStar Corporation
|
|
77,222
|
|
|
6,940
|
|
|
55,671
|
|
|
44,655
|
|
Less: Net loss
attributable to Hughes Retail Preferred Tracking
Stock (Note 1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,209)
|
|
Net income
attributable to EchoStar Corporation common
stock
|
|
$
|
77,222
|
|
|
$
|
6,940
|
|
|
$
|
55,671
|
|
|
$
|
45,864
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
- Class A and B common stock:
|
|
|
|
|
|
|
|
|
Basic earnings from
continuing operations per share
|
|
$
|
0.80
|
|
|
$
|
0.07
|
|
|
$
|
0.58
|
|
|
$
|
0.41
|
|
Total basic earnings
per share
|
|
$
|
0.80
|
|
|
$
|
0.07
|
|
|
$
|
0.58
|
|
|
$
|
0.48
|
|
Diluted earnings from
continuing operations per share
|
|
$
|
0.80
|
|
|
$
|
0.07
|
|
|
$
|
0.57
|
|
|
$
|
0.40
|
|
Total diluted
earnings per share
|
|
$
|
0.80
|
|
|
$
|
0.07
|
|
|
$
|
0.57
|
|
|
$
|
0.48
|
|
ECHOSTAR
CORPORATION
|
Consolidated
Statements of Cash Flows
|
(In
thousands)
|
|
|
|
For the six months
ended June 30,
|
|
|
2018
|
|
2017
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
|
$
|
56,513
|
|
|
$
|
44,474
|
|
Adjustments to
reconcile net income to net cash flows from operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
294,003
|
|
|
256,776
|
|
Equity in (earnings)
losses of unconsolidated affiliates, net
|
|
3,067
|
|
|
(10,080)
|
|
Amortization of debt
issuance costs
|
|
3,905
|
|
|
3,617
|
|
(Gains) losses and
impairments on investments, net
|
|
(28,674)
|
|
|
(10,574)
|
|
Stock-based
compensation
|
|
5,110
|
|
|
3,908
|
|
Deferred tax
provision
|
|
10,231
|
|
|
673
|
|
Dividend received
from unconsolidated entity
|
|
5,000
|
|
|
7,500
|
|
Proceeds from sale of
trading securities
|
|
—
|
|
|
8,922
|
|
Changes in current
assets and current liabilities, net:
|
|
|
|
|
Trade accounts
receivable, net
|
|
(3,061)
|
|
|
4,496
|
|
Trade accounts
receivable - DISH Network
|
|
17,262
|
|
|
184,077
|
|
Inventory
|
|
238
|
|
|
(24,330)
|
|
Other current
assets
|
|
(5,430)
|
|
|
(6,193)
|
|
Trade accounts
payable
|
|
2,364
|
|
|
(65,179)
|
|
Trade accounts
payable - DISH Network
|
|
(3,360)
|
|
|
(3,061)
|
|
Accrued expenses and
other
|
|
7,749
|
|
|
(2,505)
|
|
Changes in noncurrent
assets and noncurrent liabilities, net
|
|
(17,200)
|
|
|
(11,763)
|
|
Other, net
|
|
5,822
|
|
|
2,121
|
|
Net cash flows from
operating activities
|
|
353,539
|
|
|
382,879
|
|
Cash flows from
investing activities:
|
|
|
|
|
Purchases of
marketable investment securities
|
|
(1,632,930)
|
|
|
(46,533)
|
|
Sales and maturities
of marketable investment securities
|
|
841,638
|
|
|
291,082
|
|
Expenditures for
property and equipment
|
|
(248,098)
|
|
|
(230,530)
|
|
Refunds and other
receipts related to property and equipment
|
|
77,524
|
|
|
—
|
|
Sale of investment in
unconsolidated entity
|
|
—
|
|
|
17,781
|
|
Expenditures for
externally marketed software
|
|
(15,000)
|
|
|
(17,119)
|
|
Net cash flows from
investing activities
|
|
(976,866)
|
|
|
14,681
|
|
Cash flows from
financing activities:
|
|
|
|
|
Repayment of debt and
capital lease obligations
|
|
(18,417)
|
|
|
(17,718)
|
|
Net proceeds from
Class A common stock options exercised
|
|
4,064
|
|
|
31,992
|
|
Net proceeds from
Class A common stock issued under the Employee Stock Purchase
Plan
|
|
4,886
|
|
|
4,540
|
|
Cash exchanged for
Tracking Stock (Note 1)
|
|
—
|
|
|
(651)
|
|
Repayment of in-orbit
incentive obligations
|
|
(3,272)
|
|
|
(3,194)
|
|
Other, net
|
|
(401)
|
|
|
482
|
|
Net cash flows from
financing activities
|
|
(13,140)
|
|
|
15,451
|
|
Effect of exchange
rates on cash and cash equivalents
|
|
(1,941)
|
|
|
967
|
|
Net increase
(decrease) in cash and cash equivalents, including restricted
amounts
|
|
(638,408)
|
|
|
413,978
|
|
Cash and cash
equivalents, including restricted amounts, beginning of
period
|
|
2,432,249
|
|
|
2,571,866
|
|
Cash and cash
equivalents, including restricted amounts, end of period
|
|
$
|
1,793,841
|
|
|
$
|
2,985,844
|
|
|
|
|
|
|
Supplemental
disclosure of cash flow information:
|
|
|
|
|
Cash paid for
interest, net of amounts capitalized
|
|
$
|
122,017
|
|
|
$
|
96,463
|
|
Cash paid for income
taxes
|
|
$
|
2,574
|
|
|
$
|
9,369
|
|
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SOURCE EchoStar Corporation