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MarketScreener Homepage  >  Equities  >  Nasdaq  >  EchoStar Corporation    SATS

ECHOSTAR CORPORATION

(SATS)
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EchoStar : Announces Financial Results for Three and Six Months Ended June 30, 2020

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08/06/2020 | 07:01am EDT

ENGLEWOOD, Colo., Aug. 6, 2020 /PRNewswire/ -- EchoStar Corporation (NASDAQ: SATS) today announced its financial results for the three and six months ended June 30, 2020.

Three Months Ended June 30, 2020 Financial Highlights:

  • Consolidated revenues of $459.5 million.
  • Net loss from continuing operations of $14.8 million, consolidated net loss attributable to EchoStar common stock of $11.4 million, and diluted loss per share of $(0.12).
  • Consolidated Adjusted EBITDA of $160.9 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).

Six Months Ended June 30, 2020 Financial Highlights:

  • Consolidated revenues of $925.1 million.
  • Net loss from continuing operations of $72.6 million, consolidated net loss attributable to EchoStar common stock of $65.7 million, and diluted loss per share of $(0.67).
  • Consolidated Adjusted EBITDA of $309.5 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).

"The second quarter of 2020 continued to demonstrate that we are in extraordinary times, and despite the ongoing challenges of COVID-19, I am proud of our second quarter performance," commented Michael Dugan, CEO and President of EchoStar.  "Whether our current environment is a 'new normal' or a temporary state, EchoStar remains focused on delivering the connectivity our customers need today and into the future.  Operationally, we increased our consumer subscriber base by approximately 26,000, driven by our international markets, bringing our broadband subscriber total to approximately 1.542 million.  We continue to monitor economic conditions and are prudently managing the business.  We are also excited to be joining the consortium selected to acquire OneWeb out of bankruptcy and to continue as a trusted technology and distribution partner for OneWeb as it emerges from bankruptcy"

Three Months Ended June 30, 2020 - Additional Information:

  • Consolidated revenue was down $0.9 million year over year including an estimated negative foreign exchange impact of $12 million.
  • Adjusted EBITDA increased 19% or $26.2 million year over year.
    • Hughes segment Adjusted EBITDA increased $31.1 million year over year. The increase was driven by higher margin primarily associated with our consumer service as well as lower sales, marketing, and other operating expenses.
    • ESS segment Adjusted EBITDA increased by $0.1 million year over year.
    • Corporate and Other segment Adjusted EBITDA decreased by $5.0 million. The decrease was primarily driven by the loss of the revenue and EBITDA associated with the transfer of certain real estate assets to DISH Network Corporation as part of the BSS transaction, which closed in September of 2019, that were not treated as discontinued operations. The segment also had equity losses in unconsolidated affiliates during the quarter of $4.7 million compared to equity losses of $2.9 million in the same period a year ago.
  • Net loss from continuing operations was $14.8 million, a decrease of loss by $15.2 million from last year. The lower loss was primarily due to higher operating income of $39.4 million and lower net interest expense of $3 million. This was partially offset by lower gains on investments, net, of $18.9 million, higher income tax provision, net, of $6.2 million, and higher equity losses of unconsolidated affiliates, net, of $1.6 million.
  • Hughes broadband subscribers are approximately 1,542,000 as of June 30, 2020 including approximately 321,000 subscribers in Latin America. In response to the continued challenges associated with the COVID-19 pandemic, we extended the FCC's Keep America Connected Pledge through June 30, 2020, and our subscriber numbers and revenue exclude those whose service would have ordinarily been terminated in the absence of the Pledge.
  • For the three months ended June 30,2020, approximately 71% of Hughes segment revenue was attributable to our consumer customers with approximately 29% attributable to our enterprise customers.
  • Cash, cash equivalents and marketable investment securities were $2.5 billion as of June 30, 2020.

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



For the three months
ended June 30,


For the six months
ended June 30,



2020


2019


2020


2019










Revenue









Hughes


$

453,172



$

451,847



$

911,654



$

897,184


EchoStar Satellite Services


4,179



3,742



8,831



7,775


Corporate and Other


2,115



4,842



4,647



9,854


Total revenue


$

459,466



$

460,431



$

925,132



$

914,813











Adjusted EBITDA









Hughes


$

186,277



$

155,212



$

348,496



$

316,853


EchoStar Satellite Services


1,543



1,486



3,573



3,215


Corporate & Other:









Corporate overhead, operating and other


(22,252)



(19,070)



(42,375)



(37,788)


Equity in earnings (losses) of unconsolidated affiliates, net


(4,668)



(2,898)



(156)



(7,725)


Total Corporate & Other


(26,920)



(21,968)



(42,531)



(45,513)


Total Adjusted EBITDA


$

160,900



$

134,730



$

309,538



$

274,555











Expenditures for property and equipment


$

92,300



$

107,342



$

196,904



$

219,196


 

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



For the three months
ended June 30,


For the six months
ended June 30,



2020


2019


2020


2019










Net income (loss)


$

(14,843)



$

(5,060)



(72,580)



9,948


Interest income, net


(10,760)



(23,213)



(26,343)



(47,642)


Interest expense, net of amounts capitalized


38,258



53,749



74,491



106,948


Income tax provision (benefit), net


10,851



4,692



3,359



7,590


Depreciation and amortization


129,887



120,266



262,255



239,244


Net loss (income) from discontinued operations




(24,968)





(44,215)


Net loss (income) attributable to non-controlling interests


3,431



(632)



6,873



(1,438)


EBITDA


156,824



124,834



248,055



270,435


(Gains) losses on investments, net


6,090



(12,855)



52,762



(19,791)


Litigation Expense




24,504





24,504


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


(454)





(563)




Foreign currency transaction (gains) losses, net


(1,560)



(1,753)



9,284



(593)


Adjusted EBITDA


$

160,900



$

134,730



$

309,538



$

274,555



















 

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 June 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 June 30, 2020 filed today with the Securities and Exchange Commission.

EchoStar will host a conference call to discuss its earnings on Thursday, August 6, 2020 at 11:00 a.m. Eastern Time. The call-in numbers are (877) 815-1625 (toll-free) and (716) 247-5178 (international), Conference ID 3563538.

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 June 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.

 

ECHOSTAR CORPORATION

Condensed Consolidated Balance Sheets

(Amounts in thousands, except per share amounts)




As of




June 30, 2020


December 31,
2019


Assets






Current assets:






Cash and cash equivalents


$

1,948,464



$

1,519,431



Marketable investment securities


509,980



940,623



Trade accounts receivable and contract assets, net


183,379



196,629



Other current assets, net


185,699



179,531



Total current assets


2,827,522



2,836,214



Non-current assets:






Property and equipment, net


2,399,711



2,528,738



Operating lease right-of-use assets


125,996



114,042



Goodwill


509,054



506,953



Regulatory authorizations, net


474,463



478,598



Other intangible assets, net


22,667



29,507



Other investments, net


275,873



325,405



Other non-current assets, net


340,904



334,841



Total non-current assets


4,148,668



4,318,084



Total assets


$

6,976,190



$

7,154,298









Liabilities and Stockholders' Equity






Current liabilities:






Trade accounts payable


$

112,748



$

124,080



Current portion of long-term debt, net


896,386





Contract liabilities


89,831



101,060



Accrued expenses and other current liabilities


262,944



270,879



Total current liabilities


1,361,909



496,019



Non-current liabilities:






Long-term debt, net


1,494,902



2,389,168



Deferred tax liabilities, net


349,973



351,692



Operating lease liabilities


110,899



96,941



Other non-current liabilities


74,239



74,925



Total non-current liabilities


2,030,013



2,912,726



Total liabilities


3,391,922



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 June 30, 2020 and December 31, 2019





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, 56,988,365 shares issued and 50,306,445 shares outstanding at June 30, 2020 and 56,592,251 shares issued and 50,107,330 shares outstanding at December 31, 2019


57



57


Class B convertible common stock, $0.001 par value, 800,000,000 shares authorized, 47,687,039 shares issued and outstanding at both June 30, 2020 and December 31, 2019


48



48


Class C convertible common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at both June 30, 2020 and December 31, 2019





Class D common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at both June 30, 2020 and December 31, 2019





Additional paid-in capital


3,311,861



3,290,483


Accumulated other comprehensive income (loss)


(206,810)



(122,138)


Accumulated earnings (losses)


558,034



632,809


Treasury stock, at cost


(137,347)



(131,454)


Total EchoStar Corporation stockholders' equity


3,525,843



3,669,805


Non-controlling interests


58,425



75,748


Total stockholders' equity


3,584,268



3,745,553


Total liabilities and stockholders' equity


$

6,976,190



$

7,154,298


















 

 

ECHOSTAR CORPORATION

Condensed Consolidated Statements of Operations

(Amounts in thousands, except per share amounts)




For the three months
ended June 30,


For the six months
ended June 30,



2020


2019


2020


2019

Revenue:









Services and other revenue


$

417,043



$

402,786



$

825,400



$

805,454


Equipment revenue


42,423



57,645



99,732



109,359


Total revenue


459,466



460,431



925,132



914,813


Costs and expenses:









Cost of sales - services and other (exclusive of depreciation and amortization)


141,019



142,680



286,271



286,027


Cost of sales - equipment (exclusive of depreciation and amortization)


32,542



46,549



78,450



91,556


Selling, general and administrative expenses


113,798



149,209



239,079



261,323


Research and development expenses


7,448



6,388



13,702



13,276


Depreciation and amortization


129,887



120,266



262,255



239,244


Total costs and expenses


424,694



465,092



879,757



891,426


Operating income (loss)


34,772



(4,661)



45,375



23,387


Other income (expense):









Interest income, net


10,760



23,213



26,343



47,642


Interest expense, net of amounts capitalized


(38,258)



(53,749)



(74,491)



(106,948)


Gains (losses) on investments, net


(6,090)



12,855



(52,762)



19,791


Equity in earnings (losses) of unconsolidated affiliates, net


(6,345)



(4,754)



(3,732)



(11,107)


Foreign currency transaction gains (losses), net


1,560



1,753



(9,284)



593


Other, net


(391)



7



(670)



(35)


Total other income (expense), net


(38,764)



(20,675)



(114,596)



(50,064)


Income (loss) from continuing operations before income taxes


(3,992)



(25,336)



(69,221)



(26,677)


Income tax benefit (provision), net


(10,851)



(4,692)



(3,359)



(7,590)


Net income (loss) from continuing operations


(14,843)



(30,028)



(72,580)



(34,267)


Net income (loss) from discontinued operations




24,968





44,215


Net income (loss)


(14,843)



(5,060)



(72,580)



9,948


Less: Net loss (income) attributable to non-controlling interests


3,431



(632)



6,873



(1,438)


Net income (loss) attributable to EchoStar Corporation common stock


$

(11,412)



$

(5,692)



$

(65,707)



8,510











Earnings (losses) per share - Class A and B common stock:









Basic and diluted earnings (losses) from continuing operations per share


$

(0.12)



$

(0.32)



$

(0.67)



$

(0.37)


Total basic and diluted earnings (losses) per share


$

(0.12)



$

(0.06)



$

(0.67)



$

0.09


 

 

ECHOSTAR CORPORATION

Condensed Consolidated Statements of Cash Flows

(Amounts in thousands, except per share amounts)




For the six months ended June 30,



2020


2019

Cash flows from operating activities:





Net income (loss)


$

(72,580)



$

9,948


Adjustments to reconcile net income (loss) to net cash flows from operating activities:





Depreciation and amortization


262,255



309,631


Losses (gains) on investments, net


52,762



(19,791)


Equity in losses (earnings) of unconsolidated affiliates, net


3,732



11,107


Foreign currency transaction losses (gains), net


9,284



(593)


Deferred tax provision (benefit), net


(2,452)



7,014


Stock-based compensation


4,509



4,833


Amortization of debt issuance costs


2,120



3,872


Other, net


(7,295)



2,742


Changes in assets and liabilities, net:





Trade accounts receivable and contract assets, net


(5,262)



167


Other current assets, net


(11,642)



(129)


Trade accounts payable


(11,701)



(225)


Contract liabilities


(11,229)



34,024


Accrued expenses and other current liabilities


27,050



16,800


Non-current assets and non-current liabilities, net


5,729



1,374


Net cash flows from operating activities


245,280



380,774







Cash flows from investing activities:





Purchases of marketable investment securities


(555,367)



(504,264)


Sales and maturities of marketable investment securities


977,532



1,621,481


Expenditures for property and equipment


(196,904)



(219,440)


Expenditures for externally marketed software


(19,237)



(15,329)


Net cash flows from investing activities


200,524



882,448







Cash flows from financing activities:





Repurchase and maturity of the 2019 Senior Secured Notes




(920,923)


Payment of finance lease obligations


(421)



(20,008)


Payment of in-orbit incentive obligations


(1,021)



(3,778)


Net proceeds from Class A common stock options exercised


436



61,503


Net proceeds from Class A common stock issued under the Employee Stock Purchase Plan


5,300



5,074


Treasury share purchase


(5,893)




Contribution by non-controlling interest holder


10,000




Purchase of non-controlling interest




(7,313)


Other, net


674



(267)


Net cash flows from financing activities


9,075



(885,712)







Effect of exchange rates on cash and cash equivalents


(19,232)



121


Net increase (decrease) in cash and cash equivalents


435,647



377,631


Cash and cash equivalents, including restricted amounts, beginning of period


1,521,889



929,495


Cash and cash equivalents, including restricted amounts, end of period


$

1,957,536



$

1,307,126


 

Cision
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SOURCE EchoStar Corporation

© PRNewswire 2020

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