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EchoStar Announces Financial Results for the Three Months Ended March 31, 2021

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ENGLEWOOD, Colo., May 6, 2021 /PRNewswire/ -- EchoStar Corporation (NASDAQ: SATS) today announced its financial results for the three months ended March 31, 2021.

EchoStar Corporation Logo. (PRNewsfoto/EchoStar Corporation)
EchoStar Corporation Logo. (PRNewsfoto/EchoStar Corporation)

Three Months Ended March 31, 2021 Financial Highlights:

  • Consolidated revenues of $482.6 million.

  • Net income of $77.6 million, consolidated net income attributable to EchoStar common stock of $78.5 million, and basic and diluted earnings per share of $0.84.

  • Consolidated Adjusted EBITDA of $185.7 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).

"I am pleased with the company's financial performance in the first quarter of 2021," commented Michael Dugan, CEO and President of EchoStar. "We grew revenue, net income, and Adjusted EBITDA over the same period last year by focusing on meeting our customers' needs for connectivity and prudently managing all areas of the business."

Three Months Ended March 31, 2021 - Additional Information:

  • Consolidated revenue increased 3.6% or $16.9 million year over year primarily driven by higher sales of broadband services to our consumer customers. This increase included an estimated negative foreign exchange impact of $5.9 million.

  • Adjusted EBITDA increased 25% or $37.1 million year over year.

  • Net income increased $135.3 million to $77.6 million. The increase was primarily due to higher operating income of $42.9 million and higher gains on investments, net, of $125.3 million, partially offset by higher income tax expense, net, of $29.6 million.

  • Total Hughes broadband subscribers are approximately 1,553,000 as of March 31, 2021. Subscribers in the US decreased by 25,000 to approximately 1,164,000. In Latin America, subscribers increased by 14,000 to approximately 389,000.

  • For the three months ended March 31, 2021, approximately 70% of Hughes segment revenue was attributable to our consumer customers with approximately 30% attributable to our enterprise customers.

  • Cash, cash equivalents and current marketable investment securities were $2.3 billion as of March 31, 2021.

  • For the three months ended March 31, 2021, we purchased 4,770,714 shares of our Class A common stock in open market trades.

  • For the three months ended March 31, 2021, we purchased $90.5 million of our 7.625% Sr. Unsecured Notes due June 2021 in open market trades.

Set forth below is a table highlighting certain of EchoStar's segment results for the three months ended March 31, 2021 and 2020 (amounts in thousands) (all US GAAP amounts reference results from operations):



For the three months
ended March 31,



2021


2020






Revenue





Hughes


$

475,859



$

458,482


EchoStar Satellite Services


4,089



4,652


Corporate and Other


2,634



2,532


Total revenue


$

482,582



$

465,666







Adjusted EBITDA





Hughes


$

201,937



$

162,219


EchoStar Satellite Services


1,919



2,030


Corporate & Other:





Corporate overhead, operating and other


(21,468)



(20,124)


Equity in earnings (losses) of unconsolidated affiliates, net


3,353



4,512


Total Corporate & Other


(18,115)



(15,612)


Total Adjusted EBITDA


$

185,741



$

148,637







Net income (loss)


$

77,572



$

(57,737)


Expenditures for property and equipment


$

179,235



$

104,604


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



For the three months
ended March 31,



2021


2020






Net income (loss)


$

77,572



$

(57,737)


Interest income, net


(5,949)



(15,583)


Interest expense, net of amounts capitalized


34,667



36,233


Income tax provision (benefit), net


22,147



(7,492)


Depreciation and amortization


129,286



132,368


Net loss (income) attributable to non-controlling interests


947



3,442


EBITDA


258,670



91,231


(Gains) losses on investments, net


(78,600)



46,672


Impairment of long-lived assets


230




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


(210)



(110)


Loss on Debt Repurchase


1,582




Foreign currency transaction (gains) losses, net


4,069



10,844


Adjusted EBITDA


$

185,741



$

148,637


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, 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 March 31, 2021 filed today with the Securities and Exchange Commission.

EchoStar will host a conference call to discuss its earnings on Thursday, May 6, 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 1976218.

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



March 31, 2021


December 31,
2020

Assets





Current assets:





Cash and cash equivalents


$

1,583,747



$

896,005


Marketable investment securities


735,418



1,638,271


Trade accounts receivable and contract assets, net


187,280



183,989


Other current assets, net


190,958



189,821


Total current assets


2,697,403



2,908,086


Non-current assets:





Property and equipment, net


2,420,917



2,390,313


Operating lease right-of-use assets


131,601



128,303


Goodwill


510,945



511,597


Regulatory authorizations, net


476,092



478,762


Other intangible assets, net


16,316



18,433


Other investments, net


347,615



284,937


Other non-current assets, net


350,920



352,921


Total non-current assets


4,254,406



4,165,266


Total assets


$

6,951,809



$

7,073,352







Liabilities and Stockholders' Equity





Current liabilities:





Trade accounts payable


$

106,500



$

122,366


Current portion of long-term debt, net


808,758



898,237


Contract liabilities


112,507



104,569


Accrued expenses and other current liabilities


304,018



299,999


Total current liabilities


1,331,783



1,425,171


Non-current liabilities:





Long-term debt, net


1,495,436



1,495,256


Deferred tax liabilities, net


378,271



359,896


Operating lease liabilities


118,569



114,886


Other non-current liabilities


69,885



70,893


Total non-current liabilities


2,062,161



2,040,931


Total liabilities


3,393,944



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 March 31, 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,
57,712,888 shares issued and 44,551,347 shares outstanding at March 31,
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 March 31, 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 March 31, 2021 and
December 31, 2020





Class D common stock, $0.001 par value, 800,000,000 shares authorized, none
issued and outstanding at both March 31, 2021 and December 31, 2020





Additional paid-in capital


3,333,047



3,321,426


Accumulated other comprehensive income (loss)


(215,476)



(187,876)


Accumulated earnings (losses)


662,110



583,591


Treasury shares, at cost


(285,681)



(174,912)


Total EchoStar Corporation stockholders' equity


3,494,106



3,542,334


Non-controlling interests


63,759



64,916


Total stockholders' equity


3,557,865



3,607,250


Total liabilities and stockholders' equity


$

6,951,809



$

7,073,352


ECHOSTAR CORPORATION

Consolidated Statements of Operations

(Amounts in thousands, except per share amounts)




For the three months ended
March 31,



2021


2020






Revenue:





Services and other revenue


$

430,337



$

408,357


Equipment revenue


52,245



57,309


Total revenue


482,582



465,666


Costs and expenses:





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


132,789



145,252


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


45,151



45,908


Selling, general and administrative expenses


114,119



125,281


Research and development expenses


7,545



6,254


Depreciation and amortization


129,286



132,368


Impairment of long-lived assets


230




Total costs and expenses


429,120



455,063


Operating income (loss)


53,462



10,603


Other income (expense):





Interest income, net


5,949



15,583


Interest expense, net of amounts capitalized


(34,667)



(36,233)


Gains (losses) on investments, net


78,600



(46,672)


Equity in earnings (losses) of unconsolidated affiliates, net


1,374



2,613


Foreign currency transaction gains (losses), net


(4,069)



(10,844)


Other, net


(930)



(279)


Total other income (expense), net


46,257



(75,832)


Income (loss) before income taxes


99,719



(65,229)


Income tax benefit (provision), net


(22,147)



7,492


Net income (loss)


77,572



(57,737)


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


947



3,442


Net income (loss) attributable to EchoStar Corporation common stock


$

78,519



$

(54,295)







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





Basic and diluted earnings (losses) per share


$

0.84



$

(0.56)


ECHOSTAR CORPORATION

Consolidated Statements of Cash Flows

(Amounts in thousands)




For the three months ended
March 31,



2021


2020






Cash flows from operating activities:





Net income (loss)


$

77,572



$

(57,737)


Adjustments to reconcile net income (loss) to cash flows provided by
(used for) operating activities:





Depreciation and amortization


129,286



132,368


Impairment of long-lived assets


230




Losses (gains) on investments, net


(78,600)



46,672


Equity in losses (earnings) of unconsolidated affiliates, net


(1,374)



(2,613)


Foreign currency transaction losses (gains), net


4,069



10,844


Deferred tax provision (benefit), net


18,370



(10,064)


Stock-based compensation


2,011



2,384


Amortization of debt issuance costs


1,118



1,050


Other, net


11,551



(4,899)


Changes in assets and liabilities, net:





Trade accounts receivable and contract assets, net


(6,090)



(7,664)


Other current assets, net


(1,736)



(16,127)


Trade accounts payable


(18,375)



(9,559)


Contract liabilities


7,938



(3,212)


Accrued expenses and other current liabilities


(27,447)



(4,922)


Non-current assets and non-current liabilities, net


(1,636)



(5,226)


Net cash provided by (used for) operating activities


116,887



71,295







Cash flows from investing activities:





Purchases of marketable investment securities


(389,071)



(550,891)


Sales and maturities of marketable investment securities


1,361,632



687,579


Expenditures for property and equipment


(179,235)



(104,604)


Expenditures for externally marketed software


(7,846)



(8,638)


Purchase of other investments


(50,000)



(5,500)


Sales of other investments


1,500




Net cash provided by (used for) investing activities


736,980



17,946







Cash flows from financing activities:





Repurchase of the 2021 Senior Unsecured Notes


(62,588)




Payment of finance lease obligations


(329)



(215)


Payment of in-orbit incentive obligations


(1,104)



(801)


Net proceeds from Class A common stock options exercised




150


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


2,486



2,924


Treasury share repurchase


(107,862)



(5,893)


Contribution by non-controlling interest holder


5,400



4,000


Other, net


(292)



817


Net cash provided by (used for) financing activities


(164,289)



982







Effect of exchange rates on cash and cash equivalents


(1,808)



(4,809)


Net increase (decrease) in cash and cash equivalents


687,770



85,414


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


$

1,584,582



$

1,607,303


Cision
Cision

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SOURCE EchoStar Corporation