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EchoStar Announces Financial Results for the Three and Twelve Months Ended December 31, 2021

·15 min read

ENGLEWOOD, Colo., Feb. 24, 2022 /PRNewswire/ -- EchoStar Corporation (NASDAQ: SATS) today announced its financial results for the three and twelve months ended December 31, 2021.

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

Three Months Ended December 31, 2021 Financial Highlights:

  • Consolidated revenue of $498.6 million.

  • Net loss of $80.1 million, consolidated net loss attributable to EchoStar common stock of $76.3 million, and basic and diluted loss per share of $0.88.

  • Consolidated Adjusted EBITDA of $159.5 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).

Twelve Months Ended December 31, 2021 Financial Highlights:

  • Consolidated revenue of $1,985.7 million.

  • Net income of $62.7 million, consolidated net income attributable to EchoStar common stock of $72.9 million, and basic and diluted earnings per share of $0.81.

  • Consolidated Adjusted EBITDA of $718.9 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).

"The EchoStar team delivered another solid performance in 2021 with year over year growth in revenue, net income, and adjusted EBITDA," commented Michael Dugan, CEO and President of EchoStar. "We remain focused on meeting our customers' needs while operating our business in an efficient manner, innovating new multi-transport technology solutions and preparing to place our next satellite, EchoStar XXIV/JUPITER 3, into service."

Three Months Ended December 31, 2021 - Additional Information:

  • Consolidated revenue increased 1.9% or $9.4 million year over year primarily driven by higher equipment sales of $18.8 million to our domestic and international enterprise customers partially offset by lower service revenues of $9.4 million primarily due to lower broadband consumer customers.

  • Adjusted EBITDA decreased 4.3% or $7.2 million year over year.

  • Net income decreased $77.5 year over year. The decrease was primarily due to the impairment of our equity investment in DISH Mexico of $55.3 million, losses on investments, net, of $49.9 million, and unfavorable changes in foreign currency exchange rates of $11.2 million. These items were partially offset by lower net interest expense of $19.4 million and higher operating income of $5.5 million.

  • Hughes broadband subscribers totaled approximately 1,462,000, declining 48,000 from September 30, 2021. The decrease primarily reflects a balancing of capacity utilization with subscriber levels in areas of high bandwidth demand in both the US and Latin America.

  • For the three months ended December 31, 2021, approximately 65% of Hughes segment revenue was attributable to our consumer customers with approximately 35% attributable to our enterprise customers.

  • Cash, cash equivalents and current marketable investment securities were $1.5 billion as of December 31, 2021.

  • During the three months ended December 31, 2021, we purchased 1,203,821 shares of our Class A common stock in open market trades.

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



For the three months
ended December 31,


For the twelve months
ended December 31,



2021


2020


2021


2020










Revenue









Hughes


$ 491,154


$ 482,418


$ 1,956,226


$ 1,860,834

EchoStar Satellite Services


4,871


4,165


17,679


17,398

Corporate and Other


2,619


2,690


11,815


9,675

Total revenue


$ 498,644


$ 489,273


$ 1,985,720


$ 1,887,907










Adjusted EBITDA









Hughes


$ 178,218


$ 188,389


$ 790,469


$ 723,343

EchoStar Satellite Services


2,704


2,026


9,185


7,873

Corporate & Other:









Corporate overhead, operating and other


(20,675)


(23,920)


(82,615)


(87,867)

Equity in earnings (losses) of
unconsolidated affiliates, net


(723)


226


1,892


(434)

Total Corporate & Other


(21,398)


(23,694)


(80,723)


(88,301)

Total Adjusted EBITDA


$ 159,524


$ 166,721


$ 718,931


$ 642,915










Net income (loss)


$ (80,083)


$ (2,597)


$ 62,721


$ (51,904)

Expenditures for property and equipment


$ 86,427


$ 113,757


$ 438,430


$ 408,798

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



For the three months
ended December 31,


For the twelve months
ended December, 31,



2021


2020


2021


2020










Net income (loss)


$ (80,083)


$ (2,597)


$ 62,721


$ (51,904)

Interest income, net


(5,887)


(6,275)


(22,801)


(39,982)

Interest expense, net of amounts capitalized


15,664


35,469


95,512


147,927

Income tax provision (benefit), net


2,579


17,760


65,626


24,069

Depreciation and amortization


122,465


132,934


491,329


525,011

Net loss (income) attributable to non-controlling interests


3,735


2,714


10,154


11,754

EBITDA


58,473


180,005


702,541


616,875

(Gains) losses on investments, net


43,450


(6,458)


(69,531)


31,306

Impairment of long-lived assets



1,685


245


1,685

Impairment loss on equity method investment


55,266



55,266


Litigation Expense




16,800


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


(233)


107


(941)


(936)

Loss on Debt Repurchase




1,938


Foreign currency transaction (gains)
losses, net


2,568


(8,618)


12,613


(6,015)

Adjusted EBITDA


$ 159,524


$ 166,721


$ 718,931


$ 642,915

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 December 31, 2021 are attached to this press release. Detailed financial data and other information are available in EchoStar's Annual Report on Form 10-K for the period ended December 31, 2021 filed today with the Securities and Exchange Commission.

EchoStar will host a conference call to discuss its earnings on Thursday, February 24, 2022 at 3:00 p.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 4197436.

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 December 31,



2021


2020

Assets





Current assets:





Cash and cash equivalents


$ 535,894


$ 896,005

Marketable investment securities


1,010,496


1,638,271

Trade accounts receivable and contract assets, net


182,063


183,989

Other current assets, net


198,444


189,821

Total current assets


1,926,897


2,908,086

Non-current assets:





Property and equipment, net


2,338,285


2,390,313

Operating lease right-of-use assets


149,198


128,303

Goodwill


511,086


511,597

Regulatory authorizations, net


469,766


478,762

Other intangible assets, net


13,984


18,433

Other investments, net


297,747


284,937

Other non-current assets, net


338,241


352,921

Total non-current assets


4,118,307


4,165,266

Total assets


$ 6,045,204


$ 7,073,352






Liabilities and Stockholders' Equity





Current liabilities:





Trade accounts payable


$ 109,338


$ 122,366

Current portion of long-term debt, net



898,237

Contract liabilities


141,343


104,569

Accrued expenses and other current liabilities


209,442


299,999

Total current liabilities


460,123


1,425,171

Non-current liabilities:





Long-term debt, net


1,495,994


1,495,256

Deferred tax liabilities, net


403,684


359,896

Operating lease liabilities


134,897


114,886

Other non-current liabilities


136,426


70,893

Total non-current liabilities


2,171,001


2,040,931

Total liabilities


2,631,124


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 December 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,
58,059,622 shares issued and 38,726,923 shares outstanding at
December 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 December 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 December 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 December 31, 2021 and December 31,
2020



Additional paid-in capital


3,345,878


3,321,426

Accumulated other comprehensive income (loss)


(212,102)


(187,876)

Accumulated earnings (losses)


656,466


583,591

Treasury shares, at cost


(436,521)


(174,912)

Total EchoStar Corporation stockholders' equity


3,353,827


3,542,334

Non-controlling interests


60,253


64,916

Total stockholders' equity


3,414,080


3,607,250

Total liabilities and stockholders' equity


$ 6,045,204


$ 7,073,352

ECHOSTAR CORPORATION

Consolidated Statements of Operations

(Amounts in thousands, except per share amounts)




For the years ended December 31,



2021


2020


2019








Revenue:







Services and other revenue


$ 1,715,287


$ 1,682,304


$ 1,619,271

Equipment revenue


270,433


205,603


266,810

Total revenue


1,985,720


1,887,907


1,886,081

Costs and expenses:







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


551,679


577,943


561,353

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


231,975


166,435


226,002

Selling, general and administrative expenses


461,705


474,912


509,145

Research and development expenses


31,777


29,448


25,739

Depreciation and amortization


491,329


525,011


490,765

Impairment of long-lived assets


245


1,685


Total costs and expenses


1,768,710


1,775,434


1,813,004

Operating income (loss)


217,010


112,473


73,077

Other income (expense):







Interest income, net


22,801


39,982


82,352

Interest expense, net of amounts capitalized


(95,512)


(147,927)


(251,016)

Gains (losses) on investments, net


69,531


(31,306)


28,912

Equity in earnings (losses) of unconsolidated
affiliates, net


(5,170)


(7,267)


(14,734)

Foreign currency transaction gains (losses), net


(12,613)


6,015


(11,590)

Other-than-temporary impairment losses on
equity method investments


(55,266)



Other, net


(12,434)


195


(166)

Total other income (expense), net


(88,663)


(140,308)


(166,242)

Income (loss) from continuing operations before
income taxes


128,347


(27,835)


(93,165)

Income tax benefit (provision), net


(65,626)


(24,069)


(20,488)

Net income (loss) from continuing operations


62,721


(51,904)


(113,653)

Net income (loss) from discontinued operations




39,401

Net income (loss)


62,721


(51,904)


(74,252)

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


10,154


11,754


11,335

Net income (loss) attributable to EchoStar
Corporation common stock


$ 72,875


$ (40,150)


$ (62,917)








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







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


$ 0.81


$ (0.41)


$ (1.06)

Total basic and diluted earnings (losses) per share


$ 0.81


$ (0.41)


$ (0.65)

ECHOSTAR CORPORATION

Consolidated Statements of Cash Flows

(Amounts in thousands)




For the years ended December 31,



2021


2020


2019








Cash flows from operating activities:







Net income (loss)


$ 62,721


$ (51,904)


$ (74,252)

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







Depreciation and amortization


491,329


525,011


588,200

Impairment of long-lived assets


245


1,685


Losses (gains) on investments, net


(69,531)


31,306


(28,912)

Equity in losses (earnings) of unconsolidated
affiliates, net


5,170


7,267


14,734

Foreign currency transaction losses (gains),
net


12,613


(6,015)


11,590

Deferred tax provision (benefit), net


37,664


18,147


32,542

Stock-based compensation


7,699


8,887


9,353

Amortization of debt issuance costs


2,381


4,324


5,912

Dividends received from unconsolidated
affiliates




2,716

Other-than-temporary impairment losses on
equity method investments


55,266



Other, net


19,740


(12,501)


6,297

Changes in assets and liabilities, net:







Trade accounts receivable and contract
assets, net


(2,334)


2,237


8,289

Other current assets, net


(7,303)


(12,984)


(39,190)

Trade accounts payable


(15,599)


(12,339)


13,149

Contract liabilities


36,774


3,509


26,376

Accrued expenses and other current
liabilities


(84,621)


42,822


66,352

Non-current assets and non-current
liabilities, net


80,012


(15,064)


13,166

Net cash provided by (used for) operating
activities


632,226


534,388


656,322








Cash flows from investing activities:







Purchases of marketable investment securities


(1,651,608)


(2,799,838)


(993,369)

Sales and maturities of marketable investment
securities


2,321,560


2,110,336


2,391,220

Expenditures for property and equipment


(438,430)


(408,798)


(418,584)

Expenditures for externally marketed software


(33,543)


(38,655)


(29,310)

Purchase of other investments


(50,000)


(5,500)


(93,687)

Sales of other investments


10,951



Investments in unconsolidated affiliates




(2,149)

Purchases of regulatory authorizations




(34,447)

Dividend received from unconsolidated affiliate




2,284

Net cash provided by (used for) investing activities


158,930


(1,142,455)


821,958








Cash flows from financing activities:







Repurchase and maturity of the 2019 Senior
Secured Notes




(920,923)

Repurchase and maturity of the 2021 Senior
Unsecured Notes


(901,818)



Payment of finance lease obligations


(670)


(811)


(29,347)

Payment of in-orbit incentive obligations


(2,214)


(1,554)


(5,447)

Proceeds from Class A common stock options
exercised


408


855


67,337

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


9,471


10,109


9,779

Treasury share repurchase


(261,436)


(43,458)


Contribution by non-controlling interest holder


9,880


18,241


Purchase of non-controlling interest




(7,313)

Other, net


(966)


998


603

Net cash provided by (used for) financing
activities


(1,147,345)


(15,620)


(885,311)








Effect of exchange rates on cash and cash
equivalents


(3,749)


(1,390)


(575)

Net increase (decrease) in cash and cash
equivalents


(359,938)


(625,077)


592,394

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


896,812


1,521,889


929,495

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


$ 536,874


$ 896,812


$ 1,521,889

Cision
Cision

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SOURCE EchoStar Corporation