EchoStar Announces Financial Results for Three Months Ended March 31, 2019

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Englewood, CO, May 8, 2019—EchoStar Corporation (NASDAQ: SATS) today announced its financial results for the three months ended March 31, 2019.

Financial Highlights:

  • Consolidated revenues of $531 million.
  • Consolidated net income of $15 million, consolidated net income attributable to EchoStar common stock of $14 million, and diluted earnings per share of $0.15. 
  • Consolidated Adjusted EBITDA of $206 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).

Additional Highlights:

  • Approximately 1,388,000 total Hughes broadband subscribers as of March 31, 2019 including approximately 150,000 subscribers in Latin America.
  • Cash, cash equivalents and current marketable investment securities of $3.3 billion as of March 31, 2019.

Set forth below is a table highlighting certain of EchoStar’s segment results for the three months ended March 31, 2019 and 2018:

  For the three months
ended March 31,
  2019 2018 
  (Dollars in thousands)
Hughes $445,337  $400,818  
EchoStar Satellite Services  81,259   96,753  
Corporate & Other  4,486   4,221  
Total $531,082  $501,792  
Adjusted EBITDA     
Hughes $161,864  $137,108  
EchoStar Satellite Services  68,717   84,150  
Corporate & Other:     
Corporate overhead, operating and other (20,116)  (17,870)  
Equity in earnings (losses) of unconsolidated affiliates, net (4,827)  (1,009)  
Sub-total  (24,943)   (18,879)  
Total $205,638  $202,379  
Net income (loss) $15,008  $(21,171)  
Expenditures for property and equipment $111,962  $50,982  

Reconciliation of GAAP to Non-GAAP Measurement:

  For the three months
ended March 31,
  2019 2018 
Net income (loss) $15,008  $(21,171)  
Interest income and expense, net 35,453  47,116  
Income tax provision (benefit), net 8,180  (5,403)  
Depreciation and amortization 154,221  145,554  
Net income attributable to noncontrolling interests (806)  (380)  
(Gains) loss on investment, net (6,418)  36,663  
Adjusted EBITDA $205,638  $202,379  

Note on Use of Non-GAAP Financial Measures

Adjusted EBITDA is defined as “Net income (loss)” excluding “Interest income and expense, net,” “Income tax provision (benefit), net,” “Depreciation and amortization,” “Net income (loss) attributable to noncontrolling interests,” and “Gains and losses on investments, net.” Adjusted EBITDA is not a measure determined in accordance with US GAAP. Adjusted 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 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 Adjusted 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 March 31, 2019 and 2018 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, 2019 filed today with the Securities and Exchange Commission.

EchoStar will host its earnings conference call on Wednesday, May 8, 2019 at 11:00 a.m. Eastern Time. The call-in numbers are (877) 815-1625 (toll-free) and (716) 247-5178 (international), Conference ID 8058859.

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, 2018 and Quarterly Report on Form 10-Q for the period ended March 31, 2019, 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.


Consolidated Balance Sheets

(Dollars in thousands, except per share amounts)

  March 31, 2019 December 31, 2018
Assets (Unaudited) (Audited)
Current assets:    
Cash and cash equivalents $1,349,724  $928,306 
Marketable investment securities, at fair value 1,925,108  2,282,152 
Trade accounts receivable and contract assets, net (Note 3) 216,558  201,096 
Trade accounts receivable – DISH Network 19,510  14,200 
Inventory 76,114  75,379 
Prepaids and deposits 66,119  61,177 
Other current assets 24,508  18,539 
Total current assets 3,677,641  3,580,849 
Noncurrent assets:    
Property and equipment, net 3,363,404  3,414,908 
Operating lease right-of-use assets 115,647   
Regulatory authorizations, net 494,253  495,654 
Goodwill 504,173  504,173 
Other intangible assets, net 40,550  44,231 
Investments in unconsolidated entities 227,828  262,473 
Other receivables – DISH Network 95,889  95,114 
Other noncurrent assets, net 259,506  263,892 
Total noncurrent assets 5,101,250  5,080,445 
Total assets $8,778,891  $8,661,294 
Liabilities and Stockholders’ Equity    
Current liabilities:    
Trade accounts payable $115,752  $121,437 
Trade accounts payable – DISH Network 2,826  1,698 
Current portion of long-term debt and finance lease obligations 953,636  959,577 
Contract liabilities 90,180  72,284 
Accrued interest 55,552  47,416 
Accrued compensation 35,161  54,242 
Accrued taxes 17,455  16,013 
Accrued expenses and other 75,443  72,470 
Total current liabilities 1,346,005  1,345,137 
Noncurrent liabilities:    
Long-term debt and finance lease obligations, net 2,563,429  2,573,204 
Deferred tax liabilities, net 475,464  465,933 
Operating lease liabilities 95,215   
Other noncurrent liabilities 119,242  121,546 
Total noncurrent liabilities 3,253,350  3,160,683 
Total liabilities 4,599,355  4,505,820 
Commitments and contingencies    
Stockholders’ equity:    
Preferred stock, $0.001 par value, 20,000,000 shares authorized, none issued and outstanding at each of March 31, 2019 and December 31, 2018    
Common stock, $0.001 par value, 4,000,000,000 shares authorized:    
ClassA common stock, $0.001 par value, 1,600,000,000 shares authorized, 54,514,833 shares issued and 48,029,912 shares outstanding at March 31, 2019 and 54,142,566 shares issued and 47,657,645 shares outstanding at December31, 2018 54  54 
ClassB convertible common stock, $0.001 par value, 800,000,000 shares authorized, 47,687,039 shares issued and outstanding at each of March 31, 2019 and December31, 2018 48  48 
ClassC convertible common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at each of March 31, 2019 and December31, 2018    
ClassD common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at each of March 31, 2019 and December31, 2018    
Additional paid-in capital 3,713,777  3,702,522 
Accumulated other comprehensive loss (124,251)  (125,100) 
Accumulated earnings 709,928  694,129 
Treasury stock, at cost (131,454)  (131,454) 
Total EchoStar Corporation stockholders’ equity 4,168,102  4,140,199 
Other noncontrolling interests 11,434  15,275 
Total stockholders’ equity 4,179,536  4,155,474 
Total liabilities and stockholders’ equity $8,778,891  $8,661,294 


Consolidated Statements of Operations

(Dollars in thousands, except per share amounts)

  For the three months
ended March 31,
  2019 2018
Services and other revenue – DISH Network $85,888  $103,805 
Services and other revenue – other 393,480  355,040 
Equipment revenue 51,714  42,947 
Total revenue 531,082  501,792 
Costs and expenses:    
Cost of sales – services and other (exclusive of depreciation and amortization) 153,571  148,745 
Cost of sales – equipment (exclusive of depreciation and amortization) 45,007  39,071 
Selling, general and administrative expenses 112,134  103,275 
Research and development expenses 6,888  7,137 
Depreciation and amortization 154,221  145,554 
Total costs and expenses 471,821  443,782 
Operating income 59,261  58,010 
Other income (expense):    
Interest income 24,429  15,635 
Interest expense, net of amounts capitalized (59,882)  (62,751) 
Gains (losses) on investments, net 6,418  (36,663) 
Equity in losses of unconsolidated affiliates, net (6,353)  (1,009) 
Other, net (685)  204 
Total other expense, net (36,073)  (84,584) 
Income (loss) before income taxes 23,188  (26,574) 
Income tax benefit (provision), net (8,180)  5,403 
Net income (loss) 15,008  (21,171) 
Less: Net income attributable to noncontrolling interests 806  380 
Net income (loss) attributable to EchoStar Corporation common stock $14,202  $(21,551) 
Earnings per share – ClassA and B common stock:    
Basic earnings (loss) per share $0.15  $(0.22) 
Diluted earnings (loss) per share $0.15  $(0.22) 


Consolidated Statements of Cash Flows

(Dollars in thousands, except per share amounts)

  For the three months ended March 31,
  2019 2018
Cash flows from operating activities:    
Net income (loss) $15,008  $(21,171) 
Adjustments to reconcile net income to net cash flows from operating activities:    
Depreciation and amortization 154,221  145,554 
Equity in losses of unconsolidated affiliates, net 6,353  1,009 
Amortization of debt issuance costs 2,010  1,936 
(Gains) losses on investments, net (6,418)  36,673 
Stock-based compensation 2,628  2,765 
Deferred tax (benefit) provision 6,455  (7,036) 
Changes in current assets and current liabilities, net:    
Trade accounts receivable, net (19,231)  23,153 
Trade accounts receivable – DISH Network (5,310)  (13,473) 
Inventory (1,036)  (2,297) 
Other current assets (4,024)  (10,926) 
Trade accounts payable 8,831  (6,471) 
Trade accounts payable – DISH Network 1,128  (1,011) 
Accrued expenses and other 6,854  (2,288) 
Changes in noncurrent assets and noncurrent liabilities, net 5,563  (13,982) 
Other, net 2,914  2,840 
Net cash flows from operating activities 175,946  135,275 
Cash flows from investing activities:    
Purchases of marketable investment securities (325,557)  (562,611) 
Sales and maturities of marketable investment securities 712,666  298,596 
Expenditures for property and equipment (111,962)  (128,506) 
Refunds and other receipts related to property and equipment   77,524 
Expenditures for externally marketed software (7,600)  (7,148) 
Net cash flows from investing activities 267,547  (322,145) 
Cash flows from financing activities:    
Repayment of debt and finance lease obligations (9,882)  (9,368) 
Repurchase of debt (8,046)   
Net proceeds from ClassA common stock options exercised 2,047  3,481 
Net proceeds from Class A common stock issued under the Employee Stock Purchase Plan 2,749  2,636 
Noncontrolling interest purchase (7,313)   
Repayment of in-orbit incentive obligations (1,573)  (1,265) 
Other, net (131)  (243) 
Net cash flows from financing activities (22,149)  (4,759) 
Effect of exchange rates on cash and cash equivalents (133)  (242) 
Net increase (decrease) in cash and cash equivalents, including restricted amounts 421,211  (191,871) 
Cash and cash equivalents, including restricted amounts, beginning of period 929,495  2,432,249 
Cash and cash equivalents, including restricted amounts, end of period $1,350,706  $2,240,378 
Supplemental disclosure of cash flow information:    
Cash paid for interest, net of amounts capitalized $54,572  $51,073 
Cash paid for income taxes $772  $839