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

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

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.
    • Hughes segment Adjusted EBITDA increased $39.7 million year over year. The increase was driven primarily by the higher gross margin associated with the growth in our consumer broadband service revenue and lower selling, general and administrative expenses.
    • ESS segment Adjusted EBITDA was essentially flat year over year.
    • Corporate and Other segment Adjusted EBITDA decreased by $2.5 million year over year. The decrease was primarily due to lower equity in earnings of unconsolidated affiliates, net, and higher legal expense.
  • 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 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



 

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SOURCE EchoStar Corporation

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