PR Newswire | May 6, 2021 06:01AM EDT

05/06 05:00 CDT

EchoStar Announces Financial Results for the Three Months Ended March 31, 2021 ENGLEWOOD, Colo., May 6, 2021

ENGLEWOOD, Colo., May 6, 2021 /PRNewswire/ --EchoStar Corporation (NASDAQ: 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, net3,353 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, 2021December 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, 58 57 2021 and 57,254,201 shares issued and 48,863,374 shares outstanding at December 31, 2020

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 48 48 and December 31, 2020

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 2,486 2,924 Purchase Plan

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 period896,812 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