PR Newswire | Nov 9, 2021 06:01AM EST

September 30, 2021

11/09 05:00 CST

EchoStar Announces Financial Results for the Three and Nine Months Ended September 30, 2021 ENGLEWOOD, Colo., Nov. 9, 2021

ENGLEWOOD, Colo., Nov. 9, 2021 /PRNewswire/ -- EchoStar Corporation (NASDAQ: SATS) today announced its financial results for the three and nine months ended September 30, 2021.

Three Months Ended September 30, 2021 Financial Highlights:

* Consolidated revenue of $504.7 million. * Net income of $30.2 million, consolidated net income attributable to EchoStar common stock of $33.4 million, and basic and diluted earnings per share of $0.38. * Consolidated Adjusted EBITDA of $187.0 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).

Nine Months Ended September 30, 2021 Financial Highlights:

* Consolidated revenue of $1,487.1 million. * Net income of $142.8 million, consolidated net income attributable to EchoStar common stock of $149.2 million, and basic and diluted earnings per share of $1.64. * Consolidated Adjusted EBITDA of $559.4 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).

"I am pleased with our financial performance in the third quarter of 2021," commented Michael Dugan, CEO and President of EchoStar. "We grew revenue, net income, and Adjusted EBITDA from the same period last year by managing all areas of the business prudently. Laying a strategic foundation for the multi-orbit future, we announced agreements with OneWeb to provide satellite connectivity solutions in the US and India and fulfilled the remaining ITU requirements to bring our Sirion-1 filing into use which is a key milestone in the development of our global S-band capabilities."

Three Months Ended September 30, 2021 - Additional Information:

* Consolidated revenue increased 6.6% or $31.2 million year over year primarily driven by higher equipment sales of $25.0 million to our domestic and international enterprise customers. * Adjusted EBITDA increased 12.2% or $20.3 million year over year. * Hughes segment Adjusted EBITDA increased $16.5 million year over year. The increase was driven primarily by higher revenue and lower cost of services provided to our consumer customers. * ESS segment Adjusted EBITDA was flat year over year. * Corporate and Other segment Adjusted EBITDA increased $3.7 million year over year.

* Net income increased $6.9 million year over year. The increase was primarily due to higher operating income of $25.6 million and lower net interest expense of $20.0 million, partially offset by higher income tax expense, net, of $16.8 million, unfavorable changes in foreign currency exchange rates of $13.3 million, and lower gains on investments, net, of $11.3 million. * Total Hughes broadband subscribers were approximately 1,510,000, declining 32,000 from June 30, 2021. Subscribers in the US decreased by 24,000 as compared to June 30, 2021 to approximately 1,120,000. In the same period, subscribers in Latin America decreased by 8,000 to approximately 390,000. Similar to the US, our Latin American subscriber base has become capacity constrained in certain areas. While the balancing of total subscribers relative to capacity utilization resulted in lower subscribers, average revenue per user increased in both regions from the second quarter of 2021. * For the three months ended September 30, 2021, approximately 66% of Hughes segment revenue was attributable to our consumer customers with approximately 34% attributable to our enterprise customers. * Cash, cash equivalents and current marketable investment securities were $1.6 billion as of September 30, 2021. * During the three months ended September 30, 2021, we repurchased 2,592,885 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 nine months ended September 30, 2021 and 2020 (amounts in thousands) (all US GAAP amounts reference results from operations):

For the three months For the nine months ended September 30, ended September 30,

2021 2020 2021 2020



Revenue

Hughes $496,937$466,762$1,465,073$1,378,416

EchoStar Satellite Services 4,436 4,402 12,808 13,233

Corporate and Other 3,287 2,338 9,195 6,985

Total revenue $504,660$473,502$1,487,076$1,398,634



Adjusted EBITDA

Hughes $202,997$186,458$612,251 $534,955

EchoStar Satellite Services 2,319 2,274 6,481 5,847

Corporate & Other:

Corporate overhead, operating and other (19,974) (21,572) (61,940) (63,948)

Equity in earnings (losses) of unconsolidated affiliates, net1,630 (504) 2,615 (660)

Total Corporate & Other (18,344) (22,076) (59,325) (64,608)

Total Adjusted EBITDA $186,972$166,656$559,407 $476,194



Net income (loss) $30,217 $23,273 $142,804 $(49,307)

Expenditures for property and equipment $89,537 $98,137 $352,003 $295,041

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

For the three months For the nine months ended September 30, ended September 30,

2021 2020 2021 2020



Net income (loss) $30,217 $23,273 $142,804$(49,307)

Interest income, net (5,725) (7,364) (16,914) (33,707)

Interest expense, net of amounts capitalized 16,313 37,967 79,848 112,458

Income tax provision (benefit), net 19,748 2,950 63,047 6,309

Depreciation and amortization 120,596 129,822 368,864 392,077

Net loss (income) attributable to non-controlling interests 3,192 2,167 6,419 9,040

EBITDA 184,341 188,815 644,068 436,870

(Gains) losses on investments, net (3,748) (14,998) (112,981)37,764

Impairment of long-lived assets - - 245 -

Litigation Expense - - 16,800 -

License fee dispute - India, net of non-controlling interests(262) (480) (708) (1,043)

Loss on Debt Repurchase - - 1,938 -

Foreign currency transaction (gains) losses, net 6,641 (6,681) 10,045 2,603

Adjusted EBITDA $186,972$166,656$559,407$476,194

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 September 30, 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 September 30, 2021 filed today with the Securities and Exchange Commission.

EchoStar will host a conference call to discuss its earnings on Tuesday, November 9, 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 1061358.

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

September 30, December 31, 2021 2020

Assets

Current assets:

Cash and cash equivalents $ 429,656 $ 896,005

Marketable investment securities 1,127,048 1,638,271

Trade accounts receivable and contract assets, net 201,751 183,989

Other current assets, net 195,993 189,821

Total current assets 1,954,448 2,908,086

Non-current assets:

Property and equipment, net 2,374,080 2,390,313

Operating lease right-of-use assets 140,739 128,303

Goodwill 511,266 511,597

Regulatory authorizations, net 471,010 478,762

Other intangible assets, net 14,378 18,433

Other investments, net 351,884 284,937

Other non-current assets, net 364,553 352,921

Total non-current assets 4,227,910 4,165,266

Total assets $ 6,182,358 $ 7,073,352

Liabilities and Stockholders' Equity

Current liabilities:

Trade accounts payable $ 111,047 $ 122,366

Current portion of long-term debt, net - 898,237

Contract liabilities 134,635 104,569

Accrued expenses and other current liabilities 241,615 299,999

Total current liabilities 487,297 1,425,171

Non-current liabilities:

Long-term debt, net 1,495,805 1,495,256

Deferred tax liabilities, net 407,650 359,896

Operating lease liabilities 127,424 114,886

Other non-current liabilities 135,737 70,893

Total non-current liabilities 2,166,616 2,040,931

Total liabilities 2,653,913 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, 20,000,000shares authorized, none issued and outstanding at - -both September 30, 2021 and December 31, 2020

Common stock, $0.001 par value, 4,000,000,000shares authorized:

Class A common stock, $0.001 par value,1,600,000,000 shares authorized, 57,939,820 sharesissued and 39,810,942 shares outstanding at 58 57September 30, 2021 and 57,254,201 shares issued and48,863,374 shares outstanding at December 31, 2020

Class B convertible common stock, $0.001 par value,800,000,000 shares authorized, 47,687,039 shares 48 48issued and outstanding at both September 30, 2021and December 31, 2020

Class C convertible common stock, $0.001 par value,800,000,000 shares authorized, none issued and - -outstanding at both September 30, 2021 andDecember 31, 2020

Class D common stock, $0.001 par value, 800,000,000shares authorized, none issued and outstanding at - -both September 30, 2021 and December 31, 2020

Additional paid-in capital 3,341,751 3,321,426

Accumulated other comprehensive income (loss) (205,470) (187,876)

Accumulated earnings (losses) 732,814 583,591

Treasury shares, at cost (406,295) (174,912)

Total EchoStar Corporation stockholders' equity 3,462,906 3,542,334

Non-controlling interests 65,539 64,916

Total stockholders' equity 3,528,445 3,607,250

Total liabilities and stockholders' equity $ 6,182,358 $ 7,073,352

ECHOSTAR CORPORATION

Consolidated Statements of Operations

(Amounts in thousands, except per share amounts)

For the three months For the nine months ended September 30, ended September 30,

2021 2020 2021 2020

Revenue:

Services and other revenue $ 432,739 $ 426,532 $ 1,294,355 $ 1,251,932

Equipment revenue 71,921 46,970 192,721 146,702

Total revenue 504,660 473,502 1,487,076 1,398,634

Costs and expenses:

Cost of sales - services and other (exclusive of depreciation 138,179 146,577 410,515 432,848and amortization)

Cost of sales - equipment (exclusive of depreciation and 62,328 37,079 161,982 115,529amortization)

Selling, general and administrative expenses 112,986 115,358 341,143 354,437

Research and development expenses 7,974 7,676 22,960 21,378

Depreciation and amortization 120,596 129,822 368,864 392,077

Impairment of long-lived assets - - 245 -

Total costs and expenses 442,063 436,512 1,305,709 1,316,269

Operating income (loss) 62,597 36,990 181,367 82,365

Other income (expense):

Interest income, net 5,725 7,364 16,914 33,707

Interest expense, net of amounts capitalized (16,313) (37,967) (79,848) (112,458)

Gains (losses) on investments, net 3,748 14,998 112,981 (37,764)

Equity in earnings (losses) of unconsolidated affiliates, net 74 (2,134) (2,596) (5,866)

Foreign currency transaction gains (losses), net (6,641) 6,681 (10,045) (2,603)

Other, net 775 291 (12,922) (379)

Total other income (expense), net (12,632) (10,767) 24,484 (125,363)

Income (loss) before income taxes 49,965 26,223 205,851 (42,998)

Income tax benefit (provision), net (19,748) (2,950) (63,047) (6,309)

Net income (loss) 30,217 23,273 142,804 (49,307)

Less: Net loss (income) attributable to non-controlling 3,192 2,167 6,419 9,040interests

Net income (loss) attributable to EchoStar Corporation common $ 33,409 $ 25,440 $ 149,223 $ (40,267)stock

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

Basic and diluted earnings (losses) per share $ 0.38 $ 0.26 $ 1.64 $ (0.41)

ECHOSTAR CORPORATION

Consolidated Statements of Cash Flows

(Amounts in thousands)

For the nine months ended September 30,

2021 2020

Cash flows from operating activities:

Net income (loss) $ 142,804 $ (49,307)

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

Depreciation and amortization 368,864 392,077

Impairment of long-lived assets 245 -

Losses (gains) on investments, net (112,981) 37,764

Equity in losses (earnings) of unconsolidated affiliates, net 2,596 5,866

Foreign currency transaction losses (gains), net 10,045 2,603

Deferred tax provision (benefit), net 45,950 4,474

Stock-based compensation 5,913 6,887

Amortization of debt issuance costs 2,192 3,212

Other, net 16,691 (9,145)

Changes in assets and liabilities, net:

Trade accounts receivable and contract assets, net (20,894) (9,157)

Other current assets, net (7,841) (21,090)

Trade accounts payable (15,386) (17,824)

Contract liabilities 30,066 (11,438)

Accrued expenses and other current liabilities (103,457) 29,155

Non-current assets and non-current liabilities, net 63,055 1,325

Net cash provided by (used for) operating activities 427,862 365,402

Cash flows from investing activities:

Purchases of marketable investment securities (1,452,982) (2,234,671)

Sales and maturities of marketable investment securities 2,099,815 1,231,790

Expenditures for property and equipment (352,003) (295,041)

Expenditures for externally marketed software (25,634) (27,824)

Purchase of other investments (50,000) (5,500)

Sales of other investments 10,951 -

Net cash provided by (used for) investing activities 230,147 (1,331,246)

Cash flows from financing activities:

Repurchase and maturity of the 2021 Senior Unsecured Notes (901,818) -

Payment of finance lease obligations (578) (606)

Payment of in-orbit incentive obligations (1,800) (1,268)

Proceeds from Class A common stock options exercised - 983

Proceeds from Class A common stock issued under the Employee Stock Purchase 7,288 8,066Plan

Treasury share repurchase (229,383) (5,893)

Contribution by non-controlling interest holder 9,880 14,268

Other, net (966) 998

Net cash provided by (used for) financing activities (1,117,377) 16,548

Effect of exchange rates on cash and cash equivalents (3,114) (8,348)

Net increase (decrease) in cash and cash equivalents (462,482) (957,644)

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 $ 434,330 $ 564,245

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SOURCE EchoStar Corporation