May 10, 2016

EchoStar Announces First Quarter 2016 Financial Results

ENGLEWOOD, Colo., May 10, 2016 /PRNewswire/ -- EchoStar Corporation (NASDAQ: SATS) today announced its financial results for the quarter ended March 31, 2016.

EchoStar Corporation Logo.

First Quarter 2016 Financial Highlights:

  • Consolidated revenues of $816 million compared to $799 million in the first quarter of 2015.
  • Consolidated EBITDA of $223 million compared to $214 million in the first quarter of 2015.
  • Consolidated net income attributable to EchoStar common stock of $50.7 million and diluted earnings per share of $0.54 compared to $33.4 million and $0.36 in the first quarter of 2015.
  • Approximately 1,038,000 HughesNet subscribers as of March 31, 2016 compared to 998,000 subscribers as of March 31, 2015.

Set forth below is a table highlighting certain of EchoStar's segment results for the three months ended March 31, 2016 and 2015:

(in USD '000s)

For the Three Months


 Ended March 31,


2016

2015

Revenue





Hughes

$

326,238

$

325,280

EchoStar Technologies Corp.


385,126


346,220

EchoStar Satellite Services


102,989


125,398

All Other & Eliminations


2,006


1,755

Total

$

816,359

$

798,653






EBITDA





Hughes

$

99,468

$

91,273

EchoStar Technologies Corp.


28,168


25,561

EchoStar Satellite Services


88,186


106,419

All Other & Eliminations


6,974


(9,572)

Total

$

222,796

$

213,681






Net income attributable to EchoStar common stock

$

50,674

$

33,402

Diluted earnings per share (in dollars)

$

0.54

$

0.36






Capital expenditures

$

211,136

$

177,802






The following table reconciles total consolidated EBITDA to "Income before income taxes".

(in USD '000s)

 For the Three Months


  Ended March 31,


2016

2015

EBITDA

$

222,796

$

213,681

Interest income and expense, net


(19,244)


(32,697)

Depreciation and amortization


(126,734)


(133,185)

Net loss attributable to noncontrolling interests


(712)


(1,800)

Income before income taxes

$

76,106

$

45,999






Note on Use of Non-GAAP Financial Measures

EBITDA is defined as "Net income (loss) attributable to EchoStar" excluding "Interest expense, net of amounts capitalized," "Interest income," "Income tax benefit (provision), net" and "Depreciation and amortization."  EBITDA is not a measure determined in accordance with US GAAP. This non-GAAP measure is reconciled to "Income (loss) before income taxes" in the table above. EBITDA should not be considered in isolation or as a substitute for operating income, net income or any other measure determined in accordance with GAAP. Conceptually, EBITDA measures the amount of income generated each period that could be used to service debt, pay taxes and fund capital expenditures. EBITDA is used by our management as a measure of operating efficiency and overall financial performance for benchmarking against our peers and competitors. Management believes EBITDA provides meaningful supplemental information regarding liquidity and the underlying operating performance of our business. Management also believes that 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, 2016 and 2015 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 quarter ended March 31, 2016 filed today with the Securities and Exchange Commission.

EchoStar will host its earnings conference call on Tuesday, May 10, 2016 at 11:00 a.m. Eastern Time. The call-in numbers are (877) 815-1625 (toll-free) and (716) 247-5178 (international), Conference ID # 94546372.

About EchoStar Corporation

EchoStar Corporation (NASDAQ:  SATS) is a premier global provider of satellite and video delivery solutions.  Headquartered in Englewood, Colo., and conducting business around the globe, EchoStar is a pioneer in secure communications technologies through its EchoStar Satellite Services, EchoStar Technologies, and Hughes Network Systems 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. These statements are subject to certain risks, uncertainties, and assumptions. See "Risk Factors" in EchoStar's Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, filed today 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
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per-share amounts)
(Unaudited)




As of



March 31


December 31



2016


2015

Assets





Current Assets:





Cash and cash equivalents


$

898,816


$

924,240

Marketable investment securities, at fair value


603,346


612,338

Trade accounts receivable, net of allowance for doubtful accounts of $13,772 and $12,485, respectively


163,726


179,240

Trade accounts receivable - DISH Network, net of allowance for doubtful accounts of zero


340,532


277,159

Inventory


70,136


67,010

Prepaids and deposits


60,287


56,949

Other current assets


12,501


16,723

Total current assets


2,149,344


2,133,659

Noncurrent Assets:





Restricted cash and marketable investment securities


21,664


21,002

Property and equipment, net of accumulated depreciation of $3,097,803 and $2,998,074, respectively


3,527,450


3,412,990

Regulatory authorizations, net


546,411


543,812

Goodwill


510,630


510,630

Other intangible assets, net


118,650


132,653

Investments in unconsolidated entities


208,744


209,264

Other receivable - DISH Network


91,171


90,966

Other noncurrent assets, net


162,171


154,510

Total noncurrent assets


5,186,891


5,075,827

Total assets


$

7,336,235


$

7,209,486

Liabilities and Stockholders' Equity





Current Liabilities:





Trade accounts payable


$

231,873


$

213,671

Trade accounts payable - DISH Network


25,694


24,682

Current portion of long-term debt and capital lease obligations, net of unamortized debt issuance costs


1,896,233


35,698

Deferred revenue and prepayments


62,579


61,881

Accrued compensation


27,886


29,767

Accrued royalties


22,609


22,531

Accrued interest


41,645


8,596

Accrued expenses and other


100,937


130,005

Total current liabilities


2,409,456


526,831

Noncurrent Liabilities:





Long-term debt and capital lease obligations, net of unamortized debt issuance costs


290,570


2,156,667

Deferred tax liabilities, net


676,799


650,392

Other noncurrent liabilities


97,742


93,954

Total noncurrent liabilities


1,065,111


2,901,013

Total liabilities


3,474,567


3,427,844

Commitments and Contingencies (Note 14)





Stockholders' Equity:





Preferred Stock, $.001 par value, 20,000,000 shares authorized:





Hughes Retail Preferred Tracking Stock, $.001 par value, 13,000,000 shares authorized, 6,290,499 issued and outstanding at each of March 31, 2016 and December 31, 2015


6


6

Common stock, $.001 par value, 4,000,000,000 shares authorized:





Class A common stock, $.001 par value, 1,600,000,000 shares authorized, 51,580,578 shares issued and 46,048,260 shares outstanding at March 31, 2016 and 51,087,839 shares issued and 45,555,521 shares outstanding at December 31, 2015


52


51

Class B common stock, $.001 par value, 800,000,000 shares authorized, 47,687,039 shares issued and outstanding at each of March 31, 2016 and December 31, 2015


48


48

Class C common stock, $.001 par value, 800,000,000 shares authorized, none issued and outstanding at each of March 31, 2016 and December 31, 2015



Class D common stock, $.001 par value, 800,000,000 shares authorized, none issued and outstanding at each of March 31, 2016 and December 31, 2015



Additional paid-in capital


3,797,153


3,776,451

Accumulated other comprehensive loss


(106,353)


(117,233)

Accumulated earnings


183,472


134,317

Treasury stock, at cost


(98,162)


(98,162)

Total EchoStar stockholders' equity


3,776,216


3,695,478

Noncontrolling interest in HSS Tracking Stock


74,031


74,854

Other noncontrolling interests


11,421


11,310

Total stockholders' equity


3,861,668


3,781,642

Total liabilities and stockholders' equity


$


7,336,235


$


7,209,486

 

 


ECHOSTAR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
(Dollars in thousands, except per share amounts)
(Unaudited)





For the Three Months Ended March 31




2016


2015

Revenue:




Equipment revenue - DISH Network


$

249,613


$

223,959

Equipment revenue - other



80,477


79,136

Services and other revenue - DISH Network



213,727


222,804

Services and other revenue - other



272,542


272,754

Total revenue



816,359


798,653

Costs and Expenses:






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



286,863


260,223

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



197,162


208,240

Selling, general and administrative expenses



98,693


97,928

Research and development expenses



20,442


17,872

Depreciation and amortization



126,734


133,185

Total costs and expenses



729,894


717,448

Operating income



86,465


81,205







Other Income (Expense):






Interest income



3,966


2,611

Interest expense, net of amounts capitalized



(23,210)


(35,308)

Gains on marketable investment securities, net



2,462


9

Equity in losses of unconsolidated affiliates, net



(963)


(53)

Other, net



7,386


(2,465)

Total other expense, net



(10,359)


(35,206)

Income before income taxes



76,106


45,999

Income tax provision, net



(27,663)


(18,401)

Net income



48,443


27,598

Less: Net loss attributable to noncontrolling interest in HSS Tracking Stock



(823)


(2,169)

Less: Net income attributable to other noncontrolling interests



111


369

Net income attributable to EchoStar



49,155


29,398

Less: Net loss attributable to Hughes Retail Preferred Tracking Stock (Note 4)



(1,519)


(4,004)

Net income attributable to EchoStar common stock


$

50,674


$

33,402







Weighted-average common shares outstanding - Class A and B common stock:






 Basic



93,331


91,969

 Diluted



93,852


93,357







Earnings per share - Class A and B common stock:






 Basic


$

0.54


$

0.36

 Diluted


$

0.54


$

0.36







Comprehensive Income:






Net income


$

48,443


$

27,598

Other comprehensive income (loss), net of tax:






Foreign currency translation adjustments



11,624


(26,400)

Unrealized gains on available-for-sale securities and other



1,503


1,218

Recognition of realized gains on available-for-sale securities in net income



(2,247)


(9)

Total other comprehensive income (loss), net of tax



10,880


(25,191)

Comprehensive income



59,323


2,407

Less: Comprehensive loss attributable to noncontrolling interest in HSS Tracking Stock



(823)


(2,169)

Less: Comprehensive income attributable to other noncontrolling interests



111


369

Comprehensive income attributable to EchoStar


$

60,035


$

4,207

 


 

 

ECHOSTAR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)





For the Three Months Ended March 31



2016


2015

Cash Flows from Operating Activities:




Net income

$

48,443


$

27,598

Adjustments to reconcile net income to net cash flows from operating activities:





Depreciation and amortization


126,734


133,185

Equity in losses of unconsolidated affiliates, net


963


53

Gains on marketable investment securities, net


(2,462)


(9)

Stock-based compensation


4,384


4,175

Deferred tax provision


25,684


17,871

Changes in current assets and current liabilities, net


(18,184)


31,730

Changes in noncurrent assets and noncurrent liabilities, net


3,388


1,411

Other, net


3,899


5,548

Net cash flows from operating activities


192,849


221,562

Cash Flows from Investing Activities:





Purchases of marketable investment securities


(321,892)


(250,861)

Sales and maturities of marketable investment securities


323,889


269,588

Purchases of property and equipment


(235,223)


(177,802)

Refunds and other receipts related to capital expenditures


24,087


Changes in restricted cash and marketable investment securities


(662)


(1,046)

Acquisition of regulatory authorization



(3,428)

Expenditures for externally marketed software


(5,959)


(4,944)

Other, net


1,460


6

Net cash flows from investing activities


(214,300)


(168,487)

Cash Flows from Financing Activities:





Repayment of other debt and capital lease obligations


(10,542)


(16,508)

Net proceeds from Class A common stock options exercised and stock issued under the Employee Stock Purchase Plan


6,335


8,039

Other, net


(302)


3,521

Net cash flows from financing activities


(4,509)


(4,948)

Effect of exchange rates on cash and cash equivalents


536


(5,674)

Net increase (decrease) in cash and cash equivalents


(25,424)


42,453

Cash and cash equivalents, beginning of period


924,240


549,053

Cash and cash equivalents, end of period

$

898,816


$

591,506






Supplemental Disclosure of Cash Flow Information:





Cash paid for interest (including capitalized interest)

$

10,476


$

10,848

Capitalized interest

$

22,021


$

12,485

Cash paid for income taxes

$

2,586


$

1,608

Employee benefits paid in Class A common stock

$

11,126


$

10,711

Satellites and other assets financed under capital lease obligations

$

2,351


$

2,682

Increase (decrease) in capital expenditures included in accounts payable, net

$

3,670


$

(4,485)

Reduction of capital lease obligation for AMC-15 and AMC-16 satellites

$


$

4,500

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SOURCE EchoStar Corporation

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