EX-99.1 11 sats063019ex-991.htm EXHIBIT 99.1 Exhibit
Exhibit 99.1


EchoStar Announces Financial Results for Three and Six Months Ended June 30, 2019


Englewood, CO, August 8, 2019—EchoStar Corporation (NASDAQ: SATS) today announced its financial results for the three and six months ended June 30, 2019.


Three Months Ended June 30, 2019 Financial Highlights:

•
Consolidated revenues of $537 million.
•
Consolidated net loss of $5 million, consolidated net loss attributable to EchoStar common stock of $6 million, and diluted loss per share of $0.06.
•
Consolidated Adjusted EBITDA of $199 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).

Six Months Ended June 30, 2019 Financial Highlights:

•
Consolidated revenues of $1,068 million.
•
Consolidated net income of $10 million, consolidated net income attributable to EchoStar common stock of $9 million, and diluted earnings per share of $0.09.
•
Consolidated Adjusted EBITDA of $404 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).


Additional Highlights:

•
Approximately 1,415,000 total Hughes broadband subscribers as of June 30, 2019 including approximately 169,000 subscribers in Central and South America.
•
Cash, cash equivalents and current marketable investment securities of $2.5 billion as of June 30, 2019.



1


Set forth below is a table highlighting certain of EchoStar’s segment results for the three and six months ended June 30, 2019 and 2018 (amounts in thousands):
 
 
For the three months
ended June 30,
 
For the six months
ended June 30,
 
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
Hughes
 
$
451,847

 
$
426,306

 
$
897,184

 
$
827,124

EchoStar Satellite Services
 
80,961

 
95,425

 
162,220

 
192,178

Corporate & Other
 
4,316

 
4,226

 
8,802

 
8,447

Total
 
$
537,124

 
$
525,957

 
$
1,068,206

 
$
1,027,749

 
 
 
 
 
 
 
 
 
Adjusted EBITDA
 
 
 
 
 
 
 
 
Hughes
 
$
156,298

 
$
151,628

 
$
318,161

 
$
288,737

EchoStar Satellite Services
 
68,174

 
82,483

 
136,891

 
166,633

Corporate & Other:
 
 
 
 
 
 
 
 
Corporate overhead, operating and other
 
(22,336
)
 
(21,266
)
 
(42,968
)
 
(39,137
)
Equity in earnings (losses) of unconsolidated affiliates, net
 
(2,898
)
 
(2,058
)
 
(7,725
)
 
(3,067
)
Sub-total
 
(25,234
)
 
(23,324
)
 
(50,693
)
 
(42,204
)
Total
 
$
199,238

 
$
210,787

 
$
404,359

 
$
413,166

 
 
 
 
 
 
 
 
 
Net income (loss)
 
$
(5,060
)
 
$
77,684

 
$
9,948

 
$
56,513

Expenditures for property and equipment
 
$
107,478

 
$
119,592

 
$
219,440

 
$
170,574


Reconciliation of GAAP to Non-GAAP Measurement (amounts in thousands):
 
 
For the three months
ended June 30,
 
For the six months
ended June 30,
 
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
Net income (loss)
 
$
(5,060
)
 
$
77,684

 
$
9,948

 
$
56,513

Interest income and expense, net
 
36,950

 
42,281

 
72,403

 
89,397

Income tax provision, net
 
922

 
17,802

 
9,102

 
12,399

Depreciation and amortization
 
155,410

 
148,449

 
309,631

 
294,003

Net income attributable to noncontrolling interests
 
(632
)
 
(462
)
 
(1,438
)
 
(842
)
EBITDA
 
187,590

 
285,754

 
399,646

 
451,470

(Gains) losses on investments, net
 
(12,856
)
 
(65,396
)
 
(19,791
)
 
(28,733
)
Litigation expense
 
24,504

 
—

 
24,504

 
—

Vendor settlement
 
—

 
(9,571
)
 
—

 
(9,571
)
Adjusted EBITDA
 
$
199,238

 
$
210,787

 
$
404,359

 
$
413,166



2


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,” “Gains and losses on investments, net,” and other non-recurring or non-operational items. 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 June 30, 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 June 30, 2019 filed today with the Securities and Exchange Commission.

EchoStar will host its earnings conference call on Thursday, August 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 6673307.

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 June 30, 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.

###

Contact Information

EchoStar Investor Relations
EchoStar Media Relations
Deepak V. Dutt
Phone: +1 301-428-1686
Email: deepak.dutt@echostar.com
Sharyn Nerenberg
Phone: +1 301-428-7124
Email: sharyn.nerenberg@echostar.com


3


ECHOSTAR CORPORATION
Condensed Consolidated Balance Sheets
(Amounts in thousands, except per share amounts)
 
 
As of
 
 
June 30, 2019
 
December 31, 2018
Assets
 
(Unaudited) 
 
(Audited)
Current assets:
 
 

 
 

Cash and cash equivalents
 
$
1,298,005

 
$
928,306

Marketable investment securities, at fair value
 
1,203,308

 
2,282,152

Trade accounts receivable and contract assets, net (Note 3)
 
201,561

 
201,096

Trade accounts receivable - DISH Network
 
13,943

 
14,200

Inventory
 
73,345

 
75,379

Prepaids and deposits
 
65,589

 
61,177

Other current assets
 
19,857

 
18,539

Total current assets
 
2,875,608

 
3,580,849

Noncurrent assets:
 
 

 
 

Property and equipment, net
 
3,329,794

 
3,414,908

Operating lease right-of-use assets
 
113,643

 
—

Goodwill
 
504,173

 
504,173

Regulatory authorizations, net
 
493,661

 
495,654

Other intangible assets, net
 
36,869

 
44,231

Investments in unconsolidated entities
 
225,582

 
262,473

Other receivables - DISH Network
 
96,733

 
95,114

Other noncurrent assets, net
 
274,028

 
263,892

Total noncurrent assets
 
5,074,483

 
5,080,445

Total assets
 
$
7,950,091

 
$
8,661,294

Liabilities and Stockholders’ Equity
 
 

 
 

Current liabilities:
 
 

 
 

Trade accounts payable
 
$
105,929

 
$
121,437

Trade accounts payable - DISH Network
 
1,113

 
1,698

Current portion of long-term debt and finance lease obligations
 
42,682

 
959,577

Contract liabilities
 
106,308

 
72,284

Accrued interest
 
42,835

 
47,416

Accrued compensation
 
44,829

 
54,242

Accrued taxes
 
16,221

 
16,013

Accrued expenses and other
 
111,745

 
72,470

Total current liabilities
 
471,662

 
1,345,137

Noncurrent liabilities:
 
 

 
 

Long-term debt and finance lease obligations, net
 
2,553,352

 
2,573,204

Deferred tax liabilities, net
 
472,872

 
465,933

Operating lease liabilities
 
94,979

 
—

Other noncurrent liabilities
 
114,275

 
121,546

Total noncurrent liabilities
 
3,235,478

 
3,160,683

Total liabilities
 
3,707,140

 
4,505,820

Commitments and contingencies (Note 15)
 
 
 
 
Stockholders’ equity:
 
 

 
 

Preferred stock, $0.001 par value, 20,000,000 shares authorized, none issued and outstanding at each of June 30, 2019 and December 31, 2018
 
—

 
—

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, 56,189,672 shares issued and 49,704,751 shares outstanding at June 30, 2019 and 54,142,566 shares issued and 47,657,645 shares outstanding at December 31, 2018
 
56

 
54

Class B convertible common stock, $0.001 par value, 800,000,000 shares authorized, 47,687,039 shares issued and outstanding at each of June 30, 2019 and December 31, 2018
 
48

 
48

Class C convertible common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at each of June 30, 2019 and December 31, 2018
 
—

 
—

Class D common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at each of June 30, 2019 and December 31, 2018
 
—

 
—

Additional paid-in capital
 
3,777,499

 
3,702,522

Accumulated other comprehensive loss
 
(119,500
)
 
(125,100
)
Accumulated earnings
 
704,236

 
694,129

Treasury stock, at cost
 
(131,454
)
 
(131,454
)
Total EchoStar Corporation stockholders’ equity
 
4,230,885

 
4,140,199

Noncontrolling interests
 
12,066

 
15,275

Total stockholders’ equity
 
4,242,951

 
4,155,474

Total liabilities and stockholders’ equity
 
$
7,950,091

 
$
8,661,294



4


ECHOSTAR CORPORATION
Condensed Consolidated Statements of Operations
(Amounts in thousands, except per share amounts)

 
 
For the three months
ended June 30,
 
For the six months
ended June 30,
 
 
2019
 
2018
 
2019
 
2018
Revenue:
 
 
 
 
 
 

 
 

Services and other revenue - DISH Network
 
$
85,057

 
$
100,171

 
$
170,945

 
$
203,976

Services and other revenue - other
 
394,422

 
375,445

 
787,902

 
730,485

Equipment revenue
 
57,645

 
50,341

 
109,359

 
93,288

Total revenue
 
537,124

 
525,957

 
1,068,206

 
1,027,749

 
 
 
 
 
 
 
 
 
Costs and expenses:
 
 
 
 
 
 

 
 

Cost of sales - services and other (exclusive of depreciation and amortization)
 
153,198

 
151,157

 
306,769

 
299,902

Cost of sales - equipment (exclusive of depreciation and amortization)
 
46,549

 
41,865

 
91,556

 
80,936

Selling, general and administrative expenses
 
152,629

 
103,074

 
264,763

 
206,349

Research and development expenses
 
6,388

 
6,647

 
13,276

 
13,784

Depreciation and amortization
 
155,410

 
148,449

 
309,631

 
294,003

Total costs and expenses
 
514,174

 
451,192

 
985,995

 
894,974

Operating income
 
22,950

 
74,765

 
82,211

 
132,775

 
 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 

 
 

Interest income
 
23,213

 
19,253

 
47,642

 
34,888

Interest expense, net of amounts capitalized
 
(60,163
)
 
(61,534
)
 
(120,045
)
 
(124,285
)
Gains (losses) on investments, net
 
12,856

 
65,396

 
19,791

 
28,733

Equity in losses of unconsolidated affiliates, net
 
(4,754
)
 
(2,058
)
 
(11,107
)
 
(3,067
)
Other, net
 
1,760

 
(336
)
 
558

 
(132
)
Total other income (expense), net
 
(27,088
)
 
20,721

 
(63,161
)
 
(63,863
)
Income (loss) before income taxes
 
(4,138
)
 
95,486

 
19,050

 
68,912

Income tax provision, net
 
(922
)
 
(17,802
)
 
(9,102
)
 
(12,399
)
Net income (loss)
 
(5,060
)
 
77,684

 
9,948

 
56,513

Less: Net income attributable to noncontrolling interests
 
632

 
462

 
1,438

 
842

Net income (loss) attributable to EchoStar Corporation common stock
 
$
(5,692
)
 
$
77,222

 
$
8,510

 
$
55,671

 
 
 
 
 
 
 
 
 
Earnings per share - Class A and B common stock:
 
 
 
 
 
 

 
 

Basic earnings (loss) per share
 
$
(0.06
)
 
$
0.80

 
$
0.09

 
$
0.58

Diluted earnings (loss) per share
 
$
(0.06
)
 
$
0.80

 
$
0.09

 
$
0.57



5


ECHOSTAR CORPORATION
Condensed Consolidated Statements of Cash Flows
(Amounts in thousands, except per share amounts)
 
 
For the six months ended June 30,
 
 
2019
 
2018
Cash flows from operating activities:
 
 

 
 

Net income (loss)
 
$
9,948

 
$
56,513

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

 
 

Depreciation and amortization
 
309,631

 
294,003

Equity in losses of unconsolidated affiliates, net
 
11,107

 
3,067

Amortization of debt issuance costs
 
3,872

 
3,905

(Gains) losses on investments, net
 
(19,791
)
 
(28,674
)
Stock-based compensation
 
4,833

 
5,110

Deferred tax provision
 
7,014

 
10,231

Dividend received from unconsolidated entity
 
—

 
5,000

Changes in current assets and current liabilities, net:
 
 
 
 
Trade accounts receivable, net
 
167

 
(3,061
)
Trade accounts receivable - DISH Network
 
257

 
17,262

Inventory
 
2,114

 
238

Other current assets
 
(2,500
)
 
(5,430
)
Trade accounts payable
 
(225
)
 
2,364

Trade accounts payable - DISH Network
 
(585
)
 
(3,360
)
Accrued expenses and other
 
51,409

 
7,749

Changes in noncurrent assets and noncurrent liabilities, net
 
1,374

 
(17,200
)
Other, net
 
2,149

 
5,822

Net cash flows from operating activities
 
380,774

 
353,539

Cash flows from investing activities:
 
 

 
 

Purchases of marketable investment securities
 
(504,264
)
 
(1,632,930
)
Sales and maturities of marketable investment securities
 
1,621,481

 
841,638

Expenditures for property and equipment
 
(219,440
)
 
(248,098
)
Refunds and other receipts related to property and equipment
 
—

 
77,524

Expenditures for externally marketed software
 
(15,329
)
 
(15,000
)
Net cash flows from investing activities
 
882,448

 
(976,866
)
Cash flows from financing activities:
 
 

 
 

Repayment of debt and finance lease obligations
 
(21,180
)
 
(18,417
)
Repurchase and maturity of debt
 
(920,923
)
 
—

Purchase of noncontrolling interest
 
(7,313
)
 
—

Repayment of in-orbit incentive obligations
 
(3,778
)
 
(3,272
)
Net proceeds from Class A common stock options exercised
 
61,503

 
4,064

Net proceeds from Class A common stock issued under the Employee Stock Purchase Plan
 
5,074

 
4,886

Other, net
 
905

 
(401
)
Net cash flows from financing activities
 
(885,712
)
 
(13,140
)
Effect of exchange rates on cash and cash equivalents
 
121

 
(1,941
)
Net increase (decrease) in cash and cash equivalents, including restricted amounts
 
377,631

 
(638,408
)
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
 
$
1,307,126

 
$
1,793,841

 
 
 
 
 
Supplemental disclosure of cash flow information:
 
 

 
 

Cash paid for interest, net of amounts capitalized
 
$
120,625

 
$
122,017

Cash paid for income taxes
 
$
1,217

 
$
2,574


6