EchoStar Corporation (NASDAQ: SATS) announced its financial results for the three and nine months ended September 30, 2022.
Three Months Ended September 30, 2022 Financial Highlights:
Nine Months Ended September 30, 2022 Financial Highlights:
"During the third quarter of 2022, the EchoStar team continued to optimize operations and asset yields, delivering a solid performance," said Hamid Akhavan, CEO and President of EchoStar. "We remain focused on operating the business in an efficient manner while also preparing for the launch of our EchoStar XXIV/JUPITER 3 satellite. We have capitalized on enterprise market opportunities, and I am pleased that we have increased sales of equipment, primarily developed in-house, for both the three and nine month periods ending September 30, compared to the same periods last year. We continue to seek opportunities in pursuit of our strategy of being a global connectivity and services provider."
Three Months Ended September 30, 2022 - Additional Information:
Set forth below is a table highlighting certain of EchoStar's segment results for the three and nine months ended September 30, 2022 and 2021 (amounts in thousands) (all US GAAP amounts reference results from operations):
For the three months | For the nine months | |||||||
2022 | 2021 | 2022 | 2021 | |||||
Revenue | ||||||||
Hughes | $ 489,565 | $ 496,937 | $ 1,475,512 | $ 1,465,073 | ||||
EchoStar Satellite Services | 4,981 | 4,436 | 14,305 | 12,808 | ||||
Corporate and Other | 2,841 | 3,287 | 8,420 | 9,195 | ||||
Total revenue | $ 497,387 | $ 504,660 | $ 1,498,237 | $ 1,487,076 | ||||
Adjusted EBITDA | ||||||||
Hughes | $ 177,574 | $ 202,997 | $ 544,284 | $ 612,251 | ||||
EchoStar Satellite Services | 3,447 | 2,319 | 9,658 | 6,481 | ||||
Corporate & Other: | ||||||||
Corporate overhead, operating and other | (22,521) | (19,974) | (62,265) | (61,940) | ||||
Equity in earnings (losses) of | 319 | 1,630 | 759 | 2,615 | ||||
Total Corporate & Other | (22,202) | (18,344) | (61,506) | (59,325) | ||||
Total Adjusted EBITDA | $ 158,819 | $ 186,972 | $ 492,436 | $ 559,407 | ||||
Net income (loss) | $ 19,550 | $ 30,217 | $ 118,968 | $ 142,804 | ||||
Expenditures for property and equipment | $ 61,457 | $ 89,537 | $ 249,374 | $ 352,003 | ||||
Reconciliation of GAAP to Non-GAAP Measurement (amounts in thousands):
For the three months | For the nine months | |||||||
2022 | 2021 | 2022 | 2021 | |||||
Net income (loss) | $ 19,550 | $ 30,217 | $ 118,968 | $ 142,804 | ||||
Interest income, net | (14,183) | (5,725) | (29,677) | (16,914) | ||||
Interest expense, net of amounts capitalized | 13,845 | 16,313 | 43,125 | 79,848 | ||||
Income tax provision (benefit), net | 13,195 | 19,748 | 51,367 | 63,047 | ||||
Depreciation and amortization | 110,233 | 120,596 | 347,224 | 368,864 | ||||
Net loss (income) attributable to non- | 2,853 | 3,192 | 8,736 | 6,419 | ||||
EBITDA | 145,493 | 184,341 | 539,743 | 644,068 | ||||
(Gains) losses on investments, net | 10,077 | (3,748) | (48,071) | (112,981) | ||||
Impairment of long-lived assets | — | — | 711 | 245 | ||||
Litigation Expense | — | — | — | 16,800 | ||||
License fee dispute - India, net of non- | 444 | (262) | — | (708) | ||||
Loss on Debt Repurchase | — | — | — | 1,938 | ||||
Foreign currency transaction (gains) losses, | 2,805 | 6,641 | 53 | 10,045 | ||||
Adjusted EBITDA | $ 158,819 | $ 186,972 | $ 492,436 | $ 559,407 | ||||
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, 2022 and 2021 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, 2022 filed today with the Securities and Exchange Commission.
EchoStar will host a conference call to discuss its earnings on Thursday, November 3, 2022 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 participate via telephone and ask a question, participants must register using this online form.
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, 2021 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 | ||||
As of | ||||
September 30, | December 31, | |||
Assets | ||||
Current assets: | ||||
Cash and cash equivalents | $ 901,269 | $ 535,894 | ||
Marketable investment securities | 666,904 | 1,010,496 | ||
Trade accounts receivable and contract assets, net | 243,683 | 182,063 | ||
Other current assets, net | 229,214 | 198,444 | ||
Total current assets | 2,041,070 | 1,926,897 | ||
Non-current assets: | ||||
Property and equipment, net | 2,251,258 | 2,338,285 | ||
Operating lease right-of-use assets | 147,811 | 149,198 | ||
Goodwill | 532,570 | 511,086 | ||
Regulatory authorizations, net | 460,084 | 469,766 | ||
Other intangible assets, net | 16,323 | 13,984 | ||
Other investments, net | 352,778 | 297,747 | ||
Other non-current assets, net | 323,411 | 338,241 | ||
Total non-current assets | 4,084,235 | 4,118,307 | ||
Total assets | $ 6,125,305 | $ 6,045,204 | ||
Liabilities and Stockholders' Equity | ||||
Current liabilities: | ||||
Trade accounts payable | $ 95,019 | $ 109,338 | ||
Contract liabilities | 127,584 | 141,343 | ||
Accrued expenses and other current liabilities | 183,613 | 209,442 | ||
Total current liabilities | 406,216 | 460,123 | ||
Non-current liabilities: | ||||
Long-term debt, net | 1,496,578 | 1,495,994 | ||
Deferred tax liabilities, net | 434,043 | 403,684 | ||
Operating lease liabilities | 133,197 | 134,897 | ||
Other non-current liabilities | 119,719 | 136,426 | ||
Total non-current liabilities | 2,183,537 | 2,171,001 | ||
Total liabilities | 2,589,753 | 2,631,124 | ||
Commitments and contingencies | ||||
ECHOSTAR CORPORATION | ||||
Stockholders' equity: | ||||
Preferred stock, $0.001 par value, 20,000,000 shares authorized, none | — | — | ||
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 | 59 | 58 | ||
Class B convertible common stock, $0.001 par value, 800,000,000 | 48 | 48 | ||
Class C convertible common stock, $0.001 par value, 800,000,000 | — | — | ||
Class D common stock, $0.001 par value, 800,000,000 shares | — | — | ||
Additional paid-in capital | 3,361,219 | 3,345,878 | ||
Accumulated other comprehensive income (loss) | (180,339) | (212,102) | ||
Accumulated earnings (losses) | 784,170 | 656,466 | ||
Treasury shares, at cost | (525,824) | (436,521) | ||
Total EchoStar Corporation stockholders' equity | 3,439,333 | 3,353,827 | ||
Non-controlling interests | 96,219 | 60,253 | ||
Total stockholders' equity | 3,535,552 | 3,414,080 | ||
Total liabilities and stockholders' equity | $ 6,125,305 | $ 6,045,204 | ||
ECHOSTAR CORPORATION | |||||||
For the three months | For the nine months | ||||||
2022 | 2021 | 2022 | 2021 | ||||
Revenue: | |||||||
Services and other revenue | $ 401,382 | $ 432,739 | $ 1,234,890 | $ 1,294,355 | |||
Equipment revenue | 96,005 | 71,921 | 263,347 | 192,721 | |||
Total revenue | 497,387 | 504,660 | 1,498,237 | 1,487,076 | |||
Costs and expenses: | |||||||
Cost of sales - services and other (exclusive of | 145,189 | 138,179 | 430,553 | 410,515 | |||
Cost of sales - equipment (exclusive of depreciation | 74,329 | 62,328 | 213,497 | 161,982 | |||
Selling, general and administrative expenses | 111,421 | 112,986 | 342,682 | 341,143 | |||
Research and development expenses | 9,181 | 7,974 | 25,562 | 22,960 | |||
Depreciation and amortization | 110,233 | 120,596 | 347,224 | 368,864 | |||
Impairment of long-lived assets | — | — | 711 | 245 | |||
Total costs and expenses | 450,353 | 442,063 | 1,360,229 | 1,305,709 | |||
Operating income (loss) | 47,034 | 62,597 | 138,008 | 181,367 | |||
Other income (expense): | |||||||
Interest income, net | 14,183 | 5,725 | 29,677 | 16,914 | |||
Interest expense, net of amounts capitalized | (13,845) | (16,313) | (43,125) | (79,848) | |||
Gains (losses) on investments, net | (10,077) | 3,748 | 48,071 | 112,981 | |||
Equity in earnings (losses) of unconsolidated | (1,426) | 74 | (4,441) | (2,596) | |||
Foreign currency transaction gains (losses), net | (2,805) | (6,641) | (53) | (10,045) | |||
Other, net | (319) | 775 | 2,198 | (12,922) | |||
Total other income (expense), net | (14,289) | (12,632) | 32,327 | 24,484 | |||
Income (loss) before income taxes | 32,745 | 49,965 | 170,335 | 205,851 | |||
Income tax benefit (provision), net | (13,195) | (19,748) | (51,367) | (63,047) | |||
Net income (loss) | 19,550 | 30,217 | 118,968 | 142,804 | |||
Less: Net loss (income) attributable to non-controlling | 2,853 | 3,192 | 8,736 | 6,419 | |||
Net income (loss) attributable to EchoStar Corporation | $ 22,403 | $ 33,409 | $ 127,704 | $ 149,223 | |||
Earnings (losses) per share - Class A and B common | |||||||
Basic | $ 0.27 | $ 0.38 | $ 1.51 | $ 1.64 | |||
Diluted | $ 0.27 | $ 0.38 | $ 1.51 | $ 1.64 | |||
ECHOSTAR CORPORATION | ||||
For the nine months ended | ||||
2022 | 2021 | |||
Cash flows from operating activities: | ||||
Net income (loss) | $ 118,968 | $ 142,804 | ||
Adjustments to reconcile net income (loss) to cash flows provided | ||||
Depreciation and amortization | 347,224 | 368,864 | ||
Impairment of long-lived assets | 711 | 245 | ||
Losses (gains) on investments, net | (48,071) | (112,981) | ||
Equity in losses (earnings) of unconsolidated affiliates, net | 4,441 | 2,596 | ||
Foreign currency transaction losses (gains), net | 53 | 10,045 | ||
Deferred tax provision (benefit), net | 28,901 | 45,950 | ||
Stock-based compensation | 8,401 | 5,913 | ||
Amortization of debt issuance costs | 583 | 2,192 | ||
Other, net | 35,609 | 16,691 | ||
Changes in assets and liabilities, net: | ||||
Trade accounts receivable and contract assets, net | (63,563) | (20,894) | ||
Other current assets, net | (26,402) | (7,841) | ||
Trade accounts payable | 657 | (15,386) | ||
Contract liabilities | (13,759) | 30,066 | ||
Accrued expenses and other current liabilities | (27,004) | (103,457) | ||
Non-current assets and non-current liabilities, net | (23,432) | 63,055 | ||
Net cash provided by (used for) operating activities | 343,317 | 427,862 | ||
Cash flows from investing activities: | ||||
Purchases of marketable investment securities | (540,447) | (1,452,982) | ||
Sales and maturities of marketable investment securities | 917,077 | 2,099,815 | ||
Expenditures for property and equipment | (249,374) | (352,003) | ||
Expenditures for externally marketed software | (16,926) | (25,634) | ||
India JV formation | (7,892) | — | ||
Dividend received from unconsolidated affiliate | 2,000 | — | ||
Sale of unconsolidated affiliate | 7,500 | — | ||
Purchase of other investments | — | (50,000) | ||
Sales of other investments | 3,070 | 10,951 | ||
Net cash provided by (used for) investing activities | 115,008 | 230,147 | ||
Cash flows from financing activities: | ||||
Repurchase and maturity of the 2021 Senior Unsecured Notes | — | (901,818) | ||
Payment of finance lease obligations | (114) | (578) | ||
Payment of in-orbit incentive obligations | (2,422) | (1,800) | ||
Proceeds from Class A common stock issued under the Employee Stock | 7,173 | 7,288 | ||
Treasury share repurchase | (89,303) | (229,383) | ||
Contribution by non-controlling interest holder | — | 9,880 | ||
Other, net | — | (966) | ||
Net cash provided by (used for) financing activities | (84,666) | (1,117,377) | ||
Effect of exchange rates on cash and cash equivalents | (3,123) | (3,114) | ||
Net increase (decrease) in cash and cash equivalents | 370,536 | (462,482) | ||
Cash and cash equivalents, including restricted amounts, beginning of | 536,874 | 896,812 | ||
Cash and cash equivalents, including restricted amounts, end of period | $ 907,410 | $ 434,330 | ||
| Last Trade: | US$17.44 |
| Daily Change: | -0.78 -4.28 |
| Daily Volume: | 846,902 |
| Market Cap: | US$2.440B |
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