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May 10, 2017 7:46 AM ET

EchoStar Announces First Quarter 2017 Results

Disclosure NewswireTM

iCrowdNewswire - May 10, 2017

EchoStar Corporation (NASDAQ: SATS) today announced its financial results for the quarter ended March 31, 2017.

First Quarter 2017 Financial Highlights:

  • Consolidated revenues of $433 million.
  • Consolidated net income from continuing operations of $31 million
  • Consolidated net income attributable to EchoStar common stock of $39 million and diluted earnings per share of $0.41.
  • Consolidated EBITDA of $183 million (see reconciliation of this non-GAAP measure below).
  • Approximately 1,043,000 Hughes consumer broadband subscribers as of March 31, 2017.
  • Cash, cash equivalents and current marketable investment securities of $3.18 billion as of March 31, 2017

In the current quarter we changed the way we present our segments. Historically our business segments reflected an allocation of the costs of our corporate functions. Under our new presentation, these costs are no longer allocated to the operating segments and are now reported as part of the Corporate and Other segment (previously “All Other and Eliminations”).

In addition, results of our EchoStar Technology segment, which was transferred to DISH Network Corporation in the Share Exchange transaction, are included in Discontinued Operations.

Set forth below is a table highlighting EchoStar’s segment results for the three months ended March 31, 2017 and 2016:

For the Three Months Ended
March 31,

2017

2016

(Dollars in thousands)

Revenue

Hughes

$

329,320

$

326,238

EchoStar Satellite Services

100,326

102,989

Corporate & Other

3,505

2,747

Total

$

433,151

$

431,974

EBITDA

Hughes

$

100,852

$

110,356

EchoStar Satellite Services

83,063

88,640

Corporate & Other

(601)

(13,444)

Total

$

183,314

$

185,552

Net income attributable to EchoStar common stock

$

38,924

$

50,674

Diluted earnings per share (in dollars)

$

0.41

$

0.54

Net income from continuing operations

$

30,775

$

35,385

Capital expenditures for property and equipment from continuing operations

$

89,950

$

205,795

The following table reconciles total consolidated Net income to EBITDA.

For the Three Months
Ended March 31,

2017

2016

(In thousands)

Net income

$

37,352

$

48,443

Interest income and expense, net

37,105

19,206

Income tax (benefit) provision

(12)

20,172

Depreciation and amortization

115,083

110,077

Net income from discontinued operations

(6,577)

(13,058)

Net loss attributable to noncontrolling interest in HSS Tracking Stock and other noncontrolling interests

363

712

EBITDA

$

183,314

$

185,552

Note on Use of Non-GAAP Financial Measures

EBITDA is defined as “Net income” excluding “Interest expense, net of amounts capitalized,” “Interest income”, “Income tax benefit (provision)” and “Depreciation and amortization.”  EBITDA is not a measure determined in accordance with US GAAP. This non-GAAP measure is reconciled to Net income 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. 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 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, 2017 and 2016 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, 2017 filed today with the Securities and Exchange Commission.

EchoStar will host its earnings conference call on Wednesday, May 10, 2017 at 12:00 noon Eastern Time. The call-in numbers are (877) 815-1625 (toll-free) and (716) 247-5178 (international), Conference ID # 18953417.

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, 2016 and Quarterly Report on Form 10-Q for the period ended March 31, 2017, each 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

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)

(Unaudited)

As of

March 31, 2017

December 31, 2016

Assets

Current Assets:

Cash and cash equivalents

$

2,799,545

$

2,570,365

Marketable investment securities, at fair value

383,015

522,516

Trade accounts receivable, net of allowance for doubtful accounts of $11,371 and $12,956, respectively

167,860

182,527

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

50,284

19,417

Inventory

79,422

62,620

Prepaids and deposits

45,604

43,456

Other current assets

12,495

10,862

Current assets of discontinued operations

213,191

311,524

Total current assets

3,751,416

3,723,287

Noncurrent Assets:

Restricted cash and marketable investment securities

8,343

12,926

Property and equipment, net of accumulated depreciation of $2,724,049 and $2,598,492, respectively

3,425,548

3,398,195

Regulatory authorizations, net

545,620

544,633

Goodwill

504,173

504,173

Other intangible assets, net

73,006

80,734

Investments in unconsolidated entities

165,992

171,016

Other receivable – DISH Network

91,029

90,586

Other noncurrent assets, net

181,899

166,385

Noncurrent assets of discontinued operations

316,924

Total noncurrent assets

4,995,610

5,285,572

Total assets

$

8,747,026

$

9,008,859

Liabilities and Stockholders’ Equity

Current Liabilities:

Trade accounts payable

$

134,461

$

170,297

Trade accounts payable – DISH Network

3,691

1,072

Current portion of long-term debt and capital lease obligations

37,270

32,984

Deferred revenue and prepayments

54,596

59,989

Accrued interest

57,012

46,487

Accrued compensation

30,013

53,454

Accrued expenses and other

106,391

95,726

Current liabilities of discontinued operations

311

71,429

Total current liabilities

423,745

531,438

Noncurrent Liabilities:

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

3,620,044

3,622,463

Deferred tax liabilities, net

736,186

746,667

Other noncurrent liabilities

121,341

90,785

Noncurrent liabilities of discontinued operations

10,701

Total noncurrent liabilities

4,477,571

4,470,616

Total liabilities

4,901,316

5,002,054

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, zero authorized, issued and outstanding at March 31, 2017 and 13,000,000 shares authorized and 6,290,499 issued and outstanding at December 31, 2016

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, 53,320,812 shares issued and 47,788,494 shares outstanding at March 31, 2017 and 52,243,465 shares issued and 46,711,147 shares outstanding at December 31, 2016

53

52

Class B common stock, $.001 par value, 800,000,000 shares authorized, 47,687,039 shares issued and outstanding at each of March 31, 2017 and December 31, 2016

48

48

Class C common stock, $.001 par value, 800,000,000 shares authorized, none issued and outstanding at each of March 31, 2017 and December 31, 2016

Class D common stock, $.001 par value, 800,000,000 shares authorized, none issued and outstanding at each of March 31, 2017 and December 31, 2016

Additional paid-in capital

3,644,370

3,828,677

Accumulated other comprehensive loss

(80,191)

(124,803)

Accumulated earnings

366,470

314,247

Treasury stock, at cost

(98,162)

(98,162)

Total EchoStar stockholders’ equity

3,832,588

3,920,065

Noncontrolling interest in HSS Tracking Stock

73,910

Other noncontrolling interests

13,122

12,830

Total stockholders’ equity

3,845,710

4,006,805

Total liabilities and stockholders’ equity

$

8,747,026

$

9,008,859

ECHOSTAR CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

For the Three Months Ended March 31,

2017

2016

Revenue:

Services and other revenue – DISH Network

$

114,955

$

116,449

Services and other revenue – other

269,791

269,897

Equipment revenue – DISH Network

31

2,769

Equipment revenue – other

48,374

42,859

Total revenue

433,151

431,974

Costs and Expenses:

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

131,783

125,582

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

43,938

43,108

Selling, general and administrative expenses

82,991

80,545

Research and development expenses

7,705

6,932

Depreciation and amortization

115,083

110,077

Total costs and expenses

381,500

366,244

Operating income

51,651

65,730

Other Income (Expense):

Interest income

8,291

3,965

Interest expense, net of amounts capitalized

(45,396)

(23,171)

Gains on investments, net

12,035

2,462

Other-than-temporary impairment loss on available-for-sale securities

(3,298)

Equity in earnings (losses) of unconsolidated affiliates, net

6,408

(808)

Other, net

1,072

7,379

Total other expense, net

(20,888)

(10,173)

Income from continuing operations before income taxes

30,763

55,557

Income tax benefit (provision)

12

(20,172)

Net income from continuing operations

30,775

35,385

Net income from discontinued operations

6,577

13,058

Net income

37,352

48,443

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

(655)

(823)

Less: Net income attributable to other noncontrolling interests

292

111

Net income attributable to EchoStar

37,715

49,155

Less: Net loss attributable to Hughes Retail Preferred Tracking Stock

(1,209)

(1,519)

Net income attributable to EchoStar common stock

$

38,924

$

50,674

Amounts attributable to EchoStar common stock:

Net income from continuing operations

$

32,347

$

37,616

Net income from discontinued operations

6,577

13,058

Net income attributable to EchoStar common stock

$

38,924

$

50,674

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

Basic

94,745

93,331

Diluted

95,893

93,852

Earnings per share – Class A and B common stock:

Basic:

   Continuing operations

$

0.34

$

0.40

   Discontinued operations

0.07

0.14

Total basic earnings per share

$

0.41

$

0.54

Diluted:

   Continuing operations

$

0.34

$

0.40

   Discontinued operations

0.07

0.14

Total diluted earnings per share

$

0.41

$

0.54

ECHOSTAR CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

For the Three Months Ended March 31,

2017

2016

Cash Flows from Operating Activities:

Net income

$

37,352

$

48,443

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

Depreciation and amortization

126,742

126,734

Equity in losses (earnings) of unconsolidated affiliates, net

(5,249)

963

Gain and impairment on investments, net

(8,737)

(2,462)

Stock-based compensation

956

4,384

Deferred tax provision

343

25,684

Dividends received from unconsolidated entity

7,500

Changes in current assets and current liabilities, net

(13,857)

(18,184)

Changes in noncurrent assets and noncurrent liabilities, net

(6,003)

3,388

Other, net

2,308

3,899

Net cash flows from operating activities

141,355

192,849

Cash Flows from Investing Activities:

Purchases of marketable investment securities

(45,905)

(321,892)

Sales and maturities of marketable investment securities

205,296

323,889

Expenditures for property and equipment

(102,463)

(235,223)

Refunds and other receipts related to capital expenditures

24,087

Changes in restricted cash and marketable investment securities

4,583

(662)

Sale of investment in unconsolidated entity

17,781

Expenditures for externally marketed software

(10,832)

(5,959)

Other, net

1,460

Net cash flows from investing activities

68,460

(214,300)

Cash Flows from Financing Activities:

Repayment of debt and capital lease obligations

(8,736)

(10,542)

Net proceeds from Class A common stock options exercised

26,325

2,315

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

2,409

4,020

Cash exchanged for Tracking Stock

(651)

Other, net

(1,475)

(302)

Net cash flows from financing activities

17,872

(4,509)

Effect of exchange rates on cash and cash equivalents

715

536

Net increase (decrease) in cash and cash equivalents

228,402

(25,424)

Cash and cash equivalents, beginning of period

2,571,143

924,240

Cash and cash equivalents, end of period

$

2,799,545

$

898,816

Supplemental Disclosure of Cash Flow Information:

Cash paid for interest (including capitalized interest)

$

54,053

$

10,476

Capitalized interest

$

21,824

$

22,021

Cash paid for income taxes

$

1,035

$

2,586

Employee benefits paid in Class A common stock

$

11,199

$

11,126

Property and equipment financed under capital lease obligations

$

7,485

$

2,351

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

$

(6,315)

$

3,670

Capitalized in-orbit incentive obligations

$

31,000

$

Noncash net assets exchanged for Tracking Stock

$

299,425

$

 

SOURCE EchoStar Corporation

Related Links

http://www.echostar.com

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