EchoStar Announces Financial Results for Three and Twelve Months Ended December 31, 2020

ENGLEWOOD, Colo., Feb. 23, 2021 /PRNewswire/ — EchoStar Corporation (NASDAQ: SATS) today announced its financial

ENGLEWOOD, Colo., Feb. 23, 2021 /PRNewswire/ — EchoStar Corporation (NASDAQ: SATS) today announced its financial results for the three and twelve months ended December 31, 2020.

EchoStar Corporation Logo. (PRNewsfoto/EchoStar Corporation)

Three Months Ended December 31, 2020 Financial Highlights:

  • Consolidated revenues of $489.3 million.

  • Net loss from continuing operations of $2.6 million, consolidated net income attributable to EchoStar common stock of $0.1 million, and diluted earnings per share of $0.01.

  • Consolidated Adjusted EBITDA of $166.7 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).

Twelve Months Ended December 31, 2020 Financial Highlights:

  • Consolidated revenues of $1,887.9 million.

  • Net loss from continuing operations of $51.9 million, consolidated net loss attributable to EchoStar common stock of $40.2 million, and diluted loss per share of $(0.41).

  • Consolidated Adjusted EBITDA of $642.9 million (see discussion and the reconciliation of GAAP to this non-GAAP measure below).

“2020 will go down in the history books as one of the most challenging on record, but it demonstrated the value of our service to businesses and families and brought out the very best of the EchoStar team,” commented Michael Dugan, CEO and President of EchoStar. “Thanks to their efforts and accomplishments in every market sector, we delivered solid financial results and grew revenue, net income, and Adjusted EBITDA over 2019. We remain excited about our position in the industry and our ability to grow as the demand for connectivity continues to increase.”

Three Months Ended December 31, 2020 – Additional Information:

  • Consolidated revenue was down $9.7 million year over year primarily driven by lower equipment sales as well as an estimated negative foreign exchange impact of $10.3 million.

  • Adjusted EBITDA increased 7.0% or $10.8 million year over year.

  • Net loss from continuing operations was $2.6 million, an improvement of $53.7 million from last year. The change was primarily due to higher operating income of $6.5 million, lower net interest expense of $47.5 million driven primarily by $58.5 million of interest expense accrued in the fourth quarter of 2019 related to our license fee dispute with the government of India, improvement in foreign currency transactions, net, of $5.7 million, and higher gains on investments, net, of $5.6 million. This was partially offset by higher income tax provision, net, of $9.9 million.

  • Total Hughes broadband subscribers are approximately 1,564,000 as of December 31, 2020. Subscribers in the US decreased by 27,000 to approximately 1,189,000. In Latin America, subscribers increased by 11,000 to approximately 375,000.

  • Based on an updated schedule from Maxar, the Jupiter 3 satellite is expected to launch in the second half of 2022. In December 2020, we contracted for the launch of the satellite.

  • For the three months ended December 31, 2020, approximately 69% of Hughes segment revenue was attributable to our consumer customers with approximately 31% attributable to our enterprise customers.

  • Cash, cash equivalents and current marketable investment securities were $2.5 billion as of December 31, 2020.

  • In December 2020, we purchased 1,708,907 shares of our Class A common stock in the open market. From January 1, 2021 through February 11, 2021, we purchased 2,851,841 shares of our Class A common stock in the open market.

Set forth below is a table highlighting certain of EchoStar’s segment results for the three and twelve months ended December 31, 2020 and 2019 (amounts in thousands) from continuing operations (all US GAAP amounts reference results from continuing operations):

For the three months
ended December 31,

For the twelve months
ended December 31,

2020

2019

2020

2019

Revenue

Hughes

$

482,418

$

491,823

$

1,860,834

$

1,852,742

EchoStar Satellite Services

4,165

4,384

17,398

16,257

Corporate and Other

2,690

2,799

9,675

17,082

Total revenue

$

489,273

$

499,006

$

1,887,907

$

1,886,081

Adjusted EBITDA

Hughes

$

188,389

$

176,738

$

723,343

$

666,890

EchoStar Satellite Services

2,026

1,988

7,873

6,994

Corporate & Other:

Corporate overhead, operating and other

(23,920)

(23,090)

(87,867)

(81,859)

Equity in earnings (losses) of unconsolidated affiliates, net

226

250

(434)

(9,257)

Total Corporate & Other

(23,694)

(22,840)

(88,301)

(91,116)

Total Adjusted EBITDA

$

166,721

$

155,886

$

642,915

$

582,768

Expenditures for property and equipment

$

113,757

$

103,723

$

408,798

$

418,074

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

For the three months
ended December 31,

For the twelve months
ended December 31,

2020

2019

2020

2019

Net income (loss)

$

(2,597)

$

(63,094)

$

(51,904)

$

(74,252)

Interest income, net

(6,275)

(17,535)

(39,982)

(82,352)

Interest expense, net of amounts capitalized

35,469

94,203

147,927

251,016

Income tax provision (benefit), net

17,760

7,882

24,069

20,488

Depreciation and amortization

132,934

129,146

525,011

490,765

Net (income) loss from discontinued operations

6,821

(39,401)

Net (income) loss attributable to non-controlling interests

2,714

9,976

11,754

11,335

EBITDA

180,005

167,399

616,875

577,599

(Gains) losses on investments, net

(6,458)

(825)

31,306

(28,912)

Impairment of long-lived assets

1,685

1,685

Litigation expense

(627)

25,701

License fee dispute – India, net of non-controlling interests

107

(7,150)

(936)

(3,210)

Foreign currency transaction (gains) losses, net

(8,618)

(2,911)

(6,015)

11,590

Adjusted EBITDA

$

166,721

$

155,886

$

642,915

$

582,768

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,” “Net income (loss) from discontinued operations,” 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 December 31, 2020 and 2019 are attached to this press release. Detailed financial data and other information are available in EchoStar’s Annual Report on Form 10-K for the period ended December 31, 2020 filed today with the Securities and Exchange Commission.

EchoStar will host a conference call and webcast to discuss its earnings on Tuesday, February 23, 2021 at 11:00 a.m. Eastern Time. The call-in numbers are (877) 815-1625 (toll-free) and (716) 247-5178 (international), Conference ID 9174397. The webcast will be available on EchoStar’s investor relations website at www.echostar.com.

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, 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

Condensed Consolidated Balance Sheets

(Amounts in thousands, except per share amounts)

As of December 31,

2020

2019

Assets

Current assets:

Cash and cash equivalents

$

896,005

$

1,519,431

Marketable investment securities

1,638,271

940,623

Trade accounts receivable and contract assets, net

183,989

196,629

Other current assets, net

189,821

179,531

Total current assets

2,908,086

2,836,214

Non-current assets:

Property and equipment, net

2,390,313

2,528,738

Operating lease right-of-use assets

128,303

114,042

Goodwill

511,597

506,953

Regulatory authorizations, net

478,762

478,598

Other intangible assets, net

18,433

29,507

Other investments, net

284,937

325,405

Other non-current assets, net

352,921

334,841

Total non-current assets

4,165,266

4,318,084

Total assets

$

7,073,352

$

7,154,298

Liabilities and Stockholders’ Equity

Current liabilities:

Trade accounts payable

$

122,366

$

124,080

Current portion of long-term debt, net

898,237

Contract liabilities

104,569

101,060

Accrued expenses and other current liabilities

299,999

270,879

Total current liabilities

1,425,171

496,019

Non-current liabilities:

Long-term debt, net

1,495,256

2,389,168

Deferred tax liabilities, net

359,896

351,692

Operating lease liabilities

114,886

96,941

Other non-current liabilities

70,893

74,925

Total non-current liabilities

2,040,931

2,912,726

Total liabilities

3,466,102

3,408,745

Commitments and contingencies

Stockholders’ equity:

Preferred stock, $0.001 par value, 20,000,000 shares authorized, none issued and outstanding at both December 31, 2020 and 2019

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, 57,254,201 shares issued and 48,863,374 shares outstanding at December 31, 2020 and 56,592,251 shares issued and 50,107,330 shares outstanding at December 31, 2019

57

57

Class B convertible common stock, $0.001 par value, 800,000,000 shares authorized, 47,687,039 shares issued and outstanding at both December 31, 2020 and 2019

48

48

Class C convertible common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at both December 31, 2020 and 2019

Class D common stock, $0.001 par value, 800,000,000 shares authorized, none issued and outstanding at both December 31, 2020 and 2019

Additional paid-in capital

3,321,426

3,290,483

Accumulated other comprehensive income (loss)

(187,876)

(122,138)

Accumulated earnings (losses)

583,591

632,809

Treasury stock, at cost

(174,912)

(131,454)

Total EchoStar Corporation stockholders’ equity

3,542,334

3,669,805

Non-controlling interests

64,916

75,748

Total stockholders’ equity

3,607,250

3,745,553

Total liabilities and stockholders’ equity

$

7,073,352

$

7,154,298

ECHOSTAR CORPORATION

Condensed Consolidated Statements of Operations

(Amounts in thousands, except per share amounts)

For the years ended December 31,

2020

2019

2018

Revenue:

Services and other revenue

$

1,682,304

$

1,619,271

$

1,557,228

Equipment revenue

205,603

266,810

205,410

Total revenue

1,887,907

1,886,081

1,762,638

Costs and expenses:

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

577,943

561,353

563,907

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

166,435

226,002

176,600

Selling, general and administrative expenses

474,912

509,145

436,088

Research and development expenses

29,448

25,739

27,570

Depreciation and amortization

525,011

490,765

457,116

Impairment of long-lived assets

1,685

65,220

Total costs and expenses

1,775,434

1,813,004

1,726,501

Operating income (loss)

112,473

73,077

36,137

Other income (expense):

Interest income, net

39,982

82,352

80,275

Interest expense, net of amounts capitalized

(147,927)

(251,016)

(219,288)

Gains (losses) on investments, net

(31,306)

28,912

(12,622)

Equity in earnings (losses) of unconsolidated affiliates, net

(7,267)

(14,734)

(5,954)

Foreign currency transaction gains (losses), net

6,015

(11,590)

(15,583)

Other, net

195

(166)

11,249

Total other income (expense), net

(140,308)

(166,242)

(161,923)

Income (loss) from continuing operations before income taxes

(27,835)

(93,165)

(125,786)

Income tax benefit (provision), net

(24,069)

(20,488)

(6,576)

Net income (loss) from continuing operations

(51,904)

(113,653)

(132,362)

Net income (loss) from discontinued operations

39,401

93,729

Net income (loss)

(51,904)

(74,252)

(38,633)

Less: Net loss (income) attributable to non-controlling interests

11,754

11,335

(1,842)

Net income (loss) attributable to EchoStar Corporation common stock

$

(40,150)

$

(62,917)

$

(40,475)

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

Basic and diluted earnings (losses) from continuing operations per share

$

(0.41)

$

(1.06)

$

(1.39)

Total basic and diluted earnings (losses) per share

$

(0.41)

$

(0.65)

$

(0.42)

ECHOSTAR CORPORATION

Condensed Consolidated Statements of Cash Flows

(Amounts in thousands, except per share amounts)

For the years ended December 31,

2020

2019

2018

Cash flows from operating activities:

Net income (loss)

$

(51,904)

$

(74,252)

$

(38,633)

Adjustments to reconcile net income (loss) to net cash flows from operating activities:

Depreciation and amortization

525,011

588,200

598,178

Impairment of long-lived assets

1,685

65,220

Losses (gains) on investments, net

31,306

(28,912)

12,109

Equity in losses (earnings) of unconsolidated affiliates, net

7,267

14,734

6,037

Foreign currency transaction losses (gains), net

(6,015)

11,590

15,583

Deferred tax provision (benefit), net

18,147

32,542

26,327

Stock-based compensation

8,887

9,353

9,990

Amortization of debt issuance costs

4,324

5,912

7,923

Dividends received from unconsolidated affiliates

2,716

10,000

Other, net

(12,501)

6,297

(3,489)

Changes in assets and current liabilities, net:

Trade accounts receivable and contract assets, net

2,237

8,289

(17,842)

Other current assets, net

(12,984)

(39,190)

18,577

Trade accounts payable

(12,339)

13,149

9,562

Contract liabilities

3,509

26,376

7,867

Accrued expenses and other current liabilities

42,822

66,352

12,183

Non-current assets and non-current liabilities, net

(15,064)

13,166

(5,070)

Net cash flows from operating activities

534,388

656,322

734,522

Cash flows from investing activities:

Purchases of marketable investment securities

(2,799,838)

(993,369)

(2,973,254)

Sales and maturities of marketable investment securities

2,110,336

2,391,220

1,498,463

Expenditures for property and equipment

(408,798)

(418,584)

(555,141)

Expenditures for externally marketed software

(38,655)

(29,310)

(31,639)

Purchase of other investments

(5,500)

(93,687)

Investments in unconsolidated affiliates

(2,149)

(115,991)

Purchases of regulatory authorizations

(34,447)

Refunds and other receipts related to property and equipment

77,524

Dividend received from unconsolidated affiliate

2,284

Sale of investment in unconsolidated affiliates

1,558

Net cash flows from investing activities

(1,142,455)

821,958

(2,098,480)

Cash flows from financing activities:

Repurchase and maturity of the 2019 Senior Secured Notes

(920,923)

(70,173)

Repayment of other long-term debt and finance lease obligations

(811)

(29,347)

(41,019)

Payment of in-orbit incentive obligations

(1,554)

(5,447)

(5,350)

Net proceeds from Class A common stock options exercised

855

67,337

4,424

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

10,109

9,779

9,368

Treasury share purchase

(43,458)

(33,292)

Contribution by non-controlling interest holder

18,241

Purchase of non-controlling interest

(7,313)

Other, net

998

603

(521)

Net cash flows from financing activities

(15,620)

(885,311)

(136,563)

Effect of exchange rates on cash and cash equivalents

(1,390)

(575)

(2,233)

Net increase (decrease) in cash and cash equivalents

(625,077)

592,394

(1,502,754)

Cash and cash equivalents, including restricted amounts, beginning of period

1,521,889

929,495

2,432,249

Cash and cash equivalents, including restricted amounts, end of period

$

896,812

$

1,521,889

$

929,495

Cision

Cision

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SOURCE EchoStar Corporation