ENGLEWOOD, Colo., Feb. 22,
2023 /PRNewswire/ -- EchoStar Corporation (NASDAQ:
SATS) announced its financial results for the three and twelve
months ended December 31, 2022.
Three Months Ended December 31,
2022 Financial Highlights:
- Consolidated revenue of $499.9
million.
- Net income of $47.6 million,
consolidated net income attributable to EchoStar common stock of
$49.3 million, and basic and diluted
earnings per share of common stock of $0.59
- Consolidated Adjusted EBITDA of $163.6
million (see discussion and the reconciliation of GAAP to
this non-GAAP measure below).
Twelve Months Ended December 31, 2022
Financial Highlights:
- Consolidated revenue of $2.0
billion.
- Net income of $166.5 million,
consolidated net income attributable to EchoStar common stock of
$177.1 million, and basic and diluted
earnings per share of common stock of $2.10.
- Consolidated Adjusted EBITDA of $656.0
million (see discussion and the reconciliation of GAAP to
this non-GAAP measure below).
"The EchoStar team finished 2022 with a solid performance,
continuing to optimize operations and asset yields," said
Hamid Akhavan, CEO and President of
EchoStar. "In the near term, we remain focused on operating
the business in an efficient manner and preparing for the launch of
our upcoming EchoStar XXIV/JUPITER 3 satellite as a catalyst for
new growth. We have also made tangible strides toward
expanding our future capabilities as we begin construction on a
global S-band mobile satellite service network."
Three Months Ended December 31,
2022 - Additional Information:
- Consolidated revenue increased year over year. Higher equipment
sales of $33.1 million to our
domestic and international enterprise customers was offset by lower
service revenues of $31.9 million,
primarily due to lower broadband consumer customers.
- Adjusted EBITDA increased 2.5% or $4.0
million year over year.
-
- Hughes segment Adjusted EBITDA increased $4.2 million year over year. The increase was
driven primarily by lower sales and marketing expense for our
broadband consumer business.
- ESS segment Adjusted EBITDA increased $2.1 million year over year primarily due to
higher revenue.
- Corporate and Other segment Adjusted EBITDA decreased
$2.3 million year over year. The
decrease was primarily due to higher corporate expenses, partially
offset by higher earnings of unconsolidated affiliates, net, of
$1.3 million.
- Net income increased $127.7
million year over year. The increase was primarily due to
higher operating income of $16.0
million, a favorable change in net interest expense of
$17.0 million, a favorable change in
investments of $42.5 million, and
$55.3 million related to the
impairment of our Dish Mexico equity investment that occurred in
2021. These items were partially offset by higher net income tax
expense of $12.7 million.
- Hughes broadband subscribers totaled approximately 1,228,000,
declining 57,000 from September 30,
2022. Our current capacity limitations and increased
competitive pressures are impacting our consumer subscriber levels.
In Latin America, subscriber
levels were also impacted by adverse economic conditions and
capacity allocation to Community Wi-Fi and enterprise
opportunities.
- For the three months ended December 31,
2022, approximately 42% of Hughes segment revenue was
attributable to our enterprise customers, increasing from 35% in
the same period last year. The increase supports our strong focus
on our enterprise business and diversification objectives.
- Cash, cash equivalents and current marketable investment
securities were $1.7 billion as of
December 31, 2022.
- The JUPITER 3/EchoStar XXIV satellite is expected to be
launched during the second quarter of 2023.
Set forth below is a table highlighting certain of EchoStar's
segment results for the three and twelve months ended
December 31, 2022 and 2021 (amounts in thousands) (all US GAAP
amounts reference results from operations):
|
|
For the three
months
ended December 31,
|
|
For the twelve
months
ended December 31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
Hughes
|
|
$
491,075
|
|
$
491,154
|
|
$ 1,966,587
|
|
$ 1,956,226
|
|
EchoStar Satellite
Services
|
|
6,228
|
|
$
4,871
|
|
20,533
|
|
$ 17,679
|
|
Corporate and
Other
|
|
2,553
|
|
$
2,619
|
|
10,973
|
|
$ 11,815
|
|
Total
revenue
|
|
$
499,856
|
|
$
498,644
|
|
$ 1,998,093
|
|
$ 1,985,720
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
Hughes
|
|
$
182,467
|
|
$
178,218
|
|
$
726,752
|
|
$
790,469
|
|
EchoStar Satellite
Services
|
|
4,757
|
|
$
2,704
|
|
14,416
|
|
$
9,185
|
|
Corporate &
Other:
|
|
|
|
|
|
|
|
|
|
Corporate overhead,
operating and other
|
|
(24,235)
|
|
$
(20,675)
|
|
(86,502)
|
|
$
(82,615)
|
|
Equity in earnings
(losses) of unconsolidated affiliates, net
|
|
561
|
|
$
(723)
|
|
1,320
|
|
$
1,892
|
|
Total Corporate &
Other
|
|
(23,674)
|
|
$
(21,398)
|
|
(85,182)
|
|
$
(80,723)
|
|
Total Adjusted
EBITDA
|
|
$
163,550
|
|
$
159,524
|
|
$
655,986
|
|
$
718,931
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$ 47,580
|
|
$
(80,083)
|
|
$
166,548
|
|
$ 62,721
|
|
Expenditures for
property and equipment
|
|
$ 76,517
|
|
$ 86,427
|
|
$
325,891
|
|
$
438,430
|
Reconciliation of GAAP to Non-GAAP Measurement (amounts in
thousands):
|
|
For the three
months
ended December 31,
|
|
For the twelve
months
ended December 31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$ 47,580
|
|
$
(80,083)
|
|
$
166,548
|
|
$ 62,721
|
|
Interest income,
net
|
|
(21,223)
|
|
(5,887)
|
|
(50,900)
|
|
(22,801)
|
|
Interest expense, net
of amounts capitalized
|
|
14,045
|
|
15,664
|
|
57,170
|
|
95,512
|
|
Income tax provision
(benefit), net
|
|
15,308
|
|
2,579
|
|
66,675
|
|
65,626
|
|
Depreciation and
amortization
|
|
110,397
|
|
122,465
|
|
457,621
|
|
491,329
|
|
Net loss (income)
attributable to non-controlling interests
|
|
1,767
|
|
3,735
|
|
10,503
|
|
10,154
|
|
EBITDA
|
|
167,874
|
|
58,473
|
|
707,617
|
|
702,541
|
|
(Gains) losses on
investments, net
|
|
964
|
|
43,450
|
|
(47,107)
|
|
(69,531)
|
|
Impairment of
long-lived assets
|
|
—
|
|
—
|
|
711
|
|
245
|
|
Impairment loss on
equity method investment
|
|
—
|
|
55,266
|
|
—
|
|
55,266
|
|
Litigation
Expense
|
|
—
|
|
—
|
|
—
|
|
16,800
|
|
License fee dispute -
India, net of non-controlling interests
|
|
—
|
|
(233)
|
|
—
|
|
(941)
|
|
Loss on Debt
Repurchase
|
|
—
|
|
—
|
|
—
|
|
1,938
|
|
Foreign currency
transaction (gains) losses, net
|
|
(5,288)
|
|
2,568
|
|
(5,235)
|
|
12,613
|
|
Adjusted
EBITDA
|
|
$
163,550
|
|
$
159,524
|
|
$
655,986
|
|
$
718,931
|
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 December 31, 2022 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, 2022 filed today with the Securities and
Exchange Commission.
EchoStar will host a conference call to discuss its earnings on
Thursday, February 23, 2023 at
1:00 p.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, 2022 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
Consolidated Balance
Sheets
(Amounts in
thousands, except share and per share amounts)
|
|
|
|
As of December
31,
|
|
|
2022
|
|
2021
|
|
Assets
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
704,541
|
|
$
535,894
|
|
Marketable investment
securities
|
|
973,915
|
|
1,010,496
|
|
Trade accounts
receivable and contract assets, net
|
|
236,479
|
|
182,063
|
|
Other current assets,
net
|
|
210,446
|
|
198,444
|
|
Total current
assets
|
|
2,125,381
|
|
1,926,897
|
|
Non-current
assets:
|
|
|
|
|
|
Property and
equipment, net
|
|
2,237,617
|
|
2,338,285
|
|
Operating lease
right-of-use assets
|
|
151,518
|
|
149,198
|
|
Goodwill
|
|
532,491
|
|
511,086
|
|
Regulatory
authorizations, net
|
|
462,531
|
|
469,766
|
|
Other intangible
assets, net
|
|
15,698
|
|
13,984
|
|
Other investments,
net
|
|
356,705
|
|
297,747
|
|
Other non-current
assets, net
|
|
317,062
|
|
338,241
|
|
Total non-current
assets
|
|
4,073,622
|
|
4,118,307
|
|
Total
assets
|
|
$
6,199,003
|
|
$
6,045,204
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Trade accounts
payable
|
|
$
101,239
|
|
$
109,338
|
|
Contract
liabilities
|
|
121,739
|
|
141,343
|
|
Accrued expenses and
other current liabilities
|
|
199,853
|
|
209,442
|
|
Total current
liabilities
|
|
422,831
|
|
460,123
|
|
Non-current
liabilities:
|
|
|
|
|
|
Long-term debt,
net
|
|
1,496,777
|
|
1,495,994
|
|
Deferred tax
liabilities, net
|
|
424,621
|
|
403,684
|
|
Operating lease
liabilities
|
|
135,932
|
|
134,897
|
|
Other non-current
liabilities
|
|
119,787
|
|
136,426
|
|
Total non-current
liabilities
|
|
2,177,117
|
|
2,171,001
|
|
Total
liabilities
|
|
2,599,948
|
|
2,631,124
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ECHOSTAR
CORPORATION
Consolidated Balance
Sheets
(Amounts in
thousands, except share and per share amounts)
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
Preferred stock,
$0.001 par value, 20,000,000 shares authorized, none
issued and outstanding at both December 31, 2022 and
December 31,
2021
|
|
—
|
|
—
|
|
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, 58,604,927 shares issued and 35,291,616 shares
outstanding at December 31, 2022 and 58,059,622 shares issued
and
38,726,923 shares outstanding at December 31, 2021
|
|
59
|
|
58
|
|
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, 2022 and December 31, 2021
|
|
48
|
|
48
|
|
Class C
convertible common stock, $0.001 par value, 800,000,000
shares authorized, none issued and outstanding at both
December 31, 2022 and December 31, 2021
|
|
—
|
|
—
|
|
Class D common
stock, $0.001 par value, 800,000,000 shares
authorized, none issued and outstanding at both December 31,
2022
and December 31, 2021
|
|
—
|
|
—
|
|
Additional paid-in
capital
|
|
3,367,058
|
|
3,345,878
|
|
Accumulated other
comprehensive income (loss)
|
|
(172,239)
|
|
(212,102)
|
|
Accumulated earnings
(losses)
|
|
833,517
|
|
656,466
|
|
Treasury shares, at
cost, 23,313,311 and 19,332,699 shares at
December 31, 2022
and 2021, respectively
|
|
(525,824)
|
|
(436,521)
|
|
Total EchoStar
Corporation stockholders' equity
|
|
3,502,619
|
|
3,353,827
|
|
Non-controlling
interests
|
|
96,436
|
|
60,253
|
|
Total stockholders'
equity
|
|
3,599,055
|
|
3,414,080
|
|
Total liabilities
and stockholders' equity
|
|
$
6,199,003
|
|
$
6,045,204
|
|
ECHOSTAR
CORPORATION
Consolidated
Statements of Operations
(Amounts in
thousands, except per share amounts)
|
|
|
|
For the years ended
December 31,
|
|
|
2022
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
Services and other
revenue
|
|
$
1,623,931
|
|
$
1,715,287
|
|
$
1,682,304
|
|
Equipment
revenue
|
|
374,162
|
|
270,433
|
|
205,603
|
|
Total
revenue
|
|
1,998,093
|
|
1,985,720
|
|
1,887,907
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Cost of sales -
services and other (exclusive of
depreciation and amortization)
|
|
569,755
|
|
551,679
|
|
577,943
|
|
Cost of sales -
equipment (exclusive of
depreciation and amortization)
|
|
292,318
|
|
231,975
|
|
166,435
|
|
Selling, general and
administrative expenses
|
|
455,234
|
|
461,705
|
|
474,912
|
|
Research and
development expenses
|
|
32,810
|
|
31,777
|
|
29,448
|
|
Depreciation and
amortization
|
|
457,621
|
|
491,329
|
|
525,011
|
|
Impairment of
long-lived assets
|
|
711
|
|
245
|
|
1,685
|
|
Total costs and
expenses
|
|
1,808,449
|
|
1,768,710
|
|
1,775,434
|
|
Operating income
(loss)
|
|
189,644
|
|
217,010
|
|
112,473
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest income,
net
|
|
50,900
|
|
22,801
|
|
39,982
|
|
Interest expense, net
of amounts capitalized
|
|
(57,170)
|
|
(95,512)
|
|
(147,927)
|
|
Gains (losses) on
investments, net
|
|
47,107
|
|
69,531
|
|
(31,306)
|
|
Equity in earnings
(losses) of unconsolidated
affiliates, net
|
|
(5,703)
|
|
(5,170)
|
|
(7,267)
|
|
Foreign currency
transaction gains (losses), net
|
|
5,235
|
|
(12,613)
|
|
6,015
|
|
Other-than-temporary
impairment losses on
equity method investments
|
|
—
|
|
(55,266)
|
|
—
|
|
Other, net
|
|
3,210
|
|
(12,434)
|
|
195
|
|
Total other income
(expense), net
|
|
43,579
|
|
(88,663)
|
|
(140,308)
|
|
Income (loss) before
income taxes
|
|
233,223
|
|
128,347
|
|
(27,835)
|
|
Income tax benefit
(provision), net
|
|
(66,675)
|
|
(65,626)
|
|
(24,069)
|
|
Net income
(loss)
|
|
166,548
|
|
62,721
|
|
(51,904)
|
|
Less: Net loss
(income) attributable to
non-controlling interests
|
|
10,503
|
|
10,154
|
|
11,754
|
|
Net income (loss)
attributable to
EchoStar Corporation common stock
|
|
$
177,051
|
|
$
72,875
|
|
$
(40,150)
|
|
|
|
|
|
|
|
|
Earnings (losses)
per share - Class A and B
common stock:
|
|
|
|
|
|
|
|
Basic
|
|
$
2.10
|
|
$
0.81
|
|
$
(0.41)
|
|
Diluted
|
|
$
2.10
|
|
$
0.81
|
|
$
(0.41)
|
|
ECHOSTAR
CORPORATION
Consolidated
Statements of Cash Flows
(Amounts in
thousands)
|
|
|
|
For the years ended
December 31,
|
|
|
2022
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
166,548
|
|
$
62,721
|
|
$
(51,904)
|
|
Adjustments to
reconcile net income (loss) to
cash flows provided by (used for) operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
457,621
|
|
491,329
|
|
525,011
|
|
Impairment of
long-lived assets
|
|
711
|
|
245
|
|
1,685
|
|
Losses (gains) on
investments, net
|
|
(47,107)
|
|
(69,531)
|
|
31,306
|
|
Equity in losses
(earnings) of unconsolidated affiliates, net
|
|
5,703
|
|
5,170
|
|
7,267
|
|
Foreign currency
transaction losses (gains), net
|
|
(5,235)
|
|
12,613
|
|
(6,015)
|
|
Deferred tax provision
(benefit), net
|
|
21,430
|
|
37,664
|
|
18,147
|
|
Stock-based
compensation
|
|
11,546
|
|
7,699
|
|
8,887
|
|
Amortization of debt
issuance costs
|
|
783
|
|
2,381
|
|
4,324
|
|
Other-than-temporary
impairment losses
on equity method investments
|
|
—
|
|
55,266
|
|
—
|
|
Other, net
|
|
(3,711)
|
|
19,740
|
|
(12,501)
|
|
Changes in assets
and liabilities, net:
|
|
|
|
|
|
|
|
Trade accounts
receivable and contract assets, net
|
|
(50,959)
|
|
(2,334)
|
|
2,237
|
|
Other current assets,
net
|
|
(6,456)
|
|
(7,303)
|
|
(12,984)
|
|
Trade accounts
payable
|
|
8,825
|
|
(15,599)
|
|
(12,339)
|
|
Contract
liabilities
|
|
(19,604)
|
|
36,774
|
|
3,509
|
|
Accrued expenses and
other current liabilities
|
|
(3,649)
|
|
(84,621)
|
|
42,822
|
|
Non-current assets and
non-current liabilities, net
|
|
(6,841)
|
|
80,012
|
|
(15,064)
|
|
Net cash provided by
(used for) operating activities
|
|
529,605
|
|
632,226
|
|
534,388
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
Purchases of
marketable investment securities
|
|
(1,067,461)
|
|
(1,651,608)
|
|
(2,799,838)
|
|
Sales and maturities
of marketable investment securities
|
|
1,136,594
|
|
2,321,560
|
|
2,110,336
|
|
Expenditures for
property and equipment
|
|
(325,891)
|
|
(438,430)
|
|
(408,798)
|
|
Expenditures for
externally marketed software
|
|
(23,105)
|
|
(33,543)
|
|
(38,655)
|
|
India JV
formation
|
|
(7,892)
|
|
—
|
|
—
|
|
Dividend received from
unconsolidated affiliate
|
|
2,000
|
|
—
|
|
—
|
|
Sale of unconsolidated
affiliate
|
|
7,500
|
|
—
|
|
—
|
|
Purchase of other
investments
|
|
—
|
|
(50,000)
|
|
(5,500)
|
|
Sales of other
investments
|
|
3,070
|
|
10,951
|
|
—
|
|
Net cash provided by
(used for) investing activities
|
|
(275,185)
|
|
158,930
|
|
(1,142,455)
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
Repurchase and
maturity of the 2021 Senior Unsecured Notes
|
|
—
|
|
(901,818)
|
|
—
|
|
Payment of finance
lease obligations
|
|
(120)
|
|
(670)
|
|
(811)
|
|
Payment of in-orbit
incentive obligations
|
|
(2,988)
|
|
(2,214)
|
|
(1,554)
|
|
Proceeds from
Class A common stock options exercised
|
|
—
|
|
408
|
|
855
|
|
Proceeds from Class A
common stock issued under the
Employee Stock Purchase Plan
|
|
9,306
|
|
9,471
|
|
10,109
|
|
Treasury share
repurchase
|
|
(89,303)
|
|
(261,436)
|
|
(43,458)
|
|
Contribution by
non-controlling interest holder
|
|
—
|
|
9,880
|
|
18,241
|
|
Other, net
|
|
—
|
|
(966)
|
|
998
|
|
Net cash provided by
(used for) financing activities
|
|
(83,105)
|
|
(1,147,345)
|
|
(15,620)
|
|
|
|
|
|
|
|
|
Effect of exchange
rates on cash and cash equivalents
|
|
(2,306)
|
|
(3,749)
|
|
(1,390)
|
|
Net increase (decrease)
in cash and cash equivalents
|
|
169,009
|
|
(359,938)
|
|
(625,077)
|
|
Cash and cash
equivalents, including restricted amounts,
beginning of period
|
|
536,874
|
|
896,812
|
|
1,521,889
|
|
Cash and cash
equivalents, including restricted amounts,
end of period
|
|
$
705,883
|
|
$
536,874
|
|
$
896,812
|
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SOURCE EchoStar Corporation