EchoStar Reports Second Quarter 2002 Financial Results
EchoStar Communications Corporation today reported total revenue
of approximately $1.169 billion for the quarter ended June 30, 2002, a
21 percent increase compared to $966 million for the corresponding
period in 2001.
Pre-marketing cash flow grew to $487 million during the quarter
ended June 30, 2002, a 26 percent increase compared to $387 million
during the same period in 2001. Pre-marketing cash flow for the
quarter includes the effects of non-recurring benefits totaling
approximately $10 million primarily related to the final resolution of
certain legal matters. For the quarter ended June 30, 2002, EBITDA
totaled $237 million, an improvement of $103 million compared to $134
million for the corresponding period in 2001. The EBITDA improvement
resulted primarily from increased subscribers, resulting in revenue
sufficient to support the cost of new and existing subscribers. EBITDA
for the quarter also includes the benefits of the non-recurring legal
resolutions and an adjustment of approximately $17 million primarily
to reduce accrued royalty expenses.
EchoStar’s DISH Network satellite television service added
approximately 295,000 net new subscribers during the quarter ended
June 30, 2002. DISH Network had approximately 7.46 million subscribers
as of June 30, 2002, an increase of approximately 23 percent over June
30, 2001.
EchoStar’s operating income for the quarter ended June 30, 2002,
totaled $146 million compared to operating income of $64 million
during the corresponding period in 2001. The Company’s net income
totaled $46 million for the quarter ended June 30, 2002, compared to a
net loss of $6 million during the corresponding period in 2001. Both
operating and net income include the benefits of the non-recurring
legal resolutions and the royalty adjustments. For the quarter ended
June 30, 2002, net income available to common shareholders totaled $37
million, or basic net income of $0.08 per share, compared to a net
loss attributable to common shareholders of $6 million, or $0.01 per
share, during the corresponding period in 2001. Net income available
to common shareholders for the quarter ended June 30, 2002, reflects
$9 million of non-cash charges to reflect an increase in valuation of
the contingent value rights associated with the Vivendi Universal
equity investment.
For more information about EchoStar, visit the investor relations
section of our website at www.echostar.com.
Statement under the Private Securities Litigation Reform Act of
1995: All statements contained herein, as well as statements made in
press releases and oral statements that may be made by us or by
officers, directors or employees acting on our behalf, that are not
statements of historical fact constitute “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act of
1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that could cause our actual results to
be materially different from historical results or from any future
results expressed or implied by such forward-looking statements. Among
the factors that could cause our actual results to differ materially
are the following: a total or partial loss of one or more satellites
due to operational failures, space debris or otherwise; delays in the
construction of our ninth satellite; an unsuccessful deployment of
future satellites; inability to settle outstanding claims with
insurers; a decrease in sales of digital equipment and related
services to international direct-to-home service providers; a decrease
in DISH Network subscriber growth; an increase in subscriber turnover;
an increase in subscriber acquisition costs; an inability to obtain
certain retransmission consents; our inability to retain necessary
authorizations from the FCC; an inability to obtain patent licenses
from holders of intellectual property or redesign our products to
avoid patent infringement; an increase in competition from cable as a
result of advanced digital cable or otherwise, direct broadcast
satellite, other satellite system operators, and other providers of
subscription television services; future acquisitions, business
combinations, strategic partnerships and divestitures; the
introduction of new technologies and competitors into the subscription
television business; a change in the regulations governing the
subscription television service industry; the outcome of any
litigation in which we may be involved; general business and economic
conditions; and other risk factors described from time to time in our
reports and statements filed with the Securities and Exchange
Commission. In addition to statements that explicitly describe such
risks and uncertainties, readers are urged to consider statements that
include the terms “believes,” “belief,” “expects,” “plans,”
“anticipates,” “intends” or the like to be uncertain and
forward-looking. All cautionary statements made herein should be read
as being applicable to all forward-looking statements wherever they
appear. In this connection, investors should consider the risks
described herein and should not place undue reliance on any
forward-looking statements.
DISH Network(TM), which currently serves over 7.46 million
customers, is a trademark of EchoStar Communications Corporation. DISH
Network is EchoStar’s state-of-the-art direct broadcast satellite
system that is capable of offering over 500 channels of digital video
and CD-quality audio programming, including Dolby Digital sound,
interactive television and data services to consumers across the
United States. EchoStar is included in the Nasdaq-100 Index (NDX)
which contains the largest non-financial companies on the Nasdaq Stock
Market. Visit EchoStar’s Investor Relations website at
www.echostar.com. DISH Network is located on the Internet at
www.dishnetwork.com.
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SELECTED FINANCIAL DATA
EchoStar Communications Corporation
(Nasdaq National Market: DISH)
(In thousands, except subscribers and per share data)
Three Months Ended June
30,
-----------------------
2001 2002
---------- ------------
(Unaudited)
Statements of Operations Data
----------------------------------------------
Revenue:
DISH Network:
Subscription television services $ 883,055 $ 1,071,845
Other 3,245 7,843
---------- ------------
Total DISH Network 886,300 1,079,688
DTH equipment sales and integration services 47,159 68,140
Other 32,813 20,856
---------- ------------
Total revenue 966,272 1,168,684
Costs and Expenses:
DISH Network Operating Expenses:
Subscriber-related expenses 358,634 429,783
Customer service center and other 69,914 97,841
Satellite and transmission 8,821 14,844
---------- ------------
Total DISH Network operating expenses 437,369 542,468
Cost of sales -- DTH equipment and integration
services 31,160 44,103
Cost of sales -- C-band and other 22,572 9,969
Marketing:
Subscriber promotion subsidies 226,854 218,769
Advertising and other 26,877 31,563
---------- ------------
Total marketing expenses 253,731 250,332
General and administrative 87,677 85,234
Non-cash, stock-based compensation 7,011 2,169
Depreciation and amortization 62,839 87,981
---------- ------------
Total costs and expenses 902,359 1,022,256
---------- ------------
Operating income (loss) $ 63,913 $ 146,428
========== ============
Net income (loss) $ (5,855) $ 45,840
========== ============
Net income (loss) available to common shares $ (6,013) $ 37,001
========== ============
Weighted-average common shares outstanding --
basic net income (loss) per share 475,768 480,405
========== ============
Weighted-average common shares outstanding
-- diluted net income (loss) per share 475,768 544,130
------------ ------------
Basic net income (loss) per common share $ (0.01) $ 0.08
------------ ------------
Diluted net income (loss) per common share $ (0.01) $ 0.07
============ ============
Other Data
-------------------------------------------
Pre-marketing cash flow $ 387,494 $ 486,910
============ ============
EBITDA $ 133,763 $ 236,578
============ ============
DISH Network subscribers 6,070,000 7,460,000
============ ============
December 31, June 30,
2001 2002
------------ ------------
Balance Sheets Data (Unaudited)
-------------------------------------------
Cash, cash equivalents and marketable
investment securities $ 2,828,297 $ 4,351,601
Cash reserved for satellite insurance 122,068 167,522
Restricted cash and marketable investment
securities 1,288 4,249
Total assets 6,519,686 8,093,670
Total current liabilities 1,488,367 1,586,078
Total long-term obligations, net of
current portion 5,809,091 5,815,685
SELECTED FINANCIAL DATA
EchoStar Communications Corporation
(Nasdaq National Market: DISH)
(In thousands, except per share data)
(Unaudited)
Six Months Ended June 30,
-------------------------
2001 2002
------------ ------------
Statements of Operations Data
--------------------------------------------
Revenue:
DISH Network:
Subscription television services $ 1,677,503 $ 2,087,902
Other 5,728 10,670
------------ ------------
Total DISH Network 1,683,231 2,098,572
DTH equipment sales and integration
services 88,178 125,190
Other 56,793 49,390
------------ ------------
Total revenue 1,828,202 2,273,152
Costs and Expenses:
DISH Network Operating Expenses:
Subscriber-related expenses 674,969 838,010
Customer service center and other 134,696 180,692
Satellite and transmission 17,916 28,022
------------ ------------
Total DISH Network operating expenses 827,581 1,046,724
Cost of sales -- DTH equipment and
integration services 59,996 83,479
Cost of sales -- C-band and other 38,501 26,170
Marketing:
Subscriber promotion subsidies 500,085 453,074
Advertising and other 53,804 68,886
------------ ------------
Total marketing expenses 553,889 521,960
General and administrative 163,349 179,759
Non-cash, stock-based compensation 14,467 3,835
Depreciation and amortization 121,689 169,518
------------ ------------
Total costs and expenses 1,779,472 2,031,445
------------ ------------
Operating income (loss) $ 48,730 $ 241,707
============ ============
Net income (loss) $ (175,722) $ 7,232
============ ============
Net loss attributable to common shares $ (176,058) $ (60,006)
============ ============
Weighted-average common shares outstanding --
basic and diluted net loss per common share 475,169 480,070
============ ============
Basic and diluted net loss per common share $ (0.37) $ (0.12)
============ ============
Other Data
--------------------------------------------
Pre-marketing cash flow $ 738,775 $ 937,020
============ ============
EBITDA $ 184,886 $ 415,060
============ ============
Contact:
EchoStar Communications Corporation
Marc Lumpkin, 303/723-2020
marc.lumpkin@echostar.com
or
Kim Culig, 303/723-1277
kim.culig@echostar.com
