Hughes Communications Announces Third Quarter 2009 Results
GERMANTOWN, Md., Nov. 4 /PRNewswire-FirstCall/ — Hughes Communications, Inc. (Nasdaq: HUGH) (“Hughes”), the global leader in broadband satellite network solutions and services, today announced financial results for the quarter ended September 30, 2009. Hughes’ consolidated operations are classified into four reportable segments: North America Broadband; International Broadband; Telecom Systems; and Corporate and Other. The North America Broadband, International Broadband, and Telecom Systems segments represent all the operations of Hughes Network Systems, LLC (“HNS”), Hughes’ principal operating subsidiary.
Third Quarter 2009 Financial Highlights:
- Consumer business sets new records with impressive growth over the third quarter of 2008:
- Record third quarter subscriber gross adds of 50,000, an increase of 14%.
- Record third quarter subscriber net adds of 17,000 for growth of 49%.
- Services revenue increased by 19%.
- Consumer ARPU increased to $71 over $68 in the third quarter of 2008 and $70 in the second quarter of 2009.
- Churn improved to 2.3% from 2.6% in the third quarter of 2008.
- Revenue of $251 million compared to $272 million in the third quarter of 2008.
- Total services revenue up 12%, with Broadband services revenue up 16%.
- North America Broadband services revenue up 14%; International Broadband services revenue up 22%, 34% on a constant dollar basis.
- Telecom Systems revenue of $29 million, down 32% primarily due to several major MobileSat development contracts reaching completion and the winding down of the Telematics contract.
- Record third quarter Adjusted EBITDA of $44 million, an increase of 13% over the third quarter of 2008.
- New orders of $208 million, with major orders from GTech, Burger King, Social Security Service, Row 44, Equiva, Yum Brands, LodgeNet, Barrett Xplore and Rite Aid in North America. Major orders from our international customers included World Bank, Ethiopian Telecom, BP Spain, Martins Brazil and NIT Nigeria. Strong non-consumer backlog of $822 million at September 30, 2009.
- Positive cash from operations of $74 million compared to $26 million in the third quarter of 2008.
Nine Months Ended September 30, 2009 Financial Highlights
- Revenue of $747 million compared to $775 million in the nine month period ended September 2008, a 1% decline on a constant dollar basis.
- Services revenue up 13% over the nine month period ended September 2008, 16% on a constant dollar basis. Broadband services revenue up 13%, 17% on a constant dollar basis.
- Adjusted EBITDA of $117 million for a growth of 10% over the nine month period ended September 30, 2008.
- Total subscribers of 490,000 at September 30, 2009 reflecting a growth of 16% over the subscriber base at September 30, 2008.
- Positive cash from operations of $111 million compared to $40 million in the nine months ended September 30, 2008.
Set forth below are tables highlighting certain of Hughes’ results for the three and nine months ended September 30, 2009.
Hughes Communications, Inc.
---------------------------
Three Months Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
(Dollars in thousands) 2009 2008 2009 2008
---- ---- ---- ----
Revenue
North America Broadband $174,123 $169,400 $514,973 $487,431
International Broadband 47,521 60,056 142,925 170,121
Telecom Systems 28,825 42,263 87,431 116,677
Corporate and Other 948 60 2,130 352
--- -- ----- ---
Total $251,417 $271,779 $747,459 $774,581
Operating income (loss)
North America Broadband $10,629 $4,296 $(24,391)** $12,589
International Broadband 3,616 6,390 9,952 14,090
Telecom Systems 2,642 8,645 10,742 19,845
Corporate and Other (1,266) (929) (3,580) (2,753)
------ ---- ------ ------
Total $15,621 $18,402 $(7,277) $43,771
Net income (loss)
attributable to HCI
stockholders $(2,622) $3,184 $(55,060)** $5,667
Adjusted EBITDA* $44,306 $39,273 $117,447 $106,277
New Orders $207,830 $271,827 $751,452 $890,773
* For the definition of Adjusted EBITDA, see "Reconciliation of Non-GAAP
Financial Measures to GAAP Financial Measures" below.
** Includes a $44 million one-time charge as a result of Chapter 11
filing by Sea Launch.
Hughes Network Systems, LLC
---------------------------
Three Months Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
(Dollars in thousands) 2009 2008 2009 2008
---- ---- ---- ----
Revenue
North America Broadband $174,123 $169,400 $514,973 $487,431
International Broadband 47,521 60,056 142,925 170,121
Telecom Systems 28,825 42,263 87,431 116,677
------ ------ ------ -------
Total $250,469 $271,719 $745,329 $774,229
Operating income (loss)
North America Broadband $10,629 $4,296 $(24,391)** $12,589
International Broadband 3,616 6,390 9,952 14,090
Telecom Systems 2,642 8,645 10,742 19,845
----- ----- ------ ------
Total $16,887 $19,331 $(3,697) $46,524
Net income (loss)
attributable to HNS $(1,570) $3,585 $(52,134)** $7,677
Adjusted EBITDA* $45,147 $40,250 $118,725 $108,972
New Orders $207,394 $271,768 $749,582 $890,421
* For the definition of Adjusted EBITDA, see "Reconciliation of Non-GAAP
Financial Measures to GAAP Financial Measures" below.
** Includes a $44 million one-time charge as a result of Chapter 11
filing by Sea Launch.
Recent Highlights:
- HNS and Barrett Xplore Inc., Canada’s largest rural broadband provider, signed an agreement in August 2009 under which Barrett Xplore committed to acquire and operate over 10 Gbps of capacity on Jupiter, Hughes’ next-generation, high-throughput satellite. Jupiter is designed with more than 100 Gbps of capacity, representing a tenfold increase over existing satellites, and is scheduled for launch in 2012. The agreement is valued in excess of U.S. $100 million.
- Avanti Communications Group plc and HNS signed a multi-year framework agreement in October 2009 whereby HNS’ European subsidiary will supply Avanti eight (8) gateways and 50,000 customer premise terminals to operate over HYLAS, Europe’s first dedicated, high-throughput Ka-band broadband satellite to be launched in 2010. The contract value is $24 million assuming full roll-out of the planned network. In addition, Hughes agreed to acquire capacity on the HYLAS satellite to expand its managed services offering to major European corporations.
- The Communications and Transport Ministry of Mexico (SCT) selected HNS to supply its market-leading HN System to support the Mexican government’s connectivity program to expand broadband access to rural areas of the country. The Hughes HN System comprises a Network Operations Center and 5,760 HN7000S satellite terminals that will enable public schools, hospitals, libraries, and government offices to connect to the Web and each other via broadband Internet access.
- HNS and a major Southeast Asian cellular operator signed a contract for the supply of more than 1,000 Hughes HX terminals to support backhaul connectivity for rural GSM picocells. The network supports 3G wireless data and voice services in rural villages without access to cost-effective landline communications. In addition, HX terminals are being installed on maritime vessels to enable GSM cellular services aboard large, long-distance passenger ferry ships.
- HNS was a recipient of the Gazette Politics and Business Exceptional 53 Maryland Business Awards. The awards program acknowledges the top 53 businesses and organizations in Maryland based on criteria that include the recipient company’s annual revenue and employee growth, as well as noteworthy product or service innovations, community service efforts, and how the companies portray themselves as “good places to work.”
To summarize, Pradman Kaul, president and CEO said, “The consumer business continued its strong growth trajectory despite the difficult macro environment. Consistent with our stated strategy, our services revenue also continued to grow across all of our broadband businesses. I am also delighted that we were able to sign important agreements with Barrett Xplore and Avanti. Barrett, currently a major customer for SPACEWAY ® 3, will continue that relationship on Jupiter. Their commitment for space segment will enhance cash flow and returns on the Jupiter satellite. In addition, Barrett will be a major customer of NOCs and VSAT terminals for use in Canada. Our agreement with Avanti enables us to lease very competitive Ka-band space segment for our European customers, and also generate significant hardware revenues from sales of NOCs and VSAT terminals to Avanti and their Virtual Network Operators.”
Commenting on Hughes’ financial performance, Grant Barber, executive vice president and CFO said, “Our focus on expense control and working capital management continued in the third quarter of 2009 resulting in a strong liquidity position, with consolidated cash, cash equivalents and marketable securities increasing to $326 million at September 30, 2009.”
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures
The following table reconciles the differences between Hughes’ Net Income (Loss) as determined under United States of America Generally Accepted Accounting Principles (GAAP) and Adjusted EBITDA.
Hughes Communications, Inc.
---------------------------
Three Months Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
(Dollars in thousands) 2009 2008 2009 2008
---- ---- ---- ----
Net income (loss)
attributable to HCI
stockholders $(2,622) $3,184 $(55,060) $5,667
Add:
Equity incentive plan
compensation 1,849 1,530 5,473 3,991
Interest expense 17,735 14,095 47,125 37,305
Income tax expense 966 2,295 790 4,130
Depreciation and
amortization 26,879 18,793 73,209 48,908
Long-term incentive/
retention cash plan - 710 1,538 9,940
Sea Launch impairment - - 44,400 -
Other asset impairment - - 1,000 -
Less:
Interest income (501) (1,334) (1,028) (3,664)
---- ------ ------ ------
Adjusted EBITDA $44,306 $39,273 $117,447 $106,277
======= ======= ======== ========
The following table reconciles the differences between HNS’ Net Income (Loss) as determined under GAAP and Adjusted EBITDA.
Hughes Network Systems, LLC
---------------------------
Three Months Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
(Dollars in thousands) 2009 2008 2009 2008
---- ---- ---- ----
Net income (loss)
attributable to HNS $(1,570) $3,585 $(52,134) $7,677
Add:
Equity incentive plan
compensation 1,768 1,445 5,117 3,610
Interest expense 17,727 14,095 47,106 37,305
Income tax expense 981 2,288 775 4,101
Depreciation and
amortization 26,709 18,793 72,788 48,908
Long-term incentive/
retention cash plan - 710 1,538 9,940
Sea Launch impairment - - 44,400 -
Less:
Interest income (468) (666) (865) (2,569)
---- ---- ---- ------
Adjusted EBITDA $45,147 $40,250 $118,725 $108,972
======= ======= ======== ========
The condensed financial statements of Hughes and HNS for the three and nine months ended September 30, 2009 are attached to this press release.
Note on Use of Non-GAAP Financial Measures
Hughes provides non-GAAP financial data in addition to providing financial results in accordance with GAAP. This press release includes Adjusted EBITDA as a supplemental non-GAAP financial measure. Adjusted EBITDA is defined as earnings (loss) before interest, income taxes, depreciation, amortization, equity incentive plan compensation, long-term incentive/retention cash plan and other adjustments permitted by the debt instruments of HNS. We believe this non-GAAP financial measure provides useful information to both management and investors by excluding specific expenses that we believe are not indicative of our core operating results. Internally, we use this non-GAAP measure in our review of the performance of management and in the performance of our business and operations. Management also uses Adjusted EBITDA of HNS for purposes of determining the payments to be made in connection with the long-term cash incentive retention program. Externally, we believe that investors may find this non-GAAP financial information useful in their assessment of our operating performance. In addition, we believe that this non-GAAP financial measure provides information that is useful to investors in understanding period-over-period operating results separate and apart from items that may, or could, have a disproportionately positive or negative impact on results in any particular period. Adjusted EBITDA of HNS is also used in calculating covenant compliance under HNS’ credit agreements and the indenture governing HNS’ 9½% Senior Notes due 2014 issued in 2006 and 2009.
Adjusted EBITDA is not a recognized term under GAAP. This nonGAAP measure does not represent net income or cash flows from operations, as these terms are defined under GAAP and should not be considered as an alternative to net income as an indicator of operating performance or to cash flows as a measure of liquidity. Additionally, this non-GAAP measure is not intended to be a measure of cash flow available to management for discretionary use, as such measure does not consider certain cash requirements such as capital expenditures (including expenditures on VSAT operating lease hardware and capitalized software development costs), tax payments, debt service requirements (including VSAT operating lease hardware), and payments under the long-term cash incentive retention program. Adjusted EBITDA as presented herein is not necessarily comparable to similarly titled measures reported by other companies. Any analysis of non-GAAP financial measures should be used only in conjunction with results presented in accordance with GAAP.
About Hughes Communications, Inc.
Hughes Communications, Inc. (Nasdaq: HUGH) is the 100 percent owner of Hughes Network Systems, LLC. Hughes is the global leader in providing broadband satellite networks and services for enterprises, governments, small businesses, and consumers. HughesNet ® encompasses all broadband solutions and managed services from Hughes, bridging the best of satellite and terrestrial technologies. Its broadband satellite products are based on global standards approved by the TIA, ETSI, and ITU standards organizations, including IPoS/DVB-S2, RSM-A, and GMR-1. To date, Hughes has shipped more than 1.9 million systems to customers in over 100 countries.
Headquartered outside Washington, DC, in Germantown, Maryland, USA, Hughes maintains sales and support offices worldwide. For more information, please visit www.hughes.com.
Safe Harbor Statement under the U.S. 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 statements include, but are not limited to, discussions regarding industry outlook and Hughes’ expectations regarding the performance of its business, its future liquidity and capital resource needs, its strategic plans, and objectives. 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 forwardlooking statements. Although management believes that the expectations reflected in these forwardlooking 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. These statements are subject to certain risks, uncertainties and assumptions, including, but not limited to, the following: risks related to Hughes’ substantial leverage and restrictions contained in its debt agreements, technological developments, its reliance on providers of satellite transponder capacity, changes in demand for Hughes’ services and products, competition, industry trends, regulatory changes, foreign currency exchange rate fluctuations, and other risks identified and discussed under the caption “Risk Factors” in Hughes’ Annual Report on Form 10-K for the year ended December 31, 2008 filed with the Securities and Exchange Commission on March 5, 2009 and in the other documents Hughes files with the Securities and Exchange Commission from time to time.
Hughes, HughesNet, and SPACEWAY are registered trademarks of Hughes Network Systems, LLC.
HUGHES COMMUNICATIONS, INC.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
September 30, December 31,
2009 2008
---- ----
ASSETS
------
Current assets:
Cash and cash equivalents $289,270 $203,816
Marketable securities 37,114 -
Receivables, net 166,866 200,373
Inventories 67,226 65,485
Prepaid expenses and other 25,414 20,926
------ ------
Total current assets 585,890 490,600
Property, net 569,822 507,270
Capitalized software costs, net 51,206 51,454
Intangible assets, net 16,748 19,780
Goodwill 5,093 2,661
Other assets 84,332 118,628
------ -------
Total assets $1,313,091 $1,190,393
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $104,988 $82,939
Short-term debt 6,395 8,252
Accrued liabilities and other 167,904 159,041
------- -------
Total current liabilities 279,287 250,232
Long-term debt 714,826 578,298
Other long-term liabilities 13,313 18,005
------ ------
Total liabilities 1,007,426 846,535
--------- -------
Commitments and contingencies
Equity:
Hughes Communications, Inc. ("HCI")
stockholders' equity:
Preferred stock, $0.001 par value;
1,000,000 shares authorized and no
shares issued and outstanding as
of September 30, 2009 and
December 31, 2008 - -
Common stock, $0.001 par value;
64,000,000 shares authorized;
21,575,384 shares and 21,514,963
shares issued and outstanding
as of September 30, 2009 and
December 31, 2008, respectively 22 22
Additional paid in capital 728,927 724,558
Accumulated deficit (412,910) (357,850)
Accumulated other comprehensive loss (19,034) (28,583)
------- -------
Total HCI stockholders' equity 297,005 338,147
------- -------
Noncontrolling interest 8,660 5,711
----- -----
Total equity 305,665 343,858
------- -------
Total liabilities and equity $1,313,091 $1,190,393
========== ==========
HUGHES COMMUNICATIONS, INC.
Condensed Consolidated Statements of Operations
(In thousands, except share and per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
Revenues:
Services revenues $176,253 $156,919 $512,001 $455,092
Hardware sales 75,164 114,860 235,458 319,489
------ ------- ------- -------
Total revenues 251,417 271,779 747,459 774,581
------- ------- ------- -------
Operating costs and
expenses:
Cost of services 108,768 105,988 326,497 301,899
Cost of hardware
products sold 73,646 96,881 225,134 271,220
Selling, general and
administrative 46,457 42,386 136,842 133,042
Loss on impairments - - 45,400 -
Research and
development 5,453 6,493 16,502 19,745
Amortization of
intangible assets 1,472 1,629 4,361 4,904
----- ----- ----- -----
Total operating
costs and expenses 235,796 253,377 754,736 730,810
------- ------- ------- -------
Operating income
(loss) 15,621 18,402 (7,277) 43,771
Other income
(expense):
Interest expense (17,735) (14,095) (47,125) (37,305)
Interest income 501 1,334 1,028 3,664
Other income (loss),
net 50 6 (295) 95
-- - ---- --
Income (loss) before
income tax expense
and equity in
earnings (losses)
of unconsolidated
affiliates (1,563) 5,647 (53,669) 10,225
Income tax expense (966) (2,295) (790) (4,130)
Equity in earnings
(losses) of
unconsolidated
affiliates - (129) 170 (301)
- ---- --- ----
Net income (loss) (2,529) 3,223 (54,289) 5,794
Net income attributable
to the noncontrolling
interest (93) (39) (771) (127)
--- --- ---- ----
Net income (loss)
attributable to HCI
stockholders $(2,622) $3,184 $(55,060) $5,667
======= ====== ======== ======
Earnings (loss) per
share:
Basic $(0.12) $0.15 $(2.58) $0.28
Diluted $(0.12) $0.15 $(2.58) $0.28
Shares used in
computation of per
share data:
Basic 21,379,611 21,274,506 21,368,101 19,969,850
Diluted 21,379,611 21,579,006 21,368,101 20,313,373
HUGHES COMMUNICATIONS, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
-------------
2009 2008
---- ----
Cash flows from operating activities:
Net income (loss) $(54,289) $5,794
Adjustments to reconcile net income (loss)
to cash flows from operating activities:
Depreciation and amortization 73,209 48,908
Amortization of debt issuance costs 1,452 1,056
Equity plan compensation expense 5,473 3,991
Equity in (earnings) losses from
unconsolidated affiliates (170) 301
Loss on impairments 45,400 -
Other 581 18
Change in other operating assets and
liabilities, net of acquisition:
Receivables, net 37,720 12,731
Inventories (745) (8,015)
Prepaid expenses and other (2,026) (18,623)
Accounts payable 22,534 10,476
Accrued liabilities and other (18,567) (16,704)
------- -------
Net cash provided by operating activities 110,572 39,933
------- ------
Cash flows from investing activities:
Change in restricted cash 31 3,047
Purchases of marketable securities (37,117) (2,070)
Proceeds from sales of marketable securities - 8,570
Expenditures for property (93,994) (52,991)
Expenditures for capitalized software (10,315) (10,526)
Proceeds from sale of property 339 104
Acquisition of Helius, Inc., net of
cash received - (10,543)
Cash acquired, consolidation of Hughes
Systique Corporation 828 -
Long-term loan (10,000) -
Investment in Hughes Systique Corporation - (1,500)
Hughes Systique Corporation note receivables - (500)
Other, net (830) -
---- -
Net cash used in investing activities (151,058) (66,409)
-------- -------
Cash flows from financing activities:
Net increase (decrease) in notes and loans
payable (1,315) 403
Proceeds from equity offering - 93,046
Proceeds from exercise of stock options - 75
Long-term debt borrowings 142,318 2,539
Repayment of long-term debt (6,834) (11,449)
Debt issuance costs (4,612) -
------ -
Net cash provided by financing activities 129,557 84,614
------- ------
Effect of exchange rate changes on cash and
cash equivalents (3,617) 5,059
------ -----
Net increase in cash and cash equivalents 85,454 63,197
Cash and cash equivalents at beginning of
the period 203,816 134,092
------- -------
Cash and cash equivalents at end of the
period $289,270 $197,289
======== ========
Supplemental cash flow information:
Cash paid for interest $29,200 $30,011
Cash paid for income taxes $3,700 $2,559
Supplemental non-cash disclosures related to:
Investment in Hughes Telematics, Inc. $13,000
Consolidation of Hughes Systique Corporation $5,328
HUGHES NETWORK SYSTEMS, LLC
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
September 30, December 31,
2009 2008
---- ----
ASSETS
------
Current assets:
Cash and cash equivalents $209,161 $100,262
Marketable securities 25,078 -
Receivables, net 165,608 200,259
Inventories 67,226 65,485
Prepaid expenses and other 23,545 20,425
------ ------
Total current assets 490,618 386,431
Property, net 569,334 507,270
Capitalized software costs, net 51,206 51,454
Intangible assets, net 15,624 19,780
Goodwill 2,661 2,661
Other assets 72,329 112,511
------ -------
Total assets $1,201,772 $1,080,107
========== ==========
LIABILITIES AND EQUITY
----------------------
Current liabilities:
Accounts payable $103,141 $80,667
Short-term debt 6,395 8,252
Accrued liabilities and other 168,388 159,415
------- -------
Total current liabilities 277,924 248,334
Long-term debt 714,826 578,298
Other long-term liabilities 13,128 18,005
------ ------
Total liabilities 1,005,878 844,637
--------- -------
Commitments and contingencies
Equity:
Hughes Network Systems, LLC ("HNS") equity:
Class A membership interests 177,707 177,425
Class B membership interests - -
Retained earnings 28,865 80,999
Accumulated other comprehensive loss (16,188) (27,586)
------- -------
Total HNS' equity 190,384 230,838
------- -------
Noncontrolling interest 5,510 4,632
----- -----
Total equity 195,894 235,470
------- -------
Total liabilities and equity $1,201,772 $1,080,107
========== ==========
HUGHES NETWORK SYSTEMS, LLC
Condensed Consolidated Statements of Operations
(In thousands)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
Revenues:
Services revenues $175,305 $156,859 $509,871 $454,740
Hardware sales 75,164 114,860 235,458 319,489
------ ------- ------- -------
Total revenues 250,469 271,719 745,329 774,229
------- ------- ------- -------
Operating costs and
expenses:
Cost of services 108,894 105,988 326,532 301,875
Cost of hardware
products sold 73,646 96,881 225,134 271,220
Selling, general and
administrative 44,204 41,397 132,302 129,961
Loss on impairment - - 44,400 -
Research and
development 5,453 6,493 16,502 19,745
Amortization of
intangible assets 1,385 1,629 4,156 4,904
----- ----- ----- -----
Total operating costs
and expenses 233,582 252,388 749,026 727,705
------- ------- ------- -------
Operating income (loss) 16,887 19,331 (3,697) 46,524
Other income (expense):
Interest expense (17,727) (14,095) (47,106) (37,305)
Interest income 468 666 865 2,569
Other income (loss), net (1) 6 (365) 95
-- - ---- --
Income (loss) before
income tax expense (373) 5,908 (50,303) 11,883
Income tax expense (981) (2,288) (775) (4,101)
---- ------ ---- ------
Net income (loss) (1,354) 3,620 (51,078) 7,782
Net income attributable
to the noncontrolling
interest (216) (35) (1,056) (105)
---- --- ------ ----
Net income (loss)
attributable to HNS $(1,570) $3,585 $(52,134) $7,677
======= ====== ======== ======
HUGHES NETWORK SYSTEMS, LLC
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
-------------
2009 2008
---- ----
Cash flows from operating activities:
Net income (loss) $(51,078) $7,782
Adjustments to reconcile net income
(loss) to cash flows from operating
activities:
Depreciation and amortization 72,788 48,908
Amortization of debt issuance costs 1,452 1,056
Equity plan compensation expense 665 248
Loss on impairment 44,400 -
Other 578 10
Change in other operating assets
and liabilities, net of acquisition:
Receivables, net 48,922 12,615
Inventories (745) (8,015)
Prepaid expenses and other (2,531) (19,761)
Accounts payable 24,261 12,140
Accrued liabilities and other (15,657) (14,582)
------- -------
Net cash provided by operating activities 123,055 40,401
------- ------
Cash flows from investing activities:
Change in restricted cash (72) 3,047
Purchases of marketable securities (25,080) -
Proceeds from sales of marketable
securities - 3,000
Expenditures for property (93,953) (52,991)
Expenditures for capitalized software (10,315) (10,526)
Proceeds from sale of property 339 104
Long-term loan (10,000) -
Acquisition of Helius, Inc., net of
cash received - (10,543)
Other, net (755) -
---- -
Net cash used in investing activities (139,836) (67,909)
-------- -------
Cash flows from financing activities:
Net increase (decrease) in notes and
loans payable (1,315) 403
Long-term debt borrowings 142,318 2,539
Repayment of long-term debt (6,832) (11,449)
Debt issuance costs (4,612) -
------ -
Net cash provided by (used in)
financing activities 129,559 (8,507)
------- ------
Effect of exchange rate changes on
cash and cash equivalents (3,879) 5,059
------ -----
Net increase (decrease) in cash and
cash equivalents 108,899 (30,956)
Cash and cash equivalents at
beginning of the period 100,262 129,227
------- -------
Cash and cash equivalents at end of
the period $209,161 $98,271
======== =======
Supplemental cash flow information:
Cash paid for interest $29,182 $30,011
Cash paid for income taxes $3,660 $2,503
SOURCE Hughes Communications, Inc.