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PRESS RELEASES
GERMANTOWN, Md., May 7 /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 March 31, 2008. Hughes' consolidated operations are classified
into four reportable segments: North America VSAT; International VSAT; Telecom
Systems; and Corporate and Other. The North America VSAT, International VSAT
and Telecom Systems segments represent all the operations of Hughes Network
Systems, LLC ("HNS"), Hughes' principal operating subsidiary.
"We accomplished a major milestone on April 3, 2008, namely, the
initiation of commercial service on SPACEWAY(TM) 3, our new state-of-the-art
satellite," said Pradman Kaul, president and chief executive officer of
Hughes. "We launched SPACEWAY 3 in August last year and thereafter, went
through in-orbit testing as well as rigorous alpha and beta testing with
customers. I am delighted that SPACEWAY 3 is now in service with revenue
bearing traffic."
Kaul continued, "Hughes had a strong first quarter in 2008, setting new
records for first quarter revenue, Adjusted EBITDA* and new orders. Revenues
increased by 6% over the first quarter of 2007 to $237.2 million and once
again, the major contributors to revenue growth were our consumer and mobile
satellite businesses. Over 46,700 new consumers were activated in the first
quarter of 2008, resulting in the subscriber base growing to 401,000 at March
31, 2008 for a growth of 16% over the subscriber base at March 31, 2007.
Consumer ARPU increased to $65 in the first quarter of 2008 over $60 in the
first quarter of 2007. Revenue in the Telecom Systems segment grew by 29% over
the first quarter 2007 to $36 million, driven primarily by our mobile
satellite business. Our North America and International enterprise businesses
continued their steady revenue contribution with revenues of $110 million in
the first quarter of 2008."
Kaul continued, "We booked new orders of $286 million in the first quarter
of 2008. Our North America enterprise business received significant orders
from GTECH, Row 44, Galaxy Broadband, Edward Jones, Lowes, and Marathon. In
our International enterprise business, we received significant orders from
Visa International, BP, Telefonica, Bentley Walker, and Tesco. In our Telecom
Systems segment, we obtained significant orders from Mobile Satellite Ventures
and Hughes Telematics."
Net income for the first quarter of 2008 was $0.7 million, and reflects an
$8.5 million accrual related to the estimated payout in April 2009 for a
one-time employee retention plan established in connection with the 2005
purchase of HNS from The DIRECTV Group, Inc. The liability is based on
management's current assessment of the probability of achieving a
profitability goal, and continued employment by the participants through April
22, 2009 after giving effect to the vesting period. Management will continue
to assess this liability and will accrue the balance as appropriate through
the vesting period. Management currently estimates that the payout will be
$11.4 million compared to the maximum payout of $14.2 million. Adjusted Net
Income* in the first quarter of 2008, after adding back the $8.5 million
accrual and the $1.1 million in equity incentive plan compensation, was $10.2
million, an increase of $6.3 million over the first quarter of 2007. Adjusted
EBITDA for Hughes increased in the first quarter of 2008 by 15% to $29.4
million over the first quarter of 2007; Adjusted EBITDA for HNS increased to
$30.2 million which is an increase of 14% over the first quarter of 2007.
* Adjusted EBITDA is defined as EBITDA further adjusted to exclude certain
adjustments. EBITDA is defined as earnings (losses) before interest,
income taxes, depreciation, amortization, and equity incentive
compensation. Adjusted Net Income is defined as net income adjusted to
exclude equity incentive plan compensation and long-term cash incentive
(retention) plan expense. See "Reconciliation of Non-GAAP Financial
Measures to GAAP Financial Measures."
Set forth below is a table highlighting certain of our results for the
three months ended March 31, 2008 and March 31, 2007:
Hughes Communications, Inc. | Hughes Network Systems, LLC
Three Months | Three Months
Ended March 31, | Ended March 31,
(Dollars in | (Dollars in
thousands) 2008 2007 | thousands) 2008 2007
|
Revenue | Revenue
North America | North America
VSAT $156,790 $151,565 | VSAT $156,790 $151,565
International | International
VSAT 44,596 43,496 | VSAT 44,596 43,496
Telecom | Telecom
Systems 35,634 27,670 | Systems 35,634 27,670
Corporate | Total $237,020 $222,731
and Other 140 151 |
Total $237,160 $222,882 |
|
Operating income (loss) | Operating income
North America | North America
VSAT $5,022 $8,501 | VSAT $5,022 $8,501
International | International
VSAT 433 958 | VSAT 433 958
Telecom | Telecom
Systems 4,589 3,541 | Systems 4,589 3,541
Corporate | Total $10,044 $13,000
and Other (738) (1,444)|
Total $9,306 $11,556 |
|
Net income $656 $2,940 | Net income $1,458 $4,308
|
Adjusted |
net income* $10,247 $3,957 |
|
EBITDA* $20,922 $24,380 | EBITDA* $21,674 $25,415
|
Adjusted EBITDA* $29,442 $25,557 | Adjusted EBITDA* $30,194 $26,592
|
New Orders $286,405 $277,360 | New Orders $286,265 $277,209
* For the definitions of Adjusted Net Income, EBITDA, and Adjusted EBITDA,
see "Reconciliation of Non-GAAP Financial Measures to GAAP Financial
Measures" below.
Selected Highlights
-- Hughes successfully activated the first HughesNet(R) consumer
subscriber for broadband Internet service utilizing its SPACEWAY 3
satellite on April 3, 2008. With this significant milestone, the
SPACEWAY 3 satellite has officially commenced carrying revenue-bearing
traffic, making Hughes a fully integrated service provider. Launched by
Arianespace in August, 2007, SPACEWAY 3 was subsequently placed into
geostationary orbit by Boeing in December, 2007, at which time Hughes
assumed operational control. Extensive pre-commercial testing has been
completed since then and Hughes has now achieved its goal of commencing
commercial service in early 2008.
-- Hughes was awarded a 7-year contract by long-time customer, GTECH
Corporation, the world's leading provider of lottery, gaming and
transaction processing solutions, to take over management and
operations of their private satellite networks, comprising 65,000
remote satellite terminals. The migration of operation services to
Hughes facilities in North Las Vegas, NV and Germantown, MD is
currently underway and is expected to be completed in the third quarter
of 2008.
-- Hughes signed MicroCorp, Inc. to be a certified reseller of HughesNet
broadband satellite business services in the US. Now business customers
purchasing telecom solutions from MicroCorp's network of more than
1,500 agents, system integrators, and value-added remarketers will have
access to high-speed data services throughout the US, as well as
back-up services, using HughesNet broadband satellite services.
-- Hughes was issued $2.6 million in task orders by the Defense
Information Systems Agency and other participating government agencies
to provide Digital Compressed Satellite Services (DCSS) for the
Government Education and Training Network (GETN). This effort is
through the US General Services Administration's SATCOM-II vehicle and
is anticipated to be a multi-million dollar effort.
-- Orion Satellite Systems of Australia purchased and commissioned a
state-of-the-art DVB-S2/IPoS with ACM satellite system from Hughes to
provide broadband Internet access service to remote areas in Australia.
Orion Satellite Systems is one of the registered providers of broadband
satellite services under the Australian Broadband Guarantee (ABG)
program.
-- Hughes' Brazilian subsidiary Hughes Telecommunicacoes do Brasil, Ltda
signed an agreement with Intelsat, the leading provider of commercial
satellite services, to deliver a new managed cellular backhaul solution
in Brazil, enabling cellular service providers to cost-effectively
extend cell networks to rural areas and sparsely populated regions.
-- Intelsat selected Hughes' HX broadband satellite platform for a new
regional Ku-band broadband maritime service. Intelsat will deliver its
new service via a limited number of distributor partners in the
Caribbean and Gulf of Mexico regions starting in mid-2008. The Hughes
HX System is fully compliant with the world's leading satellite
industry standard, IPoS/DVB-S2 with Adaptive Coding and Modulation
(ACM). The Hughes implementation of ACM on the downlink, together with
Adaptive Inbound Selection (AIS) and signal spreading capability on the
uplink, enables the use of small shipboard antennas to deliver
high-speed Ku-band maritime services.
-- Hughes signed All Systems Satellite Distributors to be a distributor of
HughesNet satellite broadband Internet service in the Northeast and
mid-Atlantic region, where large numbers of consumers are beyond the
reach of cable and DSL. Under the terms of the agreement, All Systems
will market primarily to retailers in Delaware, Maryland, New England,
New Jersey, New York, Pennsylvania, Virginia, and West Virginia. This
will create a new income opportunity for the retailers, who will sell
and install the HughesNet satellite broadband service.
-- The Society of Satellite Professionals International (SSPI) presented
Hughes with its 2008 Industry Innovators Award for Systems Development
and Applications. Hughes was recognized for its technology leadership
in developing SPACEWAY 3, the world's first commercial satellite system
to employ on-board switching and routing, at the SSPI gala held on
February 26, 2008 during the Satellite 2008 industry forum in
Washington DC.
-- Hughes' Crypto Kernel, the cryptographic component of its HN and HX
Systems, has earned a Federal Information Processing Standard (FIPS)
140-2 level 1 certificate (Certs. #919 and #915) from the National
Institute of Standards and Technology (NIST). FIPS 140-2 validation is
a requirement for any cryptographic product, which will be used in a US
government agency network.
To summarize, Kaul said, "We are very pleased with our financial growth in
first quarter of 2008 over what was already a very strong first quarter in
2007. I am also pleased with our new orders performance in the first quarter
which has resulted in a strong non-consumer backlog of over $800 million. Our
most significant accomplishment is that we initiated commercial service on our
SPACEWAY 3 satellite and we expect to see significant cost benefits and new
revenue opportunities going forward. We believe we have continued our
tradition of delivering on our commitments to our shareholders, and are
pleased at how we are positioned for the rest of this year and beyond."
Commenting on Hughes' financial performance, Grant Barber, executive vice
president and chief financial officer, said, "Our profitability showed strong
growth in the first quarter of 2008 with Adjusted EBITDA growing 15% over the
first quarter of 2007. Hughes' GAAP net income in the quarter was $0.7 million
or $0.03 per share compared with $2.9 million or $0.15 per share on a fully
diluted basis in the first quarter of 2007. Non-GAAP Adjusted Net Income was
$10.2 million, or $0.54 per share compared to $4.0 million or $0.21 per share
on a fully diluted basis in the first quarter of 2007. Hughes ended the first
quarter of 2008 with consolidated cash and marketable securities of $128.8
million."
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures
The following table reconciles the differences between Hughes' net income
as determined under United States of America generally accepted accounting
principles (GAAP), Adjusted Net Income, EBITDA, and Adjusted EBITDA.
Hughes Communications, Inc.
Three Months
Ended March 31,
(Dollars in thousands) 2008 2007
Net income $656 $2,940
Add:
Equity incentive plan compensation 1,071 1,017
Long-term cash incentive (retention) plan 8,520 -
Adjusted net income $10,247 $3,957
Net income $656 $2,940
Add:
Interest expense 9,308 11,438
Income tax expense 640 520
Depreciation and amortization 10,710 11,543
Equity incentive plan compensation 1,071 1,017
Less:
Interest income (1,463) (3,078)
EBITDA $20,922 $24,380
Add:
Long-term cash incentive (retention) plan 8,520 -
Restructuring charge - 1,177
Adjusted EBITDA $29,442 $25,557
The following table reconciles the differences between HNS' net income as
determined under GAAP, EBITDA, and Adjusted EBITDA:
Hughes Network Systems, LLC
Three Months
Ended March 31,
(Dollars in thousands) 2008 2007
Net income $1,458 $4,308
Add:
Interest expense 9,308 11,438
Income tax expense 629 520
Depreciation and amortization 10,710 11,543
Equity incentive plan compensation 925 528
Less:
Interest income (1,356) (2,922)
EBITDA $21,674 $25,415
Add:
Long-term cash incentive (retention) plan 8,520 -
Restructuring charge - 1,177
Adjusted EBITDA $30,194 $26,592
The financial statements of Hughes and HNS for the three months ended
March 31, 2008 and March 31, 2007 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 the following
supplemental non-GAAP financial measures: Adjusted Net Income, EBITDA, and
Adjusted EBITDA. Adjusted Net Income excludes from GAAP net income the effects
of equity incentive plan compensation and the accrual of long-term cash
incentive (retention) plan, which was adopted in April 2005 in connection with
the acquisition of HNS. EBITDA is defined as earnings (loss) before interest,
income taxes, depreciation, amortization and equity incentive plan
compensation. Adjusted EBITDA is defined as EBITDA further adjusted to exclude
certain adjustments. We believe these non-GAAP financial measures provide
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 these non-GAAP measures 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) plan.
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 these non-GAAP financial measures provide
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' 91/2% Senior
Notes due 2014.
Adjusted Net Income, EBITDA, and Adjusted EBITDA are not recognized terms
under GAAP. These non-GAAP measures do not represent net income or cash flows
from operations, as these terms are defined under GAAP, and should not be
considered as alternatives to net income as an indicator of operating
performance or to cash flows as a measure of liquidity. Additionally, these
non-GAAP measures are not intended to be measures of cash flow available to
management for discretionary use, as such measures do not consider certain
cash requirements such as capital expenditures (including expenditures on VSAT
operating lease hardware and capitalized software development costs), tax
payments, and debt service requirements (including VSAT operating lease
hardware). Adjusted Net Income, EBITDA and Adjusted EBITDA as presented herein
are 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 1.5
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 http://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 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. 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, 2007 filed with the Securities and Exchange Commission on March
10, 2008 and in the other documents Hughes files with the Securities and
Exchange Commission from time to time.
Hughes, HughesNet, IPoS, and SPACEWAY are trademarks of Hughes Network
Systems, LLC. DIRECTV and DIRECWAY are registered trademarks of The DIRECTV
Group, Inc.
Attachments
Hughes Communications, Inc.
Condensed Consolidated Balance Sheets
Condensed Consolidated Statements of Operations
Condensed Consolidated Statements of Cash Flows
Hughes Network Systems, LLC
Condensed Consolidated Balance Sheets
Condensed Consolidated Statements of Operations
Condensed Consolidated Statements of Cash Flows
HUGHES COMMUNICATIONS, INC.
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
March 31, December 31,
2008 2007
ASSETS
Current assets:
Cash and cash equivalents $110,136 $134,092
Marketable securities 18,650 17,307
Receivables, net 187,490 209,943
Inventories 76,099 65,754
Prepaid expenses and other 36,215 43,720
Total current assets 428,590 470,816
Property, net 489,949 479,976
Capitalized software costs, net 49,185 47,582
Intangible assets, net 29,543 22,513
Goodwill 1,362
Other assets 115,393 108,950
Total assets $1,114,022 $1,129,837
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable $73,166 $72,440
Short-term debt 12,730 14,795
Accrued liabilities 165,258 177,932
Due to affiliates 1,077 12,621
Total current liabilities 252,231 277,788
Long-term debt 577,431 577,761
Other liabilities 20,692 6,526
Total liabilities 850,354 862,075
Commitments and contingencies
Minority interests 5,446 5,401
Stockholders' Equity:
Preferred stock, $0.001 par value; 1,000,000
shares authorized and no shares issued
and outstanding at March 31, 2008 and
December 31, 2007 - -
Common stock, $0.001 par value; 64,000,000
shares authorized; 19,185,794 shares and
19,195,972 shares issued and outstanding
as of March 31, 2008 and December 31, 2007,
respectively 19 19
Additional paid in capital 631,456 631,300
Accumulated deficit (366,212) (366,868)
Accumulated other comprehensive loss:
Foreign currency translation adjustments 3,492 3,305
Unrealized loss on interest rate swap (10,699) (5,482)
Unrealized gains on securities 166 87
Total stockholders' equity 258,222 262,361
Total liabilities and
stockholders' equity $1,114,022 $1,129,837
HUGHES COMMUNICATIONS, INC.
Condensed Consolidated Statements of Operations
(In thousands, except share and per share amounts)
(Unaudited)
Three Months Ended March 31,
2008 2007
Revenues:
Services $148,897 $119,774
Hardware sales 88,263 103,108
Total revenues 237,160 222,882
Operating costs and expenses:
Cost of services 94,217 80,234
Cost of hardware products sold 76,798 87,166
Selling, general and administrative 49,155 38,266
Research and development 6,076 4,124
Amortization of intangibles 1,608 1,536
Total operating costs and expenses 227,854 211,326
Operating income 9,306 11,556
Other income (expense):
Interest expense (9,308) (11,438)
Interest income 1,463 3,078
Other income, net 31 101
Income before income tax expense; minority
interests in net losses of subsidiaries;
and equity in losses of unconsolidated
affiliates 1,492 3,297
Income tax expense (640) (520)
Minority interests in net losses of subsidiaries (45) 283
Equity in losses of unconsolidated affiliates (151) (120)
Net income $656 $2,940
Earnings per share:
Basic $0.03 $0.16
Diluted $0.03 $0.15
Shares used in computation of per share data:
Basic 18,867,630 18,843,122
Diluted 19,275,233 19,212,462
HUGHES COMMUNICATIONS, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended
March 31,
2008 2007
Cash flows from operating activities:
Net income $656 $2,940
Adjustments to reconcile net income to cash
flows from operating activities:
Depreciation and amortization 11,053 11,467
Equity plan compensation expense 1,071 1,017
Minority interests 45 (283)
Equity in losses from unconsolidated
affiliates 151 120
Other (3) (250)
Change in other operating assets and
liabilities, net of acquisitions:
Receivables, net 23,857 (2,469)
Inventories (10,194) (1,996)
Prepaid expenses and other (3,927) (641)
Accounts payable 905 (4,470)
Accrued liabilities and other (6,197) (3,051)
Net cash provided by operating activities 17,417 2,384
Cash flows from investing activities:
Change in restricted cash 7 508
Purchases of marketable securities (2,071) (1,742)
Proceeds from sales of marketable securities 1,005 15,000
Expenditures for property (22,948) (62,245)
Expenditures for capitalized software (3,382) (3,288)
Proceeds from sale of property 25 313
Additional investment in Hughes Systique
Corporation (1,500) -
Acquisition of Helius (10,812) -
Long-term loan to Hughes Systique Corporation (500) -
Net cash used in investing activities (40,176) (51,454)
Cash flows from financing activities:
Net increase in notes and loans payable 689 303
Long-term debt borrowings 1,654 115,296
Repayment of long-term debt (4,620) (6,902)
Debt issuance costs - (1,987)
Net cash (used in) provided by financing
activities (2,277) 106,710
Effect of exchange rate changes on cash and
cash equivalents 1,080 (384)
Net(decrease) increase in cash and cash
equivalents (23,956) 57,256
Cash and cash equivalents at beginning
of the period 134,092 106,933
Cash and cash equivalents at end of the period $110,136 $164,189
Supplemental cash flow information:
Cash paid for interest $2,832 $1,168
Cash paid for income taxes $952 $1,565
HUGHES NETWORK SYSTEMS
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
March 31, December 31,
2008 2007
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $109,755 $129,227
Marketable securities 11,400 11,224
Receivables, net 187,374 209,731
Inventories 76,099 65,754
Prepaid expenses and other 35,028 42,131
Total current assets 419,656 458,067
Property, net 489,949 479,976
Capitalized software costs, net 49,185 47,582
Intangible assets, net 29,543 22,513
Goodwill 1,362
Other assets 108,465 103,870
Other assets 109,827 103,870
Total assets $1,098,160 $1,112,008
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $71,762 $69,497
Short-term debt 12,730 14,795
Accrued liabilities 164,647 177,136
Due to affiliates 1,499 13,473
Total current liabilities 250,638 274,901
Long-term debt 577,431 577,761
Other long-term liabilities 20,692 6,526
Total liabilities 848,761 859,188
Commitments and contingencies
Minority interests 5,386 5,350
Equity:
Class A membership interests 180,731 180,655
Class B membership interests - -
Retained earnings 70,361 68,903
Accumulated other comprehensive loss:
Foreign currency translation adjustments 3,492 3,305
Unrealized loss on interest rate swap (10,699) (5,482)
Unrealized gains on securities 128 89
Total equity 244,013 247,470
Total liabilities and equity $1,098,160 $1,112,008
HUGHES NETWORK SYSTEMS
Condensed Consolidated Statements of Operations
(In thousands)
(Unaudited)
Three Months Ended March 31,
2008 2007
Revenues:
Services $148,757 $119,623
Hardware sales 88,263 103,108
Total revenues 237,020 222,731
Operating costs and expenses:
Cost of services 94,203 80,206
Cost of hardware products sold 76,798 87,166
Selling, general and administrative 48,291 36,699
Research and development 6,076 4,124
Amortization of intangibles 1,608 1,536
Total operating costs and expenses 226,976 209,731
Operating income 10,044 13,000
Other income (expense):
Interest expense (9,308) (11,438)
Interest income 1,356 2,922
Other income, net 31 52
Income before income tax expense, minority
interests in net (earnings) losses of
subsidiaries 2,123 4,536
Income tax expense (629) (520)
Minority interests in net (earnings) losses
of subsidiaries (36) 292
Net income $1,458 $4,308
HUGHES NETWORK SYSTEMS
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended
March 31,
2008 2007
Cash flows from operating activities:
Net income $1,458 $4,308
Adjustments to reconcile net income to cash
flows from operating activities:
Depreciation and amortization 11,053 11,467
Equity plan compensation expense 76 80
Minority interests 36 (292)
Other (4) (191)
Change in other operating assets and
liabilities, net of acquisition:
Receivables, net 23,761 (2,447)
Inventories (10,194) (1,996)
Prepaid expenses and other (4,268) (1,617)
Accounts payable 2,444 (4,148)
Accrued liabilities and other (5,527) (2,746)
Net cash provided by operating activities $18,835 $2,418
Cash flows from investing activities:
Change in restricted cash 7 (281)
Proceeds from sales of marketable securities - 14,795
Expenditures for property (22,948) (62,245)
Expenditures for capitalized software (3,382) (3,288)
Proceeds from sale of property 25 313
Acquisition of Helius (10,812) -
Net cash used in investing activities (37,110) (50,706)
Cash flows from financing activities:
Net increase in notes and loans payable 689 303
Long-term debt borrowings 1,654 115,296
Repayment of long-term debt (4,620) (6,902)
Debt issuance costs - (1,987)
Net cash provided by (used in)
financing activities (2,277) 106,710
Effect of exchange rate changes on cash
and cash equivalents 1,080 (384)
Net increase (decrease) in cash and
cash equivalents (19,472) 58,038
Cash and cash equivalents at beginning
of the period 129,227 99,098
Cash and cash equivalents at end of the period $109,755 $157,136
Supplemental cash flow information:
Cash paid for interest $2,832 $1,168
Cash paid for income taxes $930 $1,564
SOURCE Hughes Communications, Inc.
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