News Release
Intelsat Announces Third Quarter 2021 Results
-
Third quarter revenue was
$526.1 million -
Third quarter net loss attributable to Intelsat S.A. was
$145.7 million -
Third quarter Adjusted EBITDA of
$283.3 million or 54% of revenue -
September 30, 2021 contracted backlog of$5.7 billion
LUXEMBOURG--(BUSINESS WIRE)--Nov. 4, 2021--
Intelsat S.A. ("Intelsat" or the "Company") (OTC:
Intelsat reported total revenue was
Intelsat reported EBITDA1, or earnings before net interest, taxes and depreciation and amortization, of
Intelsat’s Chief Executive Officer,
Spengler concluded, “Our team remains committed to delivering a superior customer experience while making critical investments to expand our ability to deliver mission critical services. We remain focused on executing the C-band relocation to secure accelerated payments, maintaining a high standard of operational excellence, and transforming our business. Investment in our next generation network, coupled with our unmatched scale and partnerships, will position us well to secure new business opportunities.”
Third Quarter 2021 Business Highlights
Intelsat provides critical communications infrastructure to customers in the network services, media and government sectors. Our customers use our services for broadband connectivity to deliver fixed and mobile telecommunications, enterprise, video distribution and fixed and mobile government applications.
Network Services
Network services revenue was
Media
Media revenue was
Government
Government revenue was
Average Fill Rate
Intelsat’s average fill rate as of
Contracted Backlog
At
Financial Results for the Three Months Ended
Total revenue for the three months ended
Direct costs of revenue (excluding depreciation and amortization) increased by
Selling, general and administrative expenses increased by
Depreciation and amortization expense decreased by
Other operating expense—C-band consists of reimbursable and non-reimbursable costs associated with our C-band spectrum relocation efforts. We incurred
Interest expense, net consists of the gross interest expense we incur, together with gains and losses on interest rate cap contracts we held that matured in
Interest expense, net decreased by
The non-cash portion of interest expense, net was
Other income, net was
Reorganization items reflect direct costs incurred in connection with our Chapter 11 restructuring activities. Reorganization items of
Income tax expense increased by
Net Income, Net Income per Diluted Common Share attributable to Intelsat S.A., EBITDA and Adjusted EBITDA
Net loss attributable to Intelsat S.A. was
Net loss per diluted common share attributable to Intelsat S.A. was
EBITDA was
Adjusted EBITDA was
Free Cash Flow Used In Operations1
Net cash provided by operating activities was
| _______________ |
|
1In this release, financial measures are presented both in accordance with |
Conference Call Information
In light of the Company and certain of its subsidiaries’ decision to file voluntary petitions for relief (the "Chapter 11 Cases") under title 11 of the United States Code in the
About Intelsat
As the foundational architects of satellite technology, Intelsat S.A. (OTC:
Intelsat Safe Harbor Statement:
Some of the information and statements contained in this earnings release and certain oral statements made from time to time by representatives of Intelsat constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that do not directly or exclusively relate to historical facts. When used in this earnings release, the words “may,” “will,” “might,” “should,” “expect,” “plan,” “anticipate,” “project,” “believe,” “estimate,” “predict,” “intend,” “potential,” “outlook,” and “continue,” and the negative of these terms, and other similar expressions are intended to identify forward-looking statements and information. Forward-looking statements include statements regarding: the effects of the Chapter 11 Cases on our liquidity or results of operations or business prospects; our belief as to the likelihood of the cause of the failure of Intelsat 29e in 2019 occurring on our other satellites; our guidance regarding our expectation that the launches of our satellites in the future will position us for growth; our plans for satellite launches in the near to mid-term; our intention to maximize the value of our spectrum rights; our expectations as to our ability to comply with the final
The forward-looking statements reflect Intelsat's intentions, plans, expectations, anticipations, projections, estimations, predictions, outlook, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors, many of which are outside of Intelsat's control. Important factors that could cause actual results to differ materially from the expectations expressed or implied in the forward-looking statements include known and unknown risks. Some of the factors that could cause actual results to differ from historical results or those anticipated or predicted by these forward-looking statements include: risks associated with operating our in-orbit satellites; satellite launch failures, satellite launch and construction delays and in-orbit failures or reduced satellite performance; potential changes in the number of companies offering commercial satellite launch services and the number of commercial satellite launch opportunities available in any given time period that could impact our ability to timely schedule future launches and the prices we pay for such launches; our ability to obtain new satellite insurance policies with financially viable insurance carriers on commercially reasonable terms or at all, as well as the ability of our insurance carriers to fulfill their obligations; possible future losses on satellites that are not adequately covered by insurance;
|
INTELSAT S.A. (DEBTOR-IN-POSSESSION) UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ($ in thousands, except per share amounts) |
|||||||
|
|
Three Months Ended
|
|
Three Months Ended
|
||||
|
Revenue |
$ |
489,449 |
|
|
$ |
526,095 |
|
|
Operating expenses: |
|
|
|
||||
|
Direct costs of revenue (excluding depreciation and amortization) |
119,969 |
|
|
177,176 |
|
||
|
Selling, general and administrative |
69,215 |
|
|
96,796 |
|
||
|
Depreciation and amortization |
162,573 |
|
|
162,017 |
|
||
|
Other operating expense—C-band |
298 |
|
|
17,867 |
|
||
|
Total operating expenses |
352,055 |
|
|
453,856 |
|
||
|
Income from operations |
137,394 |
|
|
72,239 |
|
||
|
Interest expense, net |
(138,075 |
) |
|
(126,600 |
) |
||
|
Other income, net |
3,067 |
|
|
10,196 |
|
||
|
Reorganization items |
(36,367 |
) |
|
(98,316 |
) |
||
|
Loss before income taxes |
(33,981 |
) |
|
(142,481 |
) |
||
|
Income tax benefit (expense) |
18,650 |
|
|
(2,605 |
) |
||
|
Net loss |
(15,331 |
) |
|
(145,086 |
) |
||
|
Net income attributable to noncontrolling interest |
(600 |
) |
|
(604 |
) |
||
|
Net loss attributable to Intelsat S.A. |
$ |
(15,931 |
) |
|
$ |
(145,690 |
) |
|
Net loss per common share attributable to Intelsat S.A.: |
|
|
|
||||
|
Basic |
$ |
(0.11 |
) |
|
$ |
(1.02 |
) |
|
Diluted |
$ |
(0.11 |
) |
|
$ |
(1.02 |
) |
|
INTELSAT S.A. (DEBTOR-IN-POSSESSION) UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO EBITDA ($ in thousands) |
|||||||
|
|
Three Months Ended
|
|
Three Months Ended
|
||||
|
Net loss |
$ |
(15,331 |
) |
|
$ |
(145,086 |
) |
|
Add (Subtract): |
|
|
|
||||
|
Interest expense, net |
138,075 |
|
|
126,600 |
|
||
|
Income tax expense (benefit) |
(18,650 |
) |
|
2,605 |
|
||
|
Depreciation and amortization |
162,573 |
|
|
162,017 |
|
||
|
EBITDA |
$ |
266,667 |
|
|
$ |
146,136 |
|
|
|
|
|
|
||||
|
EBITDA Margin |
54 |
% |
|
28 |
% |
||
Note:
Intelsat calculates a measure called EBITDA to assess the operating performance of Intelsat S.A. EBITDA consists of earnings before net interest, loss (gain) on early extinguishment of debt, taxes and depreciation and amortization. Given our high level of leverage, refinancing activities are a frequent part of our efforts to manage our costs of borrowing. Accordingly, we consider loss (gain) on early extinguishment of debt an element of interest expense. EBITDA is a measure commonly used in the Fixed Satellite Services (“FSS”) sector, and we present EBITDA to enhance the understanding of our operating performance. We use EBITDA as one criterion for evaluating our performance relative to that of our peers. We believe that EBITDA is an operating performance measure, and not a liquidity measure, that provides investors and financial analysts with a measure of operating results unaffected by differences in capital structures, capital investment cycles and ages of related assets among otherwise comparable companies.
EBITDA is not a measure of financial performance under
|
INTELSAT S.A. (DEBTOR-IN-POSSESSION) UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA ($ in thousands) |
|||||||
|
|
Three Months Ended
|
|
Three Months Ended
|
||||
|
|
|
|
|
||||
|
Net loss |
$ |
(15,331 |
) |
|
$ |
(145,086 |
) |
|
Add (Subtract): |
|
|
|
||||
|
Interest expense, net |
138,075 |
|
|
126,600 |
|
||
|
Income tax expense (benefit) |
(18,650 |
) |
|
2,605 |
|
||
|
Depreciation and amortization |
162,573 |
|
|
162,017 |
|
||
|
EBITDA |
266,667 |
|
|
146,136 |
|
||
|
Add: |
|
|
|
||||
|
Compensation and benefits(1) |
15,484 |
|
|
21,369 |
|
||
|
Non-recurring and other non-cash items(2) |
10,510 |
|
|
14,048 |
|
||
|
Reorganization items, net(3) |
36,367 |
|
|
98,316 |
|
||
|
Interest expense, net |
1,074 |
|
|
594 |
|
||
|
Depreciation and amortization |
2,815 |
|
|
2,815 |
|
||
|
Adjusted EBITDA(4)(5) |
$ |
332,917 |
|
|
$ |
283,278 |
|
|
|
|
|
|
||||
|
Adjusted EBITDA margin |
68 |
% |
|
54 |
% |
||
|
(1) |
Reflects non-cash expenses incurred relating to our equity compensation plans and expenses incurred relating to our employee retention incentive plans in connection with our Chapter 11 proceedings. |
|
(2) |
Reflects certain non-recurring expenses, gains and losses and non-cash items, including the following: costs associated with our C-band spectrum relocation efforts; professional fees related to our liability management initiatives; merger and acquisition costs; certain research and development costs; amortization of supplemental type certificates; severance, retention and relocation payments; changes in fair value and gains on sales of certain investments; certain foreign exchange gains and losses; and other various non-recurring expenses. |
|
(3) |
Reflects direct costs incurred in connection with our Chapter 11 restructuring activities. See Item 1, Note 2—Chapter 11 Proceedings, Ability to Continue as a Going Concern and Other Related Matters of Intelsat S.A.'s Quarterly Report on Form 10-Q for the quarter ended |
|
(4) |
Adjusted EBITDA included |
|
(5) |
Intelsat S.A. Adjusted EBITDA reflected |
Note:
Intelsat calculates a measure called Adjusted EBITDA to assess the operating performance of Intelsat S.A. Adjusted EBITDA consists of EBITDA as adjusted to exclude or include certain unusual items, certain other operating expense items and certain other adjustments as described in the table above. Our management believes that the presentation of Adjusted EBITDA provides useful information to investors, lenders and financial analysts regarding our financial condition and results of operations, because it permits clearer comparability of our operating performance between periods. By excluding the potential volatility related to the timing and extent of non-operating activities, our management believes that Adjusted EBITDA provides a useful means of evaluating the success of our operating activities. We also use Adjusted EBITDA, together with other appropriate metrics, to set goals for and measure the operating performance of our business, and it is one of the principal measures we use to evaluate our management’s performance in determining compensation under our incentive compensation plans. Adjusted EBITDA measures have been used historically by investors, lenders and financial analysts to estimate the value of a company, to make informed investment decisions and to evaluate performance. Our management believes that the inclusion of Adjusted EBITDA facilitates comparison of our results with those of companies having different capital structures.
Adjusted EBITDA is not a measure of financial performance under
|
INTELSAT S.A. (DEBTOR-IN-POSSESSION) CONDENSED CONSOLIDATED BALANCE SHEETS ($ in thousands) |
|||||||
|
|
|
|
|
||||
|
|
|
|
(unaudited) |
||||
|
ASSETS |
|
|
|
||||
|
Current assets: |
|
|
|
||||
|
Cash and cash equivalents |
$ |
1,060,917 |
|
|
$ |
636,510 |
|
|
Restricted cash |
21,130 |
|
|
27,675 |
|
||
|
Receivables, net of allowances of |
254,273 |
|
|
217,235 |
|
||
|
Receivables relating to C-band |
405,171 |
|
|
1,035,578 |
|
||
|
Contract assets, net of allowances |
39,774 |
|
|
42,447 |
|
||
|
Inventory |
147,094 |
|
|
125,288 |
|
||
|
Prepaid expenses and other current assets |
136,611 |
|
|
140,330 |
|
||
|
Total current assets |
2,064,970 |
|
|
2,225,063 |
|
||
|
Satellites and other property and equipment, net |
4,757,877 |
|
|
4,981,394 |
|
||
|
|
2,698,247 |
|
|
2,689,482 |
|
||
|
Non-amortizable intangible assets |
2,295,000 |
|
|
2,295,000 |
|
||
|
Amortizable intangible assets, net |
290,569 |
|
|
262,355 |
|
||
|
Contract assets, net of current portion and allowances |
86,017 |
|
|
71,914 |
|
||
|
Other assets |
605,001 |
|
|
727,862 |
|
||
|
Total assets |
$ |
12,797,681 |
|
|
$ |
13,253,070 |
|
|
LIABILITIES AND SHAREHOLDERS’ DEFICIT |
|
|
|
||||
|
Current liabilities: |
|
|
|
||||
|
Accounts payable and accrued liabilities |
$ |
252,998 |
|
|
$ |
279,122 |
|
|
Taxes payable |
7,493 |
|
|
6,486 |
|
||
|
Employee-related liabilities |
43,404 |
|
|
43,382 |
|
||
|
Accrued interest payable |
17,747 |
|
|
19,094 |
|
||
|
Current maturities of long-term debt |
5,903,724 |
|
|
6,162,315 |
|
||
|
Contract liabilities |
157,320 |
|
|
858,941 |
|
||
|
Deferred satellite performance incentives |
47,377 |
|
|
54,512 |
|
||
|
Other current liabilities |
73,479 |
|
|
105,416 |
|
||
|
Total current liabilities |
6,503,542 |
|
|
7,529,268 |
|
||
|
Contract liabilities, net of current portion |
1,447,891 |
|
|
1,309,270 |
|
||
|
Deferred satellite performance incentives, net of current portion |
138,116 |
|
|
121,439 |
|
||
|
Deferred income taxes |
61,345 |
|
|
77,485 |
|
||
|
Accrued retirement benefits, net of current portion |
129,837 |
|
|
113,452 |
|
||
|
Other long-term liabilities |
262,900 |
|
|
315,939 |
|
||
|
Liabilities subject to compromise |
10,168,518 |
|
|
10,169,243 |
|
||
|
Shareholders’ deficit: |
|
|
|
||||
|
Common shares, nominal value |
1,421 |
|
|
1,422 |
|
||
|
Paid-in capital |
2,573,840 |
|
|
2,577,607 |
|
||
|
Accumulated deficit |
(8,416,410 |
) |
|
(8,889,282 |
) |
||
|
Accumulated other comprehensive loss |
(80,322 |
) |
|
(77,261 |
) |
||
|
|
(5,921,471 |
) |
|
(6,387,514 |
) |
||
|
Noncontrolling interest |
7,003 |
|
|
4,488 |
|
||
|
Total liabilities and shareholders’ deficit |
$ |
12,797,681 |
|
|
$ |
13,253,070 |
|
|
INTELSAT S.A. (DEBTOR-IN-POSSESSION) UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ($ in thousands) |
|||||||
|
|
Three months Ended
|
|
Three months Ended
|
||||
|
Cash flows from operating activities: |
|
|
|
||||
|
Net loss |
$ |
(15,331 |
) |
|
$ |
(145,085 |
) |
|
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
||||
|
Depreciation and amortization |
162,573 |
|
|
162,018 |
|
||
|
Provision for expected credit losses |
6,818 |
|
|
5,866 |
|
||
|
Foreign currency transaction losses |
403 |
|
|
2,786 |
|
||
|
Loss on disposal of assets |
— |
|
|
2 |
|
||
|
Share-based compensation |
2,919 |
|
|
6,665 |
|
||
|
Deferred income taxes |
(911 |
) |
|
1,933 |
|
||
|
Amortization of discount, premium, issuance costs and related costs |
2,412 |
|
|
2,581 |
|
||
|
Debtor-in-possession financing fees |
— |
|
|
46,944 |
|
||
|
Amortization of actuarial loss and prior service credits for retirement benefits |
659 |
|
|
1,063 |
|
||
|
Unrealized losses on derivative financial instruments |
23 |
|
|
— |
|
||
|
Unrealized (gains) losses on investments and loans held-for-investment |
(17 |
) |
|
(10,065 |
) |
||
|
Amortization of supplemental type certificate costs |
— |
|
|
2,151 |
|
||
|
Other non-cash items |
— |
|
|
(3 |
) |
||
|
Changes in operating assets and liabilities: |
|
|
|
||||
|
Receivables |
1,503 |
|
|
234 |
|
||
|
Prepaid expenses, contract and other assets |
(39,167 |
) |
|
(2,442 |
) |
||
|
Accounts payable and accrued liabilities |
33,085 |
|
|
(23,485 |
) |
||
|
Accrued interest payable |
(62 |
) |
|
1,060 |
|
||
|
Contract liabilities |
(22,372 |
) |
|
(19,086 |
) |
||
|
Accrued retirement benefits |
(3,986 |
) |
|
(5,006 |
) |
||
|
Other long-term liabilities |
11,686 |
|
|
(16,315 |
) |
||
|
Net cash provided by operating activities |
140,235 |
|
|
11,816 |
|
||
|
Cash flows from investing activities: |
|
|
|
||||
|
Capital expenditures (including capitalized interest) |
(220,060 |
) |
|
(198,909 |
) |
||
|
Acquisition of loans held-for-investment |
(1,150 |
) |
|
— |
|
||
|
Loan amendment fees received |
— |
|
|
1,800 |
|
||
|
Proceeds from principal payments on loans held-for-investment |
249 |
|
|
105 |
|
||
|
Acquisition of intangible assets |
— |
|
|
(1,275 |
) |
||
|
Net cash used in investing activities |
(220,961 |
) |
|
(198,279 |
) |
||
|
Cash flows from financing activities: |
|
|
|
||||
|
Proceeds from debtor-in-possession financing |
— |
|
|
1,250,000 |
|
||
|
Repayments of debtor-in-possession financing |
— |
|
|
(1,000,000 |
) |
||
|
Debtor-in-possession financing fees |
— |
|
|
(46,944 |
) |
||
|
Principal payments on deferred satellite performance incentives |
(6,233 |
) |
|
(7,938 |
) |
||
|
Dividends paid to noncontrolling interest |
(3,080 |
) |
|
(1,440 |
) |
||
|
Net cash provided by (used in) financing activities |
(9,313 |
) |
|
193,678 |
|
||
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
(596 |
) |
|
(1,956 |
) |
||
|
Net change in cash, cash equivalents and restricted cash |
(90,635 |
) |
|
5,259 |
|
||
|
Cash, cash equivalents, and restricted cash, beginning of period |
1,110,985 |
|
|
658,926 |
|
||
|
Cash, cash equivalents, and restricted cash, end of period |
$ |
1,020,350 |
|
|
$ |
664,185 |
|
|
|
|
|
|
||||
|
Supplemental cash flow information: |
|
|
|
||||
|
Cash paid for reorganization items included in cash flows from operating activities |
$ |
25,070 |
|
|
$ |
60,958 |
|
|
Interest paid, net of amounts capitalized |
109,395 |
|
|
99,330 |
|
||
|
Income taxes paid, net of refunds |
2,089 |
|
|
118 |
|
||
|
Supplemental disclosure of non-cash investing activities: |
|
|
|
||||
|
Accrued capital expenditures |
$ |
(13,221 |
) |
|
$ |
(10,938 |
) |
|
Purchase price adjustment |
$ |
— |
|
|
$ |
7,843 |
|
|
INTELSAT S.A. (DEBTOR-IN-POSSESSION) UNAUDITED RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW FROM (USED IN) OPERATIONS ($ in thousands) |
|||||||
|
|
Three Months Ended
|
|
Three Months Ended
|
||||
|
Net cash provided by operating activities |
$ |
140,235 |
|
|
$ |
11,816 |
|
|
Payments for satellites and other property and equipment (including capitalized interest) |
(220,060 |
) |
|
(198,909 |
) |
||
|
Free cash flow used in operations |
$ |
(79,825 |
) |
|
$ |
(187,093 |
) |
Note:
Free cash flow from (used in) operations consists of net cash provided by (used in) operating activities and other proceeds from satellites from investing activities, less payments for satellites and other property and equipment (including capitalized interest) from investing activities. Free cash flow from (used in) operations is not a measurement of cash flow under
|
INTELSAT S.A. (DEBTOR-IN-POSSESSION) SUPPLEMENTARY TABLE REVENUE BY CUSTOMER SET ($ in thousands) |
||||||||||||||||||||
|
By Customer Set |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Three Months Ended
|
|
|
|
Three Months Ended
|
|
|
|
Increase (Decrease) |
|
Percentage Change |
|||||||||
|
Network services |
$ |
169,594 |
|
|
35 |
% |
|
$ |
241,737 |
|
|
46 |
% |
|
$ |
72,143 |
|
|
43 |
% |
|
Media |
203,552 |
|
|
42 |
% |
|
181,069 |
|
|
34 |
% |
|
(22,483 |
) |
|
(11 |
)% |
|||
|
Government |
107,981 |
|
|
22 |
% |
|
95,008 |
|
|
18 |
% |
|
(12,973 |
) |
|
(12 |
)% |
|||
|
Satellite-related services |
8,322 |
|
|
2 |
% |
|
8,281 |
|
|
2 |
% |
|
(41 |
) |
|
— |
% |
|||
|
|
$ |
489,449 |
|
|
|
|
$ |
526,095 |
|
|
|
|
$ |
36,646 |
|
|
7 |
% |
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20211104006418/en/
Vice President, Financial Planning and Analysis
Investor.Relations@intelsat.com
+1 703 559 8878 (o)
Source: Intelsat