New Skies Reports First Quarter 2002 Earnings
8 May 2002
The Hague, The Netherlands, May 8, 2002- New Skies Satellites N.V. (AEX, NYSE: NSK), the global satellite communications company, today reported financial results for the three months ended March 31, 2002. Revenues for the quarter were $51.8 million, EBITDA was $28.6 million and net income was $6.4 million.
Highlights
3 months ended
March 31
US$ millions
(except per share amounts) 2002 2001
Revenues $51.8 $51.2
Operating income 9.9 9.6
Net income 6.4 8.0
EBITDA 28.6 27.7
EBITDA margin 55.2% 54.1%
Basic and diluted earnings per share 0.05 0.06
Commenting on the quarter, CEO Dan Goldberg said:
“I am pleased to report that New Skies has achieved another solid quarter of stable revenues, EBITDA growth and strong cash flows despite the difficult economic environment in which we are operating. Furthermore, revenues remain well-diversified among our services and on a geographic basis.
“In addition, we began to lay the foundation for future growth with the April 16 launch of our first new satellite, NSS-7. This historic milestone for the company gives us the higher-power and more advanced capacity we need at 338.5 degrees east longitude to retire one ageing satellite and redeploy the second, now at that location, to serve the Asia-Pacific.
“In the first quarter, we signed important agreements with leading broadcaster TVNZ for delivery of sports and news programming around the world and with the International Broadcasting Bureau/Voice of America for digital video links between the United States and locations in the Caribbean. We have also been signing contracts for capacity on NSS-7 and we are encouraged by the interest shown by customers for capacity on this satellite. We expect NSS-7 to go into commercial service later this year, helping fuel our growth in 2003 and beyond.”
For the first quarter 2002, New Skies achieved the following financial results:
Revenues for the three-month period ended March 31, 2002 grew to $51.8 million, an increase of $0.6 million, or 1 percent as compared to $51.2 million for the same period in 2001.
In accordance with the adoption of Statement of Accounting Standards No. 142 (“SFAS No. 142”), effective January 1, 2002, the company is no longer required to record amortization expense related to goodwill. This change has resulted in a reduction of approximately $2.5 million in annual amortization expense. However, SFAS No. 142 also requires the company to assess its goodwill for impairment on an annual basis, and the company plans to perform this assessment in the coming quarter.
EBITDA (earnings before interest, taxes, depreciation and amortization) for the first quarter 2002 increased by 3 percent to $28.6 million from $27.7 million achieved in the first quarter 2001. The EBITDA margin grew to 55.2 percent in the current quarter, up from 54.1 percent for the same period in 2001. This reflects the company’s ability to leverage the infrastructure investments made to date including savings resulting from bringing the tracking, telemetry, control and monitoring functions in-house, now performed directly from New Skies’ own satellite operations center.
Net income for the first quarter 2002 was $6.4 million, or $0.05 diluted earnings per share, compared to $8.0 million and $0.06 diluted earnings per share for the same period in 2001. The decrease in the current quarter primarily relates to the lower interest income. In the first quarter of 2001, New Skies held large amounts of cash equivalents arising from its initial public offering, completed in October of 2000. During 2001 and the first quarter of 2002, New Skies used these balances to fund the ongoing construction of its expansion satellites, NSS-7, NSS-6, and NSS-8. This, together with lower interest rates, reduced the level of interest income.
Notwithstanding its construction program for three new satellites, which together will more than double New Skies’ in-orbit capacity and make its fleet one of the youngest in the industry, New Skies closed the first quarter of 2002 with more than $70 million in cash and cash equivalents, and no debt on the books.
Operating Highlights:
Signed contracts with:
New Zealand broadcaster TVNZ, doubling their New Skies capacity with a combination of C- and Ku-band global coverage for the delivery of television news and sports events around the world;
Arab Digital Distribution for their customer Star TV for video services from Hong Kong to Italy;
The International Broadcasting Bureau/Voice of America for digital video links between the United States and locations in the Caribbean;
Embratel, the major Brazilian telecommunications company, for telecommunications services throughout Brazil;
Two major European telecommunication companies, Telenor and CPR Marconi, for voice and data services over NSS-7;
Major Indian ISP Data Access, for Internet services; and
ISP Albanian Business Communications, for IPsys services to connect directly into the U.S. Internet backbone.
On April 16 New Skies successfully launched NSS-7, New Skies’ first new satellite, procured, designed and launched by New Skies and optimized to meet current and future market demands and customer requirements.
About New Skies Satellites (AEX, NYSE: NSK)
New Skies is one of only four fixed satellite communications companies with truly global satellite coverage, offering video, voice, data and Internet communications services to a range of telecommunications carriers, broadcasters, large corporations and Internet service providers around the world. New Skies currently has six satellites in geosynchronous orbit, with one slated for retirement in mid-2002, and ground facilities around the world. The company also has two new spacecraft under construction which are planned to serve Asia and the Americas. In line with its growth strategy, the company has secured certain rights to make use of four additional orbital positions. New Skies is headquartered in The Hague, The Netherlands, and has offices in London, Johannesburg, New Delhi, Săo Paulo, Singapore, Sydney and Washington, D.C. Additional information is available at www.newskies.com .
Highlights
3 months ended
March 31
US$ millions
(except per share amounts) 2002 2001
Revenues $51.8 $51.2
Operating income 9.9 9.6
Net income 6.4 8.0
EBITDA 28.6 27.7
EBITDA margin 55.2% 54.1%
Basic and diluted earnings per share 0.05 0.06
Commenting on the quarter, CEO Dan Goldberg said:
“I am pleased to report that New Skies has achieved another solid quarter of stable revenues, EBITDA growth and strong cash flows despite the difficult economic environment in which we are operating. Furthermore, revenues remain well-diversified among our services and on a geographic basis.
“In addition, we began to lay the foundation for future growth with the April 16 launch of our first new satellite, NSS-7. This historic milestone for the company gives us the higher-power and more advanced capacity we need at 338.5 degrees east longitude to retire one ageing satellite and redeploy the second, now at that location, to serve the Asia-Pacific.
“In the first quarter, we signed important agreements with leading broadcaster TVNZ for delivery of sports and news programming around the world and with the International Broadcasting Bureau/Voice of America for digital video links between the United States and locations in the Caribbean. We have also been signing contracts for capacity on NSS-7 and we are encouraged by the interest shown by customers for capacity on this satellite. We expect NSS-7 to go into commercial service later this year, helping fuel our growth in 2003 and beyond.”
For the first quarter 2002, New Skies achieved the following financial results:
Revenues for the three-month period ended March 31, 2002 grew to $51.8 million, an increase of $0.6 million, or 1 percent as compared to $51.2 million for the same period in 2001.
In accordance with the adoption of Statement of Accounting Standards No. 142 (“SFAS No. 142”), effective January 1, 2002, the company is no longer required to record amortization expense related to goodwill. This change has resulted in a reduction of approximately $2.5 million in annual amortization expense. However, SFAS No. 142 also requires the company to assess its goodwill for impairment on an annual basis, and the company plans to perform this assessment in the coming quarter.
EBITDA (earnings before interest, taxes, depreciation and amortization) for the first quarter 2002 increased by 3 percent to $28.6 million from $27.7 million achieved in the first quarter 2001. The EBITDA margin grew to 55.2 percent in the current quarter, up from 54.1 percent for the same period in 2001. This reflects the company’s ability to leverage the infrastructure investments made to date including savings resulting from bringing the tracking, telemetry, control and monitoring functions in-house, now performed directly from New Skies’ own satellite operations center.
Net income for the first quarter 2002 was $6.4 million, or $0.05 diluted earnings per share, compared to $8.0 million and $0.06 diluted earnings per share for the same period in 2001. The decrease in the current quarter primarily relates to the lower interest income. In the first quarter of 2001, New Skies held large amounts of cash equivalents arising from its initial public offering, completed in October of 2000. During 2001 and the first quarter of 2002, New Skies used these balances to fund the ongoing construction of its expansion satellites, NSS-7, NSS-6, and NSS-8. This, together with lower interest rates, reduced the level of interest income.
Notwithstanding its construction program for three new satellites, which together will more than double New Skies’ in-orbit capacity and make its fleet one of the youngest in the industry, New Skies closed the first quarter of 2002 with more than $70 million in cash and cash equivalents, and no debt on the books.
Operating Highlights:
Signed contracts with:
New Zealand broadcaster TVNZ, doubling their New Skies capacity with a combination of C- and Ku-band global coverage for the delivery of television news and sports events around the world;
Arab Digital Distribution for their customer Star TV for video services from Hong Kong to Italy;
The International Broadcasting Bureau/Voice of America for digital video links between the United States and locations in the Caribbean;
Embratel, the major Brazilian telecommunications company, for telecommunications services throughout Brazil;
Two major European telecommunication companies, Telenor and CPR Marconi, for voice and data services over NSS-7;
Major Indian ISP Data Access, for Internet services; and
ISP Albanian Business Communications, for IPsys services to connect directly into the U.S. Internet backbone.
On April 16 New Skies successfully launched NSS-7, New Skies’ first new satellite, procured, designed and launched by New Skies and optimized to meet current and future market demands and customer requirements.
About New Skies Satellites (AEX, NYSE: NSK)
New Skies is one of only four fixed satellite communications companies with truly global satellite coverage, offering video, voice, data and Internet communications services to a range of telecommunications carriers, broadcasters, large corporations and Internet service providers around the world. New Skies currently has six satellites in geosynchronous orbit, with one slated for retirement in mid-2002, and ground facilities around the world. The company also has two new spacecraft under construction which are planned to serve Asia and the Americas. In line with its growth strategy, the company has secured certain rights to make use of four additional orbital positions. New Skies is headquartered in The Hague, The Netherlands, and has offices in London, Johannesburg, New Delhi, Săo Paulo, Singapore, Sydney and Washington, D.C. Additional information is available at www.newskies.com .
Conference call:
CEO Dan Goldberg and CFO Andrew Browne will host a conference call today at 5 pm (CET). To listen in please dial +44 20 8781 0579, passcode “New Skies”.
The conference call will also be available for replay, 24 hours a day for the subsequent five working days. The international dial in number is +44 20 8288 4459, passcode 634932.
If for any reason there is a problem with the connection during the call, please dial the alternative number + 44 20 8515 2310, passcode "New Skies". A replay of the conference call in this case would be available for the subsequent five working days by dialing +44 20 8797 2499, PIN 113858#.
CEO Dan Goldberg and CFO Andrew Browne will host a conference call today at 5 pm (CET). To listen in please dial +44 20 8781 0579, passcode “New Skies”.
The conference call will also be available for replay, 24 hours a day for the subsequent five working days. The international dial in number is +44 20 8288 4459, passcode 634932.
If for any reason there is a problem with the connection during the call, please dial the alternative number + 44 20 8515 2310, passcode "New Skies". A replay of the conference call in this case would be available for the subsequent five working days by dialing +44 20 8797 2499, PIN 113858#.
For more information, please contact:
Elizabeth Hess,
Corporate Communications, New Skies Satellites +31 70 306 4133
ehess@newskies.com
Boris Djordjevic,
Investor Relations, New Skies Satellites +31 70 306 4183
bdjordjevic@newskies.com
Frank De Maria, Brunswick +44 20 7404 5959
fdemaria@brunswickgroup.com
Nina Pawlak, Brunswick +1 212 333 3810
npawlak@brunswickgroup.com
Safe Harbor
Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934 provide a “safe harbor” for forward-looking statements made by an issuer of publicly traded securities and persons acting on its behalf. New Skies Satellites N.V. has made certain forward-looking statements in this document in reliance on those safe harbors. A forward-looking statement concerns the company’s or management’s intentions or expectations, or are predictions of future performance. These statements are identified by words such as “intends”, “expects”, “anticipates”, “believes”, “estimates”, “may”, “will”, “should” and similar expressions. By their nature, forward-looking statements are not a matter of historical fact and involve risks and uncertainties that could cause New Skies’ actual results to differ materially from those expressed or implied by the forward-looking statements for a number of reasons. Factors which may affect the future performance of New Skies include: delays or problems in the construction or launch of future satellites; technical performance of in-orbit satellites and earth-based infrastructure; increased competition and changes in technology; growth of and access to the company’s target markets; legal and regulatory developments affecting the company’s business; and worldwide business and economic conditions, among other things. These risks and other risks affecting New Skies’ business are described in the company's periodic filings with the U.S. Securities and Exchange Commission, including but not limited to New Skies’ Annual Report on Form 20-F for the year ended December 31, 2000. Copies of these filings may be obtained by contacting the SEC. New Skies disclaims any obligation to update the forward-looking statements contained in this document.
New Skies Satellites N.V. and Subsidiaries
Consolidated Balance Sheets
March 31, 2002 and December 31, 2001
(In thousands of U.S. Dollars, except share data)
March 31, December 31,
2002 2001
(unaudited)
Assets
Current Assets
Cash and cash equivalents $ 73,913 $ 138,268
Trade receivables 41,225 41,981
Prepaid expenses and other 7,572 9,139
Total Current Assets 122,710 189,388
Communications, plant and other property, net 969,125 886,244
Deferred tax asset 11,113 11,441
Goodwill, net and other assets 23,458 22,730
TOTAL $ 1,126,406 $ 1,109,803
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable and accrued liabilities $ 21,446 $ 20,350
Income taxes 25,477 22,357
Deferred revenues 8,983 8,848
Satellite performance incentives 5,050 4,610
Total Current Liabilities 60,956 56,165
Long Term Liabilities 20,684 16,454
Shareholders’ Equity
Governance preference shares (227,530,000 shares authorized, par value €0.05; none issued) -
-
Cumulative preferred financing shares (22,753,000 shares authorized, par value €0.05; none issued) -
-
Ordinary Shares (204,777,000 shares authorized, par value €0.05; 130,570,241 issued and outstanding) 6,026 6,026
Additional paid-in capital 976,791 976,168
Retained earnings 67,076 60,664
Other (5,127) (5,674)
Total Shareholders’ Equity 1,044,766 1,037,184
TOTAL $ 1,126,406 $ 1,109,803
New Skies Satellites N.V. and Subsidiaries
Consolidated Statements of Income
Three-month period ended March 31, 2002 and 2001 (Unaudited)
(In thousands of U.S. Dollars, except share data)
Three-month period ended March 31,
2002 2001
Revenues $ 51,793 $ 51,204
Operating expenses:
Cost of operations 12,989 13,568
Selling, general and administrative 10,239 9,917
Depreciation and amortization 18,652 18,165
Total Operating Expenses 41,880 41,650
Operating Income 9,913 9,554
Interest and other income, net (106) (3,091)
Income Before Income Tax Expense 10,019 12,645
Income tax expense 3,607 4,679
Net Income $ 6,412 $ 7,966
Basic and diluted earnings per share $ 0.05 $ 0.06
New Skies Satellites N.V. and Subsidiaries
Consolidated Statements of Cash Flows
Three-month period ended March 31, 2002 and 2001 (Unaudited)
(In thousands of U.S. Dollars)
Three-month period ended March 31,
2002 2001
Cash flows from operating activities:
Net income $ 6,412 $ 7,966
Adjustments for non-cash items:
Depreciation and amortization 18,652 18,165
Deferred taxes 328 509
Amortization of unearned stock compensation 128 261
Changes in operating assets and liabilities:
Trade receivables 769 1,310
Prepaid expenses and other 1,580 1,385
Accounts payable and accrued liabilities 968 467
Deferred revenues 4,996 838
Income taxes payable 3,120 4,149
Net Cash Provided By Operating Activities 36,953 35,050
Cash flows from investing activities:
Payments for communication, plant and other property (101,286) (53,963)
Net Cash Used In Investing Activities (101,286) (53,963)
Cash flows from financing activities:
Satellite performance incentives and other (82) (786)
Net Cash Used In Financing Activities (82) (786)
Effect of exchange rate differences 60 (317)
Net change in cash and cash equivalents (64,355) (20,016)
Cash and cash equivalents, beginning of period 138,268 232,898
Cash and cash equivalents, end of period $ 73,913 $ 212,882
Cash payments for interest (net of amounts capitalized) were nil for the three months ended March 31, 2002 and 2001. Income tax as paid amounted to $0.2 million during the three-month period ended March 31, 2002.
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| Video Services |
| Telecom Services |
| IPsys® Internet Access |
| Occasional Use |
| Government Satellite Solutions |
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| Asia Pacific |
| Australia and South Pacific |
| Europe |
| Indian Subcontinent |
| The Middle East |
| Latin America & Caribbean |
| North America |
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| Mediaports |
| Customer Support |
| Sun Outage Data |
| Sun Outage Tool |
| Ephemeris Data |
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