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Article Excerpt
Signed Agreement to Merge With Intelsat; Continued Strong Financial Performance; Completed Acquisition of Europe*Star; Launched Two Satellites for U.S. Market
WILTON, Conn., Nov. 9 /PRNewswire-FirstCall/ -- PanAmSat Holding Corporation , the satellite-based distributor delivering the largest number of TV channels in the world and a leading global provider of network distribution services, reported financial results for the third quarter and nine months ended September 30, 2005 and reaffirmed its guidance for the full year of 4% or more revenue growth and 6% or more Adjusted EBITDA growth.
Joe Wright, CEO of PanAmSat said, "Our Company had one of the most active quarters in our history and continued to perform extremely well as we and Intelsat took important steps to transform our Companies into one that will be the leader in the technology, marketing and customer service activities that will define our industry in the future. This transaction to merge PanAmSat with Intelsat is proceeding on schedule. We also completed the acquisition of Europe*Star which strengthens our presence in the European and Middle Eastern marketplaces. We successfully launched Galaxy 14 in August and then Galaxy 15 in October giving our customers two in-orbit back-up satellites for increased reliability while solidifying our position as the largest FSS provider of HDTV signals in the world. In addition, we launched an Emergency Response Unit which will work specifically with First Responder and Disaster Recovery customers in the event of a sudden emergency, terrorist attack or natural disaster."
Highlights for the third quarter include: -- Adjusted EBITDA(1) was $167.4 million, up 5.2% over Q3 2004 while total consolidated revenues of $209.1 million increased 1.0% on a quarter- over-quarter basis. The delay in the launch of Galaxy 15 resulted in approximately $7 million of revenues being delayed until the fourth quarter of 2005 rather than in the third quarter. -- Most important, program distribution and video services revenues, the "core" markets of the business which represent 64% of total revenues, grew 6.0% over Q3 2004 -- Adjusted EBITDA Margin(1) increased to 78% from 74% in Q3 2004 -- Net income for the quarter was $54.2 million or $0.43 per share on a diluted basis, which included a gain of $18.3 million on an undesignated interest rate swap agreement -- Several new contracts and contract extensions were signed with customers in Africa, Asia, Australia, Latin America and the United States, including: CCTV, OPT New Caledonia, HDNet and Venevision Continental -- The PanGlobal TV Direct-To-Home platform grew with the addition of several new channels including: India's Zee Networks and Japan's NHK World Premium channels -- The Company completed its acquisition of Europe*Star, obtaining multiple European orbital slots as well as a satellite with European, Middle Eastern, African and Asian coverage on August 31, 2005 -- The Company signed a definitive merger agreement with Intelsat, Ltd. for $25 per share in cash or $3.2 billion in cash on August 29, 2005 Highlights for the nine months include: -- Adjusted EBITDA(1) of $497.9 million was up 6.3% over 2004 while total consolidated revenues of $631.8 million increased 2.0% on a year-over- year basis -- Program distribution and video services revenues, the "core" markets of the business, grew 7.7% over 2004 -- Adjusted EBITDA Margin(1) increased to 76% vs. 73% in 2004 -- Net income for the nine months was $23.2 million or $0.21 per share, which included charges of $56 million related to early debt repayments and fees of $10 million for termination of our Sponsor's management agreement -- $671.9 million of long-term debt was repaid in the first nine months of 2005 -- Total 2005 dividends paid to shareholders through October 14, 2005 were $300.3 million, of which $200 million were paid from the proceeds of the IPO to pre-IPO stockholders.
Wright added: "While our management team remains focused on profitable growth, we are also committed to maintaining our fleet reliability as the highest in the industry, exercising sound financial discipline and staying financially strong in order to continue providing predictable and attractive dividends to our shareholders"
Total revenues for the third quarter of 2005 were $209.1 million, compared to revenues of $207.1 million for the same quarter last year, an increase of 1.0%. Adjusted EBITDA(1) which is a key performance and liquidity metric for the Company, was $167.4 million for the third quarter of 2005, as compared to $159.2 million for the same period in 2004, an increase of 5.2%. Net income for the quarter was $54.2 million, compared to a net loss of $(76.7) million for the same period in 2004. Net income for the third quarter of 2005 was impacted by the $18.3 million gain on an undesignated interest rate swap agreement as noted above. Net loss in the third quarter of 2004 was impacted by $154.5 million of transaction related costs which were recorded in relation to the recapitalization.
Total revenues for the nine months of 2005 were $631.8 million, compared to revenues of $619.4 million for the same period last year, an increase of 2.0%. Adjusted EBITDA(1) was $497.9 million for the first nine months of 2005, as compared to $468.4 million for the same period in 2004, an increase of 6.3%. Net income for the nine months ended September 30, 2005 was $23.2 million, compared to a net loss of $(97.9) million for the same period in 2004. Net income for the nine months ended September 30, 2005 was impacted by several items noted above. Net loss for the nine months ended September 30, 2004 was impacted by $155.0 million of transaction related costs which were recorded in connection with the recapitalization, a $99.9 million satellite impairment charge and a $29.6 million write-off related to a customer transponder lease termination.
Business Highlights Fixed Satellite Services ("FSS")
Through FSS, PanAmSat leases transponder capacity to customers for various applications, including broadcasting, news gathering, Internet access and transmission, private voice and data networks, business television, distance learning and DTH in addition to providing telemetry, tracking and control (TT&C) and network services to customers.
For the Three Months Ended September 30, 2005
FSS revenues for the third quarter of 2005 increased $3.9 million to $195.8 million, from $191.9 million in the same period in 2004. This increase was primarily attributable to higher video services revenues of $7.6 million and higher government services revenues of $1.2 million, offset partially by a $3.8 million reduction in network...
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