Satmex Announces First Quarter Results
* Revenues of US$32.3 Million
* EBITDA of $21.6 Million
* Solid Results, "On Track for the Year"
MEXICO CITY, Mexico, June 1 /PRNewswire/ -- Satelites Mexicanos, S.A. de C.V. ("Satmex") announced its operating results for the first quarter of 2000, posting revenue of $32.3 million and EBITDA (earnings before interest, taxes, depreciation and amortization) of $21.6 million, compared with revenues of $28 million and EBITDA of $21.3 million during the first quarter of 1999. "I am very pleased with Satmex's first quarter performance," noted Bernard L. Schwartz, Chairman and Chief Executive Officer of Loral Space & Communications. "The company has come in solidly on plan and Satmex is in for a strong year." Lauro Gonzalez, CEO of Satmex, noted, "We hit the important milestones early in the quarter, for example when we signed the 10 transponder, long-term contract with HNS [Hughes Network Systems]. Our focus this year is to continue to fill up the remaining available satellite capacity and meet our financial targets." Revenue Satmex reported total revenue of $32.3 million during the first quarter of 2000. EBITDA for the quarter was $21.6 million. Revenue and EBITDA for the first quarter of 1999 were $28 million and $21.3 million, respectively. Revenue in the first quarter of 2000 consisted of 94% permanent service and 6% occasional and other revenue, compared with 88% permanent service and 12% occasional and other revenue in the first quarter of 1999. Contracts subject to immediate cancellation without penalty represented less than 7% of Satmex's revenue base during the first quarter of 2000, compared with 47% of Satmex's revenue for the first quarter of 1999. Transponder leasing rates for both C-band and Ku-band capacity were largely unchanged during the periods for both the Solidaridad 1 and Solidaridad 2 satellites. Satmex 5 began commercial operations in January 1999 and leased capacity at rates higher than that of Solidaridad 1 and 2, reflecting its continental footprint and higher power levels. Revenue improved substantially in the first quarter of 2000 as compared to the first quarter of 1999 as a result of the full operation and high utilization of Satmex 5. Operating Expenses and Profitability Operating expenses grew by 60% in the first quarter of 2000 compared to the first quarter of 1999, from $6.7 million to $10.7 million, largely due to the increased insurance expense related to Satmex 5 in late January 1999; the hiring of upper and middle management personnel -- a process begun during the second half of 1998 and completed during the second quarter of 1999, and; management and intellectual property fees associated with the higher revenue generated during the first quarter of 2000. As a result of this increase in operating expenses, EBITDA in the first quarter of 2000 was $21.6 million, compared with $21.3 million in the first quarter of 1999. Business Highlights During the first quarter of 2000, Satmex counts among its key achievements the following: * Signed on Satmex 5 a long-term, multitransponder contract for Hughes Network Systems. By January 2000, Satmex 5 capacity was fully committed. * Other significant contracts signed included a long-term contract with TV Azteca for additional capacity, and one transponder for ATC Teleports. * As a result, Satmex posted net bookings during the first quarter of 2000 of $145 million, which increased the backlog to $498 million. * International revenue represented approximately 50% of total revenue in the first quarter of 2000, as compared to less than 20% in the year-earlier period. * Revenue from contracts longer than 5 years in term represented greater than 50% of total revenue during the first quarter of 2000, versus less than 10% in the first quarter of 1999. * At March 31, 2000, the weighted average life of Satmex's contracts was 73 months. Liquidity and Capital Resources On January 10, 2000, Satmex solicited from its holders of Senior Secured Floating Rate Notes and its participants in its Revolving Credit Facility an amendment to the $435 million Amended and Restated Credit Agreement to permit the modification of certain covenants, in exchange for the payment of a fee and an increase in the applicable margin. On February 16, 2000, this amendment was declared effective. As of March 31, 2000, Satmex was in compliance with all debt covenants and available credit facilities continued to be available. Financial Highlights (US $, Millions) Three months ended 3/31/00 3/31/99 Revenues 32.3 28.0 Operating Expenses (10.7) (6.7) EBITDA 21.6 21.3 Depreciation & Amortization (15.4) (14.2) Operating Profit 6.3 7.2 Interest Expense, Net (16.4) (15.8) Pretax Loss (10.1) (8.7) Bookings 145.3 121.5 Backlog 497.7 228.1 Cash 8.7 5.1 Total Debt 587.8 608.8 Satmex is a leading Mexican satellite operator in the Americas that leases C and Ku band capacity on the Solidaridad 1, Solidaridad 2 and Satmex 5 geostationary satellites. Through its business partners in the NAFTA region and Latin America, Satmex delivers over 170 DTH channels to thousands of households, as well as news and entertainment to approximately 500 million viewers throughout the continent. Satmex provides high-speed connectivity to ISPs and digital broadcast services providers (DBS). Everyday, millions of long distance telephone calls are transmitted by the Satmex fleet. Distance learning, rural telephony and telemedicine, among others, are delivered through the Satmex satellites, contributing to the development of rural regions, the integration of Latin America and the rest of the continent, as well as more efficient communications in the world's largest cities. Satmex is a member of the Loral Global Alliance, offering its customers the advantages of a worldwide network of satellite capacity currently available on the Solidaridad and Satmex 5 satellites, the eight-satellite Telstar fleet and on future Europe*Star and Brazil satellites. Through this Alliance, Satmex provides global satellite solutions, focusing on the needs and requirements of the Americas. For more information, please visit the Satmex web site at http://www.satmex.com . Principia is a leading Mexican telecommunications company that is majority owned by the Autrey family and Mr. Lauro Gonzalez. In 1997, Principia and Loral Space & Communications were selected to acquire 75 percent of Satmex in connection with the privatization of Mexico's fixed satellite services. In association with Loral Space & Communications and Vodafone AirTouch Communications, Principia founded Globalstar de Mexico in 1996. Loral Space & Communications (NYSE: LOR) is a high technology company that primarily concentrates on satellite manufacturing and satellite-based services, including broadcast transponder leasing and value added services, domestic and international corporate data networks, global wireless telephony, broadband data transmission and content services, Internet services and international direct-to-home satellite services. For more information, visit Loral's web site at http://www.loral.com .
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