PanAmSat said Monday that as a result of manufacturing delays the company has revised its upcoming satellite launch schedule and now expects to launch the Galaxy XI satellite in late 1999, followed by five satellites in 2000 and one in 2001.
PanAmSat expects that these delays will result in 1999 revenues and earnings that are significantly lower than previously anticipated.
As a result, the company now expects that revenues in 1999 will be comparable to the 1998 level, 1999 earnings before net interest expense, income taxes, depreciation and amortization (EBITDA) margin will experience a modest increase as compared to prior year results and 1999 net income will decline modestly as compared to 1998 levels.
The company's statement further added a substantial portion of the revenues and earnings previously anticipated in 1999 are expected to be recognized in future years after the satellites commence commercial service. Based on the revised launch schedule, the company expects revenue growth of 30 to 40 percent in 2000 over the results now expected for 1999.
R. Douglas Kahn, PanAmSat's president and chief executive officer, said: "PanAmSat remains fully committed to its satellite expansion and restoration plans and its resolve to build and operate the world's largest geostationary satellite system. While it will take us a few months longer to do so, the long-term outlook for our business remains very strong."
Based upon information provided by the satellite manufacturer Hughes Space and Communications Co. (HSC), the following chart outlines PanAmSat's revised launch schedule and the expected in-service dates of the planned satellites. Preliminary indications from the company's launch providers are that they can accommodate the revised launch schedule.
Satellite
Galaxy XI
Galaxy X-R
Galaxy IV-R
PAS-1R
PAS-9
PAS-10(a)
Galaxy III-C
Spacecraft Model
HS 702
HS 601 HP
HS 601 HP
HS 702
HS 601 HP
HS 601 HP
HS 702
Revised Launch
4Q 1999
1Q 2000
1Q 2000
2Q 2000
2Q 2000
2Q/3Q 2000
1Q/2Q 2001
Revised In-Service
1Q 2000
2Q 2000
2Q 2000
3Q 2000
3Q 2000
3Q/4Q 2000
2Q/3Q 2001
Note: (a) Previously announced international satellite that can serve as backup or replacement for PAS-4.
HSC has indicated that during rigorous testing, a series of component concerns have been identified, including defects in parts
supplied by vendors, that require corrective actions to ensure the delivery of spacecraft to PanAmSat with the highest levels of
quality and reliability. These corrective actions include the removal, replacement and re-testing of various units, which have
resulted in a delay in the final delivery of the satellites.
