As filed with the Securities and Exchange Commission on February 11, 2003
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
New Skies Satellites N.V.
Rooseveltplantsoen 4
2517 KR The Hague
The Netherlands
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F
Form 20-F...X... Form 40-F......
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934
Yes...... No...X....
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b):
..............................N/A................................................
New Skies Satellites Logo
New Skies Reports Solid Full Year and
Fourth Quarter Results
The Hague, Netherlands, February 11, 2003 -- New Skies Satellites N.V. (AEX,
NYSE: NSK), the global satellite communications company, today reported
financial results for the fourth quarter and year ended December 31, 2002.
Revenues for the year were $200.5 million, EBITDA was $110.3 million, and net
income was $18.7 million, or $0.14 diluted earnings per share, prior to the
effect of the adoption of the new accounting principle relating to goodwill, the
Statement of Accounting Standards No.142 (SFAS 142), which was introduced on
January 1, 2002.
New Skies' adoption of this new accounting standard has resulted in a one-time,
non-cash write-down in goodwill of $23.4 million arising from the acquisition in
March 2000 of AAPT Sat-Tel. Net loss, giving effect to the cumulative effect of
change in accounting, was $4.6 million, or $0.04 diluted loss per share.
Commenting on the results, Chief Executive Officer Dan Goldberg said:
"2002 was an exceptional year for New Skies on a number of fronts.
Despite a difficult economic climate, the company delivered solid
revenue, EBITDA and net income results, results that were fully
consistent with the financial guidance we gave at the outset of the
year. I am also pleased with our performance in the fourth quarter,
with a 4 percent increase in revenue over the previous quarter,
providing positive sales momentum for the new year. Adding to this
momentum is a 12 percent increase in our contractual backlog as a
result of a significant number of new agreements signed in 2002,
allowing us to begin the year with a backlog of $706 million.
"We also achieved a number of important operational milestones, which
gives us great confidence about our prospects in 2003 and beyond. In
particular, we launched two powerful new satellites, NSS-7 and NSS-6.
These powerful, state-of-the-art satellites represent a renewal and
expansion of the New Skies global satellite fleet, endowing the company
with 67 percent more station-kept capacity and giving us one of the
youngest fleets in the industry.
"Our outlook for 2003 is bright. We are confident in our ability to
leverage our new satellite capacity to achieve meaningful sales and to
maintain tight cost controls, both of which are critical to achieving
our performance goals. Although we do not anticipate a turnaround in
the global economy generally, or the market for satellite services more
specifically, we expect to achieve revenue growth between 6 and 11
percent and greater growth still in EBITDA. Additionally, we are
positioned to become free cash flow positive this year, one year
earlier than we originally anticipated.
"Although we are focused first and foremost on realizing our organic
growth potential, our strong balance sheet and strong cash flows will
allow us to take advantage of any desirable strategic opportunities as
they arise to enhance our position in the market. In short, we
anticipate that 2003 will be a very bright year for New Skies."
Financial highlights:
For the year and three-month period ended December 31, 2002, New Skies achieved
the following financial results:
>> Revenues for the full year 2002 were $200.5 million, as compared to $209.0
million in 2001, while revenues for the three-month period ended December
31, 2002 were $50.8 million as compared to $52.4 million for the same
period in 2001. The decrease in revenues of 4 percent, or $8.5 million, for
the year is principally the result of the prevailing difficult market
conditions, as well as the unavailability of some of our capacity for
service during the transition of traffic from the NSS-K and NSS-803
satellites to NSS-7, which went into commercial service in August 2002, and
the subsequent migration of NSS-803 to the Pacific Ocean region, completed
in December 2002.
>> Operating expenses, excluding depreciation and amortization, were flat in
2002 compared to 2001, primarily reflecting our success in managing our
costs. Operating expenses for the three-month period ended December 31,
2002, excluding depreciation and amortization, were $23.0 million, as
compared to $21.6 million for the same period in the prior year.
>> Income before cumulative effect of change in accounting principle for year
ended December 31, 2002 was $18.7 million, or $0.14 diluted earnings per
share, compared to $33.1 million and $0.25 diluted earnings per share in
2001. Net income for the fourth quarter 2002 was $4.4 million compared to
$7.8 million in the same period in the prior year. The decrease primarily
relates to an increase in depreciation of $1.5 million stemming principally
from the launch of the NSS-7 satellite, $1.0 million reduction in interest
income and a decrease in revenues for the quarter.
Net income for the three months and year ended December 31, 2001 included
goodwill amortization of $0.7 million and $2.8 million, respectively. With
the required adoption of SFAS 142 effective January 1, 2002, amortization
of goodwill is no longer applied.
>> EBITDA (earnings before interest, taxes, depreciation and amortization) for
the year ended December 31, 2002 was $110.3 million, as compared to $118.8
in 2001. EBITDA for the three-month period ended December 31, 2002 was
$27.8 million
>> Backlog increased to $706 million from $701 million at the end of the third
quarter 2002, and from $631 million at the beginning of 2002.
>> Consistent with New Skies' longstanding commitment to maintaining best
practices in corporate governance and financial reporting, the Company will
expense stock options effective January 1, 2003.
>> New Skies launched a share buyback initiative in November 2002, reflecting
the Company's confidence in the strength of its business and prospects
going forward, and its strong commitment to enhancing shareholder value.
Approximately 5 million of the 13 million total shares associated with the
buyback program have been repurchased to date. As New Skies remains
virtually debt free, the share buyback can be accomplished without
constraining the Company's ability to fund its remaining satellite
procurement program or its strategic flexibility more generally.
Operating highlights:
>> New Skies launched two state-of-the-art satellites, NSS-6 and NSS-7, in
2002, giving New Skies significant new capacity for the Americas, the
Middle East, Africa, and across Asia. Although the incremental capacity
associated with these satellites came on line too late in 2002 to make a
meaningful financial contribution last year, these satellites are expected
to drive anticipated growth in 2003 and beyond.
>> Contractual backlog grew 12 percent over the course of 2002, despite a
difficult industry environment. This substantial growth in backlog is the
result of a diverse portfolio of important customer agreements signed
throughout the year. As a result, New Skies' revenues continue to be well
balanced and diversified, from both geographic and service application
perspectives.
>> Some of these significant new contracts include:
o For video service, BT Broadcast Services; Pramer, a Liberty Media
company;TV New Zealand; the European Broadcasting Union; China Central
Television; LinkSat; and the International Broadcasting Bureau;
o For voice and data services, Data Access, Reliance, Telenor, CPR
Marconi, and CODETEL; and
o For IP services, Falconstream, GULFSAT, Lynton Communications and
Microspace.
>> As part of its expansion strategy for China, New Skies opened an office in
Beijing and signed an agreement with China Telecommunications Broadcast
Satellite Corporation (ChinaSat), the Chinese satellite communications
services provider, which will allow New Skies to provide satellite capacity
to users in China.
>> New Skies built on its comprehensive strategy of partnering with leading
teleport operators around the world by signing agreements with London-based
Kingston, Singapore-based ST Teleport and Hong Kong-based Reach. These
partners joined a network of teleports that includes Verestar and Williams
Vyvx in the western United States and New Skies' own Washington, DC
mediaport.
About New Skies Satellites (AEX, NYSE: NSK)
New Skies Satellites (AEX, NYSE: NSK) 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 has six satellites in orbit,
ground facilities around the world and one additional spacecraft under
construction. The company also has secured certain rights to make use of
additional orbital positions for future growth. New Skies is headquartered in
The Hague, The Netherlands, and has offices in Beijing, Johannesburg, New Delhi,
Sao 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 (0) 20 8781 0597, passcode "New Skies".
The conference call will also be available for replay, 24 hours a day for the
subsequent 5 working days. The international dial in number is +44 20 8288 4459,
passcode 679192.
If for any reason there is a problem with the connection for the call, please
dial the alternative number: Listen only is (44) 20 8515 2343, passcode "New
Skies".
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
Pamela Small, Brunswick, (London) +44 20 7404 5959
psmall@brunswickgroup.com
Frank De Maria, Brunswick (New York) +1 212 333 3810
fdemaria@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, 2001. 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
December 31, 2002 and 2001
(In thousands of U.S. Dollars, except share data)
December 31, December 31,
2002 2001
--------------- --------------
Assets
Current Assets
Cash and cash equivalents $ 8,329 $ 138,268
Trade receivables 39,109 41,981
Prepaid expenses and other 10,885 9,139
--------------- --------------
Total Current Assets 58,323 189,388
Communications, plant and other property, net 1,058,119 886,244
Deferred tax asset 10,087 11,441
Goodwill, net and other assets 1,226 22,730
--------------- --------------
TOTAL $ 1,127,755 $ 1,109,803
=============== ==============
Liabilities and Shareholders' Equity
Current Liabilities
Short term borrowings $ 10,000 $ -
Accounts payable and accrued liabilities 18,396 20,350
Income taxes 29,124 22,357
Deferred revenues 8,994 8,848
Satellite performance incentives 6,218 4,610
--------------- --------------
Total Current Liabilities 72,732 56,165
Long Term Liabilities 35,990 16,454
Shareholders' Equity
Governance preference shares (227,530,000 shares authorized,
par value (euro)0.05; none issued) - -
Cumulative preferred financing shares (22,753,000 shares
authorized, par value(euro)0.05; none issued) - -
Ordinary Shares (204,777,000 shares authorized, par value
(euro)0.05; 130,570,241 issued) 6,026 6,026
Additional paid-in capital 977,506 976,168
Retained earnings 56,019 60,664
Unearned compensation (685) (352)
Accumulated other comprehensive loss (492) (5,322)
Treasury stock, at cost (5,194,030 ordinary shares) (19,341) -
--------------- --------------
Total Shareholders' Equity 1,019,033 1,037,184
--------------- --------------
TOTAL $ 1,127,755 $ 1,109,803
=============== ==============
New Skies Satellites N.V. and Subsidiaries
Consolidated Statements of Income
Years ended December 31, 2002 and 2001
(In thousands of U.S. Dollars, except share data)
Year ended
December 31,
2002 2001
---- ----
Revenues $ 200,524 $ 209,028
--------------- ---------------
Operating expenses:
Cost of operations 50,714 51,533
Selling, general and administrative 39,490 38,733
Depreciation and amortization 80,574 75,338
--------------- ---------------
Total Operating Expenses 170,778 165,604
--------------- ---------------
Operating Income 29,746 43,424
Interest expense (income) and other, net 510 (9,008)
--------------- ---------------
Income Before Income Tax Expense 29,236 52,432
Income tax expense (10,506) (19,364)
--------------- ---------------
Income Before Cumulative Effect of Change in
Accounting Principle 18,730 33,068
Cumulative effect of change in accounting principle,
relating to goodwill, net of taxes (A) (23,375) -
--------------- ---------------
Net (Loss) Income $ (4,645) $ 33,068
=============== ===============
Basic and Diluted Earnings Per Share Before
Cumulative Effect of Change in Accounting Principle $ 0.14 $ 0.25
Cumulative effect of change in accounting principle (0.18) -
--------------- ---------------
Basic and Diluted Earnings Per Share $ (0.04) $ 0.25
=============== ===============
(A) The Company adopted the new accounting standard, SFAS 142, "Goodwill and
Other Intangible Assets" as of January 1, 2002, which has resulted in a one-time
non-cash write-down of $23.4 million of goodwill relating to the acquisition of
NSN Pty Ltd in Australia in March 2000. Amortization of goodwill recorded for
the three- and twelve- month periods ended December 31, 2001 amounted to $0.7
million and $2.3 million, respectively.
Three-month period ended December 31, 2002 and 2001 (Unaudited)
(In thousands of U.S. Dollars, except share data)
Three-month period ended December 31,
2002 2001
---- ----
Revenues $ 50,842 $ 52,446
--------------- ---------------
Operating expenses:
Cost of operations 12,700 11,979
Selling, general and administrative 10,296 9,645
Depreciation and amortization 20,802 19,305
--------------- ---------------
Total Operating Expenses 43,798 40,929
--------------- ---------------
Operating Income 7,044 11,517
Interest expense (income) and other, net 167 (789)
--------------- ---------------
Income Before Income Tax Expense 6,877 12,306
Income tax expense (2,457) (4,528)
--------------- ---------------
Net Income $ 4,420 $ 7,778
=============== ===============
Basic and Diluted Earnings Per Share $ 0.03 $ 0.06
=============== ===============
New Skies Satellites N.V. and Subsidiaries
Consolidated Statements of Cash Flows
Years ended December 31, 2002 and 2001
(In thousands of U.S. Dollars)
Years ended December 31
2002 2001
--------------- ---------------
Cash flows from operating activities:
Net (loss) income $ (4,645) $ 33,068
Adjustments for non-cash items:
Depreciation and amortization 80,574 75,338
Cumulative effect of change in accounting principle 23,375 -
Deferred taxes 1,354 1,382
Amortization of unearned stock compensation 1,005 972
Changes in operating assets and liabilities:
Trade receivables 2,981 4,940
Prepaid expenses and other (1,727) (1,855)
Accounts payable and accrued liabilities (2,096) (321)
Deferred revenues 4,501 (129)
Income taxes payable 6,668 17,296
--------------- ---------------
Net Cash Provided By Operating Activities 111,990 130,691
--------------- ---------------
Cash flows from investing activities:
Payments for communications, plant and other property (231,400) (274,167)
Reimbursement of KTV construction costs - 51,452
--------------- ---------------
Net Cash Used In Investing Activities (231,400) (222,715)
--------------- ---------------
Cash flows from financing activities:
Stock options exercised - 67
Short term borrowings
10,000 -
Purchases of treasury stock
(19,341) -
Satellite performance incentives and other (1,297) (2,553)
--------------- ---------------
Net Cash Used In Financing Activities (10,638) (2,486)
--------------- ---------------
Effect of exchange rate differences 109 (120)
Net change in cash and cash equivalents (129,939) (94,630)
Cash and cash equivalents, beginning of period 138,268 232,898
--------------- ---------------
Cash and cash equivalents, end of period $ 8,329 $ 138,268
=============== ===============
Cash payments for interest (net of amounts capitalized) were nil for the year
ended December 31, 2002 and 2001. Income tax as paid amounted to $2.1 million
and $0.8 million for year ended December 31, 2002 and 2001, respectively.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
New Skies Satellites N.V.
By: /s/ Mary Dent
----------------------------------
Name: Mary Dent
Title: General Counsel and Member of the Management Board
Date: February 11, 2003