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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of March 2000
MEXICAN SATELLITES, INC. (SATELITES MEXICANOS, S.A. DE C.V.)
------------------------------------------------------------
(Translation of Registrant's Name Into English)
Blvd. Manuel Avila Camacho 40 -
Col. Lomas de Chapultepec
11000 Mexico, D.F.
Mexico
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(Address of Principal Executive Offices)
(Indicate by check mark whether the registrant files or will file
annual reports under cover of Form 20-F or Form 40-F.)
Form 20-F X Form 40-F
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(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
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Satelites Mexicanos, S.A. de C.V. announces 1999 Results. The Company is a
foreign private issuer and the Company is making a voluntary report.
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.
Satelites Mexicanos, S.A. de C.V.
---------------------------------
(Registrant)
Date: March 3, 2000 By /s/ CYNTHIA M. PELINI
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Cynthia M. Pelini
Chief Financial Officer
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PRESS
RELEASE LOGO
Mexico City, February 16, 2000
SATMEX ANNOUNCES 1999 RESULTS, STRONG TURNAROUND
- REVENUES OF $136 MILLION
- EBITDA OF $86 MILLION
- SATMEX 5 SATELLITE FULLY COMMITTED, 11 MONTHS POST-LAUNCH
- LONG TERM, MULTI-TRANSPONDER CONTRACT SIGNED WITH HUGHES NETWORK
SYSTEMS
- LANDING RIGHTS RECEIVED IN 11 ADDITIONAL COUNTRIES FOR A TOTAL OF
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Mexico City, Feb. 16, 2000. Satelites Mexicanos, S.A. de C.V. ("Satmex")
announced its 1999 operating results today, posting revenues of $136 million and
EBITDA (earnings before interest, taxes, depreciation and amortization) of $86
million, compared with revenues of $105 million and EBITDA of $82 million during
1998.
"What has transpired at Satmex in the two years since privatization is a very
impressive turnaround," noted Bernard L. Schwartz, Chairman and Chief Executive
Officer of Loral Space and Communications. "The management team, formed over the
last 18 months, has tackled all of the issues on multiple fronts head-on, and I
am very pleased with the results."
Lauro Gonzalez, CEO of Satmex, noted, "With the signing of the 10 transponder,
long-term contract of HNS (Hughes Network Systems), Satmex 5 is full. This
accomplishment reflects the momentum and marketing presence of Satmex today."
REVENUES:
Satmex reported total revenues of $136 million during 1999, of which $26 million
represented sales of transponders to an affiliate, Loral Skynet. 1999 EBITDA for
the year was $86 million. Without the effect of transponders sale, operating
revenues were $110 million and operating EBITDA was $75 million, compared with
revenues of $105 million and EBITDA of $82 million during 1998.
1999 revenues consisted of 93% permanent service and 7% occasional and other
revenue, compared with 96% permanent service and 4% occasional and other revenue
in 1998.
Contracts subject to immediate cancellation without penalty represented less
than 10% of Satmex's 1999 revenue base, compared with 44% of Satmex's revenues
at December 31, 1998.
International contracts represented more than 42% of Satmex's 1999 revenues
compared with 11% of Satmex's 1998 revenues.
Transponder leasing rates for both C-band and Ku-band capacity were largely
unchanged during 1999, as compared with 1998 for both Solidaridad 1 and
Solidaridad 2. 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.
Satmex was able to improve the business profile of its contracts and backlog by:
converting its contract backlog from a client base composed of
short-term, cancelable, overwhelmingly domestic to long-term, take or
pay, increasingly international customers, and
launching Satmex 5, Latin America's premier satellite, and obtaining
leasing commitments for all of its capacity in less than one year
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OPERATING EXPENSES AND PROFITABILITY
Operating expenses grew by 51% in 1999 compared to 1998, from $23 million to $35
million, largely because of: the increased insurance expense related to the in
orbit operation of Satmex 5 in January 1999; the hiring of private-sector, upper
and middle management personnel - a process begun during the second half of 1998
and completed during the second quarter of 1999; the move to permanent
headquarters in Mexico City in late 1998 and; maintenance expense for the two
satellite control centers undertaken during 1999.
In addition, Satmex recorded $14 million in transponder expense in connection
with the three transponders sold to Loral Skynet during 1999.
As a result of this increase in operating expenses, and giving no effect to the
transponder revenue or associated expense, EBITDA in 1999 was $75 million,
compared with $82 million in 1998.
BUSINESS HIGHLIGHTS
During 1999, Satmex counts among its key achievements the following:
- - Signed several US clients on Satmex 5, including Bell South, Tachyon,
Interpacket and, in early 2000, Hughes Network Systems. By January 2000,
Satmex 5 capacity is fully committed.
- - Rapidly responded to the service interruption associated with an anomaly
experienced on Solidaridad 1 on April 28 and again on May 1, 1999. Service
was fully restored on May 1 and no subsequent anomalies have occurred.
- - The full staffing of the Satmex sales team, a process that was begun in 1998.
Satmex's sales force consists of 5 industry-based, highly experienced Sales
Directors, 10 multi-lingual, multi-cultural sales representatives, and a
support team of 9 professionals.
- - The confirmation and/or conferrence of landing rights in 11 additional
countries (for a total of 26 countries with landing rights in total), giving
Satmex a premier position among satellite operators in Latin America.
LIQUIDITY AND CAPITAL RESOURCES
On March 31, 1999, Satmex issued convertible preferred stock to Loral Space and
Communications and to Principia, its private sector shareholders in exchange for
a cash infusion of approximately $32 million. Additionally, during 1999, Satmex
signed an end-of-life lease agreement with Loral Skynet for up to 7 Ku-band
transponders on Satmex 5, of which 2 were taken in June 1999 and 1 in September
1999. Satmex accounted for this transaction as a sales-type lease and,
accordingly recorded revenue of approximately $26 million and an operating
expense of $14 million for the cost of the transponders.
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.
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Exhibit 99.1
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(US $, MILLIONS)
<S> <C> <C>
12/31/98 12/31/99*
Revenues ...................................... 104.8 135.5
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(US $, MILLIONS)
<S> <C> <C>
Operating Expenses ............................ (23.2) (49.2)
EBITDA ........................................ 81.6 86.3
Depreciation & Amortization ................... (48.7) (61.3)
Operating Profit (Loss) ....................... 32.8 25.0
Interest Expense, Net ......................... (50.0) (66.0)
Pretax Profit (Loss) .......................... (17.2) (41.0)
Bookings ...................................... 120.0 325.8
Backlog ....................................... 133.0 363.7
Cash .......................................... 11.9 6.5
Total Debt .................................... 644.0 588.0
</TABLE>
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* Includes the sale and the cost of 3 transponders leased to Loral
Skynet
For Additional Information:
Cynthia Pelini: 011-525-201-0808 (Satmex)
Jeanette Clonan: (212) 338-5658 (Loral)
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