Press Release

May 17, 2012



ViaSat Announces Fourth Quarter and Fiscal Year 2012 Results


CARLSBAD, Calif., May 17, 2012 /PRNewswire/ -- ViaSat Inc. (NASDAQ: VSAT), an innovator in satellite and other wireless networking systems and services, announced financial results for the fourth quarter and fiscal year 2012. The fiscal fourth quarter results include new contract awards of $297.4 million, revenues of $240.5 million, Adjusted EBITDA of $36.9 million, non-GAAP diluted net loss attributable to ViaSat common stockholders of $0.01 per share, or $0.17 per share on a diluted GAAP basis, and cash flows from operations of $76.5 million. For the fiscal year, ViaSat reported new contract awards of over $1.0 billion, revenues of $863.6 million, Adjusted EBITDA of $149.0 million, non-GAAP diluted net income attributable to ViaSat common stockholders of $0.73 per share, or $0.17 per share on a diluted GAAP basis and cash flows from operations of $141.4 million.


(Logo: http://photos.prnewswire.com/prnh/20091216/VIASATLOGO)


"Fiscal year 2012 was a pivotal year for us with a record $1.0 billion in new contract awards, record revenue and the launch of ViaSat-1 and our new Exede(SM) by ViaSat Internet service," said Mark Dankberg, ViaSat CEO and chairman. "As disclosed previously, the delay in the launch of ViaSat-1 significantly impacted earnings in the Satellite Services segment leading to a net loss for the quarter. But, excluding the Satellite Services segment, earnings in the Government Systems and Commercial Networks segments combined grew substantially for both the fourth quarter and the fiscal year as a whole. As we add new Exede Internet subscribers, we are now poised to obtain the benefits in our Satellite Services segment. With the Exede service now available in all 50 states and a company-record sales backlog, we have a healthy outlook for fiscal year 2013."


Financial Results (1)







(In millions, except per share data)


Q4 FY12


Q4 FY11


FY12


FY11


Revenues


$240.5


$216.4


$863.6


$802.2


Adjusted EBITDA (2)


$36.9


$42.8


$149.0


$160.8


Net (loss) income (3)


($7.4)


$12.1


$7.5


$36.1


Diluted per share net (loss) income (3)


($0.17)


$0.28


$0.17


$0.84


Non-GAAP net (loss) income (3,4)


($0.6)


$18.0


$32.1


$59.9


Non-GAAP diluted per share net (loss) income (3,4)


($0.01)


$0.41


$0.73


$1.39


Fully diluted weighted average shares (6)


42.9


43.6


44.2


43.1







New contract awards


$297.4


$271.0


$1,008.6


$853.5


Sales backlog (5)


$618.5


$528.7


$618.5


$528.7


(1) ViaSat uses a 52 or 53 week fiscal year which ends on the Friday closest to March 31. ViaSat quarters for fiscal year 2012 ended on July 1, 2011, September 30, 2011, December 30, 2011, and March 30, 2012.



(2) Adjusted EBITDA represents net income (loss) attributable to ViaSat Inc. before interest, taxes, depreciation and amortization, adjusted to exclude the effects of non-cash stock-based compensation expense and acquisition related expenses. A reconciliation of specific adjustments to GAAP results for these periods is included in the table titled "An Itemized Reconciliation Between Net Income (Loss) Attributable to ViaSat Inc. and Adjusted EBITDA" contained in this release. A description of our use of non-GAAP information is provided below under "Use of Non-GAAP Financial Information."



(3) Attributable to ViaSat Inc. common stockholders.



(4) All non-GAAP net income (loss) numbers have been adjusted to exclude the effects of amortization of acquired intangible assets, acquisition related expenses, and non-cash stock-based compensation expenses, net of tax. A reconciliation of specific adjustments to GAAP results for these periods is included in the table titled "An Itemized Reconciliation Between Net Income (Loss) Attributable to ViaSat Inc. on a GAAP Basis and Non-GAAP Basis" contained in this release. A description of our use of non-GAAP information is provided below under "Use of Non-GAAP Financial Information."



(5) Amounts include certain backlog adjustments due to contract changes and amendments.



(6) As the fourth quarter fiscal year 2012 financial information results in a net loss, the weighted average number of shares used to calculate basic and diluted income per share are the same, as diluted shares would be anti-dilutive.


 


Segment Results







(In millions)


Q4 FY12


Q4 FY11


FY12


FY11


Satellite Services






   New contract awards


$54.6


$67.2


$222.1


$239.2


   Revenues


$54.7


$59.4


$222.7


$235.0


   Adjusted EBITDA


$8.3


$27.8


$63.1


$103.0







Commercial Networks






   New contract awards


$152.1


$70.9


$359.8


$153.4


   Revenues


$81.0


$54.2


$251.7


$183.1


   Adjusted EBITDA


$5.1


$1.8


$8.4


$3.7







Government Systems






   New contract awards


$90.7


$132.9


$426.7


$460.9


   Revenues


$104.8


$102.8


$389.3


$384.1


   Adjusted EBITDA


$23.5


$13.4


$77.5


$54.4


Satellite Services revenues and operating results declined for the quarter and year-over-year due to the delay in launch of ViaSat-1, the incurrence of certain fixed operating costs since April 2011, and the fourth quarter start-up of our Exede satellite Internet service. Commercial Networks revenues and Adjusted EBITDA increased for the quarter and year—over-year principally due to new satellite networking and space-based payload projects, combined with increased satellite terminal sales in Europe and North America supporting new Ka-band satellite services launched during fiscal year 2012. Government Systems operating results improved for the fourth quarter and fiscal year 2012, despite year-over-year order declines stemming mainly from the timing of awards from government customers. Increases in government mobile broadband products and services, command and control, and tactical satellite networks revenues and earnings overcame reductions in tactical data links and information assurance product areas.


Selected Fiscal Fourth Quarter Business Highlights


  • Completed rollout of Exede Internet residential services, which is providing unprecedented satellite broadband download speeds up to 12 Mbps with prices beginning at $50 per month
  • Signed distribution agreements with the National Rural Telecommunications Cooperative and DISH Network to sell customer premises equipment and wholesale broadband services
  • Received a $70 million contract to supply our high-capacity Ka-band satellite networking system to the Kingdom of Saudi Arabia as the service platform for the National Satellite Data Network for King Abdul-aziz City for Science and Technology (KACST)
  • Conducted a demonstration of our airborne mobile broadband system for members of the U.S. armed services, transmitting full-motion, encrypted HD video at industry-leading speeds up to 8 Mbps using an ultra-small aperture 12-inch Ka-band satellite tracking antenna
  • Received the Society of Satellite Professionals International (SSPI) 2012 Industry Innovator Award, together with Eutelsat Communications, in recognition of the development and launch of ViaSat-1 and KA-SAT, respectively
  • Selected by General Dynamics UK Limited to design and develop the on-board encrypted data storage systems for the Scout Specialist Vehicles (SV) for the British Army
  • Created significant cash and liquidity flexibility with the issuance of $275 million in Senior Notes due 2020, along with an extension and amendment of our $325 million revolving line of credit
  • Subsequent to the end of the quarter:
    • Signed an agreement with DIRECTV to enable them to bundle our Exede Internet service with DIRECTV video services
    • Awarded $31.5 million for the first Full Production and Fielding (FP&F) order for Multifunctional Information Distribution System Joint Tactical Radio System (MIDS JTRS) terminals for the U.S. government
    • Announced new Exede newsgathering service, a first-of-its-kind satellite newsgathering service based on the transformational economics of our high-capacity satellite system, enabling HD video transmission from the field using compact vehicle-mounted or transportable terminals

Safe Harbor Statement


This press release contains forward-looking statements that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. Forward-looking statements include, among others, statements that refer to expectations regarding our Satellite Services segment and healthy outlook for fiscal year 2013. Readers are cautioned that actual results could differ materially from those expressed in any forward-looking statements. Factors that could cause actual results to differ include: our ability to successfully implement our business plan for ViaSat-1 broadband satellite services on our anticipated timeline or at all; negative audits by the U.S. government; continued turmoil in global financial markets and economies; delays in approving U.S. government budgets and cuts in government defense expenditures; our reliance on U.S. government contracts, and on a small number of contracts which account for a significant percentage of our revenues; our ability to successfully develop, introduce and sell new technologies, products and services; reduced demand for products as a result of continued constraints on capital spending by customers; changes in relationships with, or the financial condition of, key customers or suppliers; our reliance on a limited number of third parties to manufacture and supply our products; increased competition and other factors affecting the communications and defense industries generally; the effect of adverse regulatory changes on our ability to sell products; our level of indebtedness and ability to comply with applicable debt covenants; our involvement in litigation, including intellectual property claims and litigation to protect our proprietary technology; and our dependence on a limited number of key employees. In addition, please refer to the risk factors contained in our SEC filings available at www.sec.gov, including our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update or revise any forward-looking statements for any reason.


Conference Call


ViaSat Inc. will host a conference call to discuss the fiscal year 2012 fourth quarter and year-end financial results at 5:00 p.m. Eastern Time on Thursday, May 17, 2012. The dial-in number is (877) 640-9809 in the U.S. and (914) 495-8528 internationally. A replay of the conference call will be available from 8:00 p.m. Eastern Time on Thursday, May 17 until midnight on Friday, May 18 by dialing (855) 859-2056 for U.S. callers and (404) 537-3406 for international callers, and entering the conference ID 77903086. You can also access our conference call webcast and other material financial information discussed on our conference call on the Investor Relations section of our website at investors.viasat.com. The call will be archived and available on that site for approximately one month immediately following the conference call.


About ViaSat (www.viasat.com)


ViaSat delivers fast, secure communications, Internet, and network access to virtually any location for consumers, governments, enterprise, and the military. The company offers fixed and mobile satellite network services including Exede by ViaSat, which features ViaSat-1, the world's highest capacity satellite; satellite broadband networking systems; and network-centric military communication systems and cyber security products for the U.S. and allied governments. ViaSat also offers communication system design and a number of complementary products and technologies. Based in Carlsbad, California, ViaSat has established a number of worldwide locations for customer service, network operations, and technology development.


Use of Non-GAAP Financial Information


To supplement ViaSat's consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP), ViaSat uses non-GAAP net income (loss) attributable to ViaSat Inc. and Adjusted EBITDA, measures ViaSat believes are appropriate to enhance an overall understanding of ViaSat's past financial performance and prospects for the future. Non-GAAP net income (loss) attributable to ViaSat Inc. excludes the effects of amortization of acquired intangible assets, acquisition related expenses, and non-cash stock-based compensation expenses, net of tax. Adjusted EBITDA represents net income (loss) attributable to ViaSat Inc. before interest, taxes, depreciation and amortization, adjusted to exclude the effects of non-cash stock-based compensation expenses and acquisition related expenses. We also use Adjusted EBITDA to evaluate operating performance of our segments, to allocate resources and capital to such segments, to measure performance for incentive compensation programs and to evaluate future growth opportunities. We believe the non-GAAP results provide useful information to both management and investors by excluding specific expenses that we believe are not indicative of our core operating results. In addition, since we have historically reported non-GAAP results to the investment community, we believe the inclusion of non-GAAP numbers provides consistency in our financial reporting and facilitates comparisons to the company's historical operating results. Further, these non-GAAP results are among the primary indicators that management uses as a basis for planning and forecasting in future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for measures of financial performance prepared in accordance with GAAP. A reconciliation of specific adjustments to GAAP results is provided in the tables titled "An Itemized Reconciliation Between Net Income (Loss) Attributable to ViaSat Inc. on a GAAP Basis and Non-GAAP Basis," "An Itemized Reconciliation Between Net Income (Loss) Attributable to ViaSat Inc. and Adjusted EBITDA" and "An Itemized Reconciliation Between Segment Operating Profit (Loss) Before Corporate and Amortization of Acquired Intangible Assets and Adjusted EBITDA" contained in this release.


Exede is a service mark of ViaSat Inc. 


 


Condensed Consolidated Statement of Operations


(Unaudited)


(In thousands, except per share data)











Three months ended 



Twelve months ended



March 30, 2012



April 1, 2011



March 30, 2012



April 1, 2011










Revenues:









Product revenues


$         151,045



$    144,916



$         542,064



$    523,938


Service revenues


89,493



71,456



321,563



278,268


Total revenues


240,538



216,372



863,627



802,206










Operating expenses:









Cost of product revenues


113,137



111,771



402,794



389,945


Cost of service revenues


72,349



37,941



233,187



160,623


Selling, general and administrative


49,976



42,979



181,728



164,265


Independent research and development


6,490



7,114



24,992



28,711


Amortization of acquired intangible assets


4,441



4,782



18,732



19,409


(Loss) income from operations


(5,855)



11,785



2,194



39,253


Interest (expense) income, net


(7,764)



72



(8,247)



(2,831)


(Loss) income before income taxes 


(13,619)



11,857



(6,053)



36,422


Benefit from income taxes


(6,336)



(439)



(13,651)



(2)


Net (loss) income


(7,283)



12,296



7,598



36,424


Less: Net income attributable to the noncontrolling interest, net of tax


95



152



102



309


Net (loss) income attributable to ViaSat Inc. 


$            (7,378)



$      12,144



$             7,496



$      36,115










Diluted net (loss) income per share attributable to ViaSat Inc. common stockholders


$              (0.17)



$          0.28



$               0.17



$          0.84


Diluted common equivalent shares


42,901



43,605



44,226



43,059










AN ITEMIZED RECONCILIATION BETWEEN NET INCOME (LOSS) ATTRIBUTABLE TO VIASAT INC.


ON A GAAP BASIS AND NON-GAAP BASIS IS AS FOLLOWS:



Three months ended 



Twelve months ended



March 30, 2012



April 1, 2011



March 30, 2012



April 1, 2011










GAAP net (loss) income attributable to ViaSat Inc.


$            (7,378)



$      12,144



$             7,496



$      36,115


Amortization of acquired intangible assets


4,441



4,782



18,732



19,409


Acquisition related expenses


-



-



-



1,379


Stock-based compensation expense


6,604



4,750



21,382



17,440


Income tax effect


(4,258)



(3,702)



(15,503)



(14,480)


Non-GAAP net (loss) income attributable to ViaSat Inc.


$               (591)



$      17,974



$           32,107



$      59,863


Non-GAAP diluted net (loss) income per share attributable to ViaSat Inc. common stockholders


$              (0.01)



$          0.41



$               0.73



$          1.39


Diluted common equivalent shares


42,901



43,605



44,226



43,059










AN ITEMIZED RECONCILIATION BETWEEN NET INCOME (LOSS) ATTRIBUTABLE TO VIASAT INC.


AND ADJUSTED EBITDA IS AS FOLLOWS:



Three months ended 



Twelve months ended



March 30, 2012



April 1, 2011



March 30, 2012



April 1, 2011










GAAP net (loss) income attributable to ViaSat Inc.


$            (7,378)



$      12,144



$             7,496



$      36,115


Benefit from income taxes


(6,336)



(439)



(13,651)



(2)


Interest expense (income), net


7,764



(72)



8,247



2,831


Depreciation and amortization


36,273



26,445



125,511



103,053


Stock-based compensation expense


6,604



4,750



21,382



17,440


Acquisition related expenses


-



-



-



1,379


Adjusted EBITDA


$           36,927



$      42,828



$         148,985



$    160,816












 


 


 


AN ITEMIZED RECONCILIATION BETWEEN SEGMENT OPERATING PROFIT (LOSS) BEFORE


CORPORATE AND AMORTIZATION OF ACQUIRED INTANGIBLE ASSETS AND ADJUSTED EBITDA IS AS FOLLOWS:


(In thousands)





















Three months ended March 30, 2012



Three months ended April 1, 2011




Satellite Services



Commercial Networks



Government Systems



Total



Satellite Services



Commercial Networks



Government Systems



Total


Segment operating (loss) profit before corporate and amortization of acquired intangible assets



$(15,625)



$       (1,704)



$      15,915



$   (1,414)



$  11,132



$       (1,805)



$        7,240



$  16,567


Depreciation *



21,861



3,441



4,443



29,745



15,745



2,038



3,866



21,649


Stock-based compensation expense



1,250



2,203



3,151



6,604



951



1,522



2,277



4,750


Other amortization



804



1,176



-



1,980



-



-



-



-


Acquisition related expenses



-



-



-



-



-



-



-



-


Adjusted EBITDA before other



$   8,290



$        5,116



$      23,509



36,915



$  27,828



$        1,755



$      13,383



42,966


Other 









12









(138)


Adjusted EBITDA









$  36,927









$  42,828






































Twelve months ended March 30, 2012



Twelve months ended April 1, 2011




Satellite Services



Commercial Networks



Government Systems



Total



Satellite Services



Commercial Networks



Government Systems



Total


Segment operating (loss) profit before corporate and amortization of acquired intangible assets



$(16,790)



$     (12,974)



$      50,690



$  20,926



$  38,228



$       (9,482)



$      29,872



$  58,618


Depreciation *



74,006



10,799



16,702



101,507



61,141



7,260



15,228



83,629


Stock-based compensation expense



4,239



7,023



10,120



21,382



3,106



5,946



8,388



17,440


Other amortization



1,659



3,507



-



5,166



-



-



-



-


Acquisition related expenses



-



-



-



-



513



-



866



1,379


Adjusted EBITDA before other



$ 63,114



$        8,355



$      77,512



148,981



$102,988



$        3,724



$      54,354



161,066


Other 









4









(250)


Adjusted EBITDA









$148,985









$160,816



















* Depreciation expenses not specifically recorded in a particular segment have been allocated based on sales, which management believes is a reasonable method. 




 


 


 


Condensed Consolidated Balance Sheet


(Unaudited)


(In thousands)













As of



As of





As of



As of


Assets


March 30, 2012



April 1, 2011



Liabilities and Equity



March 30, 2012



April 1, 2011












Current assets:






 Current liabilities: 






Cash and cash equivalents


$        172,583



$      40,490



 Accounts payable 



$          75,040



$      71,712


Accounts receivable, net


211,690



191,889



 Accrued liabilities 



159,762



130,583


Inventories


127,646



98,555



 Current portion of other long-term debt 



1,240



1,128


Deferred income taxes


20,316



18,805



 Total current liabilities 



236,042



203,423


Prepaid expenses and other current assets


30,917



21,141



 Senior Notes, net 



547,791



272,296


Total current assets


563,152



370,880



 Other long-term debt 



774



61,946







 Other liabilities 



50,353



23,842


Property, equipment and satellites, net


880,704



766,139



 Total liabilities 



834,960



561,507


Other acquired intangible assets, net


63,041



81,889



 Total ViaSat Inc. stockholders' equity 



887,975



840,125


Goodwill


83,461



83,532



 Noncontrolling interest in subsidiary 



4,218



4,116


Other assets


136,795



103,308



 Total equity 



892,193



844,241


Total assets


$      1,727,153



$ 1,405,748



 Total liabilities and equity 



$      1,727,153



$ 1,405,748












SOURCE ViaSat Inc.




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