Press Release

May 16, 2013



ViaSat Announces Record $1.1 Billion in Revenues and $1.4 Billion in Awards for Fiscal 2013


CARLSBAD, Calif., May 16, 2013 /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 2013. The fiscal fourth quarter results include new contract awards of $227.1 million, and a 28% growth in revenues to $308.7 million compared to the same period last year. Adjusted EBITDA also grew over 10% to $40.8 million, driving non-GAAP diluted net income attributable to ViaSat common stockholders of $0.19 per share, or $0.04 per share on a diluted GAAP basis, and cash flows from operations of $42.7 million. For the fiscal year, ViaSat reported new contract awards of $1.4 billion and revenues of $1.1 billion, increases of 36% and 30%, respectively, from the prior year. ViaSat's fiscal year 2013 Adjusted EBITDA also grew by 10% to $163.3 million, resulting in non-GAAP diluted net income attributable to ViaSat common stockholders of $0.02 per share, or a net loss attributable to ViaSat common stockholders of $0.94 per share on a diluted GAAP basis, and cash flows from operations of $91.8 million.


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


"We ended our fourth quarter and fiscal year 2013 with strong top line growth across all our business segments, including Government Systems despite severe budget pressures. Steady gains in Exede satellite broadband subscribers coupled with 36% growth in contract awards pushed our revenues up 30% to over the $1 billion mark in fiscal year 2013," said Mark Dankberg, chairman and CEO of ViaSat. "We've passed the 500,000 subscriber milestone and are reaching important earnings inflection points. We are pleased with our progress and believe we are seeing strong confirmation of our technology strategy across each of our markets."




Financial Results1



(In millions, except per share data)


Q4 FY13


Q4 FY12


FY13


FY12


Revenues


$308.7


$240.5


$1,119.7


$863.6


Adjusted EBITDA 2


$40.8


$36.9


$163.3


$149.0


Net income (loss) 3


$1.9


($7.4)


($41.2)


$7.5


Diluted per share net income (loss) 3


$0.04


($0.17)


($0.94)


$0.17


Non-GAAP net income (loss) 3,4


$8.8


($0.6)


$0.9


$32.1


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


$0.19


($0.01)


$0.02


$0.73


Fully diluted weighted average shares 5


45.9


42.9


43.9


44.2







New contract awards


$227.1


$297.4


$1,373.4


$1,008.6


Sales backlog6


$851.9


$618.5


$851.9


$618.5


1 ViaSat uses a 52 or 53 week fiscal year which ends on the Friday closest to March 31. ViaSat quarters for fiscal year 2013 end on June 29, 2012, September 28, 2012, December 28, 2012, and March 29, 2013.



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, acquisition related expenses and loss on extinguishment of debt. A reconciliation of specific adjustments to GAAP results for these periods is included in the tables below.



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, non-cash stock-based compensation expenses and loss on extinguishment of debt, net of tax. A reconciliation of specific adjustments to GAAP results for these periods is included in the tables below.



5 As the fourth quarter of fiscal year 2012 and fiscal year 2013 financial information results in a net loss, the weighted average number of shares used to calculate basic and diluted net loss per share is the same, as diluted shares would be anti-dilutive.



6 Amounts include certain backlog adjustments due to contract changes and amendments.


 


Segment Results



(In millions)


Q4 FY13


Q4 FY12


FY13


FY12


Satellite Services






  New contract awards


$78.3


$54.6


$290.8


$222.1


  Revenues


$78.6


$54.7


$277.0


$222.7


  Adjusted EBITDA


$10.2


$8.3


$34.3


$63.1







Commercial Networks






  New contract awards


$50.8


$152.1


$468.5


$359.8


  Revenues


$83.6


$81.0


$314.9


$251.7


  Adjusted EBITDA


$2.9


$5.1


$13.7


$8.4







Government Systems






  New contract awards


$98.0


$90.7


$614.1


$426.7


  Revenues


$146.4


$104.8


$527.8


$389.3


  Adjusted EBITDA


$28.1


$23.5


$115.8


$77.5


Satellite Services


Our Satellite Services segment revenues increased $23.9 million, or 44%, for the quarter, and $54.3 million, or 24%, for the year, both new records, as our total subscriber base expanded to 512,000. We completed approximately 98,000 installations during the quarter, which delivered 88,000 gross adds and 46,000 net adds to the network. New subscribers were primarily through retail channels, leading to growth in blended ARPU to $49.54. The increased subscriber base resulted in $1.9 million, or 23%, higher Adjusted EBITDA during the fourth quarter of fiscal year 2013 compared to the same period last year. Fiscal year 2013 Adjusted EBITDA declined $28.8 million, or 46%, compared to last year primarily due to the fixed costs of our network expansion and higher subscriber acquisition costs due to higher gross adds, relative to the incremental subscriber margins obtained in the initial year of our Exede service launch.


Commercial Networks


Our Commercial Networks segment fourth quarter revenues of $83.6 million grew $2.7 million, or 3%, compared to the same period last year. Fiscal year 2013 revenues and Adjusted EBITDA also grew $63.3 million, or 25%, and $5.4 million, or 64%, respectively, compared to last year, reflecting record revenues and continued success in the global Ka-band satellite networking market in both large scale infrastructure projects as well as follow on terminal production contracts. Adjusted EBITDA for the fourth quarter declined $2.3 million, or 44%, compared to the same period last year.  In the fourth quarter, we received another $12.3 million in awards for SurfBeam® 2 Ka-band terminals in addition to over $19 million in new orders for satellite antenna systems.


Government Systems


Our Government Systems segment reported another quarter of record revenues, increasing $41.6 million, or 40%, compared to the same period last year. Adjusted EBITDA for the quarter also increased by $4.6 million, or 20%, compared to the same period last year. For fiscal year 2013, our Government Systems segment revenues increased $138.5 million, or 36%, driving Adjusted EBITDA up $38.3 million, or 49%, compared to last year, both of which were new records. These results have been driven by growth in command and control, broadband networking services for military customers, our government mobile broadband products and services, and tactical satellite networks products and services. Contract awards included over $20 million in orders for tactical data link terminals and related support equipment and services.


Other Selected Fiscal Fourth Quarter Business Highlights


  • Federal Communications Commission (FCC) reported in its benchmark study titled 2013 Measuring Broadband America: A Report on Consumer Wireline Performance in the U.S. that even during peak usage periods, 90% of Exede service subscribers received 140% or better of the advertised speed of 12 Mbps (download speeds), ranking ViaSat number one for delivering on advertised speeds among all Internet service providers included in the study.
  • Received over $17 million in awards for mobile satellite communications services for the U.S. government.
  • Signed first service agreements with CBS-owned TV stations for our Exede newsgathering service.
  • Commenced implementation on a more than 60% increase in the total Ku-band capacity of ViaSat global mobility network to accommodate government and general aviation business growth and customer requirements for high data rates for mobile satellite communications.
  • Completed ground station installation and testing for King Abdul-aziz City for Science and Technology (KACST) project in Saudi Arabia.
  • Launched our new security system that protects critical infrastructure, such as energy grids or other utility networks, by averting or minimizing security breaches to ensure continued operation of these networks.
  • Demonstrated a high-performance Ka-band satellite communication system for rotary wing aircraft, providing sustained data rates of 4 Mbps from the helicopter to a ground station and 8 Mbps to the helicopter despite high shock and vibration and signal blockage from the rotating blades.
  • Appointed Bruce Dirks as Chief Financial Officer.
  • Appointed Ken Peterman to lead our Government Systems segment. Steve Estes, General Manager of Government Systems prior to this appointment, named to lead the emerging Enterprise Services business.

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 future earnings, performance and confirmation of our technology strategy. 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 our broadband satellite services on our anticipated timeline or at all; risks associated with the construction, launch and operation of our satellites, including the effect of any anomaly, operational failure or degradation in satellite performance; negative audits by the U.S. government; continued turmoil in the global business environment and economic conditions; 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 and services; 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 will host a conference call to discuss the fiscal year 2013 fourth quarter and year-end financial results at 5:00 p.m. Eastern Time on Thursday, May 16, 2013. 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 16 until midnight on Friday, May 17 by dialing (855) 859-2056 for U.S. callers and (404) 537-3406 for international callers, and entering the conference ID 71035156. 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; service to more than 2,300 mobile platforms, including Yonder® Ku-band mobile service; satellite broadband networking systems; and network-centric military communication systems and cybersecurity 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 employs over 2,700 people in a number of locations worldwide for technology development, customer service, and network operations.


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. 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 evaluating the operating performance of our segments, allocating resources to such segments, 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 below.


Exede, SurfBeam, and Yonder are registered trademarks and service marks of ViaSat Inc.






Condensed Consolidated Statement of Operations


(Unaudited)


(In thousands, except per share data)











Three months ended 



Twelve months ended



March 29, 2013



March 30, 2012



March 29, 2013



March 30, 2012










Revenues:









Product revenues


$         183,519



$         151,045



$         664,417



$         542,064


Service revenues


125,144



89,493



455,273



321,563


Total revenues


308,663



240,538



1,119,690



863,627










Operating expenses:









Cost of product revenues


135,253



113,137



484,973



402,794


Cost of service revenues


97,092



72,349



363,188



233,187


Selling, general and administrative


68,070



49,976



240,859



181,728


Independent research and development


11,709



6,490



35,448



24,992


Amortization of acquired intangible assets


3,519



4,441



15,584



18,732


(Loss) income from operations


(6,980)



(5,855)



(20,362)



2,194


Interest expense, net


(10,192)



(7,764)



(43,820)



(8,247)


Loss on extinguishment of debt


-



-



(26,501)



-


Loss before income taxes 


(17,172)



(13,619)



(90,683)



(6,053)


Benefit from income taxes


(19,447)



(6,336)



(50,054)



(13,651)


Net income (loss) 


2,275



(7,283)



(40,629)



7,598


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


344



95



543



102


Net income (loss) attributable to ViaSat Inc. 


$             1,931



$            (7,378)



$          (41,172)



$             7,496










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


$               0.04



$              (0.17)



$              (0.94)



$               0.17


Diluted common equivalent shares


45,943



42,901



43,931



44,226










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 29, 2013



March 30, 2012



March 29, 2013



March 30, 2012










GAAP net income (loss) attributable to ViaSat Inc.


$             1,931



$            (7,378)



$          (41,172)



$             7,496


Amortization of acquired intangible assets


3,519



4,441



15,584



18,732


Stock-based compensation expense


7,625



6,604



27,035



21,382


Loss on extinguishment of debt


-



-



26,501



-


Income tax effect


(4,318)



(4,258)



(27,047)



(15,503)


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


$             8,757



$               (591)



$                901



$           32,107


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


$               0.19



$              (0.01)



$               0.02



$               0.73


Diluted common equivalent shares


45,943



42,901



43,931



44,226










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


AND ADJUSTED EBITDA IS AS FOLLOWS:



Three months ended 



Twelve months ended



March 29, 2013



March 30, 2012



March 29, 2013



March 30, 2012










GAAP net income (loss) attributable to ViaSat Inc.


$             1,931



$            (7,378)



$          (41,172)



$             7,496


Benefit from income taxes


(19,447)



(6,336)



(50,054)



(13,651)


Interest expense, net


10,192



7,764



43,820



8,247


Depreciation and amortization


40,454



36,273



157,171



125,511


Stock-based compensation expense


7,625



6,604



27,035



21,382


Loss on extinguishment of debt


-



-



26,501



-


Adjusted EBITDA


$           40,755



$           36,927



$         163,301



$         148,985


































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 29, 2013



Three months ended March 30, 2012




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



$(18,927)



$       (3,775)



$      19,241



$   (3,461)



$(15,625)



$       (1,704)



$      15,915



$   (1,414)


Depreciation *



26,336



3,207



5,593



35,136



21,861



3,441



4,443



29,745


Stock-based compensation expense



1,523



2,898



3,204



7,625



1,250



2,203



3,151



6,604


Other amortization



1,249



532



70



1,851



804



1,176



-



1,980


Adjusted EBITDA before other



$ 10,181



$        2,862



$      28,108



41,151



$   8,290



$        5,116



$      23,509



36,915


Other 









(396)









12


Adjusted EBITDA









$  40,755









$  36,927






































Twelve months ended March 29, 2013



Twelve months ended March 30, 2012




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



$(79,172)



$     (11,079)



$      85,473



$   (4,778)



$(16,790)



$     (12,974)



$      50,690



$  20,926


Depreciation *



103,943



11,283



18,907



134,133



74,006



10,799



16,702



101,507


Stock-based compensation expense



5,616



10,163



11,256



27,035



4,239



7,023



10,120



21,382


Other amortization



3,911



3,347



213



7,471



1,659



3,507



-



5,166


Adjusted EBITDA before other



$ 34,298



$      13,714



$    115,849



163,861



$ 63,114



$        8,355



$      77,512



148,981


Other 









(560)









4


Adjusted EBITDA









$163,301









$148,985



















* 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 29, 2013



March 30, 2012



Liabilities and Equity



March 29, 2013



March 30, 2012












Current assets:






 Current liabilities: 






Cash and cash equivalents


$        105,738



$        172,583



 Accounts payable 



$          83,009



$          75,040


Accounts receivable, net


266,970



211,690



 Accrued liabilities 



161,909



159,762


Inventories


106,281



127,646



 Current portion of other long-term debt 



2,230



1,240


Deferred income taxes


25,065



20,316



 Total current liabilities 



247,148



236,042


Prepaid expenses and other current assets


40,819



30,917



 Senior notes, net 



584,993



547,791


Total current assets


544,873



563,152



 Other long-term debt 



1,456



774







 Other liabilities 



52,640



50,353


Property, equipment and satellites, net


913,781



880,704



 Total liabilities 



886,237



834,960


Other acquired intangible assets, net


47,170



63,041



 Total ViaSat Inc. stockholders' equity 



903,001



887,975


Goodwill


83,000



83,461



 Noncontrolling interest in subsidiary 



4,834



4,218


Other assets


205,248



136,795



 Total equity 



907,835



892,193


Total assets


$      1,794,072



$      1,727,153



 Total liabilities and equity 



$      1,794,072



$      1,727,153












SOURCE ViaSat Inc.




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