ViaSat Announces Third Quarter Fiscal Year 2013 Results

           ViaSat Announces Third Quarter Fiscal Year 2013 Results

Record Revenues Continue

PR Newswire

CARLSBAD, Calif., Feb. 6, 2013

CARLSBAD, Calif., Feb. 6, 2013 /PRNewswire/ -- ViaSat Inc. (NASDAQ: VSAT), an
innovator in satellite and other wireless networking systems and services,
announced financial results for the third quarter of fiscal year 2013. The
fiscal third quarter results included new contract awards of $265.7 million
and another record revenues quarter of $286.4 million. Operating performance
grew quarter over quarter reflecting Adjusted EBITDA of $48.4 million and net
income attributable to ViaSat common stockholders of $0.04 per share on a
non-GAAP diluted basis. On a diluted GAAP basis, ViaSat reported a net loss
attributable to ViaSat common stockholders of $0.47 per share, which, as
discussed below, reflects a one-time debt extinguishment expense of $26.5
million or $0.36 per share on a net of tax basis.

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

Results for the past nine months include new contract awards of over $1.1
billion and revenues totaling $811.0 million. On a year-to-date basis, ViaSat
reported Adjusted EBITDA of $122.5 million and a net loss attributable to
ViaSat common stockholders of $0.18 per share on a non-GAAP diluted basis, or
$0.99 per share on a diluted GAAP basis inclusive of the debt extinguishment
expense.

"Our fiscal third quarter delivered strong growth in key metrics for all our
business segments. We gained more momentum in our Exede® satellite broadband
service, growing net adds over 50% sequentially to almost 38,000 for the
quarter, while yielding continued sequential growth in Adjusted EBITDA," said
Mark Dankberg, chairman and CEO of ViaSat. "Our Government Systems segment
posted record revenues and over 70% Adjusted EBITDA growth, along with solid
orders. Our Commercial Networks segment revenues are up over 25%, driven by
Ka-band network systems. We are very pleased with these results that reflect
the strong backlog and competitive positions that we are continuing to build
throughout the company."

Financial Results^1

(In millions, except per share  Q3 FY13 Q3 FY12 First 9 Mos. FY13 First 9 Mos.
data)                                                             FY12
Revenues                        $286.4  $205.0  $811.0            $623.1
Adjusted EBITDA^2               $48.4   $36.9   $122.5            $112.1
Net (loss) income^3             ($20.8) $5.1    ($43.1)           $14.9
Diluted per share net (loss)    ($0.47) $0.12   ($0.99)           $0.34
income ^3
Non-GAAP net income (loss) ^3,4 $1.8    $11.6   ($7.9)            $32.7
Non-GAAP diluted per share net  $0.04   $0.26   ($0.18)           $0.74
income (loss) ^3,4
Fully diluted weighted average  44.2    44.3    43.7              44.0
shares ^5
New contract awards             $265.7  $211.9  $1,146.3          $711.2
Sales backlog^6                 $939.0  $575.3  $939.0            $575.3

^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 third quarter and first nine months of 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)            Q3 FY13     Q3 FY12 First 9 Mos.     First 9 Mos.
                                             FY13             FY12
Satellite Services
 New contract awards $71.4       $55.7       $212.5           $167.5
 Revenues            $71.8       $55.7       $198.4           $167.9
 Adjusted EBITDA     $11.0       $17.3       $24.1            $54.8
Commercial Networks
 New contract awards $45.8       $41.9       $417.7           $207.7
 Revenues            $68.7       $54.4       $231.3           $170.7
 Adjusted EBITDA     $2.4        ($0.1)      $10.9            $3.2
Government Systems
 New contract awards $148.5      $114.3      $516.1           $336.0
 Revenues            $146.0      $94.9       $381.3           $284.4
 Adjusted EBITDA     $35.1       $19.8       $87.7            $54.0

Satellite Services

Our Satellite Service segment revenues increased 28.9% for the quarter and
18.1% year-to-date as our total subscriber base expanded to 467,000. We
completed approximately 77,500 installations during the quarter, which
delivered 62,000 gross adds to the network, primarily through retail channels.
ARPU increased to $49.07 for the third quarter. Adjusted EBITDA declined for
the quarter and year-to-date compared to last year primarily due to the fixed
costs of the ViaSat-1 network expansion and higher subscriber acquisition
costs relative to the incremental subscriber margin gains. However, quarter
over quarter Adjusted EBITDA improved for the second consecutive quarter.

  o Our third quarter consumer Internet service reported other key metrics as
    follows:

       o Ending subscribers: 467,000 (46.4% on ViaSat-1)
       o Migrations from WildBlue® to Exede service: 15,600 (77,500 installs,
         less 62,000 gross adds)
       o Average monthly churn: 1.9%

Commercial Networks

Our Commercial Networks segment third quarter revenues of $68.7 million grew
by 26.1% compared to last year, driving Adjusted EBITDA up to $2.4 million
versus the $0.1 million Adjusted EBITDA loss reported in our fiscal 2012 third
quarter results. Year-to-date revenues and Adjusted EBITDA also grew compared
to last year, reflecting the continued success we have experienced in the
global Ka-band satellite networking market. In the third quarter, we received
another $19.9 million in awards for SurfBeam® 2 Ka-band terminals and recently
reached a significant milestone as we shipped our 500,000^th SurfBeam 2
consumer terminal.

Government Systems

Our Government Systems segment reported another quarter of record revenues and
Adjusted EBITDA improving year over year by 53.9% and 77.4%, respectively. On
a year-to-date basis, our government segment has experienced nearly $100
million in revenue growth driving Adjusted EBITDA up 62.5% compared to the
same period last year. These results have been driven by growth in our
government mobile broadband, command and control, and tactical satellite
networks products and services. In December 2012, we received a $52 million
contract renewal to continue providing broadband airborne satcom services for
a U.S. government customer and were selected by the U.S. Marine Corps Systems
Command to engineer our advanced information security into common,
off-the-shelf mobile devices, such as smartphones and tablets.

Other Selected Fiscal Third Quarter Business Highlights

  o Named by Popular Science as a Best of What's New Award winner for 2012 for
    the ViaSat-1 high-capacity satellite system and Exede Internet service for
    the home.
  o Ranked number 25 on the Defense Systems "Super 75," which recognizes the
    most successful and agile 75 companies supplying products and systems in
    the net-centric battlespace.
  o CEO Mark Dankberg named Visionary Executive of the Year at the first
    annual Satellite Markets and Research Vision Awards in New York City.
  o Completed field testing of the Exede Newsgathering service, including the
    first high-capacity Ka-band Satellite Newsgathering (SNG) vehicle built in
    the U.S., with ABC TV stations in Chicago and Houston.
  o Awarded a $13 million delivery order for Multifunctional Information
    Distribution System-Low Volume Terminals (MIDS-LVTs) from the Space and
    Naval Warfare Systems Command (SPAWAR), San Diego, augmenting the original
    $34 million Lot 13 order.
  o Shipped our 500^th VR-12 Ku-band airborne satellite antenna, which has
    been the workhorse for hundreds of military and general aviation
    customers.
  o Issued an additional $300 million in aggregate principal amount of our
    6.875% Senior Notes due 2020. The net proceeds from the notes offering
    were used primarily to repurchase our outstanding 8.875% Senior Notes due
    2016. Upon completion of the refinancing transaction in the third quarter,
    the company recorded a one-time debt extinguishment expense of $26.5
    million related to the early repayment of the old notes, and
    simultaneously lowered its annual effective interest expense by
    approximately $5 million per year over the eight-year term of the new
    notes.

 

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 strong backlog, competitive positions and continued
growth of the company. 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; 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 Inc. will host a conference call to discuss the fiscal year 2013 third
quarter results at 5:00 p.m. Eastern Time on Wednesday, February 6, 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 Wednesday, February 6 until midnight on Thursday,
February 7 by dialing (855) 859-2056 for U.S. callers and (404) 537-3406 for
international callers, and entering the conference ID 93800126. 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 1,750 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 2,600 people in a number of
locations worldwide 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. 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.

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

 

Condensed Consolidated Statement of Operations
(Unaudited)
(In thousands, except per share data)
                           Three months ended          Nine months ended
                           December 28,  December 30,  December 28,  December
                                                                     30,
                           2012          2011          2012
                                                                     2011
Revenues:
Product revenues           $             $             $             $    
                           164,694       121,862        480,898      391,019
Service revenues           121,748       83,102        330,129       232,070
Total revenues             286,442       204,964       811,027       623,089
Operating expenses:
Cost of product revenues   119,250       89,463        349,720       289,657
Cost of service revenues   92,145        57,318        266,096       160,838
Selling, general and       62,209        45,640        172,789       131,752
administrative
Independent research and   7,612         5,999         23,739        18,502
development
Amortization of acquired   3,960         4,752         12,065        14,291
intangible assets
Income (Loss) from         1,266         1,792         (13,382)      8,049
operations
Interest expense, net      (10,634)      (311)         (33,628)      (483)
Loss on extinguishment of  (26,501)      -             (26,501)      -
debt
(Loss) income before       (35,869)      1,481         (73,511)      7,566
income taxes 
Benefit from income taxes  (15,255)      (3,637)       (30,607)      (7,315)
Net (loss) income          (20,614)      5,118         (42,904)      14,881
Less: Net income (loss)
attributable to the        162           (22)          199           7
noncontrolling interest,
net of tax
Net (loss) income          $             $             $             $      
attributable to ViaSat     (20,776)       5,140         (43,103)     14,874
Inc. 
Diluted net (loss) income
per share attributable to  $             $             $             $        
ViaSat Inc. common          (0.47)        0.12         (0.99)         0.34
stockholders
Diluted common equivalent  44,189        44,333        43,662        44,015
shares
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          Nine months ended
                           December 28,  December 30,  December 28,  December
                           2012          2011          2012          30, 2011
GAAP net (loss) income     $             $             $             $    
attributable to ViaSat     (20,776)       5,140        (43,103)       14,874
Inc.
Amortization of acquired   3,960         4,752         12,065        14,291
intangible assets
Stock-based compensation   6,986         5,799         19,410        14,778
expense
Loss on extinguishment of  26,501        -             26,501        -
debt
Income tax effect          (14,829)      (4,085)       (22,729)      (11,245)
Non-GAAP net income (loss) $             $             $             $      
attributable to ViaSat      1,842        11,606        (7,856)       32,698
Inc.
Non-GAAP diluted net
income (loss) per share    $             $             $             $        
attributable to ViaSat      0.04          0.26         (0.18)         0.74
Inc. common stockholders
Diluted common equivalent  44,189        44,333        43,662        44,015
shares
AN ITEMIZED RECONCILIATION BETWEEN NET INCOME (LOSS) ATTRIBUTABLE TO VIASAT
INC.
AND ADJUSTED EBITDA IS AS FOLLOWS:
                           Three months ended          Nine months ended
                           December 28,  December 30,  December 28,  December
                           2012          2011          2012          30, 2011
GAAP net (loss) income     $             $             $             $      
attributable to ViaSat      (20,776)      5,140         (43,103)     14,874
Inc.
Benefit from income taxes  (15,255)      (3,637)       (30,607)      (7,315)
Interest expense, net      10,634        311           33,628        483
Depreciation and           40,324        29,331        116,717       89,238
amortization
Stock-based compensation   6,986         5,799         19,410        14,778
expense
Loss on extinguishment of  26,501        -             26,501        -
debt
Adjusted EBITDA            $             $             $             $    
                           48,414         36,944       122,546       112,058

 

 

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 December 28, 2012         Three months ended December 30, 2011
              Satellite  Commercial  Government  Total     Satellite  Commercial  Government  Total
              Services   Networks    Systems               Services   Networks    Systems
Segment
operating
(loss)
profit
before                   $           $           $                    $           $           $  
corporate     $(18,356)  (3,399)      26,981      5,226    $ (1,359)  (5,159)      13,062      6,544
and
amortization
of acquired
intangible
assets
Depreciation  27,009     2,451       5,178       34,638    17,341     2,345       4,076       23,762
*
Stock-based
compensation  1,460      2,653       2,873       6,986     1,042      2,111       2,646       5,799
expense
Other         934        740         55          1,729     251        568         -           819
amortization
Adjusted                 $           $                                $           $    
EBITDA        $ 11,047    2,445       35,087     48,579    $17,275    (135)        19,784     36,924
before other
Other                                            (165)                                        20
Adjusted                                         $                                            $
EBITDA                                            48,414                                       36,944
              Nine months ended December 28, 2012          Nine months ended December 30, 2011
              Satellite  Commercial  Government  Total     Satellite  Commercial  Government  Total
              Services   Networks    Systems               Services   Networks    Systems
Segment
operating
(loss)
profit
before                   $           $           $                    $           $           $
corporate     $(60,245)  (7,304)      66,232     (1,317)   $ (1,165)  (11,270)     34,775      22,340
and
amortization
of acquired
intangible
assets
Depreciation  77,607     8,076       13,314      98,997    52,145     7,358       12,259      71,762
*
Stock-based
compensation  4,093      7,265       8,052       19,410    2,989      4,820       6,969       14,778
expense
Other         2,662      2,815       143         5,620     855        2,331       -           3,186
amortization
Adjusted                 $           $                                $           $    
EBITDA        $ 24,117    10,852      87,741     122,710   $54,824     3,239       54,003     112,066
before other
Other                                            (164)                                        (8)
Adjusted                                         $122,546                                     $112,058
EBITDA

* 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         December    March 30,   Liabilities and   December    March 30,
               28, 2012    2012        Equity            28, 2012    2012
Current                                 Current
assets:                                liabilities: 
Cash and cash  $  112,667  $            Accounts         $           $      
equivalents                 172,583    payable            76,930     75,040
Accounts                                Accrued
receivable,    237,551     211,690     liabilities       139,547     159,762
net
                                        Current portion
Inventories    126,437     127,646     of other          1,027       1,240
                                       long-term debt 
Deferred       20,214      20,316       Total current    217,504     236,042
income taxes                           liabilities 
Prepaid
expenses and   36,663      30,917       Senior Notes,    585,265     547,791
other current                          net 
assets
Total current  533,532     563,152      Other long-term  62          774
assets                                 debt 
                                        Other            58,039      50,353
                                       liabilities 
Property,
equipment and  895,535     880,704      Total            860,870     834,960
satellites,                            liabilities 
net
Other acquired                          Total ViaSat
intangible     51,069      63,041      Inc.              883,599     887,975
assets, net                            stockholders'
                                       equity 
                                        Noncontrolling
Goodwill       83,561      83,461      interest in       4,466       4,218
                                       subsidiary 
Other assets   185,238     136,795      Total equity     888,065     892,193
               $           $            Total            $           $  
Total assets   1,748,935    1,727,153  liabilities and    1,748,935  1,727,153
                                       equity 

 

SOURCE ViaSat Inc.

Website: http://www.viasat.com
Contact: Heather Ferrante, ViaSat Inc., +1 760-476-2633