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 March31. ViaSatquarters 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. oOur third quarter consumer Internet service reported other key metrics as follows: oEnding subscribers: 467,000 (46.4% on ViaSat-1) oMigrations from WildBlue® to Exede service: 15,600 (77,500 installs, less 62,000 gross adds) oAverage 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 oNamed 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. oRanked 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. oCEO Mark Dankberg named Visionary Executive of the Year at the first annual Satellite Markets and Research Vision Awards in New York City. oCompleted 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. oAwarded 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. oShipped our 500^th VR-12 Ku-band airborne satellite antenna, which has been the workhorse for hundreds of military and general aviation customers. oIssued 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
ViaSat Announces Third Quarter Fiscal Year 2013 Results
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