ViaSat Announces First Quarter Fiscal Year 2014 Results

           ViaSat Announces First Quarter Fiscal Year 2014 Results

Solid performance across all segments drives record quarterly revenue and
strong growth in profitability

PR Newswire

CARLSBAD, Calif., Aug. 6, 2013

CARLSBAD, Calif., Aug. 6, 2013 /PRNewswire/ --ViaSat Inc. (NASDAQ: VSAT), an
innovator in satellite and other wireless networking systems and services,
announced its fiscal year 2014 first quarter financial results. Strong
top-line growth set a new record of $321.1 million in revenue, a 33% increase
compared to the same period last year. ViaSat also reported 78% year-over-year
Adjusted EBITDA growth, driving first quarter fiscal year 2014 results to a
record $52.7 million. Non-GAAP diluted net income reflected strong operating
performance, rising from ($0.18) per share in the first quarter last year to
$0.11 per share in the first quarter of fiscal year 2014, while diluted
results on a GAAP basis also improved from ($0.33) per share to ($0.04) per
share during the same periods.

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

"We're proud to have achieved our sixth consecutive quarter of record
revenue," said Mark Dankberg, chairman and CEO of ViaSat. "Broadband satellite
services are leading the way, but growth was again strong throughout the
company. EBITDA surged 78% compared to this quarter last year due to the
cumulative effect of Exede® subscriber and ARPU growth, continued strength in
government systems despite the challenging federal spending environment, and
solid performance in commercial products. Earnings are growing even while we
are almost doubling R&D investments as we pursue opportunities for growth. We
launched Exede VoIP, are close to bringing Exede in-flight Wi-Fi into service,
and are building on our achievements in government mobile broadband. In
addition, with ViaSat-2 now on the horizon, we're cultivating even more
opportunities to expand global markets for satellite broadband services and
technology."

Financial Results^1

(In millions, except per share data)           Q1 FY14 Q1 FY13
Revenues                                       $321.1  $241.8
Adjusted EBITDA                                $52.7   $29.6
Net loss^2                                     ($1.8)  ($14.4)
Diluted per share net loss^2                   ($0.04) ($0.33)
Non-GAAP net income (loss) ^2                  $4.9    ($7.8)
Non-GAAP diluted per share net income (loss)^2 $0.11   ($0.18)
Fully diluted weighted average shares ^3       45.1    43.2
New contract awards                            $254.0  $332.6
Sales backlog^4                                $778.7  $705.2

^1 ViaSat uses a 52 or 53 week fiscal year which ends on the Friday closest to
March31. ViaSatquarters for fiscal year 2014 end on June 28, 2013, October
4, 2013, January 3, 2014, and April 4, 2014. This results in a 53 week fiscal
year approximately every four to five years. Fiscal year 2014 is a 53week
year, compared with a 52week year in fiscal year 2013. As a result of the
shift in the fiscal calendar, the second quarter of fiscal year 2014 will
include an additional week. ViaSat does not believe that the extra week will
result in any material impact on its financial results.

^2 Attributable to ViaSat Inc. common stockholders.

^3 As the first quarter fiscal year 2014 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.

^4 Amounts include certain backlog adjustments due to contract changes and
amendments.

Segment Results

(In millions)         Q1 FY14 Q1 FY13
Satellite Services
New contract awards $96.5   $74.0
Revenues            $85.8   $59.3
Adjusted EBITDA     $17.4   $4.4
Commercial Networks
New contract awards $66.4   $64.7
Revenues            $97.4   $76.1
Adjusted EBITDA     $11.1   $3.7
Government Systems
New contract awards $91.1   $193.9
Revenues            $137.9  $106.3
Adjusted EBITDA     $24.5   $21.5

Satellite Services

Our Satellite Services segment revenues grew $26.5 million, or 45%, to $85.8
million for the first quarter of fiscal 2014, setting a new record. We
acquired 76,000 gross adds in a seasonally slower period, ending with 550,000
subscribers. Our quarter-over-quarter blended ARPU also reached record levels,
rising to over $50.50 per month, which is up nearly 10% from the same quarter
last year. The Satellite Services segment results are showing the benefits of
steady growth in subscribers and ARPU. Satellite Services segment Adjusted
EBITDA of $17.4 million for the first quarter of fiscal year 2014 is up over
295% from the same period last year, and 71% sequentially.

Commercial Networks

Our Commercial Networks segment first quarter revenues of $97.4 million
increased by $21.3 million, or 28%, compared to the same period last year,
also setting a record for the segment. The increase reflects progress in our
international Ka-band infrastructure and third-party satellite payload
development programs as well as rising demand in the aeronautical mobile
broadband market. Recently we obtained regulatory authorization for airborne
Ka-band services over all 50 U.S. states. Our success in these markets drove
first quarter Commercial Networks segment Adjusted EBITDA results to a record
$11.1 million, a 204% increase compared to the first quarter of last year,
despite substantial increases in R&D investments.

Government Systems

Our Government Systems segment revenues increased $31.5 million, or 30%,
compared to the same period last year. Growth in our mobile broadband business
continues to drive our service offerings in the government segment, which
comprised over 34% of total segment revenues in the first quarter of fiscal
year 2014. Core technology platforms – command and control situational
awareness, tactical data links, and information assurance – also made
significant contributions to this segment's performance. First quarter
Government Systems segment Adjusted EBITDA was $24.5 million, an increase of
14% compared to the same period last year, despite significant increases in
R&D and network infrastructure spending.

Selected Fiscal First Quarter Business Highlights

  oLaunched Exede Voice as a complement to our Exede service, becoming the
    first satellite Internet service provider to offer U.S. residential VoIP
    telephone service.
  oAgreed to work with Boeing Commercial Airplanes towards offering ViaSat
    Ka-band airborne satellite terminals as a factory line-fit option on
    Boeing commercial aircraft.
  oAdded two new premium classes of Yonder^® high-speed Internet service for
    business aviation – Yonder Premium and Yonder VIP – to enhance data rates,
    quality of service, network operations, and field engineering for Yonder
    customers.
  oReceived a $6.8 million order for communications encryption products from
    a U.S. government customer.
  oInitiated manufacturing of ViaSat-2, which is expected to achieve an
    unparalleled mix of capacity and coverage at the time of its launch,
    scheduled for mid-2016.
  oExpanded service offerings drove $18.0 million in first quarter government
    mobile broadband awards.
  oSubsequent to the end of the quarter, the Federal Communications
    Commission (FCC) granted us a Blanket License Radio Station Authorization
    for Ka-band aeronautical earth stations, providing regulatory
    authorization for airborne Ka-band services over all 50 U.S. states.

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 growth
opportunities, as well as the timing, capabilities and anticipated benefits of
our ViaSat-2 satellite. 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 2014 first
quarter results at 5:00 p.m. Eastern Time on Tuesday, August 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 Tuesday, August 6 until midnight on Wednesday, August 7
by dialing (855) 859-2056 for U.S. callers and (404) 537-3406 for
international callers, and entering the conference ID 27399617. 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, enterprises, 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 2,500 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 2,900 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 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 and Yonder are registered trademarks of ViaSat Inc.



Condensed Consolidated Statement of Operations
(Unaudited)
(In thousands, except per share data)
                                          Three months ended
                                          June 28, 2013        June 29, 2012
Revenues:
Product revenues                          $              $     
                                          182,161             147,729
Service revenues                          138,941              94,034
Total revenues                            321,102              241,763
Operating expenses:
Cost of product revenues                  129,414              109,049
Cost of service revenues                  105,893              78,569
Selling, general and administrative       64,781               56,501
Independent research and development      14,089               7,369
Amortization of acquired intangible       3,501                4,064
assets
Income (loss) from operations             3,424                (13,789)
Interest expense, net                     (10,142)             (11,486)
Loss before income taxes                 (6,718)              (25,275)
Benefit from income taxes                 (5,231)              (10,842)
Net loss                                  (1,487)              (14,433)
Less: Net income (loss) attributable to   347                  (13)
the noncontrolling interest, net of tax
Net loss attributable to ViaSat Inc.     $             $     
                                          (1,834)             (14,420)
Diluted net loss per share attributable   $            $       
to ViaSat Inc. common stockholders        (0.04)              (0.33)
Diluted common equivalent shares          45,110               43,182
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
                                          June 28, 2013        June 29, 2012
GAAP net loss attributable to ViaSat Inc. $             $     
                                          (1,834)             (14,420)
Amortization of acquired intangible       3,501                4,064
assets
Stock-based compensation expense          7,490                6,619
Income tax effect                         (4,236)              (4,092)
Non-GAAP net income (loss) attributable   $            $      
to ViaSat Inc.                            4,921               (7,829)
Non-GAAP diluted net income (loss) per    $           $       
share attributable to ViaSat Inc. common  0.11                (0.18)
stockholders
Diluted common equivalent shares          45,110               43,182
AN ITEMIZED RECONCILIATION BETWEEN NET INCOME (LOSS) ATTRIBUTABLE TO VIASAT
INC.
AND ADJUSTED EBITDA IS AS FOLLOWS:
                                          Three months ended
                                          June 28, 2013        June 29, 2012
GAAP net loss attributable to ViaSat Inc. $             $     
                                          (1,834)             (14,420)
Benefit from income taxes                 (5,231)              (10,842)
Interest expense, net                     10,142               11,486
Depreciation and amortization             42,115               36,717
Stock-based compensation expense          7,490                6,619
Adjusted EBITDA                           $             $      
                                          52,682              29,560

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 June 28, 2013           Three months ended June 29, 2012
              Satellite  Commercial  Government  Total   Satellite  Commercial  Government  Total
              Services   Networks    Systems             Services   Networks    Systems
Segment
operating
(loss)
profit
before        $        $       $        $     $        $        $        $   
corporate     (12,978)  3,336       16,567            (22,516)  (2,069)    14,860      (9,725)
and                                              6,925
amortization
of acquired
intangible
assets
Depreciation  27,645     3,766       4,815       36,226  24,553     2,755       3,846       31,154
*
Stock-based
compensation  1,570      2,896       3,024       7,490   1,328      2,517       2,774       6,619
expense
Other         1,125      1,140       127         2,392   1,025      458         -           1,483
amortization
Adjusted      $       $        $                $      $       $   
EBITDA        17,362     11,138      24,533      53,033  4,390      3,661       21,480      29,531
before other
Other                                           (351)                                      29
Adjusted                                         $                                        $   
EBITDA                                                                                     29,560
                                                 52,682

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

Condensed Consolidated Balance Sheet
(Unaudited)
(In thousands)
                As of      As of                        As of       As of
Assets          June 28,   March 29,  Liabilities and   June 28,    March 29,
                2013       2013       Equity            2013        2013
Current assets:                       Current
                                      liabilities:
Cash and cash   $       $       Accounts         $        $    
equivalents     79,682     105,738   payable          121,309     83,009
Accounts        260,701    266,970    Accrued          145,370     161,909
receivable, net                       liabilities
                                      Current portion
Inventories     125,692    106,281    of other          1,910       2,230
                                      long-term debt
Deferred income 25,015     25,065     Total current    268,589     247,148
taxes                                 liabilities
Prepaid
expenses and    39,229     40,819     Senior Notes,    584,717     584,993
other current                         net
assets
Total current   530,319    544,873    Other long-term  1,456       1,456
assets                                debt
                                      Other            52,548      52,640
                                      liabilities
Property,                             Total
equipment and   958,457    913,781    liabilities      907,310     886,237
satellites, net
Other acquired                        Total ViaSat
intangible      46,123     47,170     Inc.              924,780     903,001
assets, net                           stockholders'
                                      equity
                                      Noncontrolling
Goodwill        82,632     83,000     interest in       5,181       4,834
                                      subsidiary
Other assets    219,740    205,248    Total equity    929,961     907,835
                $         $        Total            $          $  
Total assets    1,837,271  1,794,072  liabilities and   1,837,271  1,794,072
                                      equity





SOURCE ViaSat Inc.

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