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

Exede® service subscribers continue to grow as Q4 installations approach 100,000

16 May, 2013, 16:21 ET from ViaSat Inc.

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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