EX-99.1 2 a20743exv99w1.htm EXHIBIT 99.1 exv99w1
 

Exhibit 99.1
     
 
  May 16, 2006
 
    
(VIASAT LOGO)News
  Contact:
  June Harrison
  ViaSat Inc.
 
  760-476-2480
 
  www.viasat.com
ViaSat Announces Record Orders, Revenues, Earnings and Cash Flows for Fiscal 2006
     Carlsbad, CA ¾ ViaSat Inc. (NASDAQ: VSAT), a provider of networking and communication equipment for government and commercial customers, today announced financial results for the fourth quarter and fiscal year 2006. The fiscal fourth quarter results include record totals for revenues of $118.1 million, new orders of $133.3 million, net income of $0.28 per share on a diluted non-GAAP basis and cash flows from operations of $22.2 million. The company also reported fourth quarter net income of $0.20 per share on a diluted GAAP basis, which includes compensation expense charges of $0.04 per share, or $1.2 million net of tax, related to the acceleration of vesting for certain employee stock options.
     Financial highlights for the fiscal year include record revenues of $433.8 million, net income of $1.00 per share on a diluted non-GAAP basis or $0.81 per share on a diluted GAAP basis, new business orders totaling $443.7 million and cash flows from operations of $52.2 million.
     “Fiscal year 2006, our 20th anniversary year, was our best ever, resulting in records in all our basic metrics – orders, revenues, earnings and cash flows,” said Mark Dankberg, chairman and CEO of ViaSat. “Our financial performance reflects a strong competitive posture in our targeted government and commercial market segments. We believe the company is well positioned to capitalize on continued growth in those key markets in our new fiscal year.”
Financial Results
     For the fourth quarter ended March 31, 2006,1 the company reported the following:
                                 
(In millions, except per share data)   Q4 2006     Q4 2005     FY 2006     FY 2005  
Revenues
   $ 118.1     $ 90.9     $ 433.8     $ 345.9  
Net income
   $ 5.8     $ 6.7     $ 23.5     $ 19.3  
Diluted per share net income
   $ 0.20     $ 0.24     $ 0.81     $ 0.68  
Non-GAAP net income 2
   $ 8.2     $ 7.6     $ 28.8     $ 23.3  
Diluted per share non-GAAP net income 2
   $ 0.28     $ 0.27     $ 1.00     $ 0.83  
Diluted weighted average shares
     29.5       28.2       28.9       28.1  
 
                                
New orders/Contract awards
   $ 133.3     $ 129.5     $ 443.7     $ 426.2  
Sales backlog
   $ 374.9     $ 361.9     $ 374.9     $ 361.9  
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1   ViaSat uses a 52- or 53-week fiscal year which ends on the Friday closest to March 31. ViaSat quarters for fiscal year 2006 ended on July 1, 2005, September 30, 2005, December 30, 2005 and March 31, 2006.
 
2   All non-GAAP numbers have been adjusted to exclude the effects of acquisition charges (amortization of intangible assets) and the non-GAAP numbers for the fourth quarter and fiscal year 2006 also exclude the effects of compensation expense from accelerating the vesting of certain employee stock options. A reconciliation of specific adjustments to GAAP results for these periods is included in the “Non-GAAP Condensed Consolidated Statement of Operations” table contained in this release. A description of our use of non-GAAP information is provided under “Use of Non-GAAP (Pro Forma) Financial Information.”
Government Segment
     The Government segment recorded quarterly revenues of $54.4 million and record annual revenues of $210.6 million, a 14.0% increase over the fourth quarter of fiscal year 2005 and a 20.1% increase over the prior fiscal year. The increase in revenues is primarily from our tactical data links and networking and information assurance products.
Commercial Segment
     For the Commercial segment, revenue increased to $64.8 million for the fourth quarter and a record $229.5 million for the fiscal year. These figures represent a 40.9% increase over the fourth quarter of fiscal year 2005 and an increase of 29.4% over the prior fiscal year. The increase in commercial segment revenues is primarily from our enterprise VSAT and consumer broadband product areas.
Selected Fiscal Year 2006 Business Highlights
  •   Awarded over $56 million from The Boeing Company for a Ground Based Beam Forming system in support of Mobile Satellite Ventures’ planned new hybrid space / ground mobile network.
 
  •   Increased our breadth and depth in satellite broadband with the purchase of Efficient Channel Coding Inc. ECC adds experience in state-of-the-art custom digital chip designs to ViaSat, including the new Adaptive Coding & Modulation (ACM) modes of the S2 version of the DVB-RCS (Digital Video Broadcast – Return Channel Satellite) satellite broadband standard. ECC also supplies custom modem chips, reference designs, and gateway technology for the Asian IPSTAR spot-beam satellite system.
 
  •   Ramped up production of Data-Over-Cable Service Interface Specification (DOCSIS®)-based, SurfBeam® two-way broadband satellite terminals. We shipped over 100,000 units in the first year of Ka-band service availability, reflecting strong underlying demand and high customer satisfaction for services offered by Wildblue Communication and Telesat Canada, as well as several other Ku-band satellite broadband service providers.
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ViaSat News   3
  •   Sustained momentum in the VSAT networks market, surpassing 70,000 shipments of the LinkStar® hub-based VSAT terminals, introduced our LinkStarS2™ and LinkWayS2™ products integrating bandwidth saving DVB S2 technology, and achieved DVB-RCS certification from SatLabs for the LinkStar VSAT system.
 
  •   Increased market share in tactical data links, including total Lot 6 delivery orders valued at $74 million, the single largest order ever for a Multifunctional Information Distribution System (MIDS) lot procurement.
 
  •   Strengthened our position in the Joint Tactical Radio System (JTRS) market through successful program design milestones and a new contract award leading to advanced airborne networking capabilities.
 
  •   Sustained a leading position in the emerging (DoD) High Assurance Internet Protocol Interoperability Specification (HAIPIS) market. Key accomplishments include release and certification of the new KG-255 gigabit Ethernet product, continued development of new versions of the interoperability standard, funding to explore new capabilities and applications, contract funding for integration of HAIPIS functionality into important new markets such as JTRS and airborne networking, and initial product orders for KG-250s from key customer communities.
Safe Harbor Statement
     Portions of this release, particularly ViaSat’s financial prospects for fiscal year 2007 and beyond and the “Selected Fiscal Year 2006 Business Highlights” section, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. ViaSat wishes to caution you that there are some factors that could cause actual results to differ materially from historical results or from any results expressed or implied by such forward-looking statements, including but not limited to: product design flaws or defects; ViaSat’s ability to successfully integrate acquired companies; ViaSat’s ability to perform under existing contracts and obtain additional contracts; ViaSat’s ability to develop new products that gain market acceptance; changes in product supply, pricing and customer demand; changes in relationships with, or the financial condition of, key customers or suppliers; changes in government regulations; changes in economic conditions globally and in the communications markets in particular; increased competition; potential product liability, infringement and other claims; and other factors affecting the communications industry generally. ViaSat refers you to the documents it files from time to time with the Securities and Exchange Commission, specifically the section titled Factors That May Affect Future Performance in ViaSat’s Form 10-Ks and subsequent Form 10-Qs. These documents contain and identify other important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. Stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update publicly or revise any forward-looking statements.
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Conference Call
     ViaSat Inc. will host a conference call to discuss fourth quarter and fiscal year 2006 financial results at 5:00 P.M. Eastern Time on Tuesday, May 16, 2006. The dial-in number is (800) 510-0178 in the U.S. and (617) 614-53450 internationally. The pass code is 93508861. An audio replay will be available until 7:00 P.M. EST May 17, 2006 at (888) 286-8010 (617-801-6888 international) and the pass code is 95389360. You can also access our conference call webcast, conference call materials and other material financial information discussed on our conference call (including any information required by Regulation G) on the Investor Relations Events Calendar page of our corporate web site (www.viasat.com). The call and associated conference call materials will be archived and available on that site for at least 12 months immediately following the conference call.
About ViaSat, Inc. (www.viasat.com)
     ViaSat produces innovative satellite and other wireless communication products that enable fast, secure, and efficient communications to any location. Products include satellite ground systems, information security devices, tactical communication radios, and communication simulators. The company’s full line of satellite communication products includes VSAT systems for network access and infrastructure, and Ka-band satellite systems, from user terminals to large gateways. Along with its headquarters in Carlsbad, CA, ViaSat has divisions located in Duluth, GA, and Germantown, MD.
In addition the company has two wholly-owned subsidiaries: US Monolithics, based in Chandler, AZ, which designs and produces monolithic microwave integrated circuits (MMICs) and modules for use in broadband communications for military and commercial applications; and Efficient Channel Coding, based in Cleveland, OH, an innovator in satellite communication components and systems that increase the efficiency of today’s advanced satellite, wireless and wire-line communication systems.
Use of Non-GAAP (Pro Forma) Financial Information
     Non-GAAP net income excludes the effects of acquisition charges (amortization of intangible assets) and the effects of compensation expense from the accelerated vesting of certain employee stock options in the fourth quarter of fiscal year 2006. Non-GAAP net income is provided to enhance the overall understanding of our current financial performance and our prospects for the future. Specifically, 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. Further, these adjusted non-GAAP results are one of the primary indicators management uses for planning and forecasting in future periods. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with generally accepted accounting
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principles. See the “Non-GAAP Condensed Consolidated Statement of Operations” table for a reconciliation of net income to non-GAAP net income. Non-GAAP as presented in this press release may not be comparable to similarly titled measures reported by other companies.
DOCSIS is a registered trademark of Cable Television Laboratories Inc.
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ViaSat News   6
Condensed Consolidated Statement of Operations
(Unaudited)
(In thousands, except per share data)
                                 
    Three months ended     Twelve months ended  
    March 31, 2006     April 1, 2005     March 31, 2006     April 1, 2005  
Revenues
   $ 118,126     $ 90,939     $ 433,823     $ 345,939  
Cost of revenues
     87,711       68,204       325,271       262,260  
 
                        
Gross profit
     30,415       22,735       108,552       83,679  
Operating expenses:
                                
Selling, general & administrative
     16,162       14,191       57,059       48,631  
Independent research and development
     5,368       2,722       15,757       8,082  
Amortization of intangible assets
     2,088       1,512       6,806       6,642  
 
                        
Income from operations
     6,797       4,310       28,930       20,324  
Interest, net
     (130 )     373       (200 )     304  
 
                        
Income before income taxes and minority interest
     6,667       4,683       28,730       20,628  
Provision (benefit) for income taxes
     768       (2,060 )     5,105       1,246  
Minority interest in net earnings of subsidiary, net of tax
     141       25       110       115  
 
                        
Net Income
   $ 5,758     $ 6,718     $ 23,515     $ 19,267  
 
                        
Diluted net income per share
   $ 0.20     $ 0.24     $ 0.81     $ 0.68  
 
                        
Diluted common equivalent shares
     29,485       28,222       28,857       28,147  
Non-GAAP Condensed Consolidated Statement of Operations
(Unaudited)
(In thousands, except per share data)
                                 
    Three months ended     Twelve months ended  
    March 31, 2006     April 1, 2005     March 31, 2006     April 1, 2005  
Revenues
   $ 118,126     $ 90,939     $ 433,823     $ 345,939  
Cost of revenues
   $ 87,010       68,204     $ 324,570       262,260  
 
                        
Gross profit
     31,116       22,735       109,253       83,679  
Operating expenses:
                                
Selling, general & administrative
     15,476       14,191       56,373       48,631  
Independent research and development
     5,294       2,722       15,683       8,082  
 
                        
Non-GAAP income from operations
     10,346       5,822       37,197       26,966  
Interest, net
     (130 )     373       (200 )     304  
 
                        
Non- GAAP income before income taxes and minority interest
     10,216       6,195       36,997       27,270  
Provision (benefit) for income taxes
     1,826       (1,455 )     8,050       3,903  
Minority interest in net earnings of subsidiary, net of tax
     141       25       110       115  
 
                        
Non-GAAP net income
   $ 8,249     $ 7,625     $ 28,837     $ 23,252  
 
                        
Non-GAAP diluted net income per share
   $ 0.28     $ 0.27     $ 1.00     $ 0.83  
 
                        
Diluted common equivalent shares
     29,485       28,222       28,857       28,147  
 
                                
AN ITEMIZED RECONCILIATION BETWEEN NET INCOME ON A GAAP BASIS AND NON-GAAP BASIS IS AS FOLLOWS:
                                
 
                                
GAAP net income
   $ 5,758     $ 6,718     $ 23,515     $ 19,267  
Amortization of intangible assets
     2,088       1,512       6,806       6,642  
Compensation expense from accelerated vesting of certain employee stock options:
                                
Cost of revenues
     701       —       701       —  
Selling, general & administrative
     686       —       686       —  
Independent research and development
     74       —       74       —  
Income tax effect
     (1,058 )     (605 )     (2,945 )     (2,657 )
 
                        
Non-GAAP net income
   $ 8,249     $ 7,625     $ 28,837     $ 23,252  
 
                        
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ViaSat News   7
Condensed Consolidated Balance Sheet
(Unaudited)
(In thousands)
                                     
Assets   March 31, 2006     April 1, 2005     Liabilities and   March 31, 2006     April 1, 2005  
                    Stockholders’ Equity                
Current Assets:
                   Current liabilities:                
Cash and S-T investments
   $ 36,887     $ 14,741     Accounts payable   $ 50,577     $ 38,523  
Accounts receivable, net
     144,715       141,298     Accrued liabilities     40,969       32,410  
Inventory
     49,883       36,612                      
 
                                
Deferred income taxes
     7,008       7,027     Total current liabilities     91,546       70,933  
Other current assets
     5,960       10,114                      
 
                                
Total current assets
     244,453       209,792                      
 
                                
 
                   Other liabilities     9,389       3,911  
 
                                
Goodwill
     28,133       19,492     Total liabilities     100,935       74,844  
 
                                
Other intangible assets, net
     23,983       20,990         Minority interest     836       698  
Property and equip, net
     46,211       33,278                      
Other assets
     22,289       18,273     Total stockholders’ equity     263,298       226,283  
 
                            
 
   $ 365,069     $ 301,825         $ 365,069     $ 301,825