EX-99.1 2 a14050exv99w1.htm EXHIBIT 99.1 Exhibit 99.1
 

Exhibit 99.1

(VIASAT LOGO)
November 3, 2005


Contact:
Heather Ferrante
ViaSat Inc.
760-476-2633
www.viasat.com


ViaSat Reports Fiscal 2006 Second Quarter Results
     Carlsbad, CA — ViaSat, Inc. (NASDAQ: VSAT) today announced results for its fiscal year 2006 second quarter, including revenues of $104.1 million, new net contract awards of $102.8 million, net income of $0.24 per share on a pro forma basis and $0.21 per share on a GAAP basis, and cash flows from operations of $12.3 million. Year-to-date, the company reported total revenues of $204.1 million, net new contract awards of $232.2 million, net income of $0.46 per share on a pro forma basis or $0.39 per share on a GAAP basis and cash flows from operations of $19.1 million.
     “Our second quarter and first half operating results are slightly better than planned and reflect the strength of both our government and commercial businesses,” said Mark Dankberg, chairman and CEO of ViaSat. “We've significantly increased deliveries of consumer broadband terminals, as well as installations of mobile broadband products and maintained solid performance in satellite networks and antenna systems. Tactical data links and information assurance product results were excellent. Our accomplishments in the first half of the year boosts confidence that we'll achieve our targets for fiscal 2006.”
Financial Results
     For the second quarter ended September 30, 20051, the company reported the following:
                                 
                    First 6 Mos.     First 6 Mos.  
(In millions, except per share data)   Q2 2006       Q2 2005   FY06     FY05  
 
Revenues
   $ 104.1     $ 82.6     $ 204.1     $ 166.8  
Net income
   $ 6.0     $ 3.7     $ 11.1     $ 7.3  
Diluted per share net income
   $ 0.21     $ 0.13     $ 0.39     $ 0.26  
Pro forma net income 2
   $ 6.9     $ 4.7     $ 12.9     $ 9.5  
Diluted per share pro forma net income 2
   $ 0.24     $ 0.17     $ 0.46     $ 0.34  
Diluted weighted average shares
     28.6       28.0       28.4       28.1  
 
                                
New orders/Contract awards
   $ 102.8     $ 87.3     $ 232.2     $ 189.3  
Sales backlog
   $ 389.9     $ 304.0     $ 389.9     $ 304.0  
 
1   ViaSat uses a 52- or 53-week fiscal year which ends on the Friday closest to March 31. ViaSat’s quarters for fiscal year 2006 end on July 1, 2005, September 30, 2005, December 30, 2005 and March 31, 2006.
 
2   All non-GAAP pro forma numbers have been adjusted to exclude the effects of acquisition charges (amortization of intangible assets). A reconciliation of specific adjustments to GAAP results for these periods is included in the “Pro Forma Condensed Consolidated Statement of Operations” table contained in this release. A description of our use of non-GAAP information is provided under “Use of Pro Forma Financial Information.”
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Government Segment
     The Government segment had quarterly revenues of $49.5 million, a 21% increase over the second quarter of fiscal year 2005. New contract awards for the quarter were $58.7 million. The revenue growth from second quarter of fiscal year 2005 to second quarter of fiscal year 2006 was primarily related to tactical data link and information assurance products.
Commercial Segment
     Revenues from our Commercial segment were $56.9 million for the second quarter, a 33% increase over the second quarter of fiscal year 2005. New contract awards for the quarter were $44.1 million. The revenue growth from the second quarter of fiscal year 2005 to second quarter of fiscal year 2006 was primarily related to consumer broadband sales.
Selected Second Quarter 2006 Business Highlights
  •   Delivered transportable and quick-deploy VSAT communication systems for disaster relief efforts – supporting re-constitution and network connections for mobile cellular and land mobile radio systems.
 
  •   Won a $19.8 million contract to supply Lockheed Martin with a Communication Navigation and Identification Function Simulator (CFS) for its Mission System Integration Lab in Fort Worth for testing of avionics in the F-35 Joint Strike Fighter (JSF).
 
  •   Achieved record awards and sales for our Tactical Networking and Information Assurance business area, led by increasing sales of the group’s two newest products: the VDC-600 ViaSat Data Controller and KG-250 Inline Network Encryptor.
 
  •   Continued market share growth in China and India for our VSAT Networks business generated by sales of our LinkStar VSAT system.
 
  •   Integrated our ArcLight® satellite networking technology into an Army C2V (Command and Control Vehicle) as part of the first successful field test of high-speed communications on the move.
 
  •   Received First Article Acceptance and delivered first production units of a maritime version of the Connexion by Boeing satellite terminal.
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Safe Harbor Statement
     Portions of this release, particularly ViaSat’s financial prospects for fiscal year 2006 and beyond and the “Selected Second Quarter 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: ViaSat’s ability to perform under existing contracts and obtain additional contracts; new product market acceptance; possible cost overruns in fixed price development contracts; 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.
Conference Call
     ViaSat will host a conference call to discuss these fiscal year 2006 second quarter results at 5:00 P.M. Eastern Time on Thursday, November 3, 2005. The dial-in number is (800) 798-2801 and (617) 614-6205 internationally. The passcode is 97150255. A replay will be available for 24 hours beginning at 7:00 P.M. November 3 at (888) 286-8010. The passcode is 72942364. You can also access our conference call webcast 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 will be archived and available on that site for at least twelve months immediately following the conference call.
About ViaSat
     ViaSat produces innovative satellite and other wireless communication products that enable fast, secure, and efficient communications to any location. ViaSat has a full line of VSAT products for data and voice applications. ViaSat is a market leader in Ka-band satellite systems, from user terminals to large gateways.
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Other products include network security devices, tactical data radios, and communication simulators. ViaSat has locations in Carlsbad, CA, and Norcross, GA, along with its Comsat Laboratories division based in Germantown, MD. Additional field offices are located in Boston, MA, Washington DC/Baltimore, Australia, China, India, Spain, and Italy.
     In addition, ViaSat’s wholly-owned subsidiary, US Monolithics, designs and produces monolithic microwave integrated circuits (MMICs) and modules for use in broadband communications. US Monolithics is based in Chandler, Arizona.
Use of Pro Forma Financial Information
     Pro forma net income (loss) excludes the effects of acquisition charges (amortization of intangible assets). Pro forma net income is provided to enhance the overall understanding of our current financial performance and our prospects for the future. Specifically, we believe the pro forma 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 pro forma results to the investment community, we believe the inclusion of pro forma numbers provides consistency in our financial reporting. Further, these adjusted pro forma 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 principles. See the “Pro Forma Condensed Consolidated Statement of Operations” table for a reconciliation of net income (loss) to pro forma net income (loss).
     Comsat Labs and Comsat Laboratories are tradenames of ViaSat. Neither Comsat Labs nor Comsat Laboratories is affiliated with COMSAT Corporation. “Comsat” is a registered trademark of COMSAT Corporation.
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Condensed Consolidated Statement of Operations
(Unaudited)
(In thousands, except per share data)
                                 
    Three months ended     Six months ended  
    September 30, 2005     October 1, 2004     September 30, 2005     October 1, 2004  
Revenues
   $ 104,112     $ 82,643     $ 204,089     $ 166,813  
Cost of revenues
     78,154       62,808       153,875       125,584  
 
                        
Gross profit
     25,958       19,835       50,214       41,229  
Operating expenses:
                                
Selling, general & administrative
     13,327       10,832       26,173       23,045  
Independent research and development
     3,557       1,575       6,861       3,419  
Amortization of intangible assets
     1,512       1,660       3,024       3,618  
 
                        
Income from operations
     7,562       5,768       14,156       11,147  
Interest
     (26 )     (26 )     (175 )     (37 )
 
                        
Income before income taxes and minority interest
     7,536       5,742       13,981       11,110  
Provision for income taxes
     1,629       1,927       2,895       3,713  
Minority interest in net (loss) earnings of subsidiary, net of tax
     (46 )     70       (43 )     89  
 
                        
Net Income
   $ 5,953     $ 3,745     $ 11,129     $ 7,308  
 
                        
Diluted net income per share
   $ 0.21     $ 0.13     $ 0.39     $ 0.26  
 
                        
Diluted common equivalent shares
     28,634       28,049       28,371       28,114  
Pro Forma Condensed Consolidated Statement of Operations
(Unaudited)
(In thousands, except per share data)
                                 
    Three months ended     Six months ended  
    September 30, 2005     October 1, 2004     September 30, 2005     October 1, 2004  
Revenues
   $ 104,112     $ 82,643     $ 204,089     $ 166,813  
Cost of revenues
   $ 78,154       62,808     $ 153,875       125,584  
 
                        
Gross profit
     25,958       19,835       50,214       41,229  
Operating expenses:
                                
Selling, general & administrative
     13,327       10,832       26,173       23,045  
Independent research and development
     3,557       1,575       6,861       3,419  
 
                        
Pro forma income from operations
     9,074       7,428       17,180       14,765  
Interest
     (26 )     (26 )     (175 )     (37 )
 
                        
Pro forma income before income taxes and minority interest
     9,048       7,402       17,005       14,728  
Provision for income taxes
     2,234       2,591       4,105       5,160  
Minority interest in net (loss) earnings of subsidiary, net of tax
     (46 )     70       (43 )     89  
 
                        
Pro forma net income
   $ 6,860     $ 4,741     $ 12,943     $ 9,479  
 
                        
Pro forma diluted net income per share
   $ 0.24     $ 0.17     $ 0.46     $ 0.34  
 
                        
Diluted common equivalent shares
     28,634       28,049       28,371       28,114  
 
AN ITEMIZED RECONCILIATION BETWEEN NET INCOME ON A GAAP BASIS AND NON-GAAP BASIS IS AS FOLLOWS:
                                
 
GAAP net income
   $ 5,953     $ 3,745     $ 11,129     $ 7,308  
Amortization of intangible assets
     1,512       1,660       3,024       3,618  
Income tax effect
     (605 )     (664 )     (1,210 )     (1,447 )
 
                        
Non-GAAP net income
   $ 6,860     $ 4,741     $ 12,943     $ 9,479  
 
                        

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Condensed Consolidated Balance Sheet
(Unaudited)
(In thousands)
                       
    September 30, 2005   April 1, 2005  
Assets                
Current Assets:
                
Cash and S-T investments
   $ 28,282     $ 14,741  
Accounts receivable, net
     157,723       141,298  
Inventory
     36,032       36,612  
Deferred income taxes
     6,986       7,027  
Other current assets
     5,163       10,114  
 
            
Total current assets
     234,186       209,792  
 
            
Goodwill
     19,492       19,492  
Other intangible assets, net
     17,966       20,990  
Property and equip, net
     36,557       33,278  
Other assets
     18,671       18,273  
 
            
 
   $ 326,872     $ 301,825  
 
            
                 
Liabilities and            
Stockholders' Equity   September 30, 2005     April 1, 2005  
Current Liabilities:
                
Accounts payable
   $ 42,430     $ 38,523  
Accrued liabilities
     38,701       32,410  
Line of credit
     —       —  
 
            
Total current liabilities
     81,131       70,933  
 
                
Other liabilities
     5,740       3,911  
 
            
Total liabilities
     86,871       74,844  
 
            
Minority interest
     632       698  
 
                
Total stockholders’ equity
     239,369       226,283  
 
            
 
   $ 326,872     $ 301,825  
 
            

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