Exhibit 99.1
November 3, 2005
Contact:
Heather Ferrante
ViaSat Inc.
760-476-2633
www.viasat.com
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 income2 | $ | 6.9 | $ | 4.7 | $ | 12.9 | $ | 9.5 | ||||||||
Diluted per share pro forma net income2 | $ | 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.” |
-more-
2
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. |
—more—
3
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.
—more—
4
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.
—more—
Condensed Consolidated Statement of Operations
(Unaudited)
(In thousands, except per share data)
(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)
(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 | ||||||||
1
Condensed Consolidated Balance Sheet
(Unaudited)
(In thousands)
(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 | |||||
2