EXHIBIT 99.1
VIASAT THIRD QUARTER RESULTS INCLUDE RECORD REVENUES, RECORD EARNINGS, AND
RECORD BACKLOG
CARLSBAD, CA -- ViaSat Inc. (NASDAQ: VSAT), a provider of communication
equipment for government and commercial customers, today announced financial
results for the third quarter of fiscal year 2004. Highlights for the quarter
included record revenues of $71.8 million, net income of $0.30 per share on a
pro forma basis or $0.26 per share on a GAAP basis, and net new orders for the
quarter of $82.5 million. Growing momentum in ViaSat's business drove results
that were ahead of plan. In addition, ViaSat `s financial results included a
pre-tax gain of approximately $6.3 million as a result of its settlement of
litigation with Scientific-Atlanta relating to the acquisition of the
Scientific-Atlanta satellite networks business in April 2000, which is net of
specific assets claimed and legal costs. This one-time gain added approximately
$0.14 per share to the results on a fully diluted basis for the third quarter.
"Our third quarter results clearly indicate the growing momentum behind our
business," said Mark Dankberg, chairman and CEO of ViaSat. "Revenues, earnings,
and per share earnings all were at record levels for the quarter, representing
substantial gains both year over year and sequentially. Results were somewhat
better than plan - even without the additional benefits of the settlement
agreement. New orders remained very strong, already setting an annual record and
putting us in a position to meet our financial objectives for the year. Plus,
sustained strength in cash flow driven by growing profitability and improved
operating efficiencies allowed us to erase outstanding debt while accumulating
over $20 million in cash at quarter's end, giving us significantly enhanced
flexibility to support our growth. "
FINANCIAL RESULTS
For the third quarter ended January 2, 2004*, the company reported the
following:
FIRST 9 FIRST 9
(In millions, except per share data) Q3 2004 Q3 2003 MOS. FY04 MOS. FY03
------------------------------------ ------- ------- --------- ---------
Revenues $ 71.8 $ 49.0 $ 195.4 $ 131.3
Net income (loss) $ 7.1 ($2.6) $ 9.4 ($8.3)
Diluted per share net income (loss) $ 0.26 ($0.10) $ 0.34 ($0.32)
Pro forma net income (loss)** $ 8.3 ($1.3) $ 12.9 ($4.5)
Diluted per share pro forma
net income (loss)** $ 0.30 ($0.05) $ 0.47 ($0.18)
Weighted average shares 27.7 26.0 27.3 26.0
New orders/Contract awards $ 82.5 $ 56.9 $ 273.3 $ 199.5
Sales backlog $ 291.6 $ 207.6 $ 291.6 $ 207.6
* ViaSat adopted a 52- or 53-week fiscal year beginning with its fiscal
year 2004, which ends on the Friday closest to March 31. ViaSat's quarters
for fiscal year 2004 end on July 4, 2003, October 3, 2003, January 2, 2004
and April 2, 2004.
** 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 on page 5 of this release. A description of our use of non-GAAP
information is provided under "Use of Pro Forma Financial Information"
below.
GOVERNMENT SEGMENT
Government Systems recorded quarterly and nine-month revenues of $33.3
million and $88.5 million, respectively, a 44% increase over the third quarter
of fiscal year 2003 and a 47% increase over the prior nine-month period. The
revenue growth reflects the significant order growth and associated contract
backlog accumulated in our tactical data links, UHF satcom, information
assurance and government broadband businesses over the past 18 months.
COMMERCIAL SEGMENT
Revenue increased to $38.5 million for the third quarter and $106.9
million year-to-date. These figures represent a 49% increase over the third
quarter of fiscal year 2003 and an increase of 50% over the first nine months of
fiscal year 2003. Revenue growth in commercial business reflects accumulated and
growing backlog in broadband systems for consumer and in flight applications, as
well as antenna and telemetry systems, plus sustained quarterly order flow in
VSAT network products for both commercial and government customers. Operating
earnings improved substantially from last quarter, excluding the effects of the
settlement.
SELECT THIRD QUARTER 2004 BUSINESS HIGHLIGHTS
- - Generated strong cash from operations during the quarter of $17.6 million,
inclusive of the $9.0 million of cash received from the settlement with
Scientific-Atlanta. A portion of the cash generated was used to pay-off
the remaining balance of our revolving line of credit. As of quarter end,
ViaSat had a cash balance of over $20 million.
- - Government Systems received a $30 million contract for 120 Multifunctional
Information Distribution System LVT(1) terminals from the Royal
Netherlands Air Force for its fleet of F-16 aircraft.
- - Broadband Systems re-started work under a revised contract valued at over
$33 million from WildBlue Communications to begin final development and
production of consumer premises and gateway networking equipment to
support WildBlue's initial service launch later this year. ViaSat supplied
customer equipment includes a Ka-band satellite modem and outdoor Ka-band
transceiver electronics from ViaSat's subsidiary US Monolithics LLC.
- - Order for a LinkStar hub and 200 terminals from China National Petroleum
Company (CNPC) to provide LinkStar(R) broadband VSATs for data collection
and video monitoring along the new West-East natural gas pipelines in
China, enabling remote monitoring and control of the pipeline.
- - Continued strong antenna system bookings and sales for Satellite Ground
Systems, led by $3.2 million in follow-on orders for telemetry antenna
systems from ITT Technologies as it continues a major modernization of the
Eastern and Western launch ranges for the U.S. Air Force Spacelift Range
System (SLRS).
- - Achieved certification for ISO 9001/2000 across all operating facilities.
- - Assessed by the Software Engineering Institute (SEI) as a Level 3
organization based on their Software Capability Maturity Model
(SW-CMM(R)).
ViaSat produces innovative satellite and other network communication
products that enable fast, easy, secure, and efficient communications to any
location. Products include network security devices, tactical data radios, and
communication simulators. ViaSat also has a full line of VSAT products for data
and voice applications, and is a market leader in Ka-band satellite systems,
from user terminals to large gateways. ViaSat has locations in Carlsbad, CA, and
Norcross, GA, along with its Comsat Laboratories division based in Clarksburg,
MD. Additional field offices are located in Marlborough, MA, Washington
DC/Baltimore, Australia, China, India, and Italy.
In addition, ViaSat's wholly-owned subsidiary, U.S. Monolithics, designs and
produces monolithic microwave integrated circuits (MMICs) and modules for use in
broadband communications. U.S. Monolithics is based in Chandler, Arizona.
NOTE: ViaSat Inc. will host a conference call to discuss these FY2004 Third
Quarter Earnings at 10:00 A.M. Eastern Time on Tuesday, January 27, 2004. The
dial-in number is (877) 855-4254 in
the U.S. and (706) 679 8583 internationally. The reservation code is 21183197.
An audio replay will be available until 12:15 P.M. EST January 28 at (800)
633-8284 and the reservation code is the same. 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.
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 (GAAP). See the "Pro Forma Condensed Consolidated
Statement of Operations" table for a reconciliation of net income (loss) to pro
forma net income (loss). Pro forma as presented in this press release may not be
comparable to similarly titled measures reported by other companies.
SAFE HARBOR STATEMENT
Portions of this release, particularly ViaSat's financial prospects for
fiscal year 2004 and beyond and the "Select Third Quarter 2004 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, 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-K. 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.
Comsat Labs and Comsat Laboratories are tradenames of ViaSat Inc. Neither Comsat
Labs nor Comsat Laboratories is affiliated with COMSAT Corporation. "Comsat" is
a registered trademark of COMSAT Corporation.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED NINE MONTHS ENDED
----------------------------- -----------------------------
JANUARY 2, DECEMBER 31, JANUARY 2, DECEMBER 31,
2004 2002 2004 2002
--------- --------- --------- ---------
Revenues $ 71,758 $ 48,962 $ 195,358 $ 131,322
Cost of revenues 51,757 39,718 142,526 100,996
--------- --------- --------- ---------
Gross Profit 20,001 9,244 52,832 30,326
Operating expenses:
Selling, general & administrative 6,389 9,102 27,572 26,728
Independent research and development 1,963 2,517 7,896 11,704
Amortization of intangible assets 1,959 2,112 5,878 6,335
--------- --------- --------- ---------
Income (loss) from operations 9,690 (4,487) 11,486 (14,441)
Equity in loss of joint venture (79) (463) (160) (1,622)
Interest and other (90) (331) (475) (626)
--------- --------- --------- ---------
Income (loss) before income taxes 9,521 (5,281) 10,851 (16,689)
--------- --------- --------- ---------
Net Income (loss) $ 7,089 $ (2,612) $ 9,354 $ (8,349)
========= ========= ========= =========
Diluted net income (loss) per share $ 0.26 $ (0.10) $ 0.34 $ (0.32)
========= ========= ========= =========
Diluted common equivalent shares 27,748 26,018 27,311 25,979
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED NINE MONTHS ENDED
----------------------------- ----------------------------
JANUARY 2, DECEMBER 31, JANUARY 2, DECEMBER 31,
2004 2002 2004 2002
--------- --------- --------- ---------
Revenues $ 71,758 $ 48,962 $ 195,358 $ 131,322
Cost of revenues 51,757 39,718 142,526 100,996
Gross Profit 20,001 9,244 52,832 30,326
Operating expenses:
Selling, general & administrative 6,389 9,102 27,572 26,728
Independent research and development 1,963 2,517 7,896 11,704
Pro forma income (loss) from operations 11,649 (2,375) 17,364 (8,106)
Equity in loss of joint venture (79) (463) (160) (1,622)
Interest and other (90) (331) (475) (626)
--------- --------- --------- ---------
Pro forma income (loss) before income taxes 11,480 (3,169) 16,729 (10,354)
--------- --------- --------- ---------
Pro forma net income (loss) $ 8,264 $ (1,345) $ 12,881 $ (4,548)
========= ========= ========= =========
Pro forma diluted net income (loss) per share $ 0.30 $ (0.05) $ 0.47 $ (0.18)
========= ========= ========= =========
Diluted common equivalent shares 27,748 26,018 27,311 25,979
THE ABOVE PRO FORMA AMOUNTS HAVE BEEN
ADJUSTED TO EXCLUDE THE FOLLOWING:
Amortization of intangible assets 1,959 2,112 5,878 6,335
Income tax effect (784) (845) (2,351) (2,534)
--------- --------- --------- ---------
Net effect of pro forma adjustment $ 1,175 $ 1,267 $ 3,527 $ 3,801
--------- --------- --------- ---------
Note: Operating results for the three-month and nine-month periods ended January
2, 2004 include a benefit to Cost of revenues of $3.2 million and to Selling,
general & administrative expenses of $3.1 million relating to the settlement of
litigation with Scientific-Atlanta, Inc.
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
(IN THOUSANDS)
JANUARY 2, MARCH 31,
2004 2003
ASSETS
Current Assets:
Cash and S-T investments $ 20,446 $ 4,269
Accounts receivable, net 89,180 80,962
Inventory 27,209 29,758
Deferred income taxes 6,072 4,241
Other current assets 10,387 6,015
--------- ---------
Total current assets 153,294 125,245
--------- ---------
Goodwill, net 19,492 19,492
Other intangible assets, net 29,596 35,474
Property and equip, net 32,675 33,609
Other assets 18,855 23,335
--------- ---------
$ 253,912 $ 237,155
========= =========
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 26,102 $ 21,983
Accrued liabilities 29,256 19,036
Line of credit -- 9,950
--------- ---------
Total current liabilities 55,358 50,969
Other liabilities 2,582 1,847
--------- ---------
Total liabilities 57,940 52,816
--------- ---------
Total stockholders' equity 195,972 184,339
--------- ---------
$ 253,912 $ 237,155
========= =========