Exhibit 99.1
VIASAT REPORTS RECORD REVENUES, GROWING EARNINGS, STRONG CASH FLOW AND NEW
ORDERS
CARLSBAD, CA - ViaSat Inc. (NASDAQ: VSAT), a provider of communication
equipment for government and commercial customers, today announced financial
results for the second quarter of fiscal year 2004. Highlights for the quarter
included record revenues of $64.3 million, net income of $0.11 per share on a
pro forma basis or $0.07 per share on a GAAP basis, and net new orders for the
quarter of $88.5 million.
"We met or exceeded our objectives for earnings, sales, cash flows and new
orders - setting new records for quarterly and year to date revenue as well as
backlog," said Mark Dankberg, chairman and CEO of ViaSat. "Cash flow from
operations was especially strong at over $9 million. Operating income and margin
continued to improve reflecting higher sales volumes and customer-funded
development, lower operating expenses as a percentage of sales due to
efficiencies and lower discretionary R&D expenses. Further, we've continued to
see progress in our market position across essentially all of our business
areas."
FINANCIAL RESULTS
For the second quarter ended October 3, 2003*, the company reported the
following:
(In millions, except per FIRST 6 FIRST 6
share data) Q2 2004 Q2 2003 MOS. FY04 MOS. FY03
----------- ------- ------- --------- ---------
Revenues $ 64.3 $ 39.5 $ 123.6 $ 82.4
Net income (loss) $ 1.8 ($ 4.2) $ 2.3 ($ 5.7)
Diluted per share net income
(loss) $ 0.07 ($ 0.16) $ 0.08 ($ 0.22)
Pro forma net income (loss)** $ 3.0 ($ 2.9) $ 4.6 ($ 3.2)
Diluted per share pro forma
net income (loss)** $ 0.11 ($ 0.11) $ 0.17 ($ 0.12)
Weighted average shares 27.3 26.0 27.0 26.0
New orders/Contract awards $ 88.5 $ 63.0 $ 190.8 $ 142.6
Sales backlog $ 280.8 $ 200.0 $ 280.8 $ 200.0
* 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 record quarterly revenues of $27.6 million, a
68% increase over the second quarter of fiscal year 2003. Revenues increased in
all of our businesses, including tactical data links, information security and
networking, UHF satcom and government broadband. Earnings in the government
segment remained strong, but declined somewhat from the second quarter of fiscal
year 2003 due to the current sales mix of programs with lower profit margins,
including substantial increases in new product development.
COMMERCIAL SEGMENT
Revenue increased to $36.7 million for the second quarter, a 60% increase
over the second quarter of fiscal year 2003. Revenues grew in our commercial
broadband, VSAT networks and large antenna systems businesses. Commercial
segment earnings were positive for the quarter, reflecting strong and continuing
improvement in VSAT networks performance, growth in the broadband area, and
steady gains in our antenna business.
SELECT SECOND QUARTER 2004 BUSINESS HIGHLIGHTS
- - Government Systems received a $43.8 million delivery order for
Multifunctional Information Distribution System (MIDS) terminals from The
Space and Naval Warfare Systems Command (SPAWAR), San Diego. The order
included LVT(1) airborne and LVT(2) ground-based Low Volume Terminals. The
MIDS LVT provides secure, high capacity, jam resistant, digital data and
voice communications capability for US Navy, US Air Force, and US Army
platforms. The ViaSat MIDS terminal completed operational evaluation on
the Navy's F/A-18 aircraft and is undergoing flight qualification and test
on the Air Force F-16 as well.
- - Government Broadband Systems received an initial order in an emerging
government market for broadband, bandwidth-on-demand capable,
rapidly-deployable satellite terminals. The terminals integrate ViaSat's
commercial LINKWAY(R) IP networking into a mobile package for video
transmission. The system will be used to quickly and securely transmit
imagery from forward areas to headquarters and command locations in the
field, as well as back to the U.S.
- - Began development of antenna and information security subsystems for the
Navy's new Common Data Link (CDL) System. ViaSat received approximately
$13 million in subcontracts from Cubic Corporation. The agreements also
contain options to add additional production units.
- - Our VSAT Networks business completed installation of a network for The
Organizing Committee of the 8th All Africa Games, COJA, to supply LINKWAY
multi-protocol broadband VSATs, Skylinx(R) digital telephony VSATs, and
antenna systems for communications and video backhaul at the All African
Games. The satellite network provided digital communications among four
cities and a hub in the Nigerian capital of Abuja, plus a video uplink
from Games locations for re-broadcast throughout Africa.
- - The Comsat Laboratories business received research and development
contracts to further enhance our VSAT products with key feature sets,
including an award from U.S. Army Communications Electronics Command
(CECOM) to add secure data encryption capability to our LINKWAY satellite
networking system.
- - We earned significant follow-on orders from key VSAT customers, including
Eutelsat and BAIIT (China).
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 Second
Quarter Earnings at 5:00 P.M. Eastern Time on Thursday, November 6, 2003. The
dial-in number is (800) 207-3319 in the U.S. and (415) 908 4743 internationally.
The reservation code is 21164530. An audio replay will be available until 7:00
P.M. EDT November 7 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. 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 Second 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 SIX MONTHS ENDED
--------------------------- ---------------------------
SEPTEMBER 30, OCTOBER 3, SEPTEMBER 30, OCTOBER 3,
2002 2003 2002 2003
---- ---- ---- ----
Revenues $ 39,497 $ 64,336 $ 82,360 $ 123,600
Cost of revenues 31,914 47,476 61,278 90,769
--------- --------- --------- ---------
Gross Profit 7,583 16,860 21,082 32,831
Operating expenses:
Selling, general &
administrative 8,888 10,859 17,626 21,183
Independent research and
development 3,489 2,215 9,187 5,933
Amortization of intangible
assets 2,112 1,959 4,223 3,919
--------- --------- --------- ---------
Income (loss) from
operations (6,906) 1,827 (9,954) 1,796
Equity in loss of joint
venture (630) (49) (1,159) (81)
Interest and other (180) (171) (295) (385)
--------- --------- --------- ---------
Income (loss) before income
taxes (7,716) 1,607 (11,408) 1,330
--------- --------- --------- ---------
Net Income (loss) $ (4,155) $ 1,802 $ (5,737) $ 2,265
========= ========= ========= =========
Diluted net income (loss)
per share $ (0.16) $ 0.07 $ (0.22) $ 0.08
========= ========= ========= =========
Diluted common equivalent
shares 26,008 27,282 25,960 27,042
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS SIX MONTHS
ENDED ENDED
--------------------------- ---------------------------
SEPTEMBER 30, OCTOBER 3, SEPTEMBER 30, OCTOBER 3,
2002 2003 2002 2003
---- ---- ---- ----
Revenues $ 39,497 $ 64,336 $ 82,360 $ 123,600
Cost of revenues 31,914 47,476 61,278 90,769
--------- --------- --------- ---------
Gross Profit 7,583 16,860 21,082 32,831
Operating expenses:
Selling, general &
administrative 8,888 10,859 17,626 21,183
Independent research and
development 3,489 2,215 9,187 5,933
--------- --------- --------- ---------
Pro forma income (loss) from
operations (4,794) 3,786 (5,731) 5,715
Equity in loss of joint
venture (630) (49) (1,159) (81)
Interest and other (180) (171) (295) (385)
--------- --------- --------- ---------
Pro forma income (loss)
before income taxes (5,604) 3,566 (7,185) 5,249
--------- --------- --------- ---------
Pro forma net income (loss) $ (2,887) $ 2,977 $ (3,203) $ 4,616
========= ========= ========= =========
Pro forma diluted net income
(loss) per share $ (0.11) $ 0.11 $ (0.12) $ 0.17
========= ========= ========= =========
Diluted common equivalent
shares 26,008 27,282 25,960 27,042
THE ABOVE PRO FORMA AMOUNTS HAVE
BEEN ADJUSTED
TO EXCLUDE THE FOLLOWING:
Amortization of intangible
assets 2,112 1,959 4,223 3,919
Income tax effect (844) (784) (1,689) (1,568)
--------- --------- --------- ---------
Net effect of pro forma
adjustment $ 1,268 $ 1,175 $ 2,534 $ 2,351
--------- --------- --------- ---------
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
(IN THOUSANDS)
ASSETS MARCH 31, 2003 OCTOBER 3, 2003 LIABILITIES AND MARCH 31,2003 OCTOBER 3, 2003
STOCKHOLDERS' EQUITY
Current Assets: Current liabilities:
Cash and S-T
investments $ 4,269 $ 10,731 Accounts payable $ 21,983 $ 19,521
Accounts
receivable, net 80,962 86,624 Accrued liabilities 19,036 33,108
Inventory 29,758 29,095 Line of credit 9,950 5,900
---------- -----------
Deferred income
taxes 4,241 6,042 Total current liabilities 50,969 58,529
Other current
assets 6,015 11,391
------------- ----------
Total current
assets 125,245 143,883 Other liabilities 1,847 2,389
------------- ---------- ---------- -----------
Goodwill, net 19,492 19,492
Other intangible
assets, net 35,474 31,555 Total liabilities 52,816 60,918
---------- -----------
Property and
equip, net 33,609 32,318
Other assets 23,335 21,374 Total stockholders' equity 184,339 187,704
------------- ---------- ---------- -----------
$ 237,155 $ 248,622 $ 237,155 $ 248,622
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