(VIASAT LOGO) NEWS May 12, 2005
Contact:
Heather Ferrante
ViaSat Inc.
760-476-2633
www.viasat.com
VIASAT ANNOUNCES RECORD ORDERS, REVENUES, AND EARNINGS FOR FISCAL YEAR 2005
CARLSBAD, CA -- 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 2005. Highlights
include fiscal year records for revenues of $345.9 million, net income of $0.83
per share on a pro forma basis or $0.68 per share on a GAAP basis, and new
business orders totaling $426.2 million. In addition, the fiscal fourth quarter
results include record quarter totals for revenues of $90.9 million, new orders
of $129.5 million, and net income of $0.27 per share on a pro forma basis or
$0.24 per share on a GAAP basis.
"Sustained strength in new orders continues to drive record financial
performance," said Mark Dankberg, chairman and CEO of ViaSat. "Earnings,
earnings per share, and new orders all met or exceeded our targets, while
product mix and non-recurring events somewhat restricted operating margins. Year
over year pre-tax earnings growth outpaced revenue growth for the fourth quarter
and for all of fiscal year 2005 - despite a substantial one-time benefit in the
third quarter of fiscal year 2004. The company also generated $8 million in
operating cash flow this quarter. Given our substantial backlog and new product
positions, the outlook for sustained and record growth in revenues, earnings,
and orders and strong cash flow in fiscal year 2006 seems very favorable."
FINANCIAL RESULTS
For the fourth quarter ended April 1, 2005(1), the Company reported the
following:
(In millions, except per share data) Q4 2005 Q4 2004 FY 2005 FY 2004
------------------------------------ ------- ------- ------- -------
Revenues $ 90.9 $ 83.2 $ 345.9 $ 278.6
Net income $ 6.7 $ 3.8 $ 19.3 $ 13.2 (3)
Diluted per share net income $ 0.24 $ 0.13 $ 0.68 $ 0.48 (3)
Pro forma net income (2) $ 7.6 $ 5.0 $ 23.3 $ 17.9 (3)
Diluted per share pro forma net income (2) $ 0.27 $ 0.18 $ 0.83 $ 0.65 (3)
Weighted average shares diluted 28.2 28.4 28.1 27.6
New orders/Contract awards $ 129.5 $ 73.2 $ 426.2 $ 346.6
Sales backlog $ 361.9 $ 281.6 $ 361.9 $ 281.6
(1) ViaSat uses a 52- or 53-week fiscal year which ends on the Friday closest
to March 31. ViaSat quarters for fiscal year 2005 ended on July 2, 2004,
October 1, 2004, December 31, 2004 and April 1, 2005.
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(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" below.
(3) In the third quarter of fiscal year 2004, the Company reached a legal
settlement related to the purchase of the Satellite Networks businesses of
Scientific-Atlanta. The results reflect an after-tax gain of $3.8 million or
$0.14 per share on a GAAP and pro forma basis, related to this settlement.
GOVERNMENT SEGMENT
The Government segment recorded quarterly revenues of $47.7 million and
record annual revenues of $175.4 million, a 20.4% increase over the fourth
quarter of fiscal year 2004 and a 36.9% increase over the prior fiscal year. The
increase in revenues is primarily from our tactical data links and networking
and information assurance systems and products.
COMMERCIAL SEGMENT
For the Commercial segment, revenue increased to $46.0 million for the fourth
quarter and a record $177.4 million for the fiscal year. These figures represent
a 0.9% increase over the fourth quarter of fiscal year 2004 and an increase of
14.9% over fiscal year 2004. The increase in commercial segment revenues is
primarily from our enterprise VSAT networks and broadband product areas.
SELECTED FISCAL YEAR 2005 HIGHLIGHTS
- - Earned record new orders of $117 million for tactical data link products,
including Multi-functional Information Distribution System (MIDS) terminal
production and development of the next generation Joint Tactical Radio System
version of MIDS.
- - Completed National Security Agency (NSA) certification and began shipments of
the KG-250 Inline Network Encryptor. This is our first programmable product
based on the DoD HAIPIS (High Assurance IP Interoperability Specification)
standard and ViaSat's PSIAM (Programmable, Scalable Information Assurance
Model) architecture. Our HAIPIS and PSIAM achievements provide a strong
position for continued growth in the emerging Crypto Modernization market.
- - Received awards for 6,500 second generation UHF satellite modems from
Raytheon. These are used in AN/PSC-5C and AN/PSC-5D portable satellite
terminals, the Tactical Tomahawk cruise missile, and other multi-band
terminals.
- - Won a significantly growing share of the VSAT IP networking market including
sales to service providers and enterprise users. Cumulative shipments of
LinkStar VSAT terminals surpassed 50,000 during FY05.
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- - Achieved major milestones in product development and initial deployments for
our Ka-band DOCSIS(R)- based consumer broadband networks. Cumulative orders
for Ka and Ku band DOCSIS satellite broadband terminals have reached
approximately 200,000 units.
In the third quarter of fiscal year 2005, the Company disclosed a material
weakness related to significant and non-routine transactions. Please see related
disclosures in the third quarter Form 10-Q filed with the Securities and
Exchange Commission. ViaSat has implemented the remediation steps outlined in
its third quarter Form 10-Q disclosure including hiring additional finance and
accounting personnel, establishing certain policies and procedures and
conducting training. However, as of this release, the Company has not concluded
its fiscal year-end assessment of internal controls, including testing of the
remediated policies and procedures.
ViaSat produces innovative satellite and other network communication products
that enable fast, 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, Spain, and Italy.
In addition, ViaSat's wholly-owned subsidiary, US Monolithics, designs and
produces MMICs and modules for use in broadband communications. US Monolithics
is based in Chandler, Arizona.
NOTE: ViaSat, Inc. will host a conference call to discuss these FY2005 fourth
quarter and year-end earnings at 5:00 P.M. Eastern Time on Thursday, May 12,
2005. The dial-in number is (800) 295-4740 in the U.S. and (617) 614-3925
internationally. The pass code is 62443535. An audio replay will be available
until 7:00 P.M. EST May 13, 2005 at (888) 286-8010 (617-801-6888 international)
and the pass code is 47152603. 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 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
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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 to pro forma net income. 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 2006 and beyond and the "Selected Fiscal Year 2005 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: the
possibility that, in finalizing year-end processes, ViaSat may determine the
material weakness related to significant and non-routine transactions, which was
previously disclosed in its Form 10-Q for the third quarter of fiscal year 2005,
has not been remediated, or that other material weaknesses exist, such that its
internal control over financial reporting was not effective at fiscal year-end;
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.
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. DOCSIS is a registered
trademark of Cable Television Laboratories Inc.
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CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED TWELVE MONTHS ENDED
------------------------------ ------------------------------
APRIL 1, 2005 APRIL 2, 2004 APRIL 1, 2005 APRIL 2, 2004
------------- ------------- ------------- -------------
Revenues $ 90,939 $ 83,221 $ 345,939 $ 278,579
Cost of revenues 68,204 63,641 262,260 206,327
--------- --------- --------- ---------
Gross profit 22,735 19,580 83,679 72,252
Operating expenses:
Selling, general & administrative 14,191 11,228 48,631 38,800
Independent research and development 2,722 2,064 8,082 9,960
Amortization of intangible assets 1,512 1,963 6,642 7,841
--------- --------- --------- ---------
Income from operations 4,310 4,325 20,324 15,651
Interest, net 373 (28) 304 (346)
--------- --------- --------- ---------
Income before income taxes and minority interest 4,683 4,297 20,628 15,305
Provision (Benefit) for income taxes (2,060) 450 1,246 2,015
Minority interest in net earnings of subsidiary, net of tax 25 33 115 122
--------- --------- --------- ---------
Net Income $ 6,718 $ 3,814 $ 19,267 $ 13,168
========= ========= ========= =========
Diluted net income per share $ 0.24 $ 0.13 $ 0.68 $ 0.48
========= ========= ========= =========
Diluted common equivalent shares 28,222 28,356 28,147 27,558
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED TWELVE MONTHS ENDED
------------------------------ ------------------------------
APRIL 1, 2005 APRIL 2, 2004 APRIL 1, 2005 APRIL 2, 2004
Revenues $ 90,939 $ 83,221 $ 345,939 $ 278,579
Cost of revenues 68,204 63,641 262,260 206,327
--------- --------- --------- ---------
Gross profit 22,735 19,580 83,679 72,252
Operating expenses:
Selling, general & administrative 14,191 11,228 48,631 38,800
Independent research and development 2,722 2,064 8,082 9,960
--------- --------- --------- ---------
Pro forma income from operations 5,822 6,288 26,966 23,492
Interest, net 373 (28) 304 (346)
--------- --------- --------- ---------
Pro forma income before income taxes and minority interest 6,195 6,260 27,270 23,146
Provision (Benefit) for income taxes (1,455) 1,235 3,903 5,151
Minority interest in net earnings of subsidiary, net of tax 25 33 115 122
--------- --------- --------- ---------
Pro forma net income $ 7,625 $ 4,992 $ 23,252 $ 17,873
========= ========= ========= =========
Pro forma diluted net income per share $ 0.27 $ 0.18 $ 0.83 $ 0.65
========= ========= ========= =========
Diluted common equivalent shares 28,222 28,356 28,147 27,558
AN ITEMIZED RECONCILIATION BETWEEN NET INCOME
ON A GAAP BASIS AND NON-GAAP BASIS IS AS FOLLOWS:
GAAP net income $ 6,718 $ 3,814 $ 19,267 $ 13,168
Amortization of intangible assets 1,512 1,963 6,642 7,841
Income tax effect (605) (785) (2,657) (3,136)
--------- --------- --------- ---------
Non-GAAP net income $ 7,625 $ 4,992 $ 23,252 $ 17,873
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CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
(IN THOUSANDS)
ASSETS APRIL 1, 2005 APRIL 2, 2004
Current Assets:
Cash and S-T investments $ 14,741 $ 18,670
Accounts receivable, net 141,298 110,766
Inventory 36,612 30,357
Deferred income taxes 7,027 5,487
Other current assets 10,114 9,251
-------- --------
Total current assets 209,792 174,531
-------- --------
Goodwill 19,492 19,492
Other intangible assets, net 20,990 27,632
Property and equip, net 33,278 32,052
Other assets 18,273 18,975
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$301,825 $272,682
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LIABILITIES AND APRIL 1, 2005 APRIL 2, 2004
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 38,523 $ 32,635
Accrued liabilities 32,410 34,050
Line of credit -- --
-------- --------
Total current liabilities 70,933 66,685
Other liabilities 3,911 2,944
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Total liabilities 74,844 69,629
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Minority interest 698 578
Total stockholders' equity 226,283 202,475
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$301,825 $272,682
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