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ViaSat Announces Fiscal Year 2011 Results


May 17, 2011

 

ViaSat Inc.  announced financial results for the fourth quarter and fiscal year 2011. The fiscal fourth quarter results include new contract awards of $271.0 million, revenues of $216.4 million, Adjusted EBITDA of $42.8 million, net income attributable to ViaSat common stockholders of $0.41 per share on a diluted non-GAAP basis or $0.28 per share on a diluted GAAP basis, and cash flows from operations of $46.3 million. Financial highlights for the fiscal year include new contract awards of $853.5 million, revenues of $802.2 million, Adjusted EBITDA of $160.8 million, net income attributable to ViaSat common stockholders of $1.39 per share on a diluted non-GAAP basis or $0.84 per share on a diluted GAAP basis, and cash flows from operations of $169.6 million.

 

“While fiscal year 2011 was a challenging year, the company set new records in several key financial metrics including new contract awards, revenues, operating income, and EBITDA,” said Mark Dankberg, ViaSat CEO and chairman. “Despite significant headwinds due to a difficult defense budget environment, and anticipated capacity constraints for broadband network services – we ended the year on a strong note. Defense backlog is at a record high, driven by significant wins in satellite networks for airborne broadband ISR and situational awareness. We’ve won strategic new commercial satellite network projects – including in-flight WiFi broadband for JetBlue Airways and its LiveTV subsidiary. And, of course, the upcoming launch of ViaSat-1 represents the culmination of over three years of investments and preparation to capitalize on industry leading breakthroughs in satellite bandwidth efficiency. We believe these factors set the stage for sustained growth in each of our business segments.”

 

Financial Results(1)

(In millions, except per share data)

Q4 FY 2011

Q4 FY 2010

FY 2011

FY 2010

Revenues

$216.4

$212.6

$802.2

$688.1

Adjusted EBITDA (4)

$42.8

$48.0

$160.8

$113.8

Net income(2)

$12.1

$10.4

$36.1

$31.1

Diluted per share net income (2)

$0.28

$0.27

$0.84

$0.89

Non-GAAP net income (2, 3)

$18.0

$16.6

$59.9

$54.0

Non-GAAP diluted net income per share (2, 3)

$0.41

$0.43

$1.39

$1.55

Fully diluted weighted average shares

43.6

38.4

43.1

34.8






New contract awards

$271.0

$267.6

$853.5

$773.0

Sales backlog (5)

$528.7

$528.8

$528.7

$528.8

(1) ViaSat uses a 52 or 53 week fiscal year which ends on the Friday closest to March 31. ViaSat quarters for fiscal year 2011 ended on July 2, 2010, October 1, 2010, December 31, 2010, and April 1, 2011.

 

(2) Attributable to ViaSat Inc. common stockholders.

 

(3) All non-GAAP net income numbers have been adjusted to exclude the effects of amortization of acquired intangible assets, acquisition related expenses, and non-cash stock-based compensation expenses, net of tax. A reconciliation of specific adjustments to GAAP results for these periods is included in the table titled “An Itemized Reconciliation Between Net Income Attributable to ViaSat, Inc. on a GAAP Basis and Non-GAAP Basis” contained in this release. A description of our use of non-GAAP information is provided below under “Use of Non-GAAP Financial Information.”

 

(4) Adjusted EBITDA represents net income (loss) attributable to ViaSat Inc. before interest, taxes, depreciation and amortization, adjusted to exclude the effects of non-cash stock based compensation expense and acquisition-related expenses. A reconciliation of specific adjustments to GAAP results for these periods is included in the table titled “An Itemized Reconciliation Between Net Income Attributable to ViaSat Inc. and Adjusted EBITDA” contained in this release. A description of our use of non-GAAP information is provided below under “Use of Non-GAAP Financial Information.”

 

(5)  Includes negative backlog adjustments of $41.9 million in the fourth quarter of fiscal year 2011 and $47.7 million in fiscal year 2011 and $4 million in the fourth quarter of fiscal year 2010 and $28 million in fiscal year 2010.

Government Systems Segment

The Government Systems segment posted quarterly and annual revenues of $102.8 million and $384.1 million, respectively, a 2.1% increase over the fourth quarter of fiscal year 2010 and a 0.3% decrease over the prior fiscal year. The increase in revenues during the fourth quarter of fiscal year 2011 compared to the same period of the prior fiscal year resulted from higher sales of our government satellite communication systems which was offset by lower sales of tactical data link products and services. The slight decrease in revenues during fiscal year 2011 over the prior fiscal year was primarily due to lower sales of information assurance products and tactical data link products and services, offset by higher sales of our government satellite communication systems. Adjusted EBITDA for the Government Systems segment was $13.4 million and $54.4 million in the fourth quarter of fiscal year 2011 and fiscal year 2011, respectively, compared to $23.6 million and $74.5 million for the same periods of the prior fiscal year. New contract awards in the Government Systems segment for the fourth quarter and fiscal year 2011 were $132.9 million and $460.9 million, respectively.

 

Commercial Networks Segment

For the Commercial Networks segment, quarterly and annual revenues were $54.2 million and $183.1 million, respectively, a 0.5% decrease over the fourth quarter of fiscal year 2010 and a 19.4% decrease over the prior fiscal year. The revenue decrease was primarily from lower sales of consumer broadband products as a result of ViaSat no longer recognizing equipment sales to its WildBlue service following our acquisition of WildBlue in December 2009, as well as reduced equipment sales to the distributors of the WildBlue service, pending additional satellite capacity. Revenues were also lower due to lower revenues in our enterprise VSAT networks products and services. These decreases were offset by increased sales of antenna systems products and services and next-generation broadband equipment. Adjusted EBITDA for the Commercial Networks segment was $1.8 million and $3.7 million in the fourth quarter of fiscal year 2011 and fiscal year 2011, respectively, compared to $6.3 million and $18.1 million for the same periods of the prior fiscal year. New contract awards in the Commercial Networks segment for the fourth quarter and fiscal year 2011 were $70.9 million and $153.4 million, respectively.

 

Satellite Services Segment

The Satellite Services segment contributed revenues of $59.4 million for the fourth quarter of fiscal year 2011, a $1.9 million increase over the same period last fiscal year, and $235.0 million for fiscal year 2011, a $159.1 million increase from fiscal year 2010. The revenue increase was attributable primarily to our acquisition of WildBlue in the third quarter of fiscal year 2010, as well as growth in our mobile broadband satellite services. Adjusted EBITDA for the Satellite Services segment was $27.8 million and $103.0 million in the fourth quarter of fiscal year 2011 and fiscal year 2011, respectively, compared to $18.1 million and $20.9 million in the same periods of the prior fiscal year. New contract awards in the Satellite Services segment for the fourth quarter and fiscal year 2011 were $67.2 million and $239.2 million, respectively.

Selected Fiscal Year 2011 and Recent Business Highlights

  • Received a $477 million IDIQ contract to supply the next generation of Blue Force Tracking (BFT) equipment to the U.S. Army, and equipment orders adding approximately $100 million to backlog entering fiscal year 2012.
  • Reached a definitive agreement to provide Ka-band satellite inflight WiFi broadband equipment and service to JetBlue Airways, including an initial $30 million equipment and services order.
  • Completed demonstrations of 4 Mbps transmit speeds over Ku-band in operational missions for broadband ISR platforms for U.S. Special Operations Command forces.
  • Reached over 150 cumulative government ArcLight® satellite broadband ISR and global Command & Control Communication terminals.
  • Reached an agreement with Asia Broadcast Satellite for exclusive access to Ka-band satellite capacity currently available in the Afghanistan region. Established agreement with YahSat to create seamless roaming capabilities for global mobile Ka-band broadband services across the United States, and the Middle East for government and commercial applications. Creating multi-party agreements to add Eutelsat KA-SAT.
  • Demonstrated a Ka-band version of the VR-12 ArcLight airborne ISR terminal capable of ISR transmit speeds up to 10 Mbps.
  • Commenced operational performance testing of our next generation SurfBeam® 2 consumer satellite broadband network over Eutelsat’s 70 Gbps KA-SAT, in anticipation of start of commercial services in Q2 of calendar year 2011.
  • Selected by Boeing to provide the ground based beam forming (GBBF) system for the MEXSAT satellite system, which will provide secure communications for Mexico’s national security needs and civil telecommunications.
  • Acquired SKYLink(SM) airborne broadband service from ARINC Incorporated, adding 80 private business jets to our Yonder® high-speed Internet access network for mobile satellite communications.
  • Awarded $19.5 million in grant funding by the Department of Agriculture Rural Utilities Service (RUS) under the American Reinvestment and Recovery Act of 2009 (ARRA) to provide affordable broadband services using our WildBlue service to unserved and rural areas in 24 Western and Midwestern states.
  • Acquired Stonewood Group Limited, a leader in the design, manufacture and delivery of data at rest encryption products and services that encrypt and protect data on computer hard drives.
  • Introduced the AltaSec® IPS-250 inline network encryptor (INE), the first network encryptor compatible with the National Security Agency (NSA) Cryptographic High Value Product (CHVP) Suite B standards, which enable U.S. warfighters and government agencies to create secure IP networks without the logistics and lifecycle costs associated with Controlled Cryptographic Items (CCI).
  • Industry Recognition:
    • Inaugural Defense Security Service Award of Excellence in Counterintelligence
    • EuroConsult “Strategic Transaction of the Year Award” for WildBlue acquisition
    • Space News Top 50 Space Companies