ViaSat Announces Record
Fourth Quarter and
Fiscal Year 2016 Results
May 24, 2016
ViaSat Inc. announced
financial results for
the fiscal fourth
quarter ended
March 31, 2016.
"Fiscal 2016 was a
milestone year for
ViaSat both financially
and strategically. Our
results highlight three
important themes around
current performance
momentum, the potential
of our next-generation
satellite technology and
a favorable business
outlook," said
Mark Dankberg,
ViaSat chairman and CEO.
"First, we had very
strong performance in
the Satellite Services
and Government Systems
segments, areas we
anticipate will continue
to propel our growth.
Solid revenue and margin
growth in both of these
segments led to a
combined 22% Adjusted
EBITDA increase for the
fourth quarter of fiscal
year 2016 compared to
the fourth quarter of
fiscal year 2015 for
those two segments.
Fiscal year 2016
Adjusted EBITDA grew 35%
for those segments
compared to the Adjusted
EBITDA in fiscal year
2015, excluding the
second quarter 2015
settlement impact. The
second theme is that
technical progress has
enabled us to start
construction of the
first two ViaSat-3 class
satellites. Since we are
building – versus buying
– the payloads, the
start of the
construction program
involves significant new
research and development
(R&D) expenses that
began impacting Adjusted
EBITDA performance in
our commercial segment
this fiscal year; ViaSat-3
class satellite
construction expenses
are expected to grow in
future quarters. The
third theme is a
favorable growth outlook
supported by record new
orders for fiscal 2016
combined with the
disruptive satellite
technology we are
bringing to market. Our
ViaSat-2 satellite
launch window begins in
less than seven months.
ViaSat-2 is expected to
more than double the
capacity of the
record-breaking ViaSat-1
satellite, with even
greater gains expected
from the first ViaSat-3
class satellites."
Financial
Results
(In
millions,
except
per
share
data)
Q4
FY16
Q4
FY15
Year-Over-Year
Change
FY16
FY15
Year-Over-Year
Change
Revenues1
$
372.0
$
364.8
2.0%
$
1,417.4
$
1,382.5
2.5%
Adjusted
EBITDA1
$
80.7
$
89.1
(9.5)%
$
330.7
$
344.8
(4.1)%
Net
income1,2
$
4.5
$
7.5
(41.1)%
$
21.7
$
40.4
(46.1)%
Diluted
per
share
net
income1,2
$
0.09
$
0.16
(43.8)%
$
0.44
$
0.84
(47.6)%
Non-GAAP
net
income1,2
$
14.3
$
17.3
(17.6)%
$
61.0
$
76.1
(19.8)%
Non-GAAP
diluted
per
share
net
income1,2
$
0.29
$
0.36
(19.4)%
$
1.23
$
1.58
(22.2)%
Fully
diluted
weighted
average
shares
49.8
48.6
2.5%
49.4
48.3
2.4%
New
contract
awards1
$
451.2
$
291.3
54.9%
$
1,483.3
$
1,413.4
4.9%
Sales
backlog3,
1
$
941.9
$
915.6
2.9%
$
941.9
$
915.6
2.9%
Segment
Results
(In
millions)
Q4
FY16
Q4
FY15
Year-Over-Year
Change
FY16
FY15
Year-Over-Year
Change
Satellite
Services
New
contract
awards1
$
135.2
$
121.2
11.6%
$
511.1
$
555.9
(8.1)%
Revenues1
$
145.4
$
130.4
11.5%
$
559.2
$
499.9
11.9%
Adjusted
EBITDA1
$
63.7
$
52.5
21.1%
$
243.7
$
208.0
17.1%
Commercial
Networks
New
contract
awards
$
74.6
$
41.1
81.9%
$
228.0
$
215.5
5.8%
Revenues
$
62.2
$
84.0
(26.0)%
$
250.7
$
347.1
(27.8)%
Adjusted
EBITDA
$
(26.6)
$
0.8
(3,345.5)%
$
(56.5)
$
17.0
(433.1)%
Government
Systems
New
contract
awards
$
241.4
$
129.0
87.0%
$
744.2
$
642.0
15.9%
Revenues
$
164.4
$
150.3
9.3%
$
607.5
$
535.5
13.4%
Adjusted
EBITDA
$
43.5
$
35.6
22.2%
$
143.6
$
119.4
20.3%
1
During
the
fiscal
years
ended
March
31, 2016
and
April 3,
2015,
the
Company
recorded
$27.5
million
and
$53.7
million,
respectively,
with
respect
to
amounts
realized
under a
legal
settlement
agreement
associated
with
certain
patents
and
intellectual
property,
of which
$25.3
million
and
$33.0
million
were
recognized
as
product
revenues
in the
Company's
Satellite
Services
segment,
no
amounts
and
$18.7
million
were
recognized
as a
reduction
to
selling,
general
and
administrative
expenses
in the
Company's
Satellite
Services
segment,
and $2.2
million
and $2.0
million
were
recognized
as
interest
income
in the
condensed
consolidated
financial
statements,
respectively.
Further
information
on the
settlement
is
contained
in
ViaSat's
Annual
Report
on Form
10-K for
the
fiscal
year
ended
March
31,
2016.
2
Attributable
to
ViaSat,
Inc.
common
stockholders.
3
Amounts
include
certain
backlog
adjustments
due to
contract
changes
and
amendments.
Companion 8-K
Announcement from May 24,
2016
In addition to its fourth
quarter and fiscal year 2016
results announcement, ViaSat today
announced:
The amendment of its
revolving credit
facility, including an
increase in the size of
the facility from
$500.0 million to
$800.0 million,
extension of the
facility's maturity for
approximately five
years, and changes to
the covenants in the
facility to provide
greater flexibility,
including for global
expansion.
Satellite Services
In the fiscal fourth quarter
of 2016, ViaSat's Satellite
Services segment achieved
record high revenues for the
third consecutive quarter,
up 12% year-over-year, with
continued growth in its
residential broadband and
in-flight connectivity
businesses. Adjusted EBITDA
performance for the fiscal
fourth quarter also grew, up
21% over last year's period,
driving the segment's
Adjusted EBITDA margin up to
44%. Highlights for the
quarter include:
Consumer subscribers
reached 697,000 at the
end of the fiscal fourth
quarter, up 2%
year-over-year.
Average revenue per
user (ARPU) in the
residential business
grew by 7%
year-over-year to
$58.46, a new
record, as higher value
plans expanded alongside
growth from value-added
services such as VoIP
and Boost 25, the
Company's new 25 Mbps
broadband internet
service.
ViaSat's in-flight
internet services grew
steadily to 476
commercial aircraft in
service at the end of
fiscal year 2016.
Revenue per plane also
increased as ViaSat's
leading Ka-band service
continued to drive
passenger engagement.
ViaSat announced
that Qantas Airways,
Australia's
largest domestic and
international airline,
has become the first
Asia Pacific
airline to select
ViaSat's in-flight
internet service, and
the first airline in the
region to choose its
hybrid Ku-/Ka-band
antenna for connecting
to the ViaSat global
satellite network.
Subsequent to the
fiscal fourth quarter
end, ViaSat announced it
signed a multi-year
agreement with Dassault
Aviation to deliver a
bundled global Ku-band
broadband services
offering, inclusive of
in-cabin network
equipment and in-flight
connectivity service for
Dassault Aviation Falcon
aircraft.
The Satellite Services
segment achieved record high
fiscal year revenues of
$559.2 million, up
12%, and record high fiscal
year Adjusted EBITDA of
$243.7 million, up
17%, compared to the same
period last year. Excluding
the
$39.7 million benefit
from the fiscal year 2015
second quarter portion of
the Loral settlement,
Satellite Services segment
revenues grew 17% and
Adjusted EBITDA grew 45%
compared to fiscal year
2015.
Commercial Networks
ViaSat's Commercial Networks
segment reported lower
revenues and Adjusted EBITDA
for the fiscal fourth
quarter and fiscal year 2016
compared to the same periods
last fiscal year. Revenue
decreases for the fiscal
fourth quarter and fiscal
year resulted from a wind
down of the initial
infrastructure portion of
the nbn™ project, and
certain larger antenna
systems and mobile broadband
satellite communications
systems programs nearing
completion. These declines
were partially offset by
revenue increases from
initial broadband terminal
orders under the nbn
project, as well as a fiscal
year increase in revenues
associated with an existing
next-generation Ka-band
system contract in
Canada. Adjusted
EBITDA results were
primarily impacted by higher
R&D activities as the
Company increased its
investment in its
next-generation ViaSat-3
broadband communications
platform as well as
increased R&D expenses for
commercial aeronautical
broadband programs in
support of, and in
anticipation of,
installations and
Supplemental Type
Certificate (STC) approval
on several new aircraft
types. Highlights for the
quarter include:
Strong progress was
made on the ViaSat-2
satellite program, with
the satellite launch
window beginning in less
than seven months with
launch partner
Arianespace. ViaSat-2 is
expected at launch to be
the highest capacity
satellite in the world,
with double the
effective bandwidth
economics of ViaSat-1
plus seven times more
geographic coverage.
The Company began
ramping investments in
the build of its
groundbreaking ViaSat-3
broadband communications
platform. In the fourth
quarter of fiscal year
2016, construction
commenced on two ViaSat-3
class spacecraft, the
Company's
third-generation
high-capacity Ka-band
satellite design. The
ViaSat-3 class
satellites are expected
to substantially improve
satellite capacity,
speed and coverage area.
Subsequent to the
fiscal fourth quarter
end, ViaSat received STC
approval from the FAA
for its Ka-band
satellite antenna and
hybrid Ku-/Ka-band
radome on Airbus A320
aircraft. This
certification, coupled
with ViaSat's in-cabin
distribution STC,
enables airlines to
deploy ViaSat's complete
end-to-end global
in-flight connectivity
system, giving
passengers access to the
industry's fastest,
highest capacity
in-flight internet
service.
Government Systems
In the fourth quarter of
fiscal year 2016, ViaSat's
Government Systems segment
revenues and Adjusted EBITDA
reached record highs for the
second consecutive quarter.
Revenue increased to
$164.4 million, or 9%
growth year-over-year, while
Adjusted EBITDA grew 22% to
$43.5
million compared to
the prior fiscal year
period. Revenue growth
reflected an increase in
government satellite
communications systems
products and tactical data
link products sales,
partially offset by lower
information assurance
products revenues. Adjusted
EBITDA reflected the
Company's expanded product
and service revenue base as
government mobile broadband
platforms continued to grow,
with approximately 400
government aircraft in
service, as well as a
decrease in Government
Systems segment R&D
spending. Highlights for the
quarter include:
Record
$241.4 million in
segment awards received
during the fiscal fourth
quarter, reflecting a
1.5 to 1 book-to-bill
ratio, and yielding
record segment backlog
of
$485.6 million, a
27% increase over the
same period last year.
In
May 2016,
subsequent to the fiscal
fourth quarter end,
ViaSat announced its
Battlefield Awareness
and Targeting System –
Dismounted (BATS-D)
handheld Link 16 radio,
a new digital device
that will enable U.S.
forces to engage enemy
forces 20 times faster
than current radios.
Development of the
ViaSat BATS-D radio is
expected to be completed
this calendar year, and
production is also
scheduled to begin by
the end of the calendar
year.
ViaSat's Government Systems
segment revenues grew 13% to
a record high of
$607.5 million and
Adjusted EBITDA grew 20% to
a record high of
$143.6 million,
compared to fiscal year
2015. Segment awards for the
fiscal year reached a record
$744.2 million.
