UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): August 5, 2011
ViaSat, Inc.
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 000-21767 | 33-0174996 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File No.) | (I.R.S. Employer Identification No.) |
6155 El Camino Real
Carlsbad, California 92009
(Address of Principal Executive Offices, Including Zip Code)
(760) 476-2200
(Registrant’s Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition.
On August 5, 2011, ViaSat, Inc. issued a press release reporting its results of operations for the first quarter of fiscal year 2012. A copy of the press release is furnished herewith as Exhibit 99.1.
The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing. The information in this report, including the exhibit hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.
Item 9.01 Financial Statements and Exhibits.
| (d) | Exhibits |
| Exhibit |
Description of Exhibit | |
| 99.1 | Press Release dated August 5, 2011 issued by ViaSat, Inc. | |
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: August 5, 2011 | ViaSat, Inc. | |||||
| By: | /s/ Paul G. Castor | |||||
| Paul G. Castor | ||||||
| Assistant General Counsel | ||||||
2
Exhibit 99.1
| Contact: Heather Ferrante ViaSat Inc. 760-476-2633 www.viasat.com | ||||
|
News | |||
ViaSat Announces First Quarter Fiscal Year 2012 Results
Carlsbad, Calif. –August 5, 2011 – ViaSat Inc. (NASDAQ: VSAT), an innovator in satellite and other wireless networking systems and services, announced financial results for the first quarter of fiscal year 2012. The fiscal first quarter results include new contract awards of $253.6 million, revenues of $195.1 million, Adjusted EBITDA of $36.1 million and net income attributable to ViaSat common stockholders of $0.17 per share on a diluted non-GAAP basis or $0.04 per share on a diluted GAAP basis.
“New orders in the first quarter continued the strength we saw in the fourth quarter of last year, while, as anticipated, revenues and earnings reflected new contract delays in prior periods and costs associated with the ViaSat-1 launch schedule,” said Mark Dankberg, chairman and CEO of ViaSat. “While defense budget constraints are a reality in our industry, our ability to meet urgent airborne broadband needs, along with our Blue Force Tracking backlog, create growth prospects for us in that segment. On the commercial side, ViaSat-1 is now set for launch on September 30, and we are seeing opportunities coming from new commercial contracts, exciting growth in mobile broadband networks, and a good start to Eutelsat’s Tooway® network.”
Financial Results1
| (In millions, except per share data) |
Q1 FY 2012 | Q1 FY 2011 | ||||||
| Revenues |
$ | 195.1 | $ | 192.0 | ||||
| Adjusted EBITDA2 |
$ | 36.1 | $ | 37.6 | ||||
| Net income3 |
$ | 1.8 | $ | 3.3 | ||||
| Diluted per share net income3 |
$ | 0.04 | $ | 0.08 | ||||
| Non-GAAP net income 3, 4 |
$ | 7.2 | $ | 9.6 | ||||
| Non-GAAP diluted net income per share 3, 4 |
$ | 0.17 | $ | 0.23 | ||||
| Fully diluted weighted average shares |
43.7 | 42.1 | ||||||
| New contract awards |
$ | 253.6 | $ | 152.9 | ||||
| Sales backlog5 |
$ | 568.2 | $ | 489.8 | ||||
1 ViaSat uses a 52 or 53 week fiscal year which ends on the Friday closest to March 31. ViaSat quarters for fiscal year 2012 end on July 1, 2011, September 30, 2011, December 30, 2011, and March 30, 2012.
2 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.”
3 Attributable to ViaSat Inc. common stockholders.
4 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.”
5 Amounts include certain backlog adjustments due to contract changes and amendments.
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ViaSat News
Government Systems Segment
The Government Systems segment recorded quarterly revenues of $86.2 million, a 3.0% decrease over the first quarter of fiscal year 2011. The decrease was primarily related to lower sales of tactical data link products and services, offset by higher sales of government satellite communication systems and services. Adjusted EBITDA for the Government Systems segment was $13.6 million in the first quarter of fiscal year 2012, compared to $7.8 million in the same period of the prior fiscal year. New contract awards in our Government Systems segment for the first quarter of fiscal year 2012 were $85.0 million.
Commercial Networks Segment
For the Commercial Networks segment, revenues were $52.1 million for the first quarter, which was a 14.1% increase from the first quarter of fiscal year 2011. The revenue increase was primarily due to an increase in sales of mobile broadband satellite communication systems, consumer broadband products and services, and antenna systems. Adjusted EBITDA for the Commercial Networks segment was $1.6 million in the first quarter of fiscal year 2012, compared to $2.1 million in the same period of the prior fiscal year. New contract awards in our Commercial Networks segment for the first quarter of fiscal year 2012 were $112.2 million.
Satellite Services Segment
Our Satellite Services segment contributed revenues of $56.9 million for the first quarter, which was a 1.2% decrease compared to the first quarter of fiscal year 2011. The revenue decrease was primarily related to lower sales of our managed broadband services. Adjusted EBITDA for the Satellite Services segment was $20.8 million in the first quarter of fiscal year 2012, compared to $27.8 million in the same period of the prior fiscal year. New contract awards in our Satellite Services segment for the first quarter of fiscal year 2012 were $56.4 million.
Selected First Quarter of Fiscal Year 2012 Business Highlights
| • | Eutelsat Communications announced the start of commercial service of KA-SAT, the first satellite to use the transformational ViaSat high-capacity satellite system architecture, initiating increased terminal orders during the quarter for our new SurfBeam® 2 broadband networking system. |
| • | Received a $40 million award to provide Ka-band transmit-receive modules to Thales Alenia Space for the Iridium NEXT satellite constellation. |
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ViaSat News
| • | Received $25.7 million in additional contract awards from Boeing for the ground based beam forming network for MexSat for the Mexican government. This brings the total value for that project to approximately $39 million. |
| • | Began offering low-priced WildBlue® service to unserved rural households in the West and Midwest through funding under the American Recovery and Reinvestment Act, helping create jobs in the U.S. by using local WildBlue dealers, installers, and U.S.-based customer care, and stimulating economic activity among rural households that can now efficiently connect to online commerce and other resources. |
| • | Won the Telecommunications category for the American Technology Awards, which bestows the only “Best Of” awards recognizing all technology products and services for the technology industry, for the innovative design of the ViaSat-1 high-capacity satellite system. |
Safe Harbor Statement
This press release contains forward-looking statements that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934. Forward-looking statements include, among others, statements that refer to the ViaSat-1 launch, growth prospects, new commercial contracts, and growth in mobile broadband networks. Readers are cautioned that actual results could differ materially from those expressed in any forward-looking statements. Factors that could cause actual results to differ include: our ability to successfully launch ViaSat-1 or implement the related broadband satellite services on our anticipated timeline or at all, including potential launch delays, launch failure and/or improper orbital placement; our ability to obtain or maintain required authorizations or contractual arrangements, including with respect to the launch and operation of ViaSat-1; negative audits by the U.S. government; continued turmoil in global financial markets and economies; delays in approving U.S. government budgets; our reliance on U.S. government contracts, and on a small number of contracts which account for a significant percentage of our revenues; our ability to successfully develop, introduce and sell new technologies, products and enhancements; reduced demand for products as a result of continued constraints on capital spending by customers; changes in relationships with, or the financial condition of, key customers or suppliers; reliance on a limited number of third parties to manufacture and supply our products; increased competition and other factors affecting the satellite and wireless communications and secure networking industries generally; the effect of adverse regulatory changes on our ability to sell products; our level of indebtedness and ability to comply with applicable debt covenants; and our dependence on a limited number of key employees. In addition, please refer to the risk factors contained in our SEC filings available at www.sec.gov, including our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update or revise any forward-looking statements for any reason.
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ViaSat News
Conference Call
ViaSat Inc. will host a conference call to discuss the fiscal year 2012 first quarter and results at 1:00 p.m. Eastern Time on Friday, August 5, 2011. The dial-in number is 877-640-9808 in the U.S. and 914-495-8528 internationally. The conference call webcast and other material financial information discussed on our conference call can also be accessed on the Investor Relations section of the ViaSat website at investors.viasat.com. The call will be archived and available on that site for approximately one month immediately following the conference call. A replay of the conference call will be available from 4:00 p.m. Eastern Time on Friday, August 5 until midnight Saturday, August 6 by dialing (855) 859-2056 for U.S. callers and (404) 537-3406 for international callers, and entering the conference ID 89431099.
About ViaSat (www.viasat.com)
ViaSat delivers fast, secure communications, Internet, and remote network access to fixed sites or on-the-move. The company provides networking products and managed network services for enterprise IP applications; is a key supplier of network-centric military communications and encryption technologies and products to the U.S. and allied governments; is the primary technology partner for gateway and customer-premises equipment for consumer and mobile satellite broadband services; and offers high-speed Ka-band satellite broadband services under the WildBlue brand. ViaSat also offers design capabilities and a number of complementary products including monolithic microwave integrated circuits and modules, DVB-S2 satellite communication components, video data link systems, data acceleration and compression, and mobile satellite antenna systems. Based in Carlsbad, California, ViaSat has established a number of worldwide locations for customer service, network operations, and technology development.
Use of Non-GAAP Financial Information
To supplement ViaSat’s consolidated financial statements presented in accordance with generally accepted accounting principles (GAAP), ViaSat uses non-GAAP net income attributable to ViaSat Inc. and Adjusted EBITDA, measures ViaSat believes are appropriate to enhance an overall understanding of ViaSat’s past financial performance and prospects for the future. Non-GAAP net income attributable to ViaSat Inc. excludes the effects of amortization of acquired intangible assets, acquisition related expenses, and non-cash stock-based compensation expenses, net of tax. 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 expenses and acquisition related expenses. We also use Adjusted EBITDA to evaluate operating performance of our segments, to allocate resources and capital to such segments, to measure performance for incentive compensation programs and to evaluate future growth opportunities. We believe the non-GAAP 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 non-GAAP results to the investment community, we believe the inclusion of non-GAAP numbers provides
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ViaSat News
consistency in our financial reporting and facilitates comparisons to the company’s historical operating results. Further, these non-GAAP results are among the primary indicators that management uses as a basis for planning and forecasting in future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for measures of financial performance prepared in accordance with GAAP. A reconciliation of specific adjustments to GAAP results is provided in the tables titled “An Itemized Reconciliation Between Net Income Attributable to ViaSat Inc. on a GAAP Basis and Non-GAAP Basis,” “An Itemized Reconciliation Between Net Income Attributable to ViaSat Inc. and Adjusted EBITDA” and “An Itemized Reconciliation Between Segment Operating Profit (Loss) Before Corporate and Amortization of Acquired Intangible Assets and Adjusted EBITDA” contained in this release.
SurfBeam is a registered trademark of ViaSat, Inc.
WildBlue is a registered service mark of WildBlue Communications, Inc.
Tooway is a registered trademark of Eutelsat SA
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Condensed Consolidated Statement of Operations
(Unaudited)
(In thousands, except per share data)
| Three months ended | ||||||||
| July 1, 2011 | July 2, 2010 | |||||||
| Revenues: |
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| Product revenues |
$ | 122,546 | $ | 125,002 | ||||
| Service revenues |
72,555 | 67,002 | ||||||
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| Total revenues |
195,101 | 192,004 | ||||||
| Operating expenses: |
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| Cost of product revenues |
92,285 | 94,714 | ||||||
| Cost of service revenues |
49,316 | 39,062 | ||||||
| Selling, general and administrative |
41,733 | 38,921 | ||||||
| Independent research and development |
5,694 | 7,314 | ||||||
| Amortization of acquired intangible assets |
4,772 | 4,610 | ||||||
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| Income from operations |
1,301 | 7,383 | ||||||
| Interest income (expense), net |
26 | (2,002 | ) | |||||
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| Income before income taxes |
1,327 | 5,381 | ||||||
| (Benefit from) provision for income taxes |
(267 | ) | 1,981 | |||||
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| Net income |
1,594 | 3,400 | ||||||
| Less: Net (loss) income attributable to the noncontrolling interest, net of tax |
(165 | ) | 139 | |||||
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| Net income attributable to ViaSat Inc. |
$ | 1,759 | $ | 3,261 | ||||
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| Diluted net income per share attributable to ViaSat Inc. common stockholders |
$ | 0.04 | $ | 0.08 | ||||
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| Diluted common equivalent shares |
43,749 | 42,125 | ||||||
|
AN ITEMIZED RECONCILIATION BETWEEN NET INCOME ATTRIBUTABLE TO VIASAT INC. ON A GAAP BASIS AND NON-GAAP BASIS IS AS FOLLOWS:
|
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| Three months ended | ||||||||
| July 1, 2011 | July 2, 2010 | |||||||
| GAAP net income attributable to ViaSat Inc. |
$ | 1,759 | $ | 3,261 | ||||
| Amortization of acquired intangible assets |
4,772 | 4,610 | ||||||
| Acquisition related expenses |
— | 1,185 | ||||||
| Stock-based compensation expense |
4,175 | 4,167 | ||||||
| Income tax effect |
(3,472 | ) | (3,601 | ) | ||||
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| Non-GAAP net income attributable to ViaSat Inc. |
$ | 7,234 | $ | 9,622 | ||||
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| Non-GAAP diluted net income per share attributable to ViaSat Inc. common stockholders |
$ | 0.17 | $ | 0.23 | ||||
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| Diluted common equivalent shares |
43,749 | 42,125 | ||||||
|
AN ITEMIZED RECONCILIATION BETWEEN NET INCOME ATTRIBUTABLE TO VIASAT INC. AND ADJUSTED EBITDA IS AS FOLLOWS:
|
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| Three months ended | ||||||||
| July 1, 2011 | July 2, 2010 | |||||||
| GAAP net income attributable to ViaSat Inc. |
$ | 1,759 | $ | 3,261 | ||||
| (Benefit from) provision for income taxes |
(267 | ) | 1,981 | |||||
| Interest expense (income), net |
(26 | ) | 2,002 | |||||
| Depreciation and amortization |
30,481 | 25,027 | ||||||
| Stock-based compensation expense |
4,175 | 4,167 | ||||||
| Acquisition related expenses |
— | 1,185 | ||||||
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| Adjusted EBITDA |
$ | 36,122 | $ | 37,623 | ||||
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AN ITEMIZED RECONCILIATION BETWEEN SEGMENT OPERATING PROFIT (LOSS) BEFORE CORPORATE AND AMORTIZATION OF ACQUIRED INTANGIBLE ASSETS AND ADJUSTED EBITDA IS AS FOLLOWS:
(In thousands)
| Three months ended July 1, 2011 | Three months ended July 2, 2010 | |||||||||||||||||||||||||||||||
| Government Systems |
Commercial Networks |
Satellite Services |
Total | Government Systems |
Commercial Networks |
Satellite Services |
Total | |||||||||||||||||||||||||
| Segment operating profit (loss) before corporate and amortization of acquired intangible assets |
$ | 7,380 | $ | (3,240 | ) | $ | 1,933 | $ | 6,073 | $ | 1,658 | $ | (1,170 | ) | $ | 11,461 | $ | 11,949 | ||||||||||||||
| Depreciation * |
4,078 | 2,464 | 17,830 | 24,372 | 3,448 | 1,770 | 15,191 | 20,409 | ||||||||||||||||||||||||
| Stock-based compensation expense |
2,143 | 1,060 | 972 | 4,175 | 2,030 | 1,500 | 637 | 4,167 | ||||||||||||||||||||||||
| Other amortization |
— | 1,301 | 44 | 1,345 | — | — | — | — | ||||||||||||||||||||||||
| Acquisition related expenses |
— | — | — | — | 672 | — | 513 | 1,185 | ||||||||||||||||||||||||
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| Adjusted EBITDA before other |
$ | 13,601 | $ | 1,585 | $ | 20,779 | 35,965 | $ | 7,808 | $ | 2,100 | $ | 27,802 | 37,710 | ||||||||||||||||||
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| Other |
157 | (87 | ) | |||||||||||||||||||||||||||||
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| Adjusted EBITDA |
$ | 36,122 | $ | 37,623 | ||||||||||||||||||||||||||||
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| * | The depreciation related to assets that are not specific to a particular segment have been allocated based on sales, which management believes is a reasonable method. |
Condensed Consolidated Balance Sheet
(Unaudited)
(In thousands)
| Assets | As
of July 1, 2011 |
As
of April 1, 2011 |
Liabilities and Equity | As
of July 1, 2011 |
As
of April 1, 2011 |
|||||||||||||
| Current assets: |
Current liabilities: | |||||||||||||||||
| Cash and cash equivalents |
$ | 26,113 | $ | 40,490 | Accounts payable | $ | 64,545 | $ | 71,712 | |||||||||
| Accounts receivable, net |
177,066 | 191,889 | Accrued liabilities | 115,124 | 130,583 | |||||||||||||
| Inventories |
124,439 | 98,555 | Current portion of other long-term debt | 1,366 | 1,128 | |||||||||||||
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| Deferred income taxes |
18,805 | 18,805 | Total current liabilities | 181,035 | 203,423 | |||||||||||||
| Prepaid expenses and other current assets |
24,066 | 21,141 | Senior Notes due 2016, net | 272,420 | 272,296 | |||||||||||||
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| Total current assets |
370,489 | 370,880 | Other long-term debt | 76,710 | 61,946 | |||||||||||||
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| Other liabilities | 24,546 | 23,842 | ||||||||||||||||
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| Property, equipment and satellites, net |
776,420 | 766,139 | Total liabilities | 554,711 | 561,507 | |||||||||||||
| Other acquired intangible assets, net |
77,088 | 81,889 | Total ViaSat Inc. stockholders' equity | 855,583 | 840,125 | |||||||||||||
| Goodwill |
83,702 | 83,532 | Noncontrolling interest in subsidiary | 3,951 | 4,116 | |||||||||||||
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| Other assets |
106,546 | 103,308 | Total equity | 859,534 | 844,241 | |||||||||||||
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| Total assets |
$ | 1,414,245 | $ | 1,405,748 | Total liabilities and equity | $ | 1,414,245 | $ | 1,405,748 | |||||||||
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