ViaSat, Inc.
Feb 10, 2009

ViaSat Announces Fiscal Third Quarter and Year-to-Date Results

CARLSBAD, Calif., Feb 10, 2009 (BUSINESS WIRE) -- ViaSat Inc. (NASDAQ:VSAT), a producer of innovative satellite and other wireless communications and networking systems, announced financial results for the third quarter ended January 2, 20091. The fiscal third quarter results include net new contract awards of $143.1 million and revenues of $150.4 million. Year-to-date, ViaSat reported net new contract awards of $604.5 million and revenues of $462.6 million, both records. For the third quarter, the company also reported net income of $0.43 per share on a diluted non-GAAP basis or $0.34 per share on a diluted GAAP basis, both quarterly records. Year-to-date, the company reported net income of $1.11 per share on a diluted non-GAAP basis or $0.82 per share on a diluted GAAP basis.

"Overall, we are very pleased with our business situation in the context of the macro economic environment," said Mark Dankberg, ViaSat CEO and chairman. "Our earnings and cash generation have been consistent with our plans. Exceptionally strong year to date contract awards, combined with more cautious spending, and careful contract backlog management, lend confidence to maintaining our outlook for continued revenue and earnings growth this year and next."

Financial Results1

(In millions, except per share data)
Q3 FY09
 
Q3 FY08
  First 9 Mos. FY09   First 9 Mos. FY08
Revenues $ 150.4 $ 152.1 $ 462.6 $ 427.2
Net income $ 10.7 $ 10.2 $ 26.2 $ 23.0
Diluted per share net income $ 0.34 $ 0.32 $ 0.82 $ 0.71
Non-GAAP net income 2 $ 13.7 $ 12.9 $ 35.3 $ 30.9
Non-GAAP diluted

net income per share 2

$

0.43

$

0.40

$

1.11

$

0.96

Fully diluted weighted average shares   31.7   32.5   31.8   32.3
         
New orders/Contract awards $ 143.1 $ 136.0 $ 604.5 $ 461.5
Sales backlog $ 516.4 $ 422.9 $ 516.4 $ 422.9

1 ViaSat uses a 52 or 53 week fiscal year which ends on the Friday closest to March 31. ViaSat's quarters for fiscal year 2009 end on June 27, 2008, October 3, 2008, January 2, 2009 and April 3, 2009. Fiscal year 2009 is a 53 week year, compared with a 52 week year in fiscal year 2008. The second quarter of fiscal year 2009 included one additional week for a total of 14 weeks. ViaSat does not believe the extra week results in a material impact on its financial results.

2 All non-GAAP numbers have been adjusted to exclude the effects of acquisition charges (amortization of intangible assets) and non-cash stock-based compensation expenses. A reconciliation of specific adjustments to GAAP results for these periods is included in the "Reconciliation Between Net Income on a GAAP Basis and Non-GAAP Basis" table contained in this release. A description of our use of non-GAAP information is provided below under "Use of Non-GAAP Financial Information."

Government Systems Segment

The Government Systems segment posted quarterly revenues of $93.8 million for the third quarter of fiscal 2009, a 10.4% increase over the third quarter of fiscal year 2008. The growth was primarily related to higher revenues for next generation military satellite communication systems and information assurance development programs, offset by decreased revenues from our majority-owned subsidiary, TrellisWare. New contract awards in our Government Systems segment for the third quarter of fiscal year 2009 were $39.9 million.

Commercial Networks Segment

For the Commercial Networks segment, revenues were $54.2 million for the third quarter of fiscal 2009, a 17.1% decrease from the third quarter of fiscal year 2008. The revenue decrease was primarily due to a reduction in consumer broadband product sales offset by increased sales related to mobile satellite systems. New contract awards in our Commercial Networks segment for the third quarter of fiscal year 2009 were $101.5 million.

Satellite Services Segment

Our Satellite Services segment contributed revenues of $2.4 million for the third quarter of fiscal 2009, which was a 37.9% increase from the same period last year. New contract awards in our Satellite Services segment for the third quarter were $1.7 million.

Selected Third Quarter 2009 Business Highlights

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements that refer to maintaining our outlook for continued revenue and earnings growth this year and next. In some cases, forward-looking statements can be identified by terminology such as "believes," "expects," "may," "will," "should," "could," "anticipates" or "intends" or the negative of such terms or other comparable terminology. ViaSat wishes to caution you that actual results could differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ include: continued turmoil in global financial markets and economies; the availability and cost of credit; the ability to have manufactured or successfully launch ViaSat-1, our first broadband satellite, or implement our related satellite service; our ability to successfully develop, introduce and sell new products and enhancements; reduced demand for our products as a result of continued constraints on capital spending by our customers; our reliance on U.S. Government contracts; changes in relationships with, or the financial condition of, key customers or suppliers; recent disruptions in the geopolitical environment in many parts of the world; increased price competition for our products; and other factors affecting the communications industry generally. In addition, ViaSat refers you to the risk factors contained in its SEC filings available at www.sec.gov, including without limitation, the most recent ViaSat Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. 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. 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 for any reason.

Conference Call

ViaSat Inc. will host a conference call on Tuesday, February 10, 2009, at 5:00 p.m. Eastern Time, to discuss the results for the third quarter of fiscal year 2009. The dial-in number is (877) 856-1960 in the U.S. and (719) 325-4810 internationally. A replay of the conference call will be available from 8:00 p.m. ET through midnight Saturday, March 14 by dialing (888) 203-1112 for U.S. callers and (719) 457-0820 for international callers, and entering the passcode 4247928. You can also access our conference call webcast and other material financial information discussed on our conference call (including any information required by Regulation G) on the Investor Relations section of our website at www.viasat.com. The call will be archived and available on that site for approximately one month immediately following the conference call.

About ViaSat (www.viasat.com)

ViaSat produces innovative satellite and other digital communication products that enable fast, secure and efficient communications to any location. 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 to the U.S. government; and is the primary technology partner for gateway and customer-premises equipment for consumer and mobile satellite broadband services. The company has five subsidiaries: US Monolithics, Efficient Channel Coding, Enerdyne Technologies, Intelligent Compression Technologies and JAST. These companies design and produce complementary products such as monolithic microwave integrated circuits, DVB-S2 satellite communication components, video data link systems, data acceleration and compression products and mobile satellite antenna systems. ViaSat has locations in Carlsbad, CA, and Duluth, GA, along with its Comsat Laboratories division in Germantown, MD. Additional offices are located in Boston, MA, Baltimore, MD, Washington DC, Tampa, FL, Gilbert, AZ, Australia, China, India, Italy, and Spain.

Use of Non-GAAP Financial Information

To supplement ViaSat's consolidated financial statements presented in accordance with GAAP, ViaSat uses non-GAAP net income, a measure ViaSat believes is appropriate to enhance an overall understanding of its past financial performance and prospects for the future. Non-GAAP net income excludes the effects of acquisition charges (amortization of intangible assets) and non-cash stock-based compensation expenses. 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 consistency in our financial reporting and facilitates comparisons to the company's historical operating results. Further, these adjusted 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 generally accepted accounting principles. A reconciliation of specific adjustments to GAAP results is provided in the "Reconciliation Between Net Income on a GAAP Basis and Non-GAAP Basis" table contained in this release.

Tooway is a trademark of Eutelsat Communications, S.A.

SurfBeam and ArcLight are registered trademarks of ViaSat Inc.

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 endedNine months ended
January 2, 2009December 28, 2007January 2, 2009December 28, 2007
 
Revenues $ 150,362 $ 152,053 $ 462,603 $ 427,240
Operating expenses:
Cost of revenues 105,529 105,842 329,100 306,751
Selling, general & administrative 23,952 20,920 72,986 59,074
Independent research and development 6,985 8,405 23,481 24,215
Amortization of intangible assets   2,337     2,389     7,017     7,173  
Income from operations 11,559 14,497 30,019 30,027
Interest, net   (19 )   1,309     1,074     3,856  
Income before income taxes and minority interest 11,540 15,806 31,093 33,883
Provision for income taxes 914 4,803 4,822 9,863
Minority interest in net (loss) earnings of subsidiary, net of tax   (40 )   778     56     1,029  
Net Income $ 10,666   $ 10,225   $ 26,215   $ 22,991  
Diluted net income per share $ 0.34   $ 0.32   $ 0.82   $ 0.71  
Diluted common equivalent shares 31,699 32,458 31,826 32,309
 
 
 
AN ITEMIZED RECONCILIATION BETWEEN NET INCOME
ON A GAAP BASIS AND NON-GAAP BASIS IS AS FOLLOWS:
 
GAAP net income $ 10,666 $ 10,225 $ 26,215 $ 22,991
Amortization of intangible assets 2,337 2,389 7,017 7,173
Stock-based compensation expense: 2,532 1,857 7,581 5,550
Income tax effect   (1,852 )   (1,620 )   (5,509 )   (4,831 )
Non-GAAP net income $ 13,683   $ 12,851   $ 35,304   $ 30,883  
Non-GAAP diluted net income per share $ 0.43   $ 0.40   $ 1.11   $ 0.96  
Diluted common equivalent shares 31,699 32,458 31,826 32,309
 
Condensed Consolidated Balance Sheet
(Unaudited)
(In thousands)
       
AssetsJanuary 2, 2009March 28, 2008

Liabilities and
Stockholders'
Equity

January 2, 2009 March 28, 2008
 
 
Current Assets: Current liabilities:
Cash and S-T investments $ 63,711 $ 125,219 Accounts payable $ 53,357 $ 52,317
Accounts receivable, net 166,149 155,484 Accrued liabilities 66,679 75,058
Inventory 62,391 60,326 Line of credit   -   -
Deferred income taxes 18,664 18,664 Total current liabilities 120,036 127,375
Other current assets   21,383   15,933
Total current assets   332,298   375,626 Other liabilities   18,693   17,290
Goodwill 66,407 66,407 Total liabilities   138,729   144,665
Other intangible assets, net 18,460 25,477 Minority interest 3,823 2,289
Property and equip, net 145,644 64,693
Other assets   21,986   18,891 Total stockholders' equity   442,243   404,140
$ 584,795 $ 551,094 $ 584,795 $ 551,094

SOURCE: ViaSat Inc.

Emily Parker
ViaSat Inc.
+1 760-476-2242
www.viasat.com

Copyright Business Wire 2009