Press Release
ViaSat Announces Record Orders, Revenues, Earnings and Cash Flows for Fiscal 2006
CARLSBAD, Calif., May 16 /PRNewswire-FirstCall/ -- 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 2006. The fiscal fourth quarter results include record totals for revenues of $118.1 million, new orders of $133.3 million, net income of $0.28 per share on a diluted non-GAAP basis and cash flows from operations of $22.2 million. The company also reported fourth quarter net income of $0.20 per share on a diluted GAAP basis, which includes compensation expense charges of $0.04 per share, or $1.2 million net of tax, related to the acceleration of vesting for certain employee stock options.
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Financial highlights for the fiscal year include record revenues of $433.8 million, net income of $1.00 per share on a diluted non-GAAP basis or $0.81 per share on a diluted GAAP basis, new business orders totaling $443.7 million and cash flows from operations of $52.2 million.
"Fiscal year 2006, our 20th anniversary year, was our best ever, resulting in records in all our basic metrics -- orders, revenues, earnings and cash flows," said Mark Dankberg, chairman and CEO of ViaSat. "Our financial performance reflects a strong competitive posture in our targeted government and commercial market segments. We believe the company is well positioned to capitalize on continued growth in those key markets in our new fiscal year."
Financial Results
For the fourth quarter ended March 31, 2006 (1), the company reported the
following:
(In millions, except
per share data)
Q4 2006 Q4 2005 FY 2006 FY 2005
Revenues $118.1 $90.9 $433.8 $345.9
Net income $5.8 $6.7 $23.5 $19.3
Diluted per share
net income $0.20 $0.24 $0.81 $0.68
Non-GAAP net income (2) $8.2 $7.6 $28.8 $23.3
Diluted per share
non-GAAP net income (2) $0.28 $0.27 $1.00 $0.83
Diluted weighted
average shares 29.5 28.2 28.9 28.1
New orders/Contract
awards $133.3 $129.5 $443.7 $426.2
Sales backlog $374.9 $361.9 $374.9 $361.9
(1) ViaSat uses a 52- or 53-week fiscal year which ends on the Friday
closest to March 31. ViaSat quarters for fiscal year 2006 ended on
July 1, 2005, September 30, 2005, December 30, 2005 and March 31,
2006.
(2) All non-GAAP numbers have been adjusted to exclude the effects of
acquisition charges (amortization of intangible assets) and the
non-GAAP numbers for the fourth quarter and fiscal year 2006 also
exclude the effects of compensation expense from accelerating the
vesting of certain employee stock options. A reconciliation of
specific adjustments to GAAP results for these periods is included in
the "Non-GAAP Condensed Consolidated Statement of Operations" table
contained in this release. A description of our use of non-GAAP
information is provided under "Use of Non-GAAP (Pro Forma) Financial
Information."
Government Segment
The Government segment recorded quarterly revenues of $54.4 million and record annual revenues of $210.6 million, a 14.0% increase over the fourth quarter of fiscal year 2005 and a 20.1% increase over the prior fiscal year. The increase in revenues is primarily from our tactical data links and networking and information assurance products.
Commercial Segment
For the Commercial segment, revenue increased to $64.8 million for the fourth quarter and a record $229.5 million for the fiscal year. These figures represent a 40.9% increase over the fourth quarter of fiscal year 2005 and an increase of 29.4% over the prior fiscal year. The increase in commercial segment revenues is primarily from our enterprise VSAT and consumer broadband product areas.
Selected Fiscal Year 2006 Business Highlights
* Awarded over $56 million from The Boeing Company for a Ground Based
Beam Forming system in support of Mobile Satellite Ventures' planned
new hybrid space / ground mobile network.
* Increased our breadth and depth in satellite broadband with the
purchase of Efficient Channel Coding Inc. ECC adds experience in
state-of-the-art custom digital chip designs to ViaSat, including the
new Adaptive Coding & Modulation (ACM) modes of the S2 version of the
DVB-RCS (Digital Video Broadcast -- Return Channel Satellite) satellite
broadband standard. ECC also supplies custom modem chips, reference
designs, and gateway technology for the Asian IPSTAR spot-beam
satellite system.
* Ramped up production of Data-Over-Cable Service Interface Specification
(DOCSIS®)-based, SurfBeam® two-way broadband satellite terminals.
We shipped over 100,000 units in the first year of Ka-band service
availability, reflecting strong underlying demand and high customer
satisfaction for services offered by WildBlue Communications and
Telesat Canada, as well as several other Ku-band satellite broadband
service providers.
* Sustained momentum in the VSAT networks market, surpassing 70,000
shipments of the LinkStar® hub-based VSAT terminals, introduced our
LinkStarS2™ and LinkWayS2™ products integrating bandwidth saving
DVB S2 technology, and achieved DVB-RCS certification from SatLabs for
the LinkStar VSAT system.
* Increased market share in tactical data links, including total Lot 6
delivery orders valued at $74 million, the single largest order ever
for a Multifunctional Information Distribution System (MIDS) lot
procurement.
* Strengthened our position in the Joint Tactical Radio System (JTRS)
market through successful program design milestones and a new contract
award leading to advanced airborne networking capabilities.
* Sustained a leading position in the emerging DoD High Assurance
Internet Protocol Interoperability Specification (HAIPIS) market. Key
accomplishments include release and certification of the new KG-255
gigabit Ethernet product, continued development of new versions of the
interoperability standard, funding to explore new capabilities and
applications, contract funding for integration of HAIPIS functionality
into important new markets such as JTRS and airborne networking, and
initial product orders for KG-250s from key customer communities.
Safe Harbor Statement
Portions of this release, particularly ViaSat's financial prospects for fiscal year 2007 and beyond and the "Selected Fiscal Year 2006 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: product design flaws or defects; ViaSat's ability to successfully integrate acquired companies; 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.
Conference Call
ViaSat Inc. will host a conference call to discuss fourth quarter and fiscal year 2006 financial results at 5:00 P.M. Eastern Time on Tuesday, May 16, 2006. The dial-in number is (800) 510-0178 in the U.S. and (617) 614-53450 internationally. The pass code is 93508861. An audio replay will be available until 7:00 P.M. EDT May 17, 2006 at (888) 286-8010 (617-801-6888 international) and the pass code is 95389360. 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.
About ViaSat Inc. (www.viasat.com)
ViaSat produces innovative satellite and other wireless communication products that enable fast, secure, and efficient communications to any location. Products include satellite ground systems, information security devices, tactical communication radios, and communication simulators. The company's full line of satellite communication products includes VSAT systems for network access and infrastructure, and Ka-band satellite systems, from user terminals to large gateways. Along with its headquarters in Carlsbad, CA, ViaSat has divisions located in Duluth, GA, and Germantown, MD.
In addition the company has two wholly-owned subsidiaries: US Monolithics, based in Chandler, AZ, which designs and produces monolithic microwave integrated circuits (MMICs) and modules for use in broadband communications for military and commercial applications; and Efficient Channel Coding, based in Cleveland, OH, an innovator in satellite communication components and systems that increase the efficiency of today's advanced satellite, wireless and wire-line communication systems.
Use of Non-GAAP (Pro Forma) Financial Information
Non-GAAP net income excludes the effects of acquisition charges (amortization of intangible assets) and the effects of compensation expense from the accelerated vesting of certain employee stock options in the fourth quarter of fiscal year 2006. Non-GAAP net income is provided to enhance the overall understanding of our current financial performance and our prospects for the future. Specifically, 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. Further, these adjusted non-GAAP 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 "Non-GAAP Condensed Consolidated Statement of Operations" table for a reconciliation of net income to non-GAAP net income. Non-GAAP as presented in this press release may not be comparable to similarly titled measures reported by other companies.
DOCSIS is a registered trademark of Cable Television Laboratories Inc.
Condensed Consolidated Statement of Operations
(Unaudited)
(In thousands, except per share data)
Three months ended Twelve months ended
March 31, April 1, March 31, April 1,
2006 2005 2006 2005
Revenues $118,126 $90,939 $433,823 $345,939
Cost of revenues 87,711 68,204 325,271 262,260
Gross profit 30,415 22,735 108,552 83,679
Operating expenses:
Selling, general &
administrative 16,162 14,191 57,059 48,631
Independent research and
development 5,368 2,722 15,757 8,082
Amortization of intangible
assets 2,088 1,512 6,806 6,642
Income from operations 6,797 4,310 28,930 20,324
Interest, net (130) 373 (200) 304
Income before income taxes
and minority interest 6,667 4,683 28,730 20,628
Provision (benefit) for
income taxes 768 (2,060) 5,105 1,246
Minority interest in net
earnings of subsidiary, net
of tax 141 25 110 115
Net Income $5,758 $6,718 $23,515 $19,267
Diluted net income per share $0.20 $0.24 $0.81 $0.68
Diluted common equivalent
shares 29,485 28,222 28,857 28,147
Non-GAAP Condensed Consolidated Statement of Operations
(Unaudited)
(In thousands, except per share data)
Three months ended Twelve months ended
March 31, April 1, March 31, April 1,
2006 2005 2006 2005
Revenues $118,126 $90,939 $433,823 $345,939
Cost of revenues 87,010 68,204 324,570 262,260
Gross profit 31,116 22,735 109,253 83,679
Operating expenses:
Selling, general &
administrative 15,476 14,191 56,373 48,631
Independent research and
development 5,294 2,722 15,683 8,082
Non-GAAP income from
operations 10,346 5,822 37,197 26,966
Interest, net (130) 373 (200) 304
Non- GAAP income before
income taxes
and minority interest 10,216 6,195 36,997 27,270
Provision (benefit) for
income taxes 1,826 (1,455) 8,050 3,903
Minority interest in net
earnings of subsidiary, net
of tax 141 25 110 115
Non-GAAP net income $8,249 $7,625 $28,837 $23,252
Non-GAAP diluted net income
per share $0.28 $0.27 $1.00 $0.83
Diluted common equivalent
shares 29,485 28,222 28,857 28,147
AN ITEMIZED RECONCILIATION BETWEEN
NET INCOME ON A GAAP BASIS AND
NON-GAAP BASIS IS AS FOLLOWS:
GAAP net income $5,758 $6,718 $23,515 $19,267
Amortization of
intangible assets 2,088 1,512 6,806 6,642
Compensation expense from
accelerated vesting of
certain employee stock
options:
Cost of revenues 701 -- 701 --
Selling, general &
administrative 686 -- 686 --
Independent research and
development 74 -- 74 --
Income tax effect (1,058) (605) (2,945) (2,657)
Non-GAAP net income $8,249 $7,625 $28,837 $23,252
Condensed Consolidated Balance Sheet
(Unaudited)
(In thousands)
March 31, April 1, March 31, April 1,
Assets 2006 2005 Liabilities and 2006 2005
Stockholders'
Equity
Current Assets: Current
Cash and S-T liabilities:
investments $36,887 $14,741 Accounts payable $50,577 $38,523
Accounts Accrued
receivable, net 144,715 141,298 liabilities 40,969 32,410
Inventory 49,883 36,612
Deferred income Total current
taxes 7,008 7,027 liabilities 91,546 70,933
Other current
assets 5,960 10,114
Total current
assets 244,453 209,792
Other
liabilities 9,389 3,911
Goodwill 28,133 19,492 Total
liabilities 100,935 74,844
Other intangible Minority
assets, net 23,983 20,990 interest 836 698
Property and
equip, net 46,211 33,278
Other assets 22,289 18,273 Total stockholders'
equity 263,298 226,283
$365,069 $301,825 $365,069 $301,825
SOURCE ViaSat Inc.
-0- 05/16/2006
/CONTACT: June Harrison of ViaSat Inc., +1-760-476-2480/
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/Web site: http://www.viasat.com /
(VSAT)
CO: ViaSat Inc.
ST: California
IN: CPR HRD STW NET ITE
SU: ERN ERP CCA
EW-SF
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