ViaSat Announces Record Fourth Quarter and Fiscal Year 2016 Results

CARLSBAD, Calif., May 24, 2016 /PRNewswire/ -- ViaSat Inc. (NASDAQ: VSAT), a global broadband services and technology company, today 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."

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.

Conference Call
ViaSat will host a conference call to discuss the fourth quarter and fiscal year 2016 results.  Details follow:

Forward-Looking Statements
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 opportunities, growth and outlook for fiscal year 2017 and beyond; satellite construction and launch activities; the performance and benefits of our ViaSat-2 and ViaSat-3 class satellites; the expected capacity, service, coverage, service speeds, availability and other features of our satellites, and the timing, cost, economics and other benefits associated therewith; and the roll-out and uptake of products and services by, and services offered by, our airline partners and commercial networks customers. 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 realize the anticipated benefits of the ViaSat-2 and ViaSat-3 class satellites; unexpected expenses related to our satellite projects; our ability to successfully implement our business plan for our broadband satellite services on our anticipated timeline or at all; risks associated with the construction, launch and operation of our satellites, including the effect of any anomaly, operational failure or degradation in satellite performance; our ability to consummate our proposed strategic partnership arrangement with Eutelsat and to realize the anticipated benefits thereof; our ability to successfully develop, introduce and sell new technologies, products and services; audits by the U.S. government; changes in the global business environment and economic conditions; delays in approving U.S. government budgets and cuts in government defense expenditures; our reliance on U.S. government contracts, and on a small number of contracts which account for a significant percentage of our revenues; reduced demand for products and services as a result of continued constraints on capital spending by customers; changes in relationships with, or the financial condition of, key customers or suppliers; our reliance on a limited number of third parties to manufacture and supply our products; increased competition; introduction of new technologies and other factors affecting the communications and defense industries generally; the effect of adverse regulatory changes on our ability to sell products and services; our level of indebtedness and ability to comply with applicable debt covenants; our involvement in litigation, including intellectual property claims and litigation to protect our proprietary technology; 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.

About ViaSat
ViaSat, Inc. (NASDAQ: VSAT) keeps the world connected. As a global broadband services and technology company, ViaSat ensures consumers, businesses, governments and military personnel have communications access – anywhere – whether on the ground or in-flight. The Company's innovations in designing highest-capacity satellites and secure ground infrastructure and terminal technologies coupled with its international network of managed Wi-Fi hotspots enable ViaSat to deliver a best available network that extends the reach and accessibility of broadband internet service, globally. For more information, visit: www.viasat.com, or follow ViaSat on Facebook, Twitter, LinkedIn or YouTube.

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 (loss) 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. 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 non-GAAP results are among the primary indicators that management uses as a basis for evaluating the operating performance of our segments, allocating resources to such segments, 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 below.

Copyright © 2016 ViaSat, Inc. All rights reserved. All other product or company names mentioned are used for identification purposes only and may be trademarks of their respective owners. ViaSat is a registered trademark of ViaSat, Inc.

SOURCE ViaSat Inc.

Related Links

http://www.viasat.com