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ViaSat Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 9, 2011 01:22PM
ViaSat Inc. (VSAT) filed Quarterly Report for the period ended 2011-09-30. Viasat Inc. has a market cap of $1.9 billion; its shares were traded at around $45.13 with a P/E ratio of 40.7 and P/S ratio of 2.4. Viasat Inc. had an annual average earning growth of 0.1% over the past 5 years.
Highlight of Business Operations:Historically, a significant portion of our revenues has been derived from customer contracts that include the research and development of products. The research and development efforts are conducted in direct response to the customers specific requirements and, accordingly, expenditures related to such efforts are included in cost of sales when incurred and the related funding (which includes a profit component) is included in revenues. Revenues for our funded research and development from our customer contracts were approximately $53.4 million or 24% and $54.0 million or 27% of our total revenues in the three months ended September 30, 2011 and October 1, 2010, respectively. Revenues for our funded research and development from our customer contracts were approximately $107.8 million or 26% and $93.6 million or 24% of our total revenues in the six months ended September 30, 2011 and October 1, 2010, respectively.
Product revenues increased from $127.6 million to $146.6 million during the second quarter of fiscal year 2012 compared to the same period last year. The increase in product revenues was primarily due to higher product sales of $6.7 million in government satellite communication systems, $6.5 million in mobile broadband satellite communication systems, $4.8 million in enterprise VSAT networks and products, $3.1 million in consumer broadband products, $2.7 million in antenna systems products and $2.1 million from satellite payload technology development programs. These increases were offset by lower product sales of $5.2 million in information assurance products and $2.5 million in tactical data link products.
In the second quarter of fiscal year 2012 compared to the same period last fiscal year, commercial networks segment revenues increased approximately $19.9 million, primarily due to an increase in product revenues of $19.6 million, while service revenues remained relatively flat. The increase in our commercial networks segment product revenues was primarily due to revenue increases of $6.5 million in mobile broadband satellite communication systems, $4.8 million in enterprise VSAT networks and products, $3.1 million in consumer broadband products, $2.7 million in antenna systems products and $2.1 million from satellite payload technology development programs.
Service revenues increased from $137.3 million to $149.0 million during the first six months of fiscal year 2012 when compared to the first six months of fiscal year 2011 primarily driven by growth in government satellite communication systems services of $6.2 million, information assurance services of $3.8 million, tactical data link services of $2.6 million and $1.8 million satellite networking development program services, offset by a decrease in WildBlue services of $2.0 million. The decrease in WildBlue service revenues was mainly due to the lower number of wholesale subscribers as our sales channels provisioned fewer customers with existing service plans in anticipation of the ViaSat-1 satellite related service offerings.
As of September 30, 2011, the Credit Facility, as amended, provided a revolving line of credit of $325.0 million (including up to $35.0 million of letters of credit) with a maturity date of January 25, 2016. Borrowings under the Credit Facility bear interest, at our option, at either (1) the highest of the Federal Funds rate plus 0.50%, Eurodollar rate plus 1.00% or the administrative agents prime rate as announced from time to time, or (2) at the Eurodollar rate plus, in the case of each of (1) and (2), an applicable margin that is based on the ratio of our debt to earnings before interest, taxes, depreciation and amortization (EBITDA) as defined in the Credit Facility. At September 30, 2011, the weighted average effective interest rate on our outstanding borrowings under the Credit Facility was 3.23%. The Credit Facility is guaranteed by certain of our domestic subsidiaries and collateralized by substantially all of our respective assets. The Credit Facility contains financial covenants regarding a maximum leverage ratio, a maximum senior secured leverage ratio and a minimum interest coverage ratio. In addition, the Credit Facility contains covenants that restrict, among other things, our ability to sell assets, make investments and acquisitions, make capital expenditures, grant liens, pay dividends and make certain other restricted payments. At September 30, 2011, we had $170.0 million in principal amount of outstanding borrowings under the Credit Facility and $8.8 million outstanding under standby letters of credit, leaving borrowing availability under the Credit Facility as of September 30, 2011 of $146.2 million. Subsequent to the quarter end, on October 31, 2011, we amended the Credit Facility torevise the definition of EBITDA for certain earnings impacts related to the delay in the launch of our ViaSat-1 satellite.
Stocks Discussed: VSAT,