22 Aug 19. Cache Creek Industries Acquires Brandywine Communications. The California-Based Company Represents Cache Creek’s Third Acquisition in the Defense Electronics Sector. Cache Creek Industries, LLC, a Los Angeles-based private equity firm, today announced that it has partnered with Rockmont Capital Partners, Ltd. to acquire Brandywine Communications, Inc., (“Brandywine”) a leading designer and manufacturer of mission critical time and frequency devices that serve the military and infrastructure markets. Founded in 1995 by its current President, Gary Smith, Brandywine designs and manufactures precision time and frequency products and integrated systems that are used on satellite hubs, naval vessels and military aircraft to ensure highly accurate and reliable communications and to support other platform missions. The products are ruggedized to perform in the most demanding environmental conditions.
“Brandywine aligns with Cache Creek’s investment thesis of acquiring niche providers of high reliability, mission critical products to the aerospace and defense markets. Most importantly, Brandywine is run by a highly talented management team that shares our philosophy of “Culture-Driven Performance.” We look forward to working with the entire Brandywine team in the United States and United Kingdom,” commented Dean Douglas, a Partner at Cache Creek who will serve as the new Brandywine Chairman. “Brandywine is Cache Creek’s third investment in the defense electronics sector in just over a year. The company represents our largest acquisition to date, and we are excited about having Brandywine work closely with our other portfolio companies (Mountain Secure Systems https://mountainsecuresystems.com/ and Automated Business Power http://www.abp.com/) to drive customer and operational synergies,” said Jake Blumenthal, a Partner at Cache Creek.
“I am very excited to partner with Cache Creek. Their highly relevant investment and operational experience will enable Brandywine to achieve its long-term growth ambitions while maintaining its customer centric culture,” commented Gary Smith, who re-invested in the transaction and will continue to serve as President.
Academy Bank provided the senior debt and Medallion Capital and Spell Capital Mezzanine co-invested in the equity and provided the mezzanine financing for the transaction. Calfee, Halter & Griswold LLP acted as legal advisor to Cache Creek Industries.
About Cache Creek Industries
Cache Creek Industries, LLC is a Los Angeles-based private equity firm focused on making control investments in companies with up to $10 million of EBITDA. The firm invests in companies in the Industrial Growth and Aerospace & Defense sectors. Cache Creek actively partners with talented management teams to drive value creation by enhancing culture, people, creativity, performance, and execution. www.cachecreekllc.com
About Rockmont Capital
Rockmont Capital Partners, Ltd. is a private investment company based in Denver, Colorado. Its mission is to build wealth by investing in and acquiring companies and to work with their management to build highly profitable and successful businesses. The firm is opportunistic in its investments, creative in solving financial and business problems and it focuses on working with people it trusts, respects and enjoys. www.rockmontcapital.com
About Brandywine Communications
Founded in 1995, Brandywine is a leading designer and manufacturer of mission critical time and frequency systems for the military and infrastructure markets. The company operates manufacturing facilities in the United States and United Kingdom and its products are sold globally. www.brandywinecomm.com (Source: BUSINESS WIRE)
22 Aug 19. Ministers asked to step in over Cobham’s sale to US. Investment bankers, lawyers and accountants working on the £4bn takeoverof one of Britain’s biggest defence and aerospace companies could earn almost £220m from the controversial deal. The takeover of Cobham is being opposed by the family that founded it. Yesterday Lady Cobham, 76, whose late husband previously led the business, called the fees “ridiculous”. Banks including Goldman Sachs and Rothschild are set to earn fees, as are law firms Allen & Overy and Linklaters.
Cobham, which is based in Dorset, is due to become the latest British company to succumb to a foreign takeover after it agreed last month to be bought by the American private equity firm Advent International.
The deal has raised concerns that one of the country’s leading industrial assets is being sold off. It marks the first serious test of the appetite of Boris Johnson’s government for overseas takeovers of strategic businesses.
The government disclosed yesterday that Andrea Leadsom, the business secretary, recently met David Lockwood, 57, the chief executive of Cobham, to discuss the deal.
The company began 85 years ago as an air-to-air refuelling firm founded by Sir Alan Cobham, an aviator and adventurer who flew during the First World War and pioneered long-distance flight. It generates annual revenues of £1.9bn and its refuelling technology remains at the forefront of the industry. Cobham has about 10,000 employees, including 1,700 in the UK.
Advent, which is based in Boston, Massachusetts, specialises in using debt to buy businesses. Private equity firms are typically not long-term investors. It emerged yesterday that Advent expects to pay City advisers working on its Cobham bid up to £189.6m if it succeeds. Cobham estimated it would pay its advisers £29.1m. The lion’s share of Advent’s fees are for its debt financing arrangements. It also expects to pay lawyers up to £7.6m and as much as £2.4m for accountancy advice. Cobham’s bill includes £24 m on advice from Bank of America Merrill Lynch, JP Morgan Cazenove and Rothschild.
Lady Cobham, whose husband, Sir Michael, was the son of the founder, was critical of the fees Cobham is paying. Her family owns a 1.5 per cent stake in the business. “It just seems on first sight ridiculous,” she said. “It seems a lot of money.”
While less than 5 per cent of Cobham’s business is with the Ministry of Defence, Lady Cobham wrote to the government this month to urge it to intervene on the ground that the sale is against the national interest. Ben Wallace, the defence secretary, has said that he will examine her concerns. Chuka Umunna, the Liberal Democrats’ business spokesman, has also called on ministers to review the national security implications. Advent said yesterday that it was holding talks with the government over possibly making legally binding undertakings about Cobham’s future in a move that could assuage worries about jobs and investment. The Department for Business, Energy and Industrial Strategy said the discussions focused “specifically on the economic implications of the proposed merger”. A spokeswoman said: “The government’s twin goals are to support private sector innovation while safeguarding the public interest.”
(Source: The Times)
22 Aug 19. Exploit BATM’s hidden value. I have had an enlightening results call with the directors of BATM Advanced Communications (BVC:45p), a provider of medical laboratory systems, cyber security and network solutions with extensive operations in Israel.
The £197m market capitalisation company is celebrating its twentieth anniversary on the main list of the London Stock Exchange. It’s shaping up to be a vintage one, too, as analysts at house broker Shore Capital predict that BATM’s full-year adjusted pre-tax profits are set to more than treble from $2m to $6.7m (£5.5m). This is partly driven by a forecast $8m increase in revenue to $128m, but also by gains on investments in joint ventures, highlighting the hidden value in the company’s balance sheet.
For instance, at the start of the year, BATM secured a $30m (£24.8m) investment from new investors to provide the funding for the commercialisation of its molecular biology diagnostics joint venture business, Ador Diagnostics, a company that is developing a new molecular diagnostic bench-top analyser that is able to probe 100 targets in a single proprietary carbon array. Existing products only probe on average between four and six targets per test sample. It is being targeted at screening for hospital-acquired infections such as MRSA and C. Diff, and to identify tropical infections in travellers returning home with fevers.
BATM’s retained 38.2 per cent stake in Ador is worth $17.2m, a hefty sum in relation to BATM’s $4m investment prior to the $14.5m initial investment by the new investors. Furthermore, an additional $15.5m at a valuation a third higher than Ador’s current enterprise valuation of $45m will be funded by the same new investors at the end of 2020, subject to certain milestones being achieved. Bearing this in mind, BATM chief executive Zvi Marom says that the meningitis cartridges have already gained CE approval, and the bench-top analyser machines are likely to gain CE approval in the coming months, ahead of in-hospital testing and full commercialisation of the product.
The point being that BATM has only booked a $3.2m gain on its Ador investment, and carries all investments in associates and joint ventures at just $9.4m on its balance sheet. The retained 38 per cent stake in Ador is worth almost double this sum alone, and that doesn’t factor in a likely sharp increase in the value of the stake when commercial quantities of the diagnostic bench-top analyser and cartridges are shipped in 2021.
Tapping into 5G potential
There are exciting prospects in 5G, too, as BATM’s network and cyber security division is accelerating the network function virtualisation (NFV) ecosystem project that it is developing in partnership with the world’s leading chip designer, Softbank-owned Arm Holdings, as the only worldwide software vendor to provide NFV functionality to Arm and Intel platforms. The partnership is developing infrastructure solutions for NFV, a technology that decouples the network functions, such as firewalling, intrusion detection and caching from proprietary hardware appliances, so they can run in software. The technology will be critical in the functionality of mobile applications in 5G and can also be used to run applications such as autonomous vehicles.
Dr Marom notes that Arm Holdings could be ready to sell the technology to its customers shortly and is “planning some very large proof of concept 5G trials.” The point being that having made its investment in NFV technology, and integrated it into products of major chip makers including NXP Semiconductors (US:NXPI), a $34bn market capitalisation company listed on the New York Stock Exchange, then BATM is incredibly well placed to reap the rewards as consumer demand for 5G really takes off. Moreover, network operators and virtualised network function providers will be able to deploy their applications and operate across all major hardware architectures, so leveraging the advancements in different processor technologies.
It’s well worth noting that analysts at Shore Capital have not included any contribution from NFV sales in their 2020 revenue estimate of $137m, nor in their 2021 revenue estimate of $148m when they predict BATM will be making pre-tax profit of $9.4m. Both forecasts also exclude any contribution from Ador, too, thus highlighting scope for outperformance.
I would also flag up that BATM’s network and cyber security business is set for a storming second half, and beyond. Finance director expects the division to report annual revenues of $61.5m, up from $57.5m in 2018, and at similar margin, thus offering scope to increase the unit’s adjusted operating profit of $5.5m. Please note the 2018 profit has been restated due to new accounting standard IFRS16.
Of course, BATM will be absorbing short term losses on some joint ventures as the businesses develop, too. For instance, the $3.2m gain on the Ador investment will be halved once you take into account BATM’s 38 per cent share of Ador’s losses this year, but this is already factored into the aforementioned analyst profit forecasts.
Creating shareholder value
What’s clear to me is that BATM is in the process of creating significant value for shareholders through its joint ventures, and potentially a multi-million dollar royalty stream from its partnership with Arm Holdings. That’s not in the price which is why having first advised buying BATM’s shares, at 19.25p, in my 2017 Bargain Shares Portfolio, and top-sliced half the holding, at 50p, to bank a 159 per cent partial gain (‘Bargain Shares: Exploiting pricing anomalies and top-slicing’, 3 Dec 2018), I subsequently advised reinvesting the proceeds from that share disposal to take advantage of a repeat buying opportunity, at 43.5p, earlier in the summer (‘BATM armed for a re-rating’, 11 Jul 2019).
I feel that my sum-of-the-parts valuation of 60p is a very realistic target to value the company’s equity at £262m, or treble the last reported net asset value of $100m after taking into account last month’s $17m (£14m) equity raise at 42.5p, details of which I covered in some detail in my last article. That’s because BATM now has net cash of $34.6m (£28.5m); the retained stake in Ador is worth £17.2m and could easily be worth double that valuation by the end of 2020; BATM’s 95 per cent stake in Adaltis, an Italian manufacturer of medical diagnostics equipment has a read-through valuation of £45m; and BATM owns conservatively valued property assets worth $16m (£13.2m).
Furthermore, even if you value BATM’s networking and cyber security division on 16 times last year’s operating profit then it’s still worth around $90m (£74m) as a standalone entity. Add to that the value embedded in the Arm Holdings partnership, and the rest of BATM’s biomedical division, too, and it’s really not difficult to arrive at a 60p sum-of-the-parts valuation. Fund manager Lombard Odier Asset Management clearly sees the investment potential as BATM’s largest shareholder has just purchased 4.3m shares to lift its stake to 26.04 per cent of the 437m shares in issue.
Importantly, there is ample scope for positive news flow in the coming months to focus investors’ mind on BATM’s hidden balance sheet value, and the exciting commercial potential of its technology investments. A return to the April 2019 10-year share price high of 54p, and beyond looks a distinct possibility. Strong buy. (Source: Investors Chronicle)
21 Aug 19. Acquisition will extend ISR reach, says MAG Aerospace. MAG Aerospace has acquired commercial charter and on-demand aircraft maintenance service provider Time Saver Aviation LLC for an undisclosed sum. Announcing the completion of the deal on 19 August, MAG Aerospace CEO Joe Fluet said the deal broadens the US-based company’s reach into the federal government market for aerial intelligence, surveillance, and reconnaissance (ISR) and training services. Time Saver Aviation operates a small fleet of Beechcraft Bonanza, Beechcraft King Air, and Piper PA-31 Navajo propeller-driven aircraft with an FAA Part 135 Air Carrier certificate. It also has FAA Part 145 certification and will be responsible for maintaining MAG’s fixed-wing aircraft. (Source: IHS Jane’s)
21 Aug 19. Proposed £4bn takeover of Cobham ‘threatens UK national security.’ The government are to look into concerns of the proposed £4bn takeover of UK defence firm Cobham. The founding family of the defence firm have called for the government to intervene as they have said it is not in “the UK’s national interests.”
Lady Nadine Cobham wrote to Ben Wallace the defence secretary and to Andrea Leadsom the business secretary over concerns and growing opposition against the buyout. Wallace responded and said he will “look at” there concerns and consider the impact on “the security and skills.” The PA news agency saw the letter written by Wallace, he said, “I do, of course understand your concerns.
“I come from a long line of UK manufacturers and have always been an active supporter of UK skills and manufacturing. In 2003, I worked for QinetiQ and know too well the competitive nature of industry.
“Let me assure you that I will look at your concerns and will at all times bear in mind the security and skills needed to best protect this country.”
Lady Cobham replied, “We are encouraged that the Defence Secretary understands our concerns about the proposed takeover of Cobham, which threatens UK national security, valuable high-tech jobs and this country’s manufacturing capability.
“The Government must block the takeover to prevent Advent from exploiting Cobham’s years of investment, the weak pound and recent stabilisation of the company’s finances.”
Liberal Democrat MP and party business spokesman Chuka Umunna said that the government “needs to act” without delay.
He said, “The alarm bells should be ringing loud and clear for ministers here – not only does this transaction pose serious national security questions but it will also have a material impact on our manufacturing base, so it undoubtedly engages the public interest.
“Instead of industrial activism, we see industrial passivism from a government happy to see a jewel in the crown of our defence and aerospace industries threatened.”
Last month the board of the aerospace and defence group led by Jamie Pike chairman recommended to their shareholders to accept the cash offer. (Source: London Loves Business)
21 Aug 19. Capital One acquires defence investment bank. Capital One is to buy investment bank KippsDeSanto, which specialises in mergers and acquisitions (M&A) in the defence and aerospace markets. The two parties did not divulge the price of the deal in a 19 August announcement, but they expect it to close in the third quarter of 2019. KippsDeSanto will retain its name as an independent subsidiary of Capital One. “By bringing our teams together, we’ll be able to add scale and expertise to our growing M&A advisory group, which will benefit clients in a wide variety of industries,” said Steve Tulip, head of capital markets for Capital One commercial banking. (Source: Google/IHS Jane’s)
19 Aug 19. Analysts at Berenberg raised their target price on respiratory protection equipment maker Avon Rubber from 1,650p to 1,800p on Monday, stating that its acquisition of 3M’s ballistic-protection business and rights to the Ceradyne brand had been the deal it was “waiting for”.
Berenberg said the $91.0m deal, announced on 7 August, was a “quality acquisition” that surpassed its expectations both strategically and financially, hence the 20-34% upgrades to its earnings estimates for the company. The German bank also said the acquisition multiple was “attractive”, particularly when considering the expected cost synergies from systems integration and back-office functions.
“Delivering these synergies is forecast to cost $10m, representing a two-year payback,” said Berenberg.
Although it noted that a deal of this size “clearly” carries integration risks, Berenberg said order visibility was good given the expected ramp-up in two major contracts.
While Berenberg expected Avon’s shares to “pause in the near term”, its analysts said that investors should continue to look further ahead.
“This is a high-quality, high-margin, cash-generative business that we believe can grow to a multiple of its current size through organic growth and M&A,” said Berenberg, which also reiterated its ‘buy’ rating on the firm.
“We believe Avon’s products will continue to drive organic opportunities with new military and law enforcement customers. New product launches should further support growth and margins, potentially also opening new avenues of growth such as in civilian applications.” (Source: Sharecast)
16 Aug 19. US Air Force seeks information on sUAS supply chain investment roadmap. Key Points:
- The US Air Force seeks information on creating financial incentives to shore up the US small unmanned aircraft systems (sUAS) supply chain
- The US sUAS industrial base has not been able to successfully compete with dominant foreign competition
The US Air Force (USAF) seeks information from industry to help formulate an investment roadmap to create commercial solutions for small unmanned aircraft systems (sUAS) and their components that support the development and integration of a common system architecture. The domestic sUAS industrial base and innovation ecosystem have not been able to successfully compete with dominant foreign competition, according to a 9 August request for information (RFI) posted on the Federal Business Opportunities website. (Source: IHS Jane’s)
15 Aug 19. Viasat-4 Now in the Works. Broadband-to-the-consumer specialist Viasat, which has yet to complete its latest constellation of high-capacity satellites (the ViaSat-3 fleet), is already working on an improved version, this according to a new posting by journalist Chris Forrester at the Advanced Television infosite.
Mark Dankberg, CEO at Viasat, confirmed a ViaSat-4 iteration is now in the works. The current plan is to see the first ViaSat-3 (which can handle 1 Terabit/second traffic) launched for service over the US early in 2021, and a European/MENA craft launching later in the same year. By the end of 2022 the third satellite should be operating over the Asia-Pacific region.
Dankberg, speaking during Viasat’s post-results call with analysts, said, “[The ViaSat 3 versions] incorporated a decade of innovation in space and ground network technology and the lessons learned from multiple generations of payload prototypes. It’s a fundamentally new, highly integrated space-ground architecture, establishing a new set of tools for broadband satellite design and construction, with an emphasis on scalability. If things continue to go well, ViaSat 3 is just the first instance of a new series of spacecraft delivering significantly more bandwidth, higher speeds and greater flexibility with each generation. We’ve now made enough progress on ViaSat 3 to begin designing and analyzing the ViaSat 4 follow-on, that could achieve similar or better relative productivity advances as ViaSat 1, 2 and 3 did in their time.”
ViaSat-3 craft are the highest-capacity satellites under construction, although Hughes Network System’s Jupiter-3 and Eutelsat’s Konnect have similar specifications.
He added that the new — and still in the design stage — ViaSat 4 craft will deliver more capacity, and “big improvements” in productivity.
Viasat turned in an impressive set of results, with Q1/2020 results of $537m, up 22 per cent on the same period last year. The Viasat fleet also serves the world’s airlines with their ‘in flight’ connectivity. Revenues for the Commercial Air division rose 76 per cent, and from 1335 aircraft. Viasat is impacted by the grounded Boeing 737 Max problems which affected 46 aircraft, and will slow the number of equipped 737’s as the problem rolls on. Viasat is already supplying in-flight live video (for American Airlines).
Viasat’s contracted backlog is up significantly at $1.84bn (up $200m on last year) and 6 successive quarter-years of sequential revenue growth.
Part of the company’s optimism is a deal with China Satcom which will supply its Ka-band satellite capacity to Viasat for what Viasat said, “We’ve opened the door to what’s expected to soon be the largest aviation market in the world. Since the partnership focuses on working with China Satcom to provide in-flight connectivity (IFC) to the country’s fast-growing airlines, consumers in China will soon get their first experience with Viasat in the air.” (Source: Satnews)
08 Aug 19. Viasat Announces First Quarter Fiscal Year 2020 Results.
– Strong first quarter fiscal year 2020 performance with a year-over-year revenue increase of 22%, net loss decrease of 66% and Adjusted EBITDA growth of 115%
– Satellite Services segment achieved a new segment revenue high of $196.8m
– Government Systems segment grew year-over-year revenues by 37% to $261.2m
– Continued progress on early entry global expansion investments
Viasat Inc. (NASDAQ: VSAT), a global communications company, today announced financial results for the fiscal first quarter ended June 30, 2019.
“We’re very pleased to report a robust start to fiscal year 2020,” said Mark Dankberg, Viasat chairman and CEO. “Our fiscal year 2020 financial outlook benefits from, and builds on, the momentum from a record fiscal year 2019. Broadband satellite services set quarterly records powered by sustained demand for higher value residential service plans, and 76% year-over-year growth in active commercial aircraft using our in-flight connectivity systems. Broadband service revenue also continues to diversify, boosted by growth in nascent vertical markets and geographic expansion. Government systems revenues jumped 37% compared to last year, and maintains a compelling growth outlook for products and services with robust new contracts and delivery order agreements. Company-wide Adjusted EBITDA of $96.8m, up 115% compared to the same quarter last year, yielded lower net leverage even as capital investments in the ViaSat-3 network continued apace. We’re augmenting investments in ViaSat-3 space and ground infrastructure with prudent early market entry strategies that we believe create long-term global growth opportunities beyond the regional surge we’re enjoying now catalyzed by ViaSat-2.”
In the first quarter of fiscal year 2020, Viasat’s Satellite Services segment achieved its sixth sequential quarter of revenue growth, setting a record high of $196.8m. This reflected gains of 28% year-over-year and 4% sequentially. Key trends for the quarter include: Average Revenue Per User (ARPU) growth resulting from higher value residential and enterprise plans, driving record U.S. fixed broadband revenues; record revenues in commercial in-flight connectivity (IFC) as in-service aircraft increased 76% year-over-year and in-flight services expanded; and international growth in fixed residential service, expanded Community Wi-Fi hotspots and enterprise services. Year-over-year, new contract awards increased 25% to $192.0m, segment operating loss decreased by 93% to $2.1m and Adjusted EBITDA increased by 96% to $67.1m, as existing fixed broadband and commercial in-flight services businesses scaled efficiently, alongside investments in global broadband businesses. Highlights for the quarter include:
- Fixed broadband services
o U.S. residential fixed broadband ARPU reached a record $84.26 for the first quarter of fiscal year 2020, an increase of about 16% year-over-year. At the end of the quarter there were 587,000 U.S. fixed broadband subscribers, a small sequential increase.
o Viasat’s enterprise internet service expanded into new territories including Puerto Rico and the U.S. Virgin Islands. The Company also introduced its Viasat Business Hotspot service, a service that allows small and medium businesses to partition their business internet operations from customer activity such as free, in-store Wi-Fi.
o In Mexico, at quarter end, Viasat’s Community Wi-Fi hotspot service was available to over 1.7m people, with almost 2,000 more Community Wi-Fi hotspot sites deployed as compared to the same quarter last year.
o In Brazil, Viasat and partner Telebras deployed thousands of Governo Eletrônico – Serviço de Atendimento ao Cidadão (GESAC) sites to-date, with the goal of reaching 15,000 sites by the end of 2019. In May 2019, the Brazilian Federal Court of Accounts (TCU) approved the Viasat-Telebras contract, enabling Viasat to offer broadband connectivity in additional markets including residential, enterprise, aviation and Community Wi-Fi hotspots.
- In-flight connectivity services
o At the close of the first quarter of fiscal year 2020, Viasat served 1,335 active commercial aircraft – up 76% year-over-year, and expects to install its IFC equipment on approximately 510 additional commercial aircraft under existing contracts.
o Viasat signed an agreement with China Satcom in April 2019, aimed at laying the groundwork for entry into the China aviation market and extending roaming over China for Viasat global commercial aviation customers.
o The partnership with Teledyne Controls LLC announced in June 2019 will enable Viasat to offer commercial airlines new services to modernize flight deck communications, flight tracking abilities and real-time aircraft monitoring.
o Viasat and United Airlines continued to expand their relationship, with Viasat serving as the direct in-flight internet service provider, delivering in-flight entertainment and connectivity services to an additional 58 planned aircraft within the United fleet. The agreement brings new aircraft onto the latest Viasat IFC kit, and is in addition to the announcement Viasat and United made in February 2019, focused on 34 A319 aircraft.
o Subsequent to end of the first quarter of fiscal year 2020, Viasat was selected by JetBlue to provide IFC equipment and in-flight internet service on the airline’s new fleet of 70 Airbus A220-300 aircraft, with an option for 50 additional aircraft. The agreement enables expanded IFC experiences on this new aircraft type.
For the first quarter of fiscal year 2020, Viasat’s Commercial Networks segment revenues decreased 17% year-over-year, as IFC terminal deliveries returned to more normalized levels, following accelerated American Airlines deliveries in fiscal year 2019. On a sequential basis, the Company grew expected IFC terminal orders under existing contracts at quarter end by 4% to approximately 510 IFC terminals, and advanced global market expansion opportunities. Segment operating loss was higher and Adjusted EBITDA was lower for the first quarter of fiscal year 2020 compared to the same period last year primarily as a result of the expected reduction in IFC terminal deliveries. Highlights for the quarter include:
- Progress made on adapting and certifying Viasat’s second-generation Ku-/Ka-band hybrid terminal for the global commercial aviation wide-body market.
- Viasat received Supplemental Type Certificate approval from the Federal Aviation Administration for its Ka-band IFC system, the Global Aero Terminal 5510, on super midsize cabin business jets.
- Viasat announced an 18-inch Ka-band IFC antenna system for government and business aviation customers, expanding Viasat’s target market.
- Viasat and Arianespace agreed to modify their initial ViaSat-3 satellite launch contract, enabling one of the ViaSat-3 satellites to launch aboard an Ariane 64. Finalizing this contract amendment will complete Viasat’s launch strategy, designed to reduce launch schedule risk for all of the ViaSat-3 spacecraft through launch vehicle diversity and integrated launch planning.
- Viasat continued to expand its Real-Time Earth (RTE) network, partnering with the Centre for Appropriate Technology Ltd and Indigenous Business Australia to build a RTE ground station in Australia. The Company also achieved a major milestone by providing ground station service support to General Atomics Electromagnetic Systems’ Orbital Test Bed satellite after its successful launch on a SpaceX Falcon Heavy rocket on June 25, 2019.
Viasat’s Government Systems segment revenues for the first quarter of fiscal year 2020 were $261.2m, an increase of 37% year-over-year with very strong performances reported across the segment’s product lines. Operating profit increased 84% to $45.9m and Adjusted EBITDA increased 49% to $64.9m, compared to the prior year period, primarily due to higher top line revenues and lower research and development expenses. Highlights for the quarter include:
- First quarter fiscal year 2020 segment backlog was $879.0m, $100.3m higher than the prior year period. Backlog excludes the unexercised ceiling on Indefinite Delivery/Indefinite Quantity (IDIQ) contracts.
- In May 2019, Viasat received a General Services Administration IDIQ contract with a $450.0m ceiling to support rapid migration of command, control, communications and computers/cyber capability best practices for U.S. Special Operations Forces and U.S. General Purpose Forces.
- At the end of the first quarter fiscal year 2020, Viasat held over $1bn of un-awarded value under existing IDIQ contracts in addition to $504.2 m in remaining customer options under the Company’s AMSS III contract for in-flight broadband and connectivity services to senior leader governmental aircraft. IDIQ contracts typically facilitate timely sales, including Viasat’s Non-Developmental Items products and services, which often fulfill operational needs not met by other government programs. The Company believes these contracts are good indicators of demand, and expects to convert these contracts into revenue over their contract periods.
- The Company was awarded a contract by the Administrator of the Space Enterprise Consortium, under the Air Force Research Laboratory Space Vehicles XVI program to deliver and test the first-ever Link 16-capable low earth orbit (LEO) spacecraft prototype.
- Viasat’s Commercial Broadband Modem-400 (CBM-400) became the first-ever software-defined modem to successfully complete the Army Forces Strategic Command certification process, enabling it to operate on the Wideband Global Satellite communications network.
- Viasat announced it successfully integrated concurrent multiple reception advancements into its extensive line of next-generation Link 16 products—ahead of emerging government requirements—to accelerate warfighters’ assured access to mission-critical information when using Link 16 communications—regardless of location (air, land or sea) or platform (aircraft, ground vehicle, ship or dismount).