In a recent news release, ViaSat, Inc. (NASDAQ: VSAT), a world leader in ultra high frequency (UHF) satellite communications for defense organizations, announced that it has been awarded a sole source contract from the Space and Naval Warfare Systems Command (“SPAWAR”) for engineering, technical services and hardware/software products in support of the U.S. Navy’s joint UHF military satellite communications (satcom) system. Per the terms of the contract, ViaSat will contribute to the ongoing sustainment and modernization of the joint UHF military satcom network integrated control system, UHF satcom channel controls and user terminals, playing a key role in the U.S. government’s continuing efforts to maintain the long-term viability of these proven systems.
“UHF military satcom has a long history enabling beyond line-of-sight communication across the battlespace, and provides a solid, ‘always available’ communications solution,” Ken Peterman, senior vice president and general manager of ViaSat’s government systems division, stated in the news release. “This award reflects the Navy’s commitment to using proven UHF radios and channel controllers already deployed worldwide, mitigating risk with non-fielded communications systems in order to ensure continued and enhanced capabilities for the warfighter many years into the future.”
The face value of ViaSat’s newly-announced SPAWAR contract is $48.27 million, with a five-year ordering base period and an option for an additional five-year ordering period to be negotiated prior to exercise of the option. No funds relating to this contract were transferred at the time of the award. Instead, funds will be obligated in line with the issuance of individual delivery orders by ViaSat.
In addition to offering an opportunity to bolster its financial growth for the foreseeable future, award of the SPAWAR contract reaffirms ViaSat’s position as a world leader in satellite communications. This positioning has translated to strong financial growth for the company in recent months. During its first quarter of fiscal 2017 (ended June 30, 2016), ViaSat, through its satellite services segment, achieved record high revenues for the fourth consecutive quarter, reporting a 15 percent increase from the previous year. Likewise, the company’s operating profit through this segment increased 81 percent year-over-year to $30.9 million. While results from ViaSat’s government systems segments were flat in its fiscal first quarter, the SPAWAR contract could foreshadow an opportunity for the company to record a strong finish to calendar 2016.
“Our financial results for the first quarter of fiscal 2017 show continued strong demand in satellite services and sustained growth in our government segment,” Mark Dankberg, chairman and CEO of ViaSat, stated in a news release earlier this month. “New aeronautical services contracts with American Airlines and the U.S. government highlight the unique and compelling competitive advantages of affordable, high bandwidth mobility services.”
For more information, visit www.ViaSat.com
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