SEC Filing | Viasat, Inc.

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vsat-10q_20210930.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021.

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number (000-21767)

VIASAT, INC.

(Exact name of registrant as specified in its charter)

Delaware

33-0174996

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

6155 El Camino Real

Carlsbad, California 92009

(760) 476-2200

(Address of principal executive offices and telephone number)

Securities registered pursuant to Section 12(b) of the Act:

(Title of Each Class)		(Trading Symbol)		(Name of Each Exchange on which Registered)
Common Stock, par value $0.0001 per share		VSAT		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s common stock, $0.0001 par value, as of October 22, 2021 was 73,398,817.

VIASAT, INC.

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)		3
Condensed Consolidated Balance Sheets		3
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)		4
Condensed Consolidated Statements of Cash Flows		5
Condensed Consolidated Statements of Equity		6
Notes to the Condensed Consolidated Financial Statements		8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		35
Item 3. Quantitative and Qualitative Disclosures About Market Risk		58
Item 4. Controls and Procedures		59
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		59
Item 1A. Risk Factors		59
Item 6. Exhibits		65
Signatures		67

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

VIASAT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	As of September 30, 2021			As of March 31, 2021
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	217,654		$	295,949
Accounts receivable, net		369,222			238,652
Inventories		348,342			336,672
Prepaid expenses and other current assets		131,169			119,960
Total current assets		1,066,387			991,233

Property, equipment and satellites, net		3,465,367			3,050,483
Operating lease right-of-use assets		340,165			340,456
Other acquired intangible assets, net		243,331			9,568
Goodwill		191,125			122,300
Other assets		686,485			835,427
Total assets	$	5,992,860		$	5,349,467
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	193,247		$	145,134
Accrued and other liabilities		511,093			532,831
Current portion of long-term debt		29,965			30,472
Total current liabilities		734,305			708,437

Senior notes		1,684,744			1,683,264
Other long-term debt		425,829			119,420
Non-current operating lease liabilities		310,565			313,762
Other liabilities		163,947			137,350
Total liabilities		3,319,390			2,962,233
Commitments and contingencies (Note 8)
Equity:
Viasat, Inc. stockholders’ equity
Common stock		7			7
Paid-in capital		2,382,356			2,092,595
Retained earnings		269,323			249,064
Accumulated other comprehensive (loss) income		(16,873	)		9,803
Total Viasat, Inc. stockholders’ equity		2,634,813			2,351,469
Noncontrolling interest in subsidiary		38,657			35,765
Total equity		2,673,470			2,387,234
Total liabilities and equity	$	5,992,860		$	5,349,467

See accompanying notes to the condensed consolidated financial statements.

VIASAT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

	Three Months Ended						Six Months Ended
	September 30, 2021			September 30, 2020			September 30, 2021			September 30, 2020
	(In thousands, except per share data)
Revenues:
Product revenues	$	308,666		$	255,980		$	601,930		$	506,614
Service revenues		392,688			298,298			764,284			578,152
Total revenues		701,354			554,278			1,366,214			1,084,766
Operating expenses:
Cost of product revenues		234,721			191,890			454,068			379,782
Cost of service revenues		253,722			195,423			488,351			393,100
Selling, general and administrative		156,684			125,451			310,884			246,490
Independent research and development		40,530			27,531			74,993			55,167
Amortization of acquired intangible assets		7,399			1,300			13,328			2,858
Income from operations		8,298			12,683			24,590			7,369
Other income (expense):
Interest income		71			128			134			360
Interest expense		(6,093	)		(9,790	)		(12,385	)		(19,314	)
Other income, net		—			—			4,118			—
Income (loss) before income taxes		2,276			3,021			16,457			(11,585	)
Benefit from income taxes		2,874			687			6,961			6,435
Equity in (loss) income of unconsolidated affiliate, net		—			(317	)		(256	)		14
Net income (loss)		5,150			3,391			23,162			(5,136	)
Less: net income attributable to noncontrolling interest, net of tax		1,859			1,428			2,903			5,290
Net income (loss) attributable to Viasat, Inc.	$	3,291		$	1,963		$	20,259		$	(10,426	)
Basic net income (loss) per share attributable to Viasat, Inc. common stockholders	$	0.04		$	0.03		$	0.28		$	(0.16	)
Diluted net income (loss) per share attributable to Viasat, Inc. common stockholders	$	0.04		$	0.03		$	0.27		$	(0.16	)
Shares used in computing basic net income (loss) per share		73,544			66,576			72,549			64,554
Shares used in computing diluted net income (loss) per share		74,872			67,006			73,862			64,554
Comprehensive income (loss):
Net income (loss)	$	5,150		$	3,391		$	23,162		$	(5,136	)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax		(10,934	)		4,418			(26,676	)		3,615
Other comprehensive (loss) income, net of tax		(10,934	)		4,418			(26,676	)		3,615
Comprehensive (loss) income		(5,784	)		7,809			(3,514	)		(1,521	)
Less: comprehensive income attributable to noncontrolling interest, net of tax		1,859			1,428			2,903			5,290
Comprehensive (loss) income attributable to Viasat, Inc.	$	(7,643	)	$	6,381		$	(6,417	)	$	(6,811	)

See accompanying notes to the condensed consolidated financial statements.

VIASAT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Six Months Ended
	September 30, 2021			September 30, 2020
	(In thousands)
Cash flows from operating activities:
Net income (loss)	$	23,162		$	(5,136	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation		198,970			157,939
Amortization of intangible assets		42,890			31,675
Stock-based compensation expense		43,241			43,328
Loss on disposition of fixed assets		19,324			17,678
Other non-cash adjustments		(7,534	)		(2,354	)
Increase (decrease) in cash resulting from changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable		(59,047	)		73,856
Inventories		(8,927	)		(38,034	)
Other assets		25,660			19,513
Accounts payable		21,129			(14,481	)
Accrued liabilities		(48,981	)		52,510
Other liabilities		(22,088	)		(2,972	)
Net cash provided by operating activities		227,799			333,522
Cash flows from investing activities:
Purchase of property, equipment and satellites		(448,345	)		(426,298	)
Cash paid for patents, licenses and other assets		(26,633	)		(33,586	)
Payments related to acquisition of businesses, net of cash acquired		(138,668	)		—
Net cash used in investing activities		(613,646	)		(459,884	)
Cash flows from financing activities:
Proceeds from debt borrowings		320,000			400,000
Payments of debt borrowings		(15,227	)		(402,940	)
Payment of debt issuance costs		—			(4,882	)
Proceeds from issuance of common stock under equity plans		8,776			9,206
Purchase of common stock in treasury (immediately retired) related to tax withholdings for stock-based compensation		(1,742	)		(747	)
Proceeds from common stock issued in private placement, net of issuance costs		—			174,749
Other financing activities		(1,479	)		(3,454	)
Net cash provided by financing activities		310,328			171,932
Effect of exchange rate changes on cash		(2,776	)		554
Net (decrease) increase in cash and cash equivalents		(78,295	)		46,124
Cash and cash equivalents at beginning of period		295,949			304,309
Cash and cash equivalents at end of period	$	217,654		$	350,433
Non-cash investing and financing activities:
Right-of-use assets obtained in exchange for operating lease liabilities	$	18,099		$	53,464
Issuance of common stock in connection with acquisition	$	207,169		$	—

See accompanying notes to the condensed consolidated financial statements.

VIASAT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(UNAUDITED)

	Viasat, Inc. Stockholders
	Common Stock
	Number of Shares Issued		Amount		Paid-in Capital			Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interest in Subsidiary			Total
	(In thousands, except share data)
For the Three Months Ended September 30, 2021
Balance at June 30, 2021		73,320,854	$	7	$	2,360,023		$	266,032	$	(5,939	)	$	36,887		$	2,657,010
Exercise of stock options		1,894		—		59			—		—			—			59
Stock-based compensation		—		—		23,558			—		—			—			23,558
RSU awards vesting, net of shares withheld for taxes which have been retired		75,330		—		(1,284	)		—		—			—			(1,284	)
Other		—		—		—			—		—			(89	)		(89	)
Net income		—		—		—			3,291		—			1,859			5,150
Other comprehensive loss, net of tax		—		—		—			—		(10,934	)		—			(10,934	)
Balance at September 30, 2021		73,398,078	$	7	$	2,382,356		$	269,323	$	(16,873	)	$	38,657		$	2,673,470

For the Three Months Ended September 30, 2020
Balance at June 30, 2020		63,026,001	$	6	$	1,846,827		$	232,984	$	(6,851	)	$	26,217		$	2,099,183
Common stock issued in private placement, net of issuance costs		4,474,559		1		174,748		—		—			—				174,749
Stock-based compensation	—			—		26,296		—		—			—				26,296
RSU awards vesting, net of shares withheld for taxes which have been retired		32,309		—		(346	)	—		—			—				(346	)
Net income	—			—	—				1,963	—