SEC Filing | Viasat, Inc.

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10-Q

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, 2022.


☐		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 21, 2022 was 75,586,954.

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		37
Item 3. Quantitative and Qualitative Disclosures About Market Risk		59
Item 4. Controls and Procedures		60
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		60
Item 1A. Risk Factors		60
Item 6. Exhibits		62
Signatures		63

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

VIASAT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


	As of September 30, 2022			As of March 31, 2022
	(In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	149,172		$	310,459
Accounts receivable, net		320,249			312,172
Inventories		244,284			197,864
Prepaid expenses and other current assets		148,122			141,386
Current assets of discontinued operations		285,249			197,591
Total current assets		1,147,076			1,159,472

Property, equipment and satellites, net		4,002,742			3,704,991
Operating lease right-of-use assets		317,921			343,339
Other acquired intangible assets, net		211,273			236,043
Goodwill		162,003			168,710
Other assets		669,265			699,280
Non-current assets of discontinued operations		—			77,511
Total assets	$	6,510,280		$	6,389,346
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	244,917		$	200,673
Accrued and other liabilities		452,644			482,564
Current portion of long-term debt		38,577			34,911
Current liabilities of discontinued operations		67,484			52,273
Total current liabilities		803,622			770,421

Senior notes		1,687,705			1,686,225
Other long-term debt		959,274			764,991
Non-current operating lease liabilities		289,746			316,178
Other liabilities		141,742			153,156
Non-current liabilities of discontinued operations		—			15,781
Total liabilities		3,882,089			3,706,752
Commitments and contingencies (Note 10)
Equity:
Viasat, Inc. stockholders’ equity
Common stock		8			7
Paid-in capital		2,496,783			2,421,950
Retained earnings		163,726			233,530
Accumulated other comprehensive income (loss)		(63,957	)		(21,621	)
Total Viasat, Inc. stockholders’ equity		2,596,560			2,633,866
Noncontrolling interest in subsidiary		31,631			48,728
Total equity		2,628,191			2,682,594
Total liabilities and equity	$	6,510,280		$	6,389,346

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, 2022			September 30, 2021			September 30, 2022			September 30, 2021
	(In thousands, except per share data)
Revenues:
Product revenues	$	254,861		$	221,055		$	424,106		$	426,697
Service revenues		401,822			388,102			804,011			753,240
Total revenues		656,683			609,157			1,228,117			1,179,937
Operating expenses:
Cost of product revenues		171,105			183,905			318,581			347,916
Cost of service revenues		267,448			249,935			536,000			480,766
Selling, general and administrative		177,191			152,724			348,816			303,393
Independent research and development		32,416			39,612			67,181			73,217
Amortization of acquired intangible assets		7,379			7,399			14,902			13,328
Income (loss) from operations		1,144			(24,418	)		(57,363	)		(38,683	)
Other income (expense):
Interest income		6,809			71			6,932			134
Interest expense		(4,638	)		(6,093	)		(10,511	)		(12,385	)
Other income, net		87			—			1,098			4,118
Income (loss) from continuing operations before income taxes		3,402			(30,440	)		(59,844	)		(46,816	)
(Provision for) benefit from income taxes from continuing operations		(76,079	)		9,110			(52,503	)		19,490
Equity in income (loss) of unconsolidated affiliate, net		(40	)		—			(40	)		(256	)
Net income (loss) from continuing operations		(72,717	)		(21,330	)		(112,387	)		(27,582	)
Net income (loss) from discontinued operations, net of tax		25,161			26,480			43,792			50,744
Net income (loss)		(47,556	)		5,150			(68,595	)		23,162
Less: net income (loss) attributable to noncontrolling interest, net of tax		684			1,859			1,209			2,903
Net income (loss) attributable to Viasat, Inc.	$	(48,240	)	$	3,291		$	(69,804	)	$	20,259
Income (loss) per share attributable to Viasat, Inc. common stockholders - basic:
Continuing operations	$	(0.97	)	$	(0.32	)	$	(1.51	)	$	(0.42	)
Discontinued operations		0.33			0.36			0.58			0.70
Income (loss)	$	(0.64	)	$	0.04		$	(0.93	)	$	0.28
Income (loss) per share attributable to Viasat, Inc. common stockholders - diluted
Continuing operations	$	(0.97	)	$	(0.32	)	$	(1.51	)	$	(0.42	)
Discontinued operations		0.33			0.36			0.58			0.70
Income (loss)	$	(0.64	)	$	0.04		$	(0.93	)	$	0.28
Shares used in computing basic net income (loss) per share		75,758			73,544			75,313			72,549
Shares used in computing diluted net income (loss) per share		75,758			73,544			75,313			72,549
Comprehensive income (loss):
Net income (loss)	$	(47,556	)	$	5,150		$	(68,595	)	$	23,162
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments, net of tax		(21,995	)		(10,934	)		(42,336	)		(26,676	)
Other comprehensive income (loss), net of tax		(21,995	)		(10,934	)		(42,336	)		(26,676	)
Comprehensive income (loss)		(69,551	)		(5,784	)		(110,931	)		(3,514	)
Less: comprehensive income (loss) attributable to noncontrolling interest, net of tax		684			1,859			1,209			2,903
Comprehensive income (loss) attributable to Viasat, Inc.	$	(70,235	)	$	(7,643	)	$	(112,140	)	$	(6,417	)

See accompanying notes to the condensed consolidated financial statements.

VIASAT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Six Months Ended
	September 30, 2022			September 30, 2021
Cash Flows from Continuing and Discontinued Operations	(In thousands)
Cash flows from operating activities:
Net income (loss)	$	(68,595	)	$	23,162
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation		204,599			198,970
Amortization of intangible assets		43,888			42,890
Stock-based compensation expense		43,806			43,241
Loss on disposition of fixed assets		25,406			19,324
Deferred income taxes and other non-cash adjustments		65,250			(7,534	)
Increase (decrease) in cash resulting from changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable		(42,625	)		(59,047	)
Inventories		(40,190	)		(8,927	)
Other assets		8,382			25,660
Accounts payable		13,222			21,129
Accrued liabilities		3,299			(48,981	)
Other liabilities		(28,310	)		(22,088	)
Net cash provided by (used in) operating activities		228,132			227,799
Cash flows from investing activities:
Purchase of property, equipment and satellites		(508,068	)		(448,345	)
Cash paid for patents, licenses and other assets		(46,745	)		(26,633	)
Payments related to acquisition of businesses, net of cash acquired		—			(138,668	)
Net cash provided by (used in) investing activities		(554,813	)		(613,646	)
Cash flows from financing activities:
Proceeds from debt borrowings		275,000			320,000
Payments on debt borrowings		(82,348	)		(15,227	)
Payments of debt issuance costs		(1,511	)		—
Repurchase of shares by majority-owned subsidiary		(30,000	)		—
Proceeds from issuance of common stock under equity plans		9,626			8,776
Purchase of common stock in treasury (immediately retired) related to tax withholdings for stock-based compensation		(832	)		(1,742	)
Other financing activities		(1,540	)		(1,479	)
Net cash provided by (used in) financing activities		168,395			310,328
Effect of exchange rate changes on cash		(3,001	)		(2,776	)
Net increase (decrease) in cash and cash equivalents		(161,287	)		(78,295	)
Cash and cash equivalents at beginning of period		310,459			295,949
Cash and cash equivalents at end of period	$	149,172		$	217,654
Non-cash investing and financing activities:
Right-of-use assets obtained in exchange for operating lease liabilities	$	3,499		$	18,099
Issuance of common stock in satisfaction of certain accrued compensation liabilities	$	27,618		$	24,488
Capital expenditures not paid for during the period	$	45,688		$	27,903
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