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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.

OR

 

 

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)

 

https://cdn.kscope.io/273d12b8cf26fc9e460003d0c3dd16eb-img242761121_0.jpg 

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

 

2


 

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.

3


 

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.

4


 

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.

5


 

VIASAT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(UNAUDITED)

 

 

 

Viasat, Inc. Stockholders

 

 

 

 

 

 

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of
Shares
Issued