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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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☒ |
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended December 31, 2022.
OR
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☐ |
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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)
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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:
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(Title of Each Class) |
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(Trading Symbol) |
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(Name of Each Exchange on which Registered) |
Common Stock, par value $0.0001 per share |
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VSAT |
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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.
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Large accelerated filer |
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Accelerated filer |
☐ |
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Non-accelerated filer |
☐ |
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Smaller reporting company |
☐ |
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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, $0.0001 par value, as of January 27, 2023 was 76,373,242.
VIASAT, INC.
TABLE OF CONTENTS
2
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
VIASAT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
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As of December 31, 2022 |
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As of March 31, 2022 |
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(In thousands) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
182,130 |
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$ |
310,459 |
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Accounts receivable, net |
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368,827 |
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312,172 |
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Inventories |
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260,886 |
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197,864 |
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Prepaid expenses and other current assets |
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156,932 |
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141,386 |
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Current assets of discontinued operations |
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283,404 |
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197,591 |
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Total current assets |
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1,252,179 |
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1,159,472 |
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Property, equipment and satellites, net |
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4,198,133 |
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3,704,991 |
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Operating lease right-of-use assets |
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310,398 |
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343,339 |
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Other acquired intangible assets, net |
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207,174 |
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236,043 |
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Goodwill |
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166,293 |
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168,710 |
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Other assets |
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667,747 |
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699,280 |
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Non-current assets of discontinued operations |
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— |
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77,511 |
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Total assets |
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$ |
6,801,924 |
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$ |
6,389,346 |
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LIABILITIES AND EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
300,115 |
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$ |
200,673 |
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Accrued and other liabilities |
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445,733 |
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482,564 |
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Current portion of long-term debt |
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41,261 |
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34,911 |
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Current liabilities of discontinued operations |
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64,114 |
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52,273 |
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Total current liabilities |
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851,223 |
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770,421 |
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Senior notes |
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1,688,445 |
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1,686,225 |
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Other long-term debt |
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1,210,569 |
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764,991 |
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Non-current operating lease liabilities |
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281,204 |
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316,178 |
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Other liabilities |
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148,295 |
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153,156 |
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Non-current liabilities of discontinued operations |
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— |
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15,781 |
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Total liabilities |
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4,179,736 |
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3,706,752 |
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Commitments and contingencies (Note 10) |
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Equity: |
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Viasat, Inc. stockholders’ equity |
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Common stock |
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8 |
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7 |
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Paid-in capital |
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2,506,355 |
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2,421,950 |
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Retained earnings |
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121,498 |
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233,530 |
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Accumulated other comprehensive income (loss) |
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(39,107 |
) |
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(21,621 |
) |
Total Viasat, Inc. stockholders’ equity |
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2,588,754 |
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2,633,866 |
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Noncontrolling interest in subsidiary |
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33,434 |
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48,728 |
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Total equity |
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2,622,188 |
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2,682,594 |
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Total liabilities and equity |
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$ |
6,801,924 |
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$ |
6,389,346 |
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See accompanying notes to the condensed consolidated financial statements.
3
VIASAT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
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Three Months Ended |
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Nine Months Ended |
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December 31, 2022 |
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December 31, 2021 |
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December 31, 2022 |
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December 31, 2021 |
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(In thousands, except per share data) |
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Revenues: |
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Product revenues |
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$ |
249,315 |
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$ |
226,708 |
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$ |
682,769 |
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$ |
658,355 |
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Service revenues |
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402,129 |
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398,559 |
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1,207,290 |
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1,152,077 |
|
Total revenues |
|
|
651,444 |
|
|
|
625,267 |
|
|
|
1,890,059 |
|
|
|
1,810,432 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product revenues |
|
|
205,177 |
|
|
|
185,057 |
|
|
|
528,478 |
|
|
|
535,144 |
|
Cost of service revenues |
|
|
277,856 |
|
|
|
259,175 |
|
|
|
814,224 |
|
|
|
740,085 |
|
Selling, general and administrative |
|
|
162,845 |
|
|
|
165,855 |
|
|
|
511,661 |
|
|
|
469,248 |
|
Independent research and development |
|
|
29,444 |
|
|
|
36,380 |
|
|
|
96,625 |
|
|
|
109,597 |
|
Amortization of acquired intangible assets |
|
|
7,433 |
|
|
|
7,531 |
|
|
|
22,335 |
|
|
|
20,859 |
|
Income (loss) from operations |
|
|
(31,311 |
) |
|
|
(28,731 |
) |
|
|
(83,264 |
) |
|
|
(64,501 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
525 |
|
|
|
386 |
|
|
|
7,457 |
|
|
|
520 |
|
Interest expense |
|
|
(8,747 |
) |
|
|
(5,411 |
) |
|
|
(19,258 |
) |
|
|
(17,796 |
) |
Other income, net |
|
|
— |
|
|
|
— |
|
|
|
1,098 |
|
|
|
4,118 |
|
Income (loss) from continuing operations before income taxes |
|
|
(39,533 |
) |
|
|
(33,756 |
) |
|
|
(93,967 |
) |
|
|
(77,659 |
) |
(Provision for) benefit from income taxes from continuing operations |
|
|
(5,212 |
) |
|
|
3,313 |
|
|
|
(59,045 |
) |
|
|
21,966 |
|
Equity in income (loss) of unconsolidated affiliate, net |
|
|
(13 |
) |
|
|
— |
|
|
|
(53 |
) |
|
|
(256 |
) |
Net income (loss) from continuing operations |
|
|
(44,758 |
) |
|
|
(30,443 |
) |
|
|
(153,065 |
) |
|
|
(55,949 |
) |
Net income (loss) from discontinued operations, net of tax |
|
|
4,333 |
|
|
|
26,453 |
|
|
|
44,045 |
|
|
|
75,121 |
|
Net income (loss) |
|
|
(40,425 |
) |
|
|
(3,990 |
) |
|
|
(109,020 |
) |
|
|
19,172 |
|
Less: net income (loss) attributable to noncontrolling interest, net of tax |
|
|
1,803 |
|
|
|
2,623 |
|
|
|
3,012 |
|
|
|
5,526 |
|
Net income (loss) attributable to Viasat, Inc. |
|
$ |
(42,228 |
) |
|
$ |
(6,613 |
) |
|
$ |
(112,032 |
) |
|
$ |
13,646 |
|
Income (loss) per share attributable to Viasat, Inc. common stockholders - basic: |
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.61 |
) |
|
$ |
(0.45 |
) |
|
$ |
(2.06 |
) |
|
$ |
(0.84 |
) |
Discontinued operations |
|
|
0.06 |
|
|
|
0.36 |
|
|
|
0.58 |
|
|
|
1.03 |
|
Income (loss) |
|
$ |
(0.55 |
) |
|
$ |
(0.09 |
) |
|
$ |
(1.48 |
) |
|
$ |
0.19 |
|
Income (loss) per share attributable to Viasat, Inc. common stockholders - diluted |
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.61 |
) |
|
$ |
(0.45 |
) |
|
$ |
(2.06 |
) |
|
$ |
(0.84 |
) |
Discontinued operations |
|
|
0.06 |
|
|
|
0.36 |
|
|
|
0.58 |
|
|
|
1.03 |
|
Income (loss) |
|
$ |
(0.55 |
) |
|
$ |
(0.09 |
) |
|
$ |
(1.48 |
) |
|
$ |
0.19 |
|
Shares used in computing basic net income (loss) per share |
|
|
76,138 |
|
|
|
73,917 |
|
|
|
75,586 |
|
|
|
73,004 |
|
Shares used in computing diluted net income (loss) per share |
|
|
76,138 |
|
|
|
73,917 |
|
|
|
75,586 |
|
|
|
73,004 |
|
Comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(40,425 |
) |
|
$ |
(3,990 |
) |
|
$ |
(109,020 |
) |
|
$ |
19,172 |
|
Other comprehensive income (loss), net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments, net of tax |
|
|
24,850 |
|
|
|
(9,297 |
) |
|
|
(17,486 |
) |
|
|
(35,973 |
) |
Other comprehensive income (loss), net of tax |
|
|
24,850 |
|
|
|
(9,297 |
) |
|
|
(17,486 |
) |
|
|
(35,973 |
) |
Comprehensive income (loss) |
|
|
(15,575 |
) |
|
|
(13,287 |
) |
|
|
(126,506 |
) |
|
|
(16,801 |
) |
Less: comprehensive income (loss) attributable to noncontrolling interest, net of tax |
|
|
1,803 |
|
|
|
2,623 |
|
|
|
3,012 |
|
|
|
5,526 |
|
Comprehensive income (loss) attributable to Viasat, Inc. |
|
$ |
(17,378 |
) |
|
$ |
(15,910 |
) |
|
$ |
(129,518 |
) |
|
$ |
(22,327 |
) |
See accompanying notes to the condensed consolidated financial statements.
4
VIASAT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
December 31, 2022 |
|
|
December 31, 2021 |
|
Cash Flows from Continuing and Discontinued Operations |
|
(In thousands) |
|
Cash flows from operating activities: |
|
|
|
|
|
|
Net income (loss) |
|
$ |
(109,020 |
) |
|
$ |
19,172 |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
Depreciation |
|
|
307,632 |
|
|
|
304,145 |
|
Amortization of intangible assets |
|
|
65,848 |
|
|
|
65,343 |
|
Stock-based compensation expense |
|
|
64,941 |
|
|
|
64,676 |
|
Loss on disposition of fixed assets |
|
|
36,337 |
|
|
|
32,383 |
|
Deferred income taxes and other non-cash adjustments |
|
|
81,847 |
|
|
|
(932 |
) |
Increase (decrease) in cash resulting from changes in operating assets and liabilities, net of effect of acquisitions: |
|
|
|
|
|
|
Accounts receivable |
|
|
(76,208 |
) |
|
|
(58,166 |
) |
Inventories |
|
|
(64,474 |
) |
|
|
(14,717 |
) |
Other assets |
|
|
8,680 |
|
|
|
25,141 |
|
Accounts payable |
|
|
55,421 |
|
|
|
49,718 |
|
Accrued liabilities |
|
|
(19,374 |
) |
|
|
(59,135 |
) |
Other liabilities |
|
|
(34,018 |
) |
|
|
(41,250 |
) |
Net cash provided by (used in) operating activities |
|
|
317,612 |
|
|
|
386,378 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
Purchase of property, equipment and satellites |
|
|
(782,595 |
) |
|
|
(671,207 |
) |
Cash paid for patents, licenses and other assets |
|
|
(68,152 |
) |
|
|
(41,041 |
) |
Payments related to acquisition of businesses, net of cash acquired |
|
|
— |
|
|
|
(138,668 |
) |
Net cash provided by (used in) investing activities |
|
|
(850,747 |
) |
|
|
(850,916 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
Proceeds from debt borrowings |
|
|
540,000 |
|
|
|
440,000 |
|
Payments on debt borrowings |
|
|
(93,853 |
) |
|
|
(97,784 |
) |
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 |
|
|
|
20,549 |
|
Purchase of common stock in treasury (immediately retired) related to tax withholdings for stock-based compensation |
|
|
(15,921 |
) |
|
|
(22,165 |
) |
Other financing activities |
|
|
(2,374 |
) |
|
|
(2,340 |
) |
Net cash provided by (used in) financing activities |
|
|
405,967 |
|
|
|
338,260 |
|
Effect of exchange rate changes on cash |
|
|
(1,161 |
) |
|
|
(3,639 |
) |
Net increase (decrease) in cash and cash equivalents |
|
|
(128,329 |
) |
|
|
(129,917 |
) |
Cash and cash equivalents at beginning of period |
|
|
310,459 |
|
|
|
295,949 |
|
Cash and cash equivalents at end of period |
|
$ |
182,130 |
|
|
$ |
166,032 |
|
Non-cash investing and financing activities: |
|
|
|
|
|
|
Right-of-use assets obtained in exchange for operating lease liabilities |
|
$ |
6,923 |
|
|
$ |
36,422 |
|
Issuance of common stock in satisfaction of certain accrued compensation liabilities |
|
$ |
27,618 |
|
|
$ |
24,488 |
|
Capital expenditures not paid for during the period |
|
$ |
78,642 |
|
|
$ |
73,705 |
|
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 |
|
|
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 December 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at September 30, 2022 |
|
|
75,585,221 |
|
|
$ |
8 |
|
|
$ |
2,496,783 |
|
|
$ |
163,726 |
|
|
$ |
(63,957 |
) |
|
$ |
|