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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 December 31, 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/ab75e1b8ba855b34aafa6c42e6033d1c-img242784186_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 January 27, 2023 was 76,373,242.

 

 

 


 

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

 

58

Item 4. Controls and Procedures

 

59

PART II. OTHER INFORMATION

 

 

Item 1. Legal Proceedings

 

59

Item 1A. Risk Factors

 

59

Item 6. Exhibits

 

60

Signatures

 

61

 

2


 

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

VIASAT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

 

 

As of
 December 31, 2022

 

 

As of
 March 31, 2022

 

 

 

(In thousands)

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

182,130

 

 

$

310,459

 

Accounts receivable, net

 

 

368,827

 

 

 

312,172

 

Inventories

 

 

260,886

 

 

 

197,864

 

Prepaid expenses and other current assets

 

 

156,932

 

 

 

141,386

 

Current assets of discontinued operations

 

 

283,404

 

 

 

197,591

 

Total current assets

 

 

1,252,179

 

 

 

1,159,472

 

 

 

 

 

 

 

 

Property, equipment and satellites, net

 

 

4,198,133

 

 

 

3,704,991

 

Operating lease right-of-use assets

 

 

310,398

 

 

 

343,339

 

Other acquired intangible assets, net

 

 

207,174

 

 

 

236,043

 

Goodwill

 

 

166,293

 

 

 

168,710

 

Other assets

 

 

667,747

 

 

 

699,280

 

Non-current assets of discontinued operations

 

 

 

 

 

77,511

 

Total assets

 

$

6,801,924

 

 

$

6,389,346

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

300,115

 

 

$

200,673

 

Accrued and other liabilities

 

 

445,733

 

 

 

482,564

 

Current portion of long-term debt

 

 

41,261

 

 

 

34,911

 

Current liabilities of discontinued operations

 

 

64,114

 

 

 

52,273

 

Total current liabilities

 

 

851,223

 

 

 

770,421

 

 

 

 

 

 

 

 

Senior notes

 

 

1,688,445

 

 

 

1,686,225

 

Other long-term debt

 

 

1,210,569

 

 

 

764,991

 

Non-current operating lease liabilities

 

 

281,204

 

 

 

316,178

 

Other liabilities

 

 

148,295

 

 

 

153,156

 

Non-current liabilities of discontinued operations

 

 

 

 

 

15,781

 

Total liabilities

 

 

4,179,736

 

 

 

3,706,752

 

Commitments and contingencies (Note 10)

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Viasat, Inc. stockholders’ equity

 

 

 

 

 

 

Common stock

 

 

8

 

 

 

7

 

Paid-in capital

 

 

2,506,355

 

 

 

2,421,950

 

Retained earnings

 

 

121,498

 

 

 

233,530

 

Accumulated other comprehensive income (loss)

 

 

(39,107

)

 

 

(21,621

)

Total Viasat, Inc. stockholders’ equity

 

 

2,588,754

 

 

 

2,633,866

 

Noncontrolling interest in subsidiary

 

 

33,434

 

 

 

48,728

 

Total equity

 

 

2,622,188

 

 

 

2,682,594

 

Total liabilities and equity

 

$

6,801,924

 

 

$

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

 

 

Nine Months Ended

 

 

 

December 31, 2022

 

 

December 31, 2021

 

 

December 31, 2022

 

 

December 31, 2021

 

 

 

(In thousands, except per share data)

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Product revenues

 

$

249,315

 

 

$

226,708

 

 

$

682,769

 

 

$

658,355

 

Service revenues

 

 

402,129

 

 

 

398,559

 

 

 

1,207,290

 

 

 

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

)

 

$