SEC Filing | Viasat, Inc.

View:

Download DOC

Download PDF

Download XLS

Download XBRL

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 December 31, 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 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

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.

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.

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.

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