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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, 2021.

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)

 

img241860665_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 21, 2022 was 74,393,040.

 

 

 


 

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

 

36

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

 

61

Signatures

 

62

 

2


 

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

VIASAT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

 

 

As of
 December 31, 2021

 

 

As of
 March 31, 2021

 

 

 

(In thousands)

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

166,032

 

 

$

295,949

 

Accounts receivable, net

 

 

363,013

 

 

 

238,652

 

Inventories

 

 

353,993

 

 

 

336,672

 

Prepaid expenses and other current assets

 

 

144,833

 

 

 

119,960

 

Total current assets

 

 

1,027,871

 

 

 

991,233

 

 

 

 

 

 

 

 

Property, equipment and satellites, net

 

 

3,603,181

 

 

 

3,050,483

 

Operating lease right-of-use assets

 

 

344,499

 

 

 

340,456

 

Other acquired intangible assets, net

 

 

237,850

 

 

 

9,568

 

Goodwill

 

 

190,907

 

 

 

122,300

 

Other assets

 

 

682,486

 

 

 

835,427

 

Total assets

 

$

6,086,794

 

 

$

5,349,467

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

251,335

 

 

$

145,134

 

Accrued and other liabilities

 

 

505,702

 

 

 

532,831

 

Current portion of long-term debt

 

 

29,590

 

 

 

30,472

 

Total current liabilities

 

 

786,627

 

 

 

708,437

 

 

 

 

 

 

 

 

Senior notes

 

 

1,685,484

 

 

 

1,683,264

 

Other long-term debt

 

 

463,908

 

 

 

119,420

 

Non-current operating lease liabilities

 

 

317,941

 

 

 

313,762

 

Other liabilities

 

 

157,104

 

 

 

137,350

 

Total liabilities

 

 

3,411,064

 

 

 

2,962,233

 

Commitments and contingencies (Note 8)

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Viasat, Inc. stockholders’ equity

 

 

 

 

 

 

Common stock

 

 

7

 

 

 

7

 

Paid-in capital

 

 

2,397,903

 

 

 

2,092,595

 

Retained earnings

 

 

262,710

 

 

 

249,064

 

Accumulated other comprehensive (loss) income

 

 

(26,170

)

 

 

9,803

 

Total Viasat, Inc. stockholders’ equity

 

 

2,634,450

 

 

 

2,351,469

 

Noncontrolling interest in subsidiary

 

 

41,280

 

 

 

35,765

 

Total equity

 

 

2,675,730

 

 

 

2,387,234

 

Total liabilities and equity

 

$

6,086,794

 

 

$

5,349,467

 

 

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, 2021

 

 

December 31, 2020

 

 

December 31, 2021

 

 

December 31, 2020

 

 

 

(In thousands, except per share data)

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Product revenues

 

$

316,143

 

 

$

266,514

 

 

$

918,073

 

 

$

773,128

 

Service revenues

 

 

403,574

 

 

 

309,045

 

 

 

1,167,858

 

 

 

887,197

 

Total revenues

 

 

719,717

 

 

 

575,559

 

 

 

2,085,931

 

 

 

1,660,325

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of product revenues

 

 

237,481

 

 

 

196,895

 

 

 

691,549

 

 

 

576,677

 

Cost of service revenues

 

 

262,640

 

 

 

194,394

 

 

 

750,991

 

 

 

587,494

 

Selling, general and administrative

 

 

170,222

 

 

 

132,394

 

 

 

481,106

 

 

 

378,884

 

Independent research and development

 

 

37,316

 

 

 

28,803

 

 

 

112,309

 

 

 

83,970

 

Amortization of acquired intangible assets

 

 

7,531

 

 

 

1,313

 

 

 

20,859

 

 

 

4,171

 

Income from operations

 

 

4,527

 

 

 

21,760

 

 

 

29,117

 

 

 

29,129

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

386

 

 

 

114

 

 

 

520

 

 

 

474

 

Interest expense

 

 

(5,411

)

 

 

(7,880

)

 

 

(17,796

)

 

 

(27,194

)

Other income, net

 

 

 

 

 

 

 

 

4,118

 

 

 

 

(Loss) income before income taxes

 

 

(498

)

 

 

13,994

 

 

 

15,959

 

 

 

2,409

 

(Provision for) benefit from income taxes

 

 

(3,492

)

 

 

(7,008

)

 

 

3,469

 

 

 

(573

)

Equity in income (loss) of unconsolidated affiliate, net

 

 

 

 

 

774

 

 

 

(256

)

 

 

788

 

Net (loss) income

 

 

(3,990

)

 

 

7,760

 

 

 

19,172

 

 

 

2,624

 

Less: net income attributable to
   noncontrolling interest, net of tax

 

 

2,623

 

 

 

1,000

 

 

 

5,526

 

 

 

6,290

 

Net (loss) income attributable to Viasat, Inc.

 

$

(6,613

)

 

$

6,760

 

 

$

13,646

 

 

$

(3,666

)

Basic net (loss) income per share attributable
   to Viasat, Inc. common stockholders

 

$

(0.09

)

 

$

0.10

 

 

$

0.19

 

 

$

(0.06

)

Diluted net (loss) income per share attributable
   to Viasat, Inc. common stockholders

 

$

(0.09

)

 

$

0.10

 

 

$

0.18

 

 

$

(0.06

)

Shares used in computing basic net
   (loss) income per share

 

 

73,917

 

 

 

67,995

 

 

 

73,004

 

 

 

65,704

 

Shares used in computing diluted net
   (loss) income per share

 

 

73,917

 

 

 

68,668

 

 

 

74,348

 

 

 

65,704

 

Comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(3,990

)

 

$

7,760

 

 

$

19,172

 

 

$

2,624

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments, net
   of tax

 

 

(9,297

)

 

 

9,047

 

 

 

(35,973

)

 

 

12,662

 

Other comprehensive (loss) income, net of tax

 

 

(9,297

)

 

 

9,047

 

 

 

(35,973

)

 

 

12,662

 

Comprehensive (loss) income

 

 

(13,287

)

 

 

16,807

 

 

 

(16,801

)

 

 

15,286

 

Less: comprehensive income attributable
   to noncontrolling interest, net of tax

 

 

2,623

 

 

 

1,000

 

 

 

5,526

 

 

 

6,290

 

Comprehensive (loss) income attributable to
   Viasat, Inc.

 

$

(15,910

)

 

$

15,807

 

 

$

(22,327

)

 

$

8,996

 

 

See accompanying notes to the condensed consolidated financial statements.

4


 

VIASAT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

 

Nine Months Ended

 

 

 

December 31, 2021

 

 

December 31, 2020

 

 

 

(In thousands)

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

19,172

 

 

$

2,624

 

Adjustments to reconcile net income to net cash provided by
   operating activities:

 

 

 

 

 

 

Depreciation

 

 

304,145

 

 

 

241,935

 

Amortization of intangible assets

 

 

65,343

 

 

 

50,181

 

Stock-based compensation expense

 

 

64,676

 

 

 

64,967

 

Loss on disposition of fixed assets

 

 

32,383

 

 

 

29,841

 

Other non-cash adjustments

 

 

(932

)

 

 

3,611

 

Increase (decrease) in cash resulting from changes in operating
   assets and liabilities, net of effect of acquisitions:

 

 

 

 

 

 

Accounts receivable

 

 

(58,166

)

 

 

123,374

 

Inventories

 

 

(14,717

)

 

 

(39,988

)

Other assets

 

 

25,141

 

 

 

24,017

 

Accounts payable

 

 

49,718

 

 

 

(39,004

)

Accrued liabilities

 

 

(59,135

)

 

 

102,603

 

Other liabilities

 

 

(41,250

)

 

 

(6,787

)

Net cash provided by operating activities

 

 

386,378

 

 

 

557,374

 

Cash flows from investing activities:

 

 

 

 

 

 

Purchase of property, equipment and satellites

 

 

(671,207

)

 

 

(655,672

)

Cash paid for patents, licenses and other assets

 

 

(41,041

)

 

 

(47,164

)

Payments related to acquisition of businesses, net of cash acquired

 

 

(138,668

)

 

 

 

Net cash used in investing activities

 

 

(850,916

)

 

 

(702,836

)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from debt borrowings

 

 

440,000

 

 

 

400,000

 

Payments of debt borrowings

 

 

(97,784

)

 

 

(414,604

)

Payment of debt issuance costs

 

 

 

 

 

(5,060

)

Proceeds from issuance of common stock under equity plans

 

 

20,549

 

 

 

19,101

 

Purchase of common stock in treasury (immediately retired) related
   to tax withholdings for stock-based compensation

 

 

(22,165

)

 

 

(13,013

)

Proceeds from common stock issued in private placement, net
   of issuance costs

 

 

 

 

 

174,749

 

Other financing activities

 

 

(2,340

)

 

 

(4,280

)

Net cash provided by financing activities

 

 

338,260

 

 

 

156,893

 

Effect of exchange rate changes on cash

 

 

(3,639

)

 

 

1,604

 

Net (decrease) increase in cash and cash equivalents

 

 

(129,917

)

 

 

13,035

 

Cash and cash equivalents at beginning of period

 

 

295,949

 

 

 

304,309

 

Cash and cash equivalents at end of period

 

$

166,032

 

 

$

317,344

 

Non-cash investing and financing activities:

 

 

 

 

 

 

Capital expenditures not paid for

 

$

73,705

 

 

$

22,224

 

Right-of-use assets obtained in exchange for operating lease liabilities

 

$

36,422

 

 

$

55,717

 

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, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at September 30, 2021

 

 

73,398,078

 

 

$

7

 

 

$

2,382,356

 

 

$

269,323

 

 

$

(16,873

)

 

$

38,657

 

 

$

2,673,470

 

Exercise of stock options

 

 

24,850

 

 

 

 

 

 

1,456

 

 

 

 

 

 

 

 

 

 

 

 

1,456

 

Issuance of stock under Employee Stock Purchase
   Plan

 

 

272,503

 

 

 

 

 

 

10,317

 

 

 

 

 

 

 

 

 

 

 

 

10,317

 

Stock-based compensation

 

 

 

 

 

 

 

 

24,197

 

 

 

 

 

 

 

 

 

 

 

 

24,197

 

RSU awards vesting, net of shares withheld for taxes
   which have been retired

 

 

697,472

 

 

 

 

 

 

(20,423

)

 

 

 

 

 

 

 

 

 

 

 

(20,423

)

Net (loss) income

 

 

 

 

 

 

 

 

 

 

 

(6,613

)

 

 

 

 

 

2,623

 

 

 

(3,990

)

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,297

)

 

 

 

 

 

(9,297

)

Balance at December 31, 2021

 

 

74,392,903

 

 

$

7

 

 

$

2,397,903

 

 

$

262,710

 

 

$

(26,170

)

 

$

41,280

 

 

$

2,675,730

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at September 30, 2020

 

 

67,532,869

 

 

$

7

 

 

$

2,047,525

 

 

$

234,947

 

 

$

(2,433

)

 

$

27,645

 

 

$

2,307,691

 

Issuance of stock under Employee Stock Purchase
   Plan

 

 

356,523

 

 

 

 

 

 

9,895

 

 

 

 

 

 

 

 

 

 

 

 

9,895

 

Stock-based compensation

 

 

 

 

 

 

 

 

25,199

 

 

 

 

 

 

 

 

 

 

 

 

25,199

 

RSU awards vesting, net of shares withheld for taxes
   which have been retired

 

 

614,936

 

 

 

 

 

 

(12,266

)

 

 

 

 

 

 

 

 

 

 

 

(12,266

)

Net income

 

 

 

 

 

 

 

 

 

 

 

6,760

 

 

 

 

 

 

1,000

 

 

 

7,760

 

Other comprehensive income, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9,047

 

 

 

 

 

 

9,047

 

Balance at December 31, 2020

 

 

68,504,328

 

 

$

7

 

 

$

2,070,353

 

 

$

241,707

 

 

$

6,614

 

 

$

28,645

 

 

$

2,347,326

 

 

See accompanying notes to the condensed consolidated financial statements.

6


 

VIASAT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(UNAUDITED)

 

 

 

Viasat, Inc. Stockholders