(Mark One) | ||
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended April 1, 2011 | ||
or
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o
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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 . |
Delaware
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33-0174996 | |
(State or other jurisdiction
of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Title of Each Class) | (Name of Each Exchange on which Registered) | |
Common Stock, par value $0.0001 per share
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The NASDAQ Stock Market LLC |
Large accelerated filer þ
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Accelerated filer o |
Non-accelerated filer o (Do not check if a smaller reporting company) |
Smaller reporting company o |
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ITEM 1. | BUSINESS |
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| Government Satellite Communication Systems. Our government satellite communication systems offer an array of portable, mobile and fixed broadband modems, terminals, network access control systems and antenna systems using a range of satellite frequency bands for line-of-sight and beyond-line-of-sight Intelligence, Surveillance, and Reconnaissance (ISR) and Command and Control (C2) missions, as well as satellite networking services. Our systems and products are designed to support high-throughput broadband data links, to increase available bandwidth using existing satellite capacity, and to withstand certain catastrophic events. Our range of broadband modems, terminals and systems support high-speed broadband and multimedia transmissions over point-to-point, mesh and hub-and-spoke satellite networking systems, and include products designed for manpacks, aircraft, unmanned aerial vehicles (UAVs), seagoing vessels, ground mobile vehicles and fixed applications. | |
| Information Assurance. Our information security and assurance products provide advanced, high-speed IP-based Type 1 and High Assurance Internet Protocol Encryption (HAIPE®)-compliant encryption solutions that enable military and government users to communicate information securely over networks, and that secure data stored on computers and storage devices. Our encryption modules use a programmable, high-assurance architecture that can be easily upgraded in the field or integrated into existing communication networks, and are available both on a stand-alone basis and as embedded modules within our tactical radio, information distribution and other satellite communication systems and products. | |
| Tactical Data Links. We develop and produce advanced tactical radio and information distribution systems that enable real-time collection and dissemination of video and data using secure, jam-resistant transmission links from manned aircraft, ground mobile vehicles and other remote platforms to networked communication and command centers. Key products in this category include: our Multifunctional Information Distribution System (MIDS) terminals for military fighter jets and their successor, MIDS Joint Tactical Radio System (MIDS-JTRS) terminals, disposable weapon data links and portable small tactical terminals. |
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| Consumer Broadband. We are a leading network technology supplier for the consumer satellite market. Our SurfBeam® network systems and modems enable satellite broadband access for residential or home office customers. In addition, we designed and developed next-generation satellite network infrastructure and ground terminals to access Ka-band broadband on high-capacity satellites, including ViaSat-1, which is planned for launch in the summer of 2011 to serve the United States and Canada and KA-SAT (Eutelsats new high-capacity Ka-band satellite), which was launched at the end of 2010 and serves Europe and parts of the Middle East and Africa. We anticipate growing demand for Ka-band network infrastructure and ground terminals driven by additional high-capacity Ka-band satellites in other geographies around the world. | |
| Antenna Systems. We develop, design, produce, test and install turnkey ground terminals and antennas for terrestrial and satellite applications, specializing in geospatial imagery, mobile satellite communication, Ka-band gateways, and other multi-band antennas. | |
| Mobile Broadband Satellite Communication Systems. Our ArcLight® Ku-band mobile satellite systems and related products provide high-speed, cost-efficient broadband access while on the move via small transceivers, and are designed for use in aircraft, seagoing vessels and high-speed trains. We also sell our ArcLight mobile satellite systems to government customers as part of our government satellite communication systems business. | |
| Enterprise VSAT Networks and Products. Our enterprise Very Small Aperture Terminal (VSAT) networks and products comprise VSAT satellite systems and products designed to provide enterprises with broadband access to the internet or private networks in order to support retail point-of-sale, voice-over-IP, distance learning and other web-centric or network applications. We also offer enterprise customers related products and services to address bandwidth constraints, latency and other issues, such as our AcceleNet® wide area network (WAN) optimization product, which enables enterprise customers to optimize cloud computing services and other applications delivered over WANs. In developing countries, we also supply our enterprise VSAT networks and products to carriers to provide cellular backhaul and telephony services in under-served areas. |
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| Satellite Networking Development. Through our Comsat Labs division, we offer specialized design and technology services covering all aspects of satellite communication system architecture and technology, including the analysis, design, and specification of satellites and ground systems, ASIC and MMIC design and production, and WAN compression for enterprise networks. |
| Wholesale and Retail Broadband Services. Our WildBlue® service provides two-way satellite-based broadband internet access to consumers and small businesses in the United States. We offer a range of WildBlue service plans to both wholesale and retail customers, with pricing based on maximum downstream/upstream data speeds. As of April 1, 2011, we provided WildBlue service to approximately 409,000 subscribers. In addition, following the launch of ViaSat-1, we expect to provide wholesale and retail broadband service via ViaSat-1 in the United States at speeds and volumes that provide a broadband experience that is comparable to or better than terrestrial broadband alternatives such as wireless and DSL connections. We plan to offer wholesale broadband services via ViaSat-1 to national and regional distribution partners, including direct-to-home satellite video providers, retail service providers and communications companies. We plan to offer our retail service via ViaSat-1 through WildBlue and its dealer network. | |
| Mobile Broadband Services. Our Yondertm worldwide mobile broadband services is comprised of global network management services for customers who use our ArcLight®-based mobile satellite systems supporting airborne, maritime and various ground-mobile customers. |
| Leading Satellite and Wireless Technology Platform. We believe our ability to design and deliver cost-effective satellite and wireless communications and networking solutions, covering both the supply of advanced communications systems, ground network equipment and end-user terminals, and the provision of managed network services, enables us to provide our government and commercial customers with a diverse portfolio of leading applications and solutions. Our product and systems offerings are often linked through common underlying technologies, customer applications and market relationships. We believe that many of the market segments in which we compete have significant barriers to entry relating to the complexity of technology, the amount of required developmental funding, the willingness of the customer to support multiple suppliers, and the importance of existing customer relationships. We believe our history of developing complex secure satellite and wireless networking and communications technologies demonstrates that we possess the expertise and credibility required to serve the evolving technology needs of our government and commercial customers. In addition, our acquisition of WildBlue provides us with |
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significant expertise in network management and operational and business systems support for large-scale network deployments. |
| Blue-Chip Customer Base. Our customers include the DoD, civil agencies, defense contractors, allied foreign governments, satellite network integrators, large communications service providers and enterprises requiring complex communications and networking solutions. The credit strength of our key customers, including the U.S. government and leading aerospace and defense prime contractors, supports our consistent financial performance. | |
| Strong Balance Sheet and Equity Capitalization. We are well-capitalized with total equity as of April 1, 2011 of $844.2 million, or 72% of our total capitalization. Our revolving credit facility (the Credit Facility) allows us to borrow up to $325.0 million, and we had $60.0 million in principal amount of outstanding borrowings under the Credit Facility as of April 1, 2011. This financial flexibility along with the significant cash flow generated from our operations is expected to provide us with the liquidity to finance our ongoing capital expenditures, as well as our investment in ViaSat-1, for at least the next twelve months. | |
| Experienced Management Team. Our Chief Executive Officer, Mark D. Dankberg, and our Chief Technology Officers have been with the company since its inception in 1986. Mr. Dankberg is considered to be a leading expert in the field of wireless and satellite communications. In 2008, Mr. Dankberg received the prestigious AIAA Aerospace International Communication award, which recognized him for shepherding ViaSat into a leading satellite communications company through outstanding leadership and technical expertise. | |
| Innovation of Next-Generation Satellite Technology. ViaSat-1, our high-capacity Ka-band spot-beam satellite planned for launch in the summer of 2011, is currently under construction. At the time of launch, we believe ViaSat-1 will be the highest capacity, most cost-efficient satellite in the world. With the market demonstrating increasing demand for satellite broadband services, ViaSat-1 and our associated SurfBeam 2 ground segment technology are designed to significantly expand the quality, capability and availability of high-speed broadband satellite services for consumers and enterprises. In addition, we expect that our WildBlue business will facilitate our deployment of broadband services in the United States using ViaSat-1, as well as provide a platform for the provision of network management services to international providers of satellite broadband services. | |
| Innovative Product Development and Cost-Efficient Business Model. Maintaining technological competencies and innovative new product development has been one of our hallmarks and continues to be critical to our success. Our research and development efforts are supported by an employee base of over 1,100 engineers and a culture that deeply values innovation. We balance an emphasis on new product development with efficient management of our capital. For example, the majority of our research and development efforts with respect to the development of new products or applications are funded by customers. In addition, we drive capital efficiencies by outsourcing a significant portion of our manufacturing to subcontractors with whom we collaborate to ensure quality control and superior finished products. |
| Address Increasingly Larger Markets. We have focused on addressing larger markets since our inception. As we have grown our revenues, we are able to target larger opportunities and markets more credibly and more successfully. We consider several factors in selecting new market opportunities, including whether (1) there are meaningful entry barriers for new competitors (for example, specialized technologies or relationships), (2) the new market is the right size and consistent with our growth objectives, and (3) the customers in the market value our technology competence and focus, which makes us an attractive partner. |
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| Evolve into Adjacent Technologies and Markets. We anticipate continued organic growth into adjacent technologies and markets. We seek to increase our share in the market segments we address by selling existing or customized versions of technologies we developed for one customer base to a different market for instance, to different segments of the government market or between government and commercial markets. In addition, we seek to expand the breadth of technologies and products we offer by selling new, but related, technologies and products to existing customers. | |
| Enhance International Growth. International revenues represented approximately 17% of our total fiscal year 2011 revenues. We believe growth in international markets represents an attractive opportunity, as we believe our comprehensive offering of satellite communications products, systems and services will be attractive to government and commercial customers on an international basis. In addition, we expect that our WildBlue business will provide a platform for the provision of network management and back-office services to international providers of satellite broadband services, capitalizing on both the strength of WildBlues reputation in the satellite industry globally and WildBlues operational expertise with respect to the commercial provision of satellite broadband services. | |
| Pursue Growth Through Strategic Alliances and Relationships. We have regularly entered into teaming arrangements with other government contractors to more effectively capture complex government programs, and we expect to continue to actively seek strategic relationships and ventures with companies whose financial, marketing, operational or technological resources can accelerate the introduction of new technologies and the penetration of new markets. We have also engaged in strategic relationships with companies that have innovative technologies and products, highly skilled personnel, market presence, or customer relationships and distribution channels that complement our strategy. We may continue to evaluate acquisitions of, or investments in, complementary companies, businesses, products or technologies to supplement our internal growth. |
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| Government Sales Organization. Our government sales organization consists of both direct sales personnel who sell our standard products, and business development personnel who work with engineers, program managers, marketing managers and contract managers to identify business opportunities, develop customer relationships, develop solutions for customers needs, prepare proposals and negotiate contractual arrangements. The period of time from initial contact through the point of product sale and delivery can take over three years for more complex product developments. Products already in production can usually be delivered to a customer between 90 to 180 days from the point of product sale. | |
| Commercial Networks Sales Organization. Our commercial networks sales organization consists of sales managers and sales engineers, who act as the primary interface to establish account relationships and determine technical requirements for customer networks. In addition to our sales force, we maintain a highly trained service staff to provide technical product and service support to our customers. The sales cycle in the commercial network market is lengthy and it is not unusual for a sale to take up to 18 months from the initial contact through the execution of the agreement. The sales process often includes several network design iterations, network demonstrations and pilot networks consisting of a few sites. | |
| Satellite Services Sales Organization. Our satellite services sales organization includes exclusive wholesale distribution relationships with DirecTV and the National Rural Telecommunications Cooperative for our WildBlue satellite broadband internet service, as well as our own retail distribution channel, which sells directly to residential customers. | |
| Strategic Partners. To augment our direct sales efforts, we seek to develop key strategic relationships to market and sell our products and services. We direct our sales and marketing efforts to our strategic partners, primarily through our senior management relationships. In some cases a strategic ally may be the prime contractor for a system or network installation and will subcontract a portion of the project to us. In other cases, the strategic ally may recommend us as the prime contractor for the design and integration of the network. We seek strategic relationships and partners based on many factors, including financial resources, technical capability, geographic location and market presence. |
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| the innovative and flexible features integrated into our products; | |
| the increased bandwidth efficiency offered by our networks and products; | |
| our network management experience; | |
| the cost-effectiveness of our products and services; | |
| our end-to-end network implementation capabilities; | |
| the distinct advantages of satellite data networks; | |
| technical advantages and advanced features of our antenna systems as compared to our competitors offerings; | |
| the overall cost of our antenna systems and satellite networks, which can include equipment, installation and bandwidth costs, as compared to products offered by terrestrial and other satellite service providers; and | |
| our proven designs and network integration services for complex, customized network needs. |
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Name | Age | Position | ||||
Mark D. Dankberg
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55 | Chairman of the Board and Chief Executive Officer | ||||
Richard A. Baldridge
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52 | President and Chief Operating Officer | ||||
H. Stephen Estes
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56 | Vice President Human Resources | ||||
Kevin J. Harkenrider
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55 | Vice President of ViaSat; Vice President and Chief Operating Officer of WildBlue | ||||
Steven R. Hart
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57 | Vice President and Chief Technical Officer | ||||
Keven K. Lippert
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38 | Vice President General Counsel and Secretary | ||||
Mark J. Miller
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51 | Vice President and Chief Technical Officer | ||||
Thomas E. Moore
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49 | Senior Vice President of ViaSat; President of WildBlue | ||||
Ronald G. Wangerin
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44 | Vice President and Chief Financial Officer |
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ITEM 1A. | RISK FACTORS |
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| Business Plan. We may be unsuccessful in implementing our business plan for the WildBlue business and our satellite services segment as a whole, or we may not be able to achieve the revenue that we expect from our satellite services segment. A failure to attract a sufficient number of distributors or customers would result in lower revenues than anticipated. | |
| Satellite Failures and Degradations in Performance. The WildBlue-1 satellite and Telesat Canadas Anik F2 satellite supporting our WildBlue business are, and ViaSat-1 and any future satellite we acquire will be, subject to potential satellite failures or performance degradations. Satellites are subject to in-orbit risks including malfunctions, commonly referred to as anomalies, interference from electrostatic storms, and collisions with meteoroids, decommissioned spacecraft or other space debris. Anomalies occur as a result of various factors, such as satellite manufacturing errors, problems with the power systems or control systems of the satellites and general failures resulting from operating satellites in the harsh environment of space. If any of the foregoing were to occur on either WildBlue-1, Anik F2, ViaSat-1 or any other satellite we may acquire or use, this could have a material adverse effect on our operations, our ability to generate revenues in our satellite services segment, and our relationships with current customers and distributors, as well as our ability to attract new customers for our satellite broadband services. Anomalies may also reduce the expected useful life of a satellite, thereby creating additional expenses due to the need to provide replacement or backup capacity and potentially reduce revenues if service is interrupted on the satellites we utilize. We may not be able to obtain or finance backup transponder capacity or a replacement satellite on reasonable economic terms or at all. In addition, an increased frequency of anomalies could impact market acceptance of our services. | |
| Cost and Schedule Risks. The cost of completing satellites and developing the associated next generation SurfBeam 2 ground infrastructure may be more than we anticipate and there may be delays in completing satellites and SurfBeam 2 infrastructure within the expected timeframe. We may be required to spend in excess of our current forecast for the completion, launch and launch insurance of ViaSat-1, or for the development associated with the SurfBeam 2 equipment. The construction and launch of satellites are often subject to delays, including satellite and launch vehicle construction delays, cost overruns, periodic unavailability of reliable launch opportunities and delays in obtaining regulatory approvals. If the satellite construction schedule is not met, there may be even further delays because there can be no assurance that a launch opportunity will be available at the time the satellite is ready to be launched, and we may not be able to obtain or maintain regulatory authority or ITU priority necessary to implement the satellite as proposed. | |
| Launch Risks. There are risks associated with the launch of satellites, including launch failure, damage or destruction during launch and improper orbital placement. Launch vehicles may underperform, in which case the satellite may still be placed into service by using its onboard propulsion systems to reach the desired orbital location, resulting in a reduction in its service life. Launch failures result in significant delays in the deployment of satellites because of the need both to construct replacement satellites, which can take up to 36 months, and obtain other launch opportunities. The overall historical loss rate in the satellite industry for all launches of commercial satellites in fixed orbits in the last five years is estimated by some industry participants to be approximately 10% but could at any time be higher. | |
| Satellite Life. Our ability to earn revenue depends on the usefulness of WildBlue-1, Anik F2, ViaSat-1 and any other satellite we may acquire in the future. Each satellite has a limited useful life. The period of time during which a satellite is expected to function in accordance with its specifications is referred to as such satellites design life. The design life of ViaSat-1 is 15 years from launch. The design life of WildBlue-1 was 12 years from launch, ending in 2019, and the design life of Telesat Canadas Anik F2 satellite was 15 years |
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from launch, ending in 2019. A number of factors affect the useful lives of the satellites, including, among other things, the quality of their design and construction, the durability of their component parts and back-up units, the ability to continue to maintain proper orbit and control over the satellites functions, the efficiency of the launch vehicle used, the remaining on-board fuel following orbit insertion, the occurrence of any anomaly or series of anomalies affecting the satellite, and the launch risks and in-orbit risks described above. There can be no assurance that the actual useful life of WildBlue-1, Anik F2, ViaSat-1or any other satellite that we may acquire will equal its design life. In addition, continued improvements in satellite technology may make obsolete ViaSat-1 or any other satellite we may acquire prior to the end of its life. |
| Insurance Risks. We currently hold launch insurance for ViaSat-1, in-orbit insurance for WildBlue-1 and Anik F2, and the first years in-orbit insurance for ViaSat-1. We also intend to seek in-orbit insurance for any satellite we may acquire. However, we may not be able to obtain insurance, or renew existing insurance, on reasonable economic terms or at all. If we are able to obtain or renew our insurance, it may contain customary exclusions and will not likely cover the full cost of constructing and launching or replacing the satellites, nor will it cover business interruptions or similar losses. In addition, the occurrence of any anomalies on other satellites, including other Ka-band satellites, or any failures of a satellite using similar components or failures of a similar launch vehicle to the launch vehicle we expect to use to launch ViaSat-1, may materially adversely affect our ability to insure the satellites at commercially reasonable premiums, if at all. |
| Joint Venture Risks. We may own or operate future satellites through joint ventures that we do not control. If we were to enter into any such joint venture, we would be exposed to certain risks and uncertainties, including the risk of the joint venture or applicable entity failing to satisfy its obligations, which may result in certain liabilities to us for guarantees and other commitments, challenges in achieving strategic objectives and expected benefits of the business arrangement, the risk of conflicts arising between us and our partners and the difficulty of managing and resolving such conflicts, and the difficulty of managing or otherwise monitoring such business arrangements. In addition, our operating results would be affected by the performance of businesses over which we do not exercise unilateral control and, if any other members of such joint venture were to file for bankruptcy or otherwise fail to perform its obligations or to manage the joint venture effectively, this could cause us to lose our investment in any such joint venture entity. |
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| a complex and lengthy procurement process for most of our customers or potential customers; | |
| changes in the levels of research and development spending, including the effects of associated tax credits; | |
| cost overruns on fixed-price development contracts; | |
| the difficulty in estimating costs over the life of a contract, which may require adjustment in future periods; | |
| the timing, quantity and mix of products and services sold; | |
| price discounts given to some customers; | |
| market acceptance and the timing of availability of our new products and services; | |
| the timing of customer payments for significant contracts; | |
| one-time charges to operating income arising from items such as acquisition expenses, impairment of assets and write-offs of assets related to customer non-payments or obsolescence; | |
| the failure to receive an expected order or a deferral of an order to a later period; and | |
| general economic and political conditions. |
| changes in governmental procurement legislation and regulations and other policies, which may reflect military and political developments; | |
| unexpected contract or project terminations or suspensions; | |
| unpredictable order placements, reductions or cancellations; | |
| reductions or delays in government funds available for our projects due to government policy changes, budget cuts or delays and contract adjustments; | |
| the ability of competitors to protest contractual awards; | |
| penalties arising from post-award contract audits; | |
| the reduction in the value of our contracts as a result of the routine audit and investigation of our costs by U.S. government agencies; |
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| higher-than-expected final costs, particularly relating to software and hardware development, for work performed under contracts where we commit to specified deliveries for a fixed price; | |
| limited profitability from cost-reimbursement contracts under which the amount of profit is limited to a specified amount; | |
| unpredictable cash collections of unbilled receivables that may be subject to acceptance of contract deliverables by the customer and contract close-out procedures, including government approval of final indirect rates; | |
| competition with programs managed by other government contractors for limited resources and for uncertain levels of funding; | |
| significant changes in contract scheduling or program structure, which generally result in delays or reductions in deliveries; and | |
| intense competition for available U.S. government business necessitating increases in time and investment for design and development. |
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| our ability to enhance our offerings by adding innovative features that differentiate our offerings from those of our competitors; | |
| successful integration of various elements of our complex technologies and system architectures; | |
| timely completion and introduction of new product designs; | |
| achievement of acceptable product costs; | |
| timely and efficient implementation of our manufacturing and assembly processes and cost reduction efforts; | |
| establishment of close working relationships with major customers for the design of their new communications and secure networking systems incorporating our products; | |
| development of competitive products and technologies by competitors; | |
| marketing and pricing strategies of our competitors with respect to competitive products; and | |
| market acceptance of our new products. |
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| the difficulty in integrating newly acquired businesses and operations in an efficient and effective manner; | |
| the challenges in achieving strategic objectives, cost savings and other benefits expected from acquisitions; | |
| the risk of diverting our resources and the attention of our senior management from the operations of our business; |
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| additional demands on management related to the increase in the size and scope of our company following the acquisition; | |
| the risk that our markets do not evolve as anticipated and the technologies acquired do not prove to be those needed to be successful in those markets; | |
| difficulties in combining corporate cultures; | |
| difficulties in the assimilation and retention of key employees; | |
| difficulties in maintaining relationships with present and potential customers, distributors and suppliers of the acquired business; | |
| costs and expenses associated with any undisclosed or potential liabilities of the acquired business; | |
| delays, difficulties or unexpected costs in the integration, assimilation, implementation or modification of platforms, systems, functions, technologies and infrastructure to support the combined business, as well as maintaining uniform standards, controls (including internal accounting controls), procedures and policies; | |
| the risk that the returns on acquisitions will not support the expenditures or indebtedness incurred to acquire such businesses or the capital expenditures needed to develop such businesses; | |
| the risks of entering markets in which we have less experience; and | |
| the risks of potential disputes concerning indemnities and other obligations that could result in substantial costs. |
| make it more difficult for us to satisfy our debt obligations; | |
| increase our vulnerability to general adverse economic and industry conditions; | |
| impair our ability to obtain additional debt or equity financing in the future for working capital, capital expenditures, product development, satellite construction, acquisitions or general corporate or other purposes; | |
| require us to dedicate a material portion of our cash flows from operations to the payment of principal and interest on our indebtedness, thereby reducing the availability of our cash flows to fund working capital needs, capital expenditures, product development, satellite construction, acquisitions and other general corporate purposes; | |
| limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; |
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| place us at a disadvantage compared to our competitors that have less indebtedness; and | |
| limit our ability to adjust to changing market conditions. |
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| incur, assume or guarantee additional indebtedness; | |
| issue redeemable stock and preferred stock; | |
| grant or incur liens; | |
| sell or otherwise dispose of assets, including capital stock of subsidiaries; | |
| make loans and investments; | |
| pay dividends, make distributions, or redeem or repurchase capital stock; | |
| enter into transactions with affiliates; | |
| reduce our satellite insurance; and | |
| consolidate or merge with or into, or sell substantially all of our assets to, another person. |
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| unexpected changes in laws, policies and regulatory requirements, including but not limited to regulations related to import-export control; | |
| increased cost of localizing systems in foreign countries; | |
| increased sales and marketing and research and development expenses; | |
| availability of suitable export financing; | |
| timing and availability of export licenses; | |
| imposition of taxes, tariffs, embargoes and other trade barriers; | |
| political and economic instability; | |
| fluctuations in currency exchange rates; |
| compliance with a variety of international laws and U.S. laws affecting the activities of U.S. companies abroad; |
| challenges in staffing and managing foreign operations; | |
| difficulties in managing distributors; | |
| potentially adverse tax consequences; | |
| potential difficulty in making adequate payment arrangements; and | |
| potential difficulty in collecting accounts receivable. |
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| quarterly variations in operating results and announcements of innovations; | |
| new products, services and strategic developments by us or our competitors; |
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| developments in our relationships with our customers, distributors and suppliers; | |
| regulatory developments; | |
| changes in our revenues, expense levels or profitability; | |
| changes in financial estimates and recommendations by securities analysts; | |
| failure to meet the expectations of securities analysts; | |
| changes in the satellite and wireless communications and secure networking industries; and | |
| changes in the economy. |
| permit the board of directors to increase its own size and fill the resulting vacancies; | |
| provide for a board comprised of three classes of directors with each class serving a staggered three-year term; | |
| authorize the issuance of blank check preferred stock in one or more series; and | |
| prohibit stockholder action by written consent. |
ITEM 1B. | UNRESOLVED STAFF COMMENTS |
ITEM 2. | PROPERTIES |
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ITEM 3. | LEGAL PROCEEDINGS |
ITEM 5. | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
High | Low | |||||||
Fiscal 2010
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||||||||
First Quarter
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$ | 27.36 | $ | 20.35 | ||||
Second Quarter
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28.88 | 23.53 | ||||||
Third Quarter
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32.46 | 28.12 | ||||||
Fourth Quarter
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35.13 | 26.04 | ||||||
Fiscal 2011
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First Quarter
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$ | 36.74 | $ | 30.60 | ||||
Second Quarter
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41.81 | 31.00 | ||||||
Third Quarter
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44.88 | 38.40 | ||||||
Fourth Quarter
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46.00 | 37.50 |
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ITEM 6. | SELECTED FINANCIAL DATA |
Fiscal Years Ended | ||||||||||||||||||||
April 1, |
April 2, |
April 3, |
March 28, |
March 30, |
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2011 | 2010 | 2009 | 2008 | 2007 | ||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||
Consolidated Statement of Income Data:
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Total revenues
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$ | 802,206 | $ | 688,080 | $ | 628,179 | $ | 574,650 | $ | 516,566 | ||||||||||
Operating expenses:
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Cost of revenues
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550,568 | 475,356 | 446,824 | 413,520 | 380,092 | |||||||||||||||
Selling, general and administrative
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164,265 | 132,895 | 98,624 | 76,365 | 69,896 | |||||||||||||||
Independent research and development
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28,711 | 27,325 | 29,622 | 32,273 | 21,631 | |||||||||||||||
Amortization of acquired intangible assets
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19,409 | 9,494 | 8,822 | 9,562 | 9,502 | |||||||||||||||
Income from operations
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39,253 | 43,010 | 44,287 | 42,930 | 35,445 | |||||||||||||||
Interest income (expense), net
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(2,831 | ) | (6,733 | ) | 954 | 5,155 | 1,741 | |||||||||||||
Income before income taxes
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36,422 | 36,277 | 45,241 | 48,085 | 37,186 | |||||||||||||||
(Benefit from) provision for income taxes
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(2 | ) | 5,438 | 6,794 | 13,521 | 6,755 | ||||||||||||||
Net income
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36,424 | 30,839 | 38,447 | 34,564 | 30,431 | |||||||||||||||
Less: Net income (loss) attributable to noncontrolling interest,
net of tax
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309 | (297 | ) | 116 | 1,051 | 265 | ||||||||||||||
Net income attributable to ViaSat, Inc.
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$ | 36,115 | $ | 31,136 | $ | 38,331 | $ | 33,513 | $ | 30,166 | ||||||||||
Basic net income per share attributable to ViaSat, Inc. common
stockholders
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$ | 0.88 | $ | 0.94 | $ | 1.25 | $ | 1.11 | $ | 1.06 | ||||||||||
Diluted net income per share attributable to ViaSat, Inc. common
stockholders
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$ | 0.84 | $ | 0.89 | $ | 1.20 | $ | 1.04 | $ | 0.98 | ||||||||||
Shares used in computing basic net income per share
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40,858 | 33,020 | 30,772 | 30,232 | 28,589 | |||||||||||||||
Shares used in computing diluted net income per share
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43,059 | 34,839 | 31,884 | 32,224 | 30,893 | |||||||||||||||
Consolidated Balance Sheet Data:
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Cash, cash equivalents and short-term investments
|
$ | 40,490 | $ | 89,631 | $ | 63,491 | $ | 125,219 | $ | 103,392 | ||||||||||
Working capital
|
167,457 | 214,541 | 203,390 | 248,251 | 187,406 | |||||||||||||||
Total assets
|
1,405,748 | 1,293,552 | 622,942 | 551,094 | 483,939 | |||||||||||||||
Other long-term debt
|
61,946 | 60,000 | | | | |||||||||||||||
Senior Notes due 2016, net
|
272,296 | 271,801 | | | | |||||||||||||||
Other liabilities
|
23,842 | 24,395 | 24,718 | 17,290 | 13,273 | |||||||||||||||
Total ViaSat, Inc. stockholders equity
|
840,125 | 753,005 | 458,748 | 404,140 | 348,795 |
35
ITEM 7. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
| Government satellite communication systems, including an array of portable and fixed broadband modems, terminals, network access control systems and antenna systems using a range of satellite frequency bands for line-of-sight and beyond-line-of-sight ISR and C2 missions, satellite networking services, as well as products designed for manpacks, aircraft, UAVs, seagoing vessels, ground mobile vehicles and fixed applications. | |
| Information assurance products that enable military and government users to communicate information securely over networks, and that secure data stored on computers and storage devices. | |
| Tactical data links, including MIDS terminals for military fighter jets and their successor, MIDS-JTRS terminals, disposable weapon data links and portable small tactical terminals. |
36
| Consumer broadband, including next-generation satellite network infrastructure and ground terminals to access high capacity satellites. | |
| Antenna systems for terrestrial and satellite applications, specializing in geospatial imagery, mobile satellite communication, Ka-band gateways, and other multi-band antennas. | |
| Mobile broadband satellite communication systems, designed for use in aircraft, seagoing vessels and high-speed trains. | |
| Enterprise VSAT networks and products, designed to provide enterprises with broadband access to the internet or private networks. | |
| Satellite networking development programs, including specialized design and technology services covering all aspects of satellite communication system architecture and technology. |
| Wholesale and retail broadband services, comprised of WildBlue service, which provides two-way satellite-based broadband internet access to consumers and small businesses in the United States. | |
| Our Yonder worldwide mobile broadband services, comprised of global network management services for customers who use our ArcLight-based mobile satellite systems. |
37
38
39
40
41
April 1, |
April 2, |
April 3, |
||||||||||
Fiscal Years Ended | 2011 | 2010 | 2009 | |||||||||
Revenues:
|
100.0 | % | 100.0 | % | 100.0 | % | ||||||
Product revenues
|
65.3 | 84.9 | 94.8 | |||||||||
Service revenues
|
34.7 | 15.1 | 5.2 | |||||||||
Operating expenses:
|
||||||||||||
Cost of product revenues
|
48.6 | 59.3 | 67.6 | |||||||||
Cost of service revenues
|
20.0 | 9.7 | 3.5 | |||||||||
Selling, general and administrative
|
20.5 | 19.3 | 15.7 | |||||||||
Independent research and development
|
3.6 | 4.0 | 4.7 | |||||||||
Amortization of acquired intangible assets
|
2.4 | 1.4 | 1.4 | |||||||||
Income from operations
|
4.9 | 6.3 | 7.1 | |||||||||
Income before income taxes
|
4.5 | 5.3 | 7.2 | |||||||||
Provision for income taxes
|
0.0 | 0.8 | 1.1 | |||||||||
Net income
|
4.5 | 4.5 | 6.1 | |||||||||
Net income attributable to ViaSat, Inc.
|
4.5 | 4.5 | 6.1 |
Fiscal Years Ended |
Dollar |
Percentage |
||||||||||||||
April 1, |
April 2, |
Increase |
Increase |
|||||||||||||
2011 | 2010 | (Decrease) | (Decrease) | |||||||||||||
(In millions, except percentages) | ||||||||||||||||
Product revenues
|
$ | 523.9 | $ | 584.1 | $ | (60.1 | ) | (10.3 | )% | |||||||
Percentage of total revenues
|
65.3 | % | 84.9 | % |
42
Fiscal Years Ended |
Dollar |
Percentage |
||||||||||||||
April 1, |
April 2, |
Increase |
Increase |
|||||||||||||
2011 | 2010 | (Decrease) | (Decrease) | |||||||||||||
(In millions, except percentages) | ||||||||||||||||
Service revenues
|
$ | 278.3 | $ | 104.0 | $ | 174.3 | 167.6 | % | ||||||||
Percentage of total revenues
|
34.7 | % | 15.1 | % |
Fiscal Years Ended |
Dollar |
Percentage |
||||||||||||||
April 1, |
April 2, |
Increase |
Increase |
|||||||||||||
2011 | 2010 | (Decrease) | (Decrease) | |||||||||||||
(In millions, except percentages) | ||||||||||||||||
Cost of product revenues
|
$ | 389.9 | $ | 408.5 | $ | (18.6 | ) | (4.5 | )% | |||||||
Percentage of product revenues
|
74.4 | % | 69.9 | % |
Fiscal Years Ended |
Dollar |
Percentage |
||||||||||||||
April 1, |
April 2, |
Increase |
Increase |
|||||||||||||
2011 | 2010 | (Decrease) | (Decrease) | |||||||||||||
(In millions, except percentages) | ||||||||||||||||
Cost of service revenues
|
$ | 160.6 | $ | 66.8 | $ | 93.8 | 140.3 | % | ||||||||
Percentage of service revenues
|
57.7 | % | 64.3 | % |
43
Fiscal Years Ended |
Dollar |
Percentage |
||||||||||||||
April 1, |
April 2, |
Increase |
Increase |
|||||||||||||
2011 | 2010 | (Decrease) | (Decrease) | |||||||||||||
(In millions, except percentages) | ||||||||||||||||
Selling, general and administrative
|
$ | 164.3 | $ | 132.9 | $ | 31.4 | 23.6 | % | ||||||||
Percentage of total revenues
|
20.5 | % | 19.3 | % |
Fiscal Years Ended |
Dollar |
Percentage |
||||||||||||||
April 1, |
April 2, |
Increase |
Increase |
|||||||||||||
2011 | 2010 | (Decrease) | (Decrease) | |||||||||||||
(In millions, except percentages) | ||||||||||||||||
Independent research and development
|
$ | 28.7 | $ | 27.3 | $ | 1.4 | 5.1 | % | ||||||||
Percentage of total revenues
|
3.6 | % | 4.0 | % |
44
Amortization | ||||
(In thousands) | ||||
Expected for fiscal year 2012
|
$ | 18,735 | ||
Expected for fiscal year 2013
|
15,623 | |||
Expected for fiscal year 2014
|
13,879 | |||
Expected for fiscal year 2015
|
13,803 | |||
Expected for fiscal year 2016
|
10,203 | |||
Thereafter
|
9,646 | |||
$ | 81,889 | |||
Fiscal Years Ended |
Dollar |
Percentage |
||||||||||||||
April 1, |
April 2, |
Increase |
Increase |
|||||||||||||
2011 | 2010 | (Decrease) | (Decrease) | |||||||||||||
(In millions, except percentages) | ||||||||||||||||
Revenues
|
$ | 384.1 | $ | 385.2 | $ | (1.0 | ) | (0.3 | )% |
45
Fiscal Years Ended |
Dollar |
Percentage |
||||||||||||||
April 1, |
April 2, |
Increase |
Increase |
|||||||||||||
2011 | 2010 | (Decrease) | (Decrease) | |||||||||||||
(In millions, except percentages) | ||||||||||||||||
Segment operating profit
|
$ | 29.9 | $ | 55.7 | $ | (25.8 | ) | (46.4 | )% | |||||||
Percentage of segment revenues
|
7.8 | % | 14.5 | % |
Fiscal Years Ended |
Dollar |
Percentage |
||||||||||||||
April 1, |
April 2, |
Increase |
Increase |
|||||||||||||
2011 | 2010 | (Decrease) | (Decrease) | |||||||||||||
(In millions, except percentages) | ||||||||||||||||
Revenues
|
$ | 183.1 | $ | 227.1 | $ | (44.0 | ) | (19.4 | )% |
Fiscal Years Ended |
Dollar |
Percentage |
||||||||||||||
April 1, |
April 2, |
Increase |
Increase |
|||||||||||||
2011 | 2010 | (Decrease) | (Decrease) | |||||||||||||
(In millions, except percentages) | ||||||||||||||||
Segment operating (loss) profit
|
$ | (9.5 | ) | $ | 6.1 | $ | (15.6 | ) | (255.7 | )% | ||||||
Percentage of segment revenues
|
(5.2 | )% | 2.7 | % |
46
Fiscal Years Ended |
Dollar |
Percentage |
||||||||||||||
April 1, |
April 2, |
Increase |
Increase |
|||||||||||||
2011 | 2010 | (Decrease) | (Decrease) | |||||||||||||
(In millions, except percentages) | ||||||||||||||||
Revenues
|
$ | 235.0 | $ | 75.8 | $ | 159.1 | 209.9 | % |
Fiscal Years Ended |
Dollar |
Percentage |
||||||||||||||
April 1, |
April 2, |
Increase |
Increase |
|||||||||||||
2011 | 2010 | (Decrease) | (Decrease) | |||||||||||||
(In millions, except percentages) | ||||||||||||||||
Segment operating profit (loss)
|
$ | 38.2 | $ | (9.3 | ) | $ | 47.5 | 510.8 | % | |||||||
Percentage of segment revenues
|
16.3 | % | (12.3 | )% |
Fiscal Years Ended |
Dollar |
Percentage |
||||||||||||||
April 2, |
April 3, |
Increase |
Increase |
|||||||||||||
2010 | 2009 | (Decrease) | (Decrease) | |||||||||||||
(In millions, except percentages) | ||||||||||||||||
Product revenues
|
$ | 584.1 | $ | 595.3 | $ | (11.3 | ) | (1.9 | )% | |||||||
Percentage of total revenues
|
84.9 | % | 94.8 | % |
Fiscal Years Ended |
Dollar |
Percentage |
||||||||||||||
April 2, |
April 3, |
Increase |
Increase |
|||||||||||||
2010 | 2009 | (Decrease) | (Decrease) | |||||||||||||
(In millions, except percentages) | ||||||||||||||||
Service revenues
|
$ | 104.0 | $ | 32.8 | $ | 71.2 | 216.7 | % | ||||||||
Percentage of total revenues
|
15.1 | % | 5.2 | % |
47
Fiscal Years Ended |
Dollar |
Percentage |
||||||||||||||
April 2, |
April 3, |
Increase |
Increase |
|||||||||||||
2010 | 2009 | (Decrease) | (Decrease) | |||||||||||||
(In millions, except percentages) | ||||||||||||||||
Cost of product revenues
|
$ | 408.5 | $ | 424.6 | $ | (16.1 | ) | (3.8 | )% | |||||||
Percentage of product revenues
|
69.9 | % | 71.3 | % |
Fiscal Years Ended |
Dollar |
Percentage |
||||||||||||||
April 2, |
April 3, |
Increase |
Increase |
|||||||||||||
2010 | 2009 | (Decrease) | (Decrease) | |||||||||||||
(In millions, except percentages) | ||||||||||||||||
Cost of service revenues
|
$ | 66.8 | $ | 22.2 | $ | 44.6 | 201.0 | % | ||||||||
Percentage of service revenues
|
64.3 | % | 67.6 | % |
Fiscal Years Ended |
Dollar |
Percentage |
||||||||||||||
April 2, |
April 3, |
Increase |
Increase |
|||||||||||||
2010 | 2009 | (Decrease) | (Decrease) | |||||||||||||
(In millions, except percentages) | ||||||||||||||||
Selling, general and administrative
|
$ | 132.9 | $ | 98.6 | $ | 34.3 | 34.7 | % | ||||||||
Percentage of total revenues
|
19.3 | % | 15.7 | % |
48
Fiscal Years Ended |
Dollar |
Percentage |
||||||||||||||
April 2, |
April 3, |
Increase |
Increase |
|||||||||||||
2010 | 2009 | (Decrease) | (Decrease) | |||||||||||||
(In millions, except percentages) | ||||||||||||||||
Independent research and development
|
$ | 27.3 | $ | 29.6 | $ | (2.3 | ) | (7.8 | )% | |||||||
Percentage of total revenues
|
4.0 | % | 4.7 | % |
Fiscal Years Ended |
Dollar |
Percentage |
||||||||||||||
April 2, |
April 3, |
Increase |
Increase |
|||||||||||||
2010 | 2009 | (Decrease) | (Decrease) | |||||||||||||
(In millions, except percentages) | ||||||||||||||||
Revenues
|
$ | 385.2 | $ | 388.7 | $ | (3.5 | ) | (0.9 | )% |
49
Fiscal Years Ended |
Dollar |
Percentage |
||||||||||||||
April 2, |
April 3, |
Increase |
Increase |
|||||||||||||
2010 | 2009 | (Decrease) | (Decrease) | |||||||||||||
(In millions, except percentages) | ||||||||||||||||
Segment operating profit
|
$ | 55.7 | $ | 57.0 | $ | (1.3 | ) | (2.3 | )% | |||||||
Percentage of segment revenues
|
14.5 | % | 14.7 | % |
Fiscal Years Ended |
Dollar |
Percentage |
||||||||||||||
April 2, |
April 3, |
Increase |
Increase |
|||||||||||||
2010 | 2009 | (Decrease) | (Decrease) | |||||||||||||
(In millions, except percentages) | ||||||||||||||||
Revenues
|
$ | 227.1 | $ | 230.8 | $ | (3.7 | ) | (1.6 | )% |
Fiscal Years Ended |
Dollar |
Percentage |
||||||||||||||
April 2, |
April 3, |
Increase |
Increase |
|||||||||||||
2010 | 2009 | (Decrease) | (Decrease) | |||||||||||||
(In millions, except percentages) | ||||||||||||||||
Segment operating profit
|
$ | 6.1 | $ | 0.1 | $ | 6.0 | 9,568.3 | % | ||||||||
Percentage of segment revenues
|
2.7 | % | 0.0 | % |
Fiscal Years Ended |
Dollar |
Percentage |
||||||||||||||
April 2, |
April 3, |
Increase |
Increase |
|||||||||||||
2010 | 2009 | (Decrease) | (Decrease) | |||||||||||||
(In millions, except percentages) | ||||||||||||||||
Revenues
|
$ | 75.8 | $ | 8.7 | $ | 67.1 | 771.9 | % |
50
Fiscal Years Ended |
Dollar |
Percentage |
||||||||||||||
April 2, |
April 3, |
Increase |
Increase |
|||||||||||||
2010 | 2009 | (Decrease) | (Decrease) | |||||||||||||
(In millions, except percentages) | ||||||||||||||||
Segment operating loss
|
$ | (9.3 | ) | $ | (4.0 | ) | $ | (5.3 | ) | (133.9 | )% | |||||
Percentage of segment revenues
|
(12.3 | )% | (45.8 | )% |
April 1, 2011 | April 2, 2010 | |||||||
(In millions) | ||||||||
Firm backlog
|
||||||||
Government Systems segment
|
$ | 283.8 | $ | 217.8 | ||||
Commercial Networks segment
|
216.7 | 283.5 | ||||||
Satellite Services segment
|
28.2 | 27.5 | ||||||
Total
|
$ | 528.7 | $ | 528.8 | ||||
Funded backlog
|
||||||||
Government Systems segment
|
$ | 235.6 | $ | 210.0 | ||||
Commercial Networks segment
|
216.7 | 283.5 | ||||||
Satellite Services segment
|
28.2 | 27.5 | ||||||
Total
|
$ | 480.5 | $ | 521.0 | ||||
51
52
53
54
For the Fiscal Years Ending | ||||||||||||||||||||
Total | 2012 | 2013-2014 | 2015-2016 | Thereafter | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Operating leases and satellite capacity agreements
|
$ | 161,919 | $ | 35,642 | $ | 55,402 | $ | 28,857 | $ | 42,018 | ||||||||||
Capital lease
|
3,269 | 1,238 | 2,031 | | | |||||||||||||||
The Notes(1)
|
408,217 | 24,406 | 48,813 | 48,813 | 286,185 | |||||||||||||||
Line of credit
|
60,000 | | | 60,000 | | |||||||||||||||
Standby letters of credit
|
14,278 | 14,278 | | | | |||||||||||||||
Purchase commitments including satellite-related agreements
|
502,378 | 194,950 | 136,927 | 97,950 | 72,551 | |||||||||||||||
Total
|
$ | 1,150,061 | $ | 270,514 | $ | 243,173 | $ | 235,620 | $ | 400,754 | ||||||||||
(1) | Includes total interest payments on the Notes of $24.4 million in fiscal year 2012, $48.8 million in fiscal 2013-2014, $48.8 million in fiscal 2015-2016 and $11.2 million thereafter. |
55
ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
56
ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
57
1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
2011
|
||||||||||||||||
Total revenues
|
$ | 192,004 | $ | 197,889 | $ | 195,941 | $ | 216,372 | ||||||||
Income from operations
|
7,383 | 13,073 | 7,012 | 11,785 | ||||||||||||
Net income
|
3,400 | 7,801 | 12,927 | 12,296 | ||||||||||||
Net income attributable to ViaSat, Inc.
|
3,261 | 7,786 | 12,924 | 12,144 | ||||||||||||
Basic net income per share
|
0.08 | 0.19 | 0.31 | 0.29 | ||||||||||||
Diluted net income per share
|
0.08 | 0.18 | 0.30 | 0.28 | ||||||||||||
2010
|
||||||||||||||||
Total revenues
|
$ | 158,408 | $ | 160,666 | $ | 156,364 | $ | 212,642 | ||||||||
Income from operations
|
11,271 | 12,029 | 1,862 | 17,848 | ||||||||||||
Net income
|
8,292 | 9,092 | 3,063 | 10,392 | ||||||||||||
Net income attributable to ViaSat, Inc.
|
8,269 | 9,175 | 3,246 | 10,446 | ||||||||||||
Basic net income per share
|
0.27 | 0.29 | 0.10 | 0.29 | ||||||||||||
Diluted net income per share
|
0.25 | 0.28 | 0.09 | 0.27 |
ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
ITEM 9A. | CONTROLS AND PROCEDURES |
58
ITEM 9B. | OTHER INFORMATION |
ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
ITEM 11. | EXECUTIVE COMPENSATION |
59
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES |
ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES |
Page |
||||
Number | ||||
F-1 | ||||
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
II-1 |
60
By: |
/s/ MARK
D. DANKBERG
|
Signature | Title | Date | ||||
/s/ MARK
D. DANKBERG Mark D. Dankberg |
Chairman of the Board and Chief Executive Officer (Principal Executive Officer) |
May 26, 2011 | ||||
/s/ RONALD
G. WANGERIN Ronald G. Wangerin |
Vice President, Chief Financial Officer (Principal Financial and Accounting Officer) |
May 26, 2011 | ||||
/s/ ROBERT
W. JOHNSON Robert W. Johnson |
Director | May 26, 2011 | ||||
/s/ JEFFREY
M. NASH Jeffrey M. Nash |
Director | May 26, 2011 | ||||
/s/ B.
ALLEN LAY B. Allen Lay |
Director | May 26, 2011 | ||||
/s/ MICHAEL
B. TARGOFF Michael B. Targoff |
Director | May 26, 2011 | ||||
/s/ JOHN
P. STENBIT John P. Stenbit |
Director | May 26, 2011 | ||||
/s/ HARVEY
P. WHITE Harvey P. White |
Director | May 26, 2011 |
61
Filed or |
||||||||||||||||
Exhibit |
Incorporated by Reference |
Furnished |
||||||||||||||
Number | Exhibit Description | Form | File No. | Exhibit | Filing Date | Herewith | ||||||||||
2 | .1 | Agreement and Plan of Merger, dated as of September 30, 2009, by and among ViaSat, Inc., WildBlue Holding, Inc. and Aloha Merger Sub, Inc. | 8-K | 000-21767 | 2 | .1 | 10/02/2009 | |||||||||
3 | .1 | Second Amended and Restated Certificate of Incorporation of ViaSat, Inc. | 10-Q | 000-21767 | 3 | .1 | 11/14/2000 | |||||||||
3 | .2 | First Amended and Restated Bylaws of ViaSat, Inc. | S-3 | 333-116468 | 3 | .2 | 06/14/2004 | |||||||||
4 | .1 | Form of Common Stock Certificate | S-1/A | 333-13183 | 4 | .1 | 11/05/1996 | |||||||||
4 | .2 | Indenture, dated as of October 22, 2009, by and among ViaSat, Inc., ViaSat Credit Corp., Enerdyne Technologies, Inc., ViaSat Satellite Ventures, LLC, VSV I Holdings, LLC, VSV II Holdings, LLC, ViaSat Satellite Ventures U.S. I, LLC, ViaSat Satellite Ventures U.S. II, LLC and Wilmington Trust FSB, as trustee | 8-K | 000-21767 | 4 | .1 | 10/22/2009 | |||||||||
4 | .3 | Form of 8.875% Senior Note due 2016 of ViaSat, Inc. (attached as Exhibit A to the Indenture filed as Exhibit 4.2 hereto) | 8-K | 000-21767 | 4 | .1 | 10/22/2009 | |||||||||
10 | .1 | Form of Indemnification Agreement between ViaSat, Inc. and each of its directors and officers | 8-K | 000-21767 | 99 | .1 | 03/07/2008 | |||||||||
10 | .2* | ViaSat, Inc. Employee Stock Purchase Plan (as Amended and Restated Effective July 1, 2009) | 8-K | 000-21767 | 10 | .1 | 10/05/2009 | |||||||||
10 | .3* | 1996 Equity Participation Plan of ViaSat, Inc. (As Amended and Restated Effective September 22, 2010) | 8-K | 000-21767 | 10 | .1 | 09/24/2010 | |||||||||
10 | .4* | Form of Stock Option Agreement for the 1996 Equity Participation Plan of ViaSat, Inc. | 8-K | 000-21767 | 10 | .2 | 10/02/2008 | |||||||||
10 | .5* | Form of Restricted Stock Unit Award Agreement for the 1996 Equity Participation Plan of ViaSat, Inc. | 8-K | 000-21767 | 10 | .3 | 10/02/2008 | |||||||||
10 | .6* | Form of Executive Restricted Stock Unit Award Agreement for the 1996 Equity Participation Plan of ViaSat, Inc. | 8-K | 000-21767 | 10 | .4 | 10/02/2008 | |||||||||
10 | .7* | Form of Non-Employee Director Restricted Stock Unit Award Agreement for the 1996 Equity Participation Plan of ViaSat, Inc. | 8-K | 000-21767 | 10 | .3 | 10/05/2009 | |||||||||
10 | .8* | Form of Change in Control Severance Agreement between ViaSat, Inc. and each of its executive officers | 8-K | 000-21767 | 10 | .1 | 08/04/2010 | |||||||||
10 | .9 | Fourth Amended and Restated Revolving Loan Agreement dated July 1, 2009 by and among ViaSat, Inc., Banc of America Securities LLC, Bank of America, N.A., JPMorgan Chase Bank, N.A., Union Bank, N.A. and the other lenders party thereto | 10-Q | 000-21767 | 10 | .2 | 08/12/2009 |
62
Filed or |
||||||||||||||||
Exhibit |
Incorporated by Reference |
Furnished |
||||||||||||||
Number | Exhibit Description | Form | File No. | Exhibit | Filing Date | Herewith | ||||||||||
10 | .10 | First Amendment to Fourth Amended and Restated Revolving Loan Agreement, dated as of September 30, 2009, by and among ViaSat, Inc., Banc of America Securities LLC, Bank of America, N.A., JPMorgan Chase Bank, N.A., Union Bank, N.A., and the other lenders party thereto | 8-K | 000-21767 | 10 | .1 | 10/02/2009 | |||||||||
10 | .11 | Second Amendment to Fourth Amended and Restated Revolving Loan Agreement, dated as of October 6, 2009, by and among ViaSat, Inc., Banc of America Securities LLC, Bank of America, N.A., JPMorgan Chase Bank, N.A., Union Bank, N.A., Wells Fargo Bank, National Association and the other lenders party thereto | 8-K | 000-21767 | 10 | .1 | 10/09/2009 | |||||||||
10 | .12 | Third Amendment to Fourth Amended and Restated Revolving Loan Agreement, dated as of December 14, 2009, by and among ViaSat, Inc., Union Bank, N.A., and the other lenders party thereto | 10-Q | 000-21767 | 10 | .2 | 02/10/2010 | |||||||||
10 | .13 | Fourth Amendment to Fourth Amended and Restated Revolving Loan Agreement, dated as of March 15, 2010, by and among ViaSat, Inc., Banc of America Securities LLC, Bank of America, N.A., JPMorgan Chase Bank, N.A., Union Bank, N.A., Wells Fargo Bank, National Association and the other lenders party thereto | 8-K | 000-21767 | 10 | .1 | 03/17/2010 | |||||||||
10 | .14 | Fifth Amendment to Fourth Amended and Restated Revolving Loan Agreement, dated as of March 31, 2010, by and among ViaSat, Inc., Union Bank, N.A., Bank of America, N.A., JPMorgan Chase Bank, N.A., Compass Bank and Wells Fargo Bank, National Association and the other lenders party thereto | X | |||||||||||||
10 | .15 | Sixth Amendment to Fourth Amended and Restated Revolving Loan Agreement, dated as of October 12, 2010, by and among ViaSat, Inc., Union Bank, N.A., and the other lenders party thereto | 10-Q | 000-21767 | 10 | .1 | 02/09/2011 | |||||||||
10 | .16 | Seventh Amendment to Fourth Amended and Restated Revolving Loan Agreement, dated as of January 25, 2011, by and among ViaSat, Inc., Bank of America, N.A., Union Bank, N.A., JPMorgan Chase Bank, N.A., Wells Fargo Bank, National Association, Compass Bank, Credit Suisse AG, Cayman Islands Branch, Bank of the West, and other lenders party thereto | 8-K | 000-21767 | 10 | .1 | 01/28/2011 |
63
Filed or |
||||||||||||||||
Exhibit |
Incorporated by Reference |
Furnished |
||||||||||||||
Number | Exhibit Description | Form | File No. | Exhibit | Filing Date | Herewith | ||||||||||
10 | .17 | Lease, dated March 24, 1998, by and between W9/LNP Real Estate Limited Partnership and ViaSat, Inc. (6155 El Camino Real, Carlsbad, California) | 10-K | 000-21767 | 10 | .27 | 06/29/1998 | |||||||||
10 | .18 | Amendment to Lease, dated June 17, 2004, by and between Levine Investments Limited Partnership and ViaSat, Inc. (6155 El Camino Real, Carlsbad, CA) | 10-Q | 000-21767 | 10 | .1 | 08/10/2004 | |||||||||
10 | .19 | Contract for the ViaSat Satellite Program dated as of January 7, 2008 between ViaSat, Inc. and Space Systems/Loral, Inc. | 10-Q | 000-21767 | 10 | .1 | 02/06/2008 | |||||||||
10 | .20 | Beam Sharing Agreement dated January 11, 2008 between ViaSat, Inc. and Loral Space & Communications, Inc. | 10-Q | 000-21767 | 10 | .2 | 02/06/2008 | |||||||||
10 | .21 | Amended and Restated Launch Services Agreement dated May 7, 2009 between ViaSat, Inc. and Arianespace | 10-K | 000-21767 | 10 | .13 | 05/28/2009 | |||||||||
10 | .22 | Contract for Launch Services dated March 5, 2009 between ViaSat, Inc. and ILS International Launch Services, Inc. | 10-K | 000-21767 | 10 | .14 | 05/28/2009 | |||||||||
10 | .23 | Award/Contract dated March 10, 2010 between ViaSat, Inc. and Space and Naval Warfare Systems | 10-K | 000-21767 | 10 | .14 | 06/01/2010 | |||||||||
21 | .1 | Subsidiaries | X | |||||||||||||
23 | .1 | Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm | X | |||||||||||||
24 | .1 | Power of Attorney (see signature page) | X | |||||||||||||
31 | .1 | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Chief Executive Officer | X | |||||||||||||
31 | .2 | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Chief Financial Officer | X | |||||||||||||
32 | .1 | Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | |||||||||||||
101 | .INS** | XBRL Instance Document | X | |||||||||||||
101 | .SCH** | XBRL Taxonomy Extension Schema | X | |||||||||||||
101 | .CAL** | XBRL Taxonomy Extension Calculation Linkbase | X | |||||||||||||
101 | .LAB** | XBRL Taxonomy Extension Labels Linkbase | X | |||||||||||||
101 | .PRE** | XBRL Taxonomy Extension Presentation Linkbase | X | |||||||||||||
101 | .DEF** | XBRL Taxonomy Extension Definition Linkbase | X |
* | Indicates management contract, compensatory plan or arrangement. |
64
| Portions of this exhibit (indicated by asterisks) have been omitted and separately filed with the Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934. | |
** | Attached as Exhibit 101 to this report are documents formatted in XBRL (Extensible Business Reporting Language). Pursuant to applicable securities laws and regulations, we are deemed to have complied with the reporting obligation relating to the submission of interactive data files in such exhibits and are not subject to liability under any anti-fraud provisions of the federal securities laws as long as we have made a good faith attempt to comply with the submission requirements and promptly amend the interactive data files after becoming aware that the interactive data files fail to comply with the submission requirements. Users of this data are advised that, pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, are deemed not filed or part of any registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, and are otherwise not subject to liability under these sections. |
65
F-1
As of |
As of |
|||||||
April 1, |
April 2, |
|||||||
2011 | 2010 | |||||||
(In thousands, except share data) | ||||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 40,490 | $ | 89,631 | ||||
Accounts receivable, net
|
191,889 | 176,351 | ||||||
Inventories
|
98,555 | 82,962 | ||||||
Deferred income taxes
|
18,805 | 17,346 | ||||||
Prepaid expenses and other current assets
|
21,141 | 28,857 | ||||||
Total current assets
|
370,880 | 395,147 | ||||||
Satellites, net
|
533,000 | 495,689 | ||||||
Property and equipment, net
|
233,139 | 155,804 | ||||||
Other acquired intangible assets, net
|
81,889 | 89,389 | ||||||
Goodwill
|
83,532 | 75,024 | ||||||
Other assets
|
103,308 | 82,499 | ||||||
Total assets
|
$ | 1,405,748 | $ | 1,293,552 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 71,712 | $ | 78,355 | ||||
Accrued liabilities
|
130,583 | 102,251 | ||||||
Current portion of other long-term debt
|
1,128 | | ||||||
Total current liabilities
|
203,423 | 180,606 | ||||||
Senior Notes due 2016, net
|
272,296 | 271,801 | ||||||
Other long-term debt
|
61,946 | 60,000 | ||||||
Other liabilities
|
23,842 | 24,395 | ||||||
Total liabilities
|
561,507 | 536,802 | ||||||
Commitments and contingencies (Notes 11 and 12)
|
||||||||
Equity:
|
||||||||
ViaSat, Inc. stockholders equity
|
||||||||
Series A, convertible preferred stock, $.0001 par
value; 5,000,000 shares authorized; no shares issued and
outstanding at April 1, 2011 and April 2, 2010,
respectively
|
| | ||||||
Common stock, $.0001 par value, 100,000,000 shares
authorized; 41,664,767 and 39,792,633 shares outstanding at
April 1, 2011 and April 2, 2010, respectively
|
4 | 4 | ||||||
Paid-in capital
|
601,029 | 545,962 | ||||||
Retained earnings
|
254,722 | 218,607 | ||||||
Common stock held in treasury, at cost, 560,363 and
407,137 shares at April 1, 2011 and April 2,
2010, respectively
|
(17,907 | ) | (12,027 | ) | ||||
Accumulated other comprehensive income
|
2,277 | 459 | ||||||
Total ViaSat, Inc. stockholders equity
|
840,125 | 753,005 | ||||||
Noncontrolling interest in subsidiary
|
4,116 | 3,745 | ||||||
Total equity
|
844,241 | 756,750 | ||||||
Total liabilities and equity
|
$ | 1,405,748 | $ | 1,293,552 | ||||
F-2
Fiscal Years Ended | ||||||||||||
April 1, 2011 | April 2, 2010 | April 3, 2009 | ||||||||||
(In thousands, except per share data) | ||||||||||||
Revenues:
|
||||||||||||
Product revenues
|
$ | 523,938 | $ | 584,074 | $ | 595,342 | ||||||
Service revenues
|
278,268 | 104,006 | 32,837 | |||||||||
Total revenues
|
802,206 | 688,080 | 628,179 | |||||||||
Operating expenses:
|
||||||||||||
Cost of product revenues
|
389,945 | 408,526 | 424,620 | |||||||||
Cost of service revenues
|
160,623 | 66,830 | 22,204 | |||||||||
Selling, general and administrative
|
164,265 | 132,895 | 98,624 | |||||||||
Independent research and development
|
28,711 | 27,325 | 29,622 | |||||||||
Amortization of acquired intangible assets
|
19,409 | 9,494 | 8,822 | |||||||||
Income from operations
|
39,253 | 43,010 | 44,287 | |||||||||
Other income (expense):
|
||||||||||||
Interest income
|
323 | 621 | 1,463 | |||||||||
Interest expense
|
(3,154 | ) | (7,354 | ) | (509 | ) | ||||||
Income before income taxes
|
36,422 | 36,277 | 45,241 | |||||||||
(Benefit from) provision for income taxes
|
(2 | ) | 5,438 | 6,794 | ||||||||
Net income
|
36,424 | 30,839 | 38,447 | |||||||||
Less: Net income (loss) attributable to the noncontrolling
interest, net of tax
|
309 | (297 | ) | 116 | ||||||||
Net income attributable to ViaSat, Inc.
|
$ | 36,115 | $ | 31,136 | $ | 38,331 | ||||||
Net income per share attributable to ViaSat, Inc. common
stockholders:
|
||||||||||||
Basic net income per share attributable to ViaSat, Inc. common
stockholders
|
$ | 0.88 | $ | 0.94 | $ | 1.25 | ||||||
Diluted net income per share attributable to ViaSat, Inc. common
stockholders
|
$ | 0.84 | $ | 0.89 | $ | 1.20 | ||||||
Shares used in computing basic net income per share
|
40,858 | 33,020 | 30,772 | |||||||||
Shares used in computing diluted net income per share
|
43,059 | 34,839 | 31,884 |
F-3
Fiscal Years Ended | ||||||||||||
April 1, 2011 | April 2, 2010 | April 3, 2009 | ||||||||||
(In thousands) | ||||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income
|
$ | 36,424 | $ | 30,839 | $ | 38,447 | ||||||
Adjustments to reconcile net income to net cash provided by
operating
activities: |
||||||||||||
Depreciation
|
83,629 | 37,373 | 18,658 | |||||||||
Amortization of intangible assets
|
19,424 | 9,582 | 9,952 | |||||||||
Stock-based compensation expense
|
17,440 | 12,212 | 9,837 | |||||||||
Loss on disposition of fixed assets
|
6,999 | 594 | 193 | |||||||||
Deferred income taxes
|
(4,098 | ) | 4,229 | (5,285 | ) | |||||||
Other non-cash adjustments
|
503 | 2,483 | 211 | |||||||||
Increase (decrease) in cash resulting from changes in operating
assets and liabilities, net of effects of acquisitions:
|
||||||||||||
Accounts receivable
|
(14,138 | ) | (1,117 | ) | (9,103 | ) | ||||||
Inventories
|
(14,030 | ) | (9,367 | ) | (5,338 | ) | ||||||
Other assets
|
3,151 | 1,504 | (2,653 | ) | ||||||||
Accounts payable
|
6,644 | 2,965 | 1,740 | |||||||||
Accrued liabilities
|
32,441 | 20,612 | 2,654 | |||||||||
Other liabilities
|
(4,772 | ) | 637 | 2,629 | ||||||||
Net cash provided by operating activities
|
169,617 | 112,546 | 61,942 | |||||||||
Cash flows from investing activities:
|
||||||||||||
Purchase of property, equipment and satellites, net
|
(208,285 | ) | (134,543 | ) | (117,194 | ) | ||||||
Cash paid for patents, licenses and other assets
|
(15,986 | ) | (13,796 | ) | (8,028 | ) | ||||||
Payments related to acquisition of businesses, net of cash
acquired
|
(13,456 | ) | (377,987 | ) | (925 | ) | ||||||
Change in restricted cash, net
|
| 7,298 | | |||||||||
Net cash used in investing activities
|
(237,727 | ) | (519,028 | ) | (126,147 | ) | ||||||
Cash flows from financing activities:
|
||||||||||||
Proceeds from line of credit borrowings
|
40,000 | 263,000 | 10,000 | |||||||||
Payments on line of credit
|
(40,000 | ) | (203,000 | ) | (10,000 | ) | ||||||
Proceeds from issuance of Senior Notes due 2016, net of discount
|
| 271,582 | | |||||||||
Payment of debt issuance costs
|
(2,775 | ) | (12,781 | ) | | |||||||
Proceeds from issuance of common stock under equity plans
|
26,398 | 23,085 | 6,742 | |||||||||
Proceeds from common stock issued under public offering, net of
issuance costs
|
| 100,533 | | |||||||||
Purchase of common stock in treasury
|
(5,880 | ) | (10,326 | ) | (667 | ) | ||||||
Incremental tax benefits from stock-based compensation
|
867 | | 346 | |||||||||
Payment on secured borrowing
|
| | (4,720 | ) | ||||||||
Proceeds from sale of stock of majority-owned subsidiary
|
| | 1,500 | |||||||||
Net cash provided by financing activities
|
18,610 | 432,093 | 3,201 | |||||||||
Effect of exchange rate changes on cash
|
359 | 529 | (681 | ) | ||||||||
Net (decrease) increase in cash and cash equivalents
|
(49,141 | ) | 26,140 | (61,685 | ) | |||||||
Cash and cash equivalents at beginning of fiscal year
|
89,631 | 63,491 | 125,176 | |||||||||
Cash and cash equivalents at end of fiscal year
|
$ | 40,490 | $ | 89,631 | $ | 63,491 | ||||||
Supplemental information:
|
||||||||||||
Cash paid for interest (net of amounts capitalized)
|
$ | 2,797 | $ | 6,287 | $ | 413 | ||||||
Cash (received) paid for income taxes, net of refunds
|
$ | (6,563 | ) | $ | 7,784 | $ | 13,287 | |||||
Non-cash investing and financing activities:
|
||||||||||||
Issuance of common stock in connection with acquisitions
|
$ | 4,630 | $ | 131,888 | $ | | ||||||
Fair value of assets acquired in business combinations,
excluding cash acquired
|
$ | 22,699 | $ | 536,732 | $ | | ||||||
Liabilities assumed in business combinations
|
$ | 4,613 | $ | 26,857 | $ | | ||||||
Issuance of stock in satisfaction of certain accrued employee
compensation liabilities
|
$ | 5,096 | $ | 5,090 | $ | | ||||||
Equipment acquired under capital lease
|
$ | 3,074 | $ | | $ | | ||||||
Issuance of common stock in connection with license right
obtained
|
$ | | $ | 303 | $ | |
F-4
ViaSat, Inc. Stockholders | ||||||||||||||||||||||||||||||||||||||||
Common Stock |
Common Stock |
Accumulated |
||||||||||||||||||||||||||||||||||||||
Number of |
in Treasury |
Other |
||||||||||||||||||||||||||||||||||||||
Shares |
Paid-in |
Retained |
Number of |
Comprehensive |
Noncontrolling |
Comprehensive |
||||||||||||||||||||||||||||||||||
Issued | Amount | Capital | Earnings | Shares | Amount | Income (Loss) | Interest | Total | Income | |||||||||||||||||||||||||||||||
(In thousands, except share data) | ||||||||||||||||||||||||||||||||||||||||
Balance at March 28, 2008
|
30,500,605 | $ | 3 | $ | 255,856 | $ | 149,140 | (33,238 | ) | $ | (1,034 | ) | $ | 175 | $ | 2,289 | $ | 406,429 | ||||||||||||||||||||||
Exercise of stock options
|
337,276 | | 3,619 | | | | | | 3,619 | |||||||||||||||||||||||||||||||
Stock-based compensation expense
|
| | 9,837 | | | | | | 9,837 | |||||||||||||||||||||||||||||||
Tax benefit from exercise of stock options and release of RSU
awards
|
| | 667 | | | | | | 667 | |||||||||||||||||||||||||||||||
Issuance of stock under
|
||||||||||||||||||||||||||||||||||||||||
Employee Stock Purchase Plan
|
182,024 | | 3,123 | | | | | | 3,123 | |||||||||||||||||||||||||||||||
RSU awards vesting
|
94,181 | | | | | | | | | |||||||||||||||||||||||||||||||
Purchase of treasury shares pursuant to vesting of certain RSU
agreements
|
| | | | (33,730 | ) | (667 | ) | | | (667 | ) | ||||||||||||||||||||||||||||
Majority-owned subsidiary stock issuance
|
| | | | | | | 1,500 | 1,500 | |||||||||||||||||||||||||||||||
Other noncontrolling interest activity
|
| | | | | | | 137 | 137 | |||||||||||||||||||||||||||||||
Net income
|
| | | 38,331 | | | | 116 | 38,447 | $ | 38,447 | |||||||||||||||||||||||||||||
Foreign currency translation, net of tax
|
| | | | | | (302 | ) | | (302 | ) | (302 | ) | |||||||||||||||||||||||||||
Comprehensive income
|
$ | 38,145 | ||||||||||||||||||||||||||||||||||||||
Balance at April 3, 2009
|
31,114,086 | $ | 3 | $ | 273,102 | $ | 187,471 | (66,968 | ) | $ | (1,701 | ) | $ | (127 | ) | $ | 4,042 | $ | 462,790 | |||||||||||||||||||||
Exercise of stock options
|
1,019,899 | | 19,435 | | | | | | 19,435 | |||||||||||||||||||||||||||||||
Issuance of stock under Employee Stock Purchase Plan
|
168,640 | | 3,650 | | | | | | 3,650 | |||||||||||||||||||||||||||||||
Stock-based compensation expense
|
| | 12,212 | | | | | | 12,212 | |||||||||||||||||||||||||||||||
Shares issued in settlement of certain accrued employee
compensation liabilities
|
192,894 | | 5,090 | | | | | | 5,090 | |||||||||||||||||||||||||||||||
RSU awards vesting
|
234,039 | | | | | | | | | |||||||||||||||||||||||||||||||
Purchase of treasury shares pursuant to vesting of certain RSU
agreements
|
| | | | (88,438 | ) | (2,326 | ) | | | (2,326 | ) | ||||||||||||||||||||||||||||
Shares issued in connection with acquisition of business, net of
issuance costs
|
4,286,250 | 1 | 131,637 | | | | | | 131,638 | |||||||||||||||||||||||||||||||
Shares repurchased from Intelsat
|
| | | | (251,731 | ) | (8,000 | ) | | | (8,000 | ) | ||||||||||||||||||||||||||||
Shares issued in connection with license right obtained
|
10,000 | | 303 | | | | | | 303 | |||||||||||||||||||||||||||||||
Common stock issued under public offering, net of issuance costs
|
3,173,962 | | 100,533 | | | | | | 100,533 | |||||||||||||||||||||||||||||||
Net income
|
| | | 31,136 | | | | (297 | ) | 30,839 | $ | 30,839 | ||||||||||||||||||||||||||||
Foreign currency translation, net of tax
|
| | | | | | 586 | | 586 | 586 | ||||||||||||||||||||||||||||||
Comprehensive income
|
$ | 31,425 | ||||||||||||||||||||||||||||||||||||||
Balance at April 2, 2010
|
40,199,770 | $ | 4 | $ | 545,962 | $ | 218,607 | (407,137 | ) | $ | (12,027 | ) | $ | 459 | $ | 3,745 | $ | 756,750 | ||||||||||||||||||||||
Exercise of stock options
|
1,124,415 | | 22,101 | | | | | | 22,101 | |||||||||||||||||||||||||||||||
Issuance of stock under Employee Stock Purchase Plan
|
159,940 | | 4,297 | | | | | | 4,297 | |||||||||||||||||||||||||||||||
Stock-based compensation expense
|
| | 17,640 | | | | | | 17,640 | |||||||||||||||||||||||||||||||
Tax benefit from exercise of stock options and release of RSU
awards
|
| | 1,303 | | | | | | 1,303 | |||||||||||||||||||||||||||||||
Shares issued in settlement of certain accrued employee
compensation liabilities
|
162,870 | | 5,096 | | | | | | 5,096 | |||||||||||||||||||||||||||||||
RSU awards vesting
|
433,173 | | | | | | | | | |||||||||||||||||||||||||||||||
Purchase of treasury shares pursuant to vesting of certain RSU
agreements
|
| | | | (153,226 | ) | (5,880 | ) | | | (5,880 | ) | ||||||||||||||||||||||||||||
Shares issued in connection with acquisition of business, net of
issuance costs
|
144,962 | | 4,630 | | | | | | 4,630 | |||||||||||||||||||||||||||||||
Other noncontrolling interest activity
|
| | | | | | | 62 | 62 | |||||||||||||||||||||||||||||||
Net income
|
| | | 36,115 | | | | 309 | 36,424 | $ | 36,424 | |||||||||||||||||||||||||||||
Hedging transactions, net of tax
|
| | | | | | 182 | | 182 | 182 | ||||||||||||||||||||||||||||||
Foreign currency translation, net of tax
|
| | | | | | 1,636 | | 1,636 | 1,636 | ||||||||||||||||||||||||||||||
Comprehensive income
|
$ | 38,242 | ||||||||||||||||||||||||||||||||||||||
Balance at April 1, 2011
|
42,225,130 | $ | 4 | $ | 601,029 | $ | 254,722 | (560,363 | ) | $ | (17,907 | ) | $ | 2,277 | $ | 4,116 | $ | 844,241 | ||||||||||||||||||||||
F-5
Note 1 | The Company and a Summary of Its Significant Accounting Policies |
F-6
F-7
F-8
F-9
F-10
F-11
Asset Derivatives | Liability Derivatives | |||||||||||||||
Balance Sheet |
Fair |
Balance Sheet |
||||||||||||||
Classification | Value | Classification | Fair Value | |||||||||||||
(In thousands) | ||||||||||||||||
Derivatives designated as hedging instruments
|
||||||||||||||||
Foreign currency forward contracts
|
Other current assets | $ | 182 | Not applicable | $ | | ||||||||||
Total derivatives designated as hedging instruments
|
$ | 182 | $ | | ||||||||||||
Amount of |
||||||||||||||||
Gain or |
||||||||||||||||
(Loss) |
||||||||||||||||
Amount |
Location of |
Amount of |
Location of Gain |
Recognized |
||||||||||||
of Gain or |
Gain or |
Gain or |
or (Loss) |
in Income on |
||||||||||||
(Loss) |
(Loss) |
(Loss) |
Recognized in |
Derivative |
||||||||||||
Recognized |
Reclassified |
Reclassified |
Income on |
(Ineffective |
||||||||||||
in Accumulated |
from |
from |
Derivative |
Portion and |
||||||||||||
OCI |
Accumulated |
Accumulated |
(Ineffective |
Amount |
||||||||||||
on |
OCI into |
OCI into |
Portion and |
Excluded |
||||||||||||
Derivatives in Cash |
Derivatives |
Income |
Income |
Amount Excluded |
from |
|||||||||||
Flow Hedging |
(Effective |
(Effective |
(Effective |
from Effectiveness |
Effectiveness |
|||||||||||
Relationships | Portion) | Portion) | Portion) | Testing) | Testing) | |||||||||||
(In thousands) | ||||||||||||||||
Foreign currency forward contracts
|
$ | 182 |
Cost of product revenues |
$ | 857 |
Not applicable |
$ | | ||||||||
Total
|
$ | 182 | $ | 857 | $ | | ||||||||||
F-12
Amount of |
||||||||||||||||
Gain or |
||||||||||||||||
(Loss) |
||||||||||||||||
Amount |
Location of |
Amount of |
Location of Gain |
Recognized |
||||||||||||
of Gain or |
Gain or |
Gain or |
or (Loss) |
in Income on |
||||||||||||
(Loss) |
(Loss) |
(Loss) |
Recognized in |
Derivative |
||||||||||||
Recognized |
Reclassified |
Reclassified |
Income on |
(Ineffective |
||||||||||||
in Accumulated |
from |
from |
Derivative |
Portion and |
||||||||||||
OCI |
Accumulated |
Accumulated |
(Ineffective |
Amount |
||||||||||||
on |
OCI into |
OCI into |
Portion and |
Excluded |
||||||||||||
Derivatives in Cash |
Derivatives |
Income |
Income |
Amount Excluded |
from |
|||||||||||
Flow Hedging |
(Effective |
(Effective |
(Effective |
from Effectiveness |
Effectiveness |
|||||||||||
Relationships | Portion) | Portion) | Portion) | Testing) | Testing) | |||||||||||
(In thousands) | ||||||||||||||||
Foreign currency forward contracts
|
$ | |
Cost of product revenues |
$ | (268 | ) |
Not applicable |
$ | | |||||||
Total
|
$ | | $ | (268 | ) | $ | | |||||||||
F-13
F-14
Fiscal Years Ended | ||||||||||||
April 1, 2011 | April 2, 2010 | April 3, 2009 | ||||||||||
(In thousands) | ||||||||||||
Stock-based compensation expense before taxes
|
$ | 17,440 | $ | 12,212 | $ | 9,837 | ||||||
Related income tax benefits
|
(6,511 | ) | (4,429 | ) | (3,518 | ) | ||||||
Stock-based compensation expense, net of taxes
|
$ | 10,929 | $ | 7,783 | $ | 6,319 | ||||||
F-15
Employee Stock Options | Employee Stock Purchase Plan | |||||||||||
Fiscal Year |
Fiscal Year |
Fiscal Year |
Fiscal Year |
Fiscal Year |
Fiscal Year |
|||||||
2011 | 2010 | 2009 | 2011 | 2010 | 2009 | |||||||
Volatility
|
42.2% | 43.0% | 38.9% | 28.3% | 43.7% | 54.6% | ||||||
Risk-free interest rate
|
0.9% | 1.6% | 2.7% | 0.2% | 0.3% | 1.2% | ||||||
Dividend yield
|
0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | ||||||
Weighted average expected life
|
4.2 years | 4.2 years | 4.1 years | 0.5 years | 0.5 years | 0.5 years |
Weighted Average |
Weighted Average |
|||||||||||||||
Number of |
Exercise Price |
Remaining |
Aggregate Intrinsic |
|||||||||||||
Shares | per Share | Contractual Term | Value | |||||||||||||
(In thousands) | ||||||||||||||||
Outstanding at April 2, 2010
|
4,718,176 | $ | 20.90 | |||||||||||||
Options granted
|
266,250 | 41.26 | ||||||||||||||
Options canceled
|
(20,543 | ) | 27.40 | |||||||||||||
Options exercised
|
(1,124,415 | ) | 19.60 | |||||||||||||
Outstanding at April 1, 2011
|
3,839,468 | $ | 22.66 | 2.91 | $ | 63,894 | ||||||||||
Vested and exercisable at April 1, 2011
|
3,131,456 | $ | 20.50 | 2.54 | $ | 58,408 |
F-16
Weighted Average |
||||||||||||
Remaining |
Aggregate |
|||||||||||
Restricted Stock |
Contractual |
Intrinsic |
||||||||||
Units | Term in Years | Value | ||||||||||
(In thousands) | ||||||||||||
Outstanding at April 2, 2010
|
1,389,615 | |||||||||||
Awarded
|
630,056 | |||||||||||
Forfeited
|
(37,035 | ) | ||||||||||
Released
|
(433,173 | ) | ||||||||||
Outstanding at April 1, 2011
|
1,549,463 | 1.64 | $ | 60,661 | ||||||||
Vested and deferred at April 1, 2011
|
41,467 | | $ | 1,623 |
F-17
F-18
Note 2 | Composition of Certain Balance Sheet Captions |
April 1, |
April 2, |
|||||||
2011 | 2010 | |||||||
(In thousands) | ||||||||
Accounts receivable, net:
|
||||||||
Billed
|
$ | 100,863 | $ | 93,737 | ||||
Unbilled
|
91,519 | 83,153 | ||||||
Allowance for doubtful accounts
|
(493 | ) | (539 | ) | ||||
$ | 191,889 | $ | 176,351 | |||||
Inventories:
|
||||||||
Raw materials
|
$ | 46,651 | $ | 36,255 | ||||
Work in process
|
18,713 | 21,345 | ||||||
Finished goods
|
33,191 | 25,362 | ||||||
$ | 98,555 | $ | 82,962 | |||||
Prepaid expenses and other current assets:
|
||||||||
Prepaid expenses
|
$ | 18,235 | $ | 13,239 | ||||
Income tax receivable
|
26 | 9,022 | ||||||
Other
|
2,880 | 6,596 | ||||||
$ | 21,141 | $ | 28,857 | |||||
Satellites, net:
|
||||||||
Satellite WildBlue-1 (estimated useful life of
10 years)
|
$ | 195,890 | $ | 195,890 | ||||
Capital lease of satellite capacity Anik F2
(estimated useful life of 10 years)
|
99,090 | 99,090 | ||||||
Satellite under construction
|
276,418 | 209,432 | ||||||
571,398 | 504,412 | |||||||
Less accumulated depreciation and amortization
|
(38,398 | ) | (8,723 | ) | ||||
$ | 533,000 | $ | 495,689 | |||||
F-19
April 1, |
April 2, |
|||||||
2011 | 2010 | |||||||
(In thousands) | ||||||||
Property and equipment, net:
|
||||||||
Machinery and equipment (estimated useful life of 2-5 years)
|
$ | 122,113 | $ | 96,484 | ||||
Computer equipment and software (estimated useful life of
2-7 years)
|
66,768 | 55,384 | ||||||
CPE leased equipment (estimated useful life of 3-5 years)
|
61,610 | 41,469 | ||||||
Furniture and fixtures (estimated useful life of 7 years)
|
13,053 | 10,760 | ||||||
Leasehold improvements (estimated useful life of 2-11 years)
|
24,550 | 20,119 | ||||||
Building (estimated useful life of 24 years)
|
8,923 | 8,923 | ||||||
Land
|
4,384 | 4,384 | ||||||
Construction in progress
|
80,976 | 18,578 | ||||||
382,377 | 256,101 | |||||||
Less accumulated depreciation and amortization
|
(149,238 | ) | (100,297 | ) | ||||
$ | 233,139 | $ | 155,804 | |||||
Other assets:
|
||||||||
Capitalized software costs, net
|
$ | 24,472 | $ | 8,683 | ||||
Patents, orbital slots and other licenses, net
|
8,639 | 7,954 | ||||||
Deferred income taxes
|
47,017 | 44,910 | ||||||
Other
|
23,180 | 20,952 | ||||||
$ | 103,308 | $ | 82,499 | |||||
Accrued liabilities:
|
||||||||
Warranty reserve, current portion
|
$ | 8,014 | $ | 6,410 | ||||
Accrued vacation
|
15,600 | 13,437 | ||||||
Accrued employee compensation
|
18,804 | 17,268 | ||||||
Collections in excess of revenues and deferred revenues
|
61,916 | 46,180 | ||||||
Other
|
26,249 | 18,956 | ||||||
$ | 130,583 | $ | 102,251 | |||||
Other liabilities:
|
||||||||
Warranty reserve, long-term portion
|
$ | 4,928 | $ | 4,798 | ||||
Deferred rent, long-term portion
|
6,267 | 6,127 | ||||||
Deferred revenue, long-term portion
|
6,960 | 4,584 | ||||||
Deferred income taxes, long-term portion
|
3,374 | | ||||||
Unrecognized tax position liabilities
|
2,217 | 2,644 | ||||||
Other
|
96 | 6,242 | ||||||
$ | 23,842 | $ | 24,395 | |||||
F-20
Note 3 | Fair Value Measurements |
| Level 1 Inputs based on quoted market prices for identical assets or liabilities in active markets at the measurement date. | |
| Level 2 Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. | |
| Level 3 Inputs which reflect managements best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instruments valuation. |
Fair Value at |
||||||||||||||||
April 1, 2011 | Level 1 | Level 2 | Level 3 | |||||||||||||
(In thousands) | ||||||||||||||||
Assets
|
||||||||||||||||
Cash equivalents
|
$ | 4,488 | $ | 4,488 | $ | $ | | |||||||||
Foreign currency forward contracts
|
182 | | 182 | | ||||||||||||
Total assets measured at fair value on a recurring basis
|
$ | 4,670 | $ | 4,488 | $182 | $ | | |||||||||
Fair Value at |
||||||||||||||||
April 2, 2010 | Level 1 | Level 2 | Level 3 | |||||||||||||
(In thousands) | ||||||||||||||||
Assets
|
||||||||||||||||
Cash equivalents
|
$ | 14,810 | $ | 14,810 | $ | | $ | | ||||||||
Total assets measured at fair value on a recurring basis
|
$ | 14,810 | $ | 14,810 | $ | | $ | | ||||||||
F-21
Amortization | ||||
(In thousands) | ||||
Expected for fiscal year 2012
|
$ | 18,735 | ||
Expected for fiscal year 2013
|
15,623 | |||
Expected for fiscal year 2014
|
13,879 | |||
Expected for fiscal year 2015
|
13,803 | |||
Expected for fiscal year 2016
|
10,203 | |||
Thereafter
|
9,646 | |||
$ | 81,889 | |||
F-22
Weighted |
As of April 1, 2011 | As of April 2, 2010 | ||||||||||||||||||||||||
Average |
Accumulated |
Net book |
Accumulated |
Net book |
||||||||||||||||||||||
Useful Life | Total | Amortization | Value | Total | Amortization | Value | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Technology
|
6 | $ | 54,344 | $ | (43,930 | ) | $ | 10,414 | $ | 44,552 | $ | (39,147 | ) | $ | 5,405 | |||||||||||
Contracts and customer relationships
|
7 | 88,834 | (28,597 | ) | 60,237 | 86,707 | (17,184 | ) | 69,523 | |||||||||||||||||
Non-compete agreements
|
4 | 9,332 | (9,101 | ) | 231 | 9,098 | (8,870 | ) | 228 | |||||||||||||||||
Satellite co-location rights
|
9 | 8,600 | (1,194 | ) | 7,406 | 8,600 | (270 | ) | 8,330 | |||||||||||||||||
Trade name
|
3 | 5,680 | (2,446 | ) | 3,234 | 5,680 | (552 | ) | 5,128 | |||||||||||||||||
Other
|
6 | 9,331 | (8,964 | ) | 367 | 9,326 | (8,551 | ) | 775 | |||||||||||||||||
Total other acquired intangible assets
|
$ | 176,121 | $ | (94,232 | ) | $ | 81,889 | $ | 163,963 | $ | (74,574 | ) | $ | 89,389 | ||||||||||||
Note 5 | Senior Notes and Other Long-Term Debt |
As of |
As of |
|||||||
April 1, 2011 | April 2, 2010 | |||||||
(In thousands) | ||||||||
Senior Notes due 2016 (the Notes)
|
||||||||
Notes
|
$ | 275,000 | $ | 275,000 | ||||
Unamortized discount on the Notes
|
(2,704 | ) | (3,199 | ) | ||||
Total Notes, net of discount
|
272,296 | 271,801 | ||||||
Less: current portion of the Notes
|
| | ||||||
Total Notes long-term, net
|
272,296 | 271,801 | ||||||
Other Long-Term Debt
|
||||||||
Line of credit
|
60,000 | 60,000 | ||||||
Capital lease obligations, due fiscal years 2014 to 2015,
weighted average interest rate of 4.69%
|
3,074 | | ||||||
Total other long-term debt
|
63,074 | 60,000 | ||||||
Less: current portion of other long-term debt
|
1,128 | | ||||||
Other long-term debt, net
|
61,946 | 60,000 | ||||||
Total debt
|
335,370 | 331,801 | ||||||
Less: current portion
|
1,128 | | ||||||
Long-term debt, net
|
$ | 334,242 | $ | 331,801 | ||||
F-23
For the Fiscal Years Ending | ||||
(In thousands) | ||||
2012
|
$ | 1,238 | ||
2013
|
1,308 | |||
2014
|
723 | |||
2015
|
| |||
2016
|
60,000 | |||
Thereafter
|
275,000 | |||
338,269 | ||||
Less: imputed interest
|
195 | |||
Less: unamortized discount on the Notes
|
2,704 | |||
Total
|
$ | 335,370 | ||
F-24
F-25
Note 6 | Common Stock and Stock Plans |
F-26
Weighted Average |
||||||||||||
Number of |
Exercise Price |
Exercise Price |
||||||||||
Shares | per Share | per Share | ||||||||||
Outstanding at March 28, 2008
|
5,641,225 | $ | 4.70 $43.82 | $ | 19.63 | |||||||
Options granted
|
280,800 | 19.05 27.27 | 21.04 | |||||||||
Options canceled
|
(135,700 | ) | 10.73 33.68 | 24.86 | ||||||||
Options exercised
|
(337,276 | ) | 4.70 22.03 | 10.73 | ||||||||
Outstanding at April 3, 2009
|
5,449,049 | 5.03 43.82 | 20.12 | |||||||||
Options granted
|
383,900 | 23.66 29.45 | 29.05 | |||||||||
Options canceled
|
(94,874 | ) | 5.03 43.82 | 29.06 | ||||||||
Options exercised
|
(1,019,899 | ) | 5.03 30.74 | 19.06 | ||||||||
Outstanding at April 2, 2010
|
4,718,176 | 5.03 33.68 | 20.90 | |||||||||
Options granted
|
266,250 | 39.21 41.52 | 41.26 | |||||||||
Options canceled
|
(20,543 | ) | 8.94 33.68 | 27.40 | ||||||||
Options exercised
|
(1,124,415 | ) | 5.03 33.68 | 19.60 | ||||||||
Outstanding at April 1, 2011
|
3,839,468 | $ | 5.03 $41.52 | $ | 22.66 | |||||||
Weighted |
||||||||||||||||||||
Average |
Weighted |
Weighted |
||||||||||||||||||
Remaining |
Average |
Average |
||||||||||||||||||
Number |
Contractual |
Exercise |
Number |
Exercise |
||||||||||||||||
Range of Exercise Prices | Outstanding | Life-Years | Price | Exercisable | Price | |||||||||||||||
$5.03 $12.76
|
387,292 | 1.79 | $ | 10.36 | 387,292 | $ | 10.36 | |||||||||||||
13.01 18.25
|
546,376 | 1.61 | 15.31 | 546,376 | 15.31 | |||||||||||||||
18.41 18.41
|
3,500 | 1.67 | 18.41 | 3,500 | 18.41 | |||||||||||||||
18.73 18.73
|
470,315 | 3.52 | 18.73 | 470,315 | 18.73 | |||||||||||||||
18.97 20.95
|
392,366 | 3.12 | 20.22 | 270,866 | 20.27 | |||||||||||||||
21.02 23.37
|
387,669 | 3.73 | 21.62 | 387,669 | 21.62 | |||||||||||||||
23.66 25.88
|
214,317 | 2.62 | 24.60 | 199,967 | 24.60 | |||||||||||||||
26.15 26.15
|
501,438 | 1.52 | 26.15 | 501,438 | 26.15 | |||||||||||||||
26.63 29.45
|
440,350 | 4.39 | 28.91 | 169,200 | 28.35 | |||||||||||||||
30.37 41.52
|
495,845 | 4.05 | 36.91 | 194,833 | 32.00 | |||||||||||||||
$5.03 $41.52
|
3,839,468 | 2.91 | $ | 22.66 | 3,131,456 | $ | 20.50 | |||||||||||||
F-27
Number of |
||||
Restricted Stock |
||||
Units | ||||
Outstanding at March 28, 2008
|
300,909 | |||
Awarded
|
637,200 | |||
Forfeited
|
(29,717 | ) | ||
Released
|
(94,181 | ) | ||
Outstanding at April 3, 2009
|
814,211 | |||
Awarded
|
831,250 | |||
Forfeited
|
(21,807 | ) | ||
Released
|
(234,039 | ) | ||
Outstanding at April 2, 2010
|
1,389,615 | |||
Awarded
|
630,056 | |||
Forfeited
|
(37,035 | ) | ||
Released
|
(433,173 | ) | ||
Outstanding at April 1, 2011
|
1,549,463 | |||
Note 7 | Shares Used In Computing Diluted Net Income Per Share |
Fiscal Years Ended | ||||||||||||
April 1, |
April 2, |
April 3, |
||||||||||
2011 | 2010 | 2009 | ||||||||||
(In thousands) | ||||||||||||
Weighted average:
|
||||||||||||
Common shares outstanding used in calculating basic net income
per share attributable to ViaSat, Inc. common stockholders
|
40,858 | 33,020 | 30,772 | |||||||||
Options to purchase common stock as determined by application of
the treasury stock method
|
1,611 | 1,404 | 944 | |||||||||
Restricted stock units to acquire common stock as determined by
application of the treasury stock method
|
428 | 272 | 130 | |||||||||
Contingently issuable shares in connection with certain terms of
the JAST acquisition agreement
|
| | 5 | |||||||||
Potentially issuable shares in connection with certain terms of
the amended ViaSat 401(k) Profit Sharing Plan
|
113 | 114 | 1 | |||||||||
Employee Stock Purchase Plan equivalents
|
49 | 29 | 32 | |||||||||
Shares used in computing diluted net income per share
attributable to ViaSat, Inc. common stockholders
|
43,059 | 34,839 | 31,884 | |||||||||
F-28
Note 8 | Income Taxes |
Fiscal Years Ended | ||||||||||||
April 1, |
April 2, |
April 3, |
||||||||||
2011 | 2010 | 2009 | ||||||||||
(In thousands) | ||||||||||||
Current tax provision (benefit)
|
||||||||||||
Federal
|
$ | 433 | $ | (6,461 | ) | $ | 13,021 | |||||
State
|
3,178 | (667 | ) | 3,644 | ||||||||
Foreign
|
222 | 199 | 215 | |||||||||
3,833 | (6,929 | ) | 16,880 | |||||||||
Deferred tax provision (benefit)
|
||||||||||||
Federal
|
3,704 | 13,608 | (5,059 | ) | ||||||||
State
|
(7,064 | ) | (1,191 | ) | (5,005 | ) | ||||||
Foreign
|
(475 | ) | (50 | ) | (22 | ) | ||||||
(3,835 | ) | 12,367 | (10,086 | ) | ||||||||
Total (benefit from) provision for income taxes
|
$ | (2 | ) | $ | 5,438 | $ | 6,794 | |||||
As of | ||||||||
April 1, |
April 2, |
|||||||
2011 | 2010 | |||||||
(In thousands) | ||||||||
Deferred tax assets:
|
||||||||
Net operating loss carryforwards
|
$ | 79,930 | $ | 86,325 | ||||
Tax credit carryforwards
|
46,355 | 28,673 | ||||||
Warranty reserve
|
5,086 | 4,363 | ||||||
Accrued compensation
|
5,125 | 4,394 | ||||||
Deferred rent
|
2,673 | 2,582 | ||||||
Inventory reserve
|
4,899 | 1,498 | ||||||
Stock-based compensation
|
8,830 | 7,654 | ||||||
Contract accounting
|
1,415 | 2,005 | ||||||
Other
|
8,060 | 8,001 | ||||||
Valuation allowance
|
(12,671 | ) | (13,074 | ) | ||||
Total deferred tax assets
|
149,702 | 132,421 | ||||||
Deferred tax liabilities:
|
||||||||
Property, equipment and satellites and intangible assets
|
87,254 | 70,160 | ||||||
Total deferred tax liabilities
|
87,254 | 70,160 | ||||||
Net deferred tax assets
|
$ | 62,448 | $ | 62,261 | ||||
F-29
Fiscal Years Ended | ||||||||||||
April 1, |
April 2, |
April 3, |
||||||||||
2011 | 2010 | 2009 | ||||||||||
(In thousands) | ||||||||||||
Tax expense at federal statutory rate
|
$ | 12,749 | $ | 12,698 | $ | 15,834 | ||||||
State tax provision, net of federal benefit
|
1,375 | 2,259 | 2,545 | |||||||||
Tax credits, net of valuation allowance
|
(15,615 | ) | (11,408 | ) | (10,017 | ) | ||||||
Manufacturing deduction
|
| | (920 | ) | ||||||||
Non-deductible transaction costs
|
30 | 1,435 | | |||||||||
Non-deductible compensation
|
1,054 | 377 | 468 | |||||||||
Other
|
405 | 77 | (1,116 | ) | ||||||||
Total provision for income taxes
|
$ | (2 | ) | $ | 5,438 | $ | 6,794 | |||||
F-30
As of | ||||||||||||
April 1, |
April 2, |
April 3, |
||||||||||
2011 | 2010 | 2009 | ||||||||||
(In thousands) | ||||||||||||
Balance, beginning of fiscal year
|
$ | 31,759 | $ | 37,917 | $ | 30,691 | ||||||
Increases related to current year tax positions
|
4,740 | 3,031 | 8,880 | |||||||||
Increase (decrease) related to prior year tax positions
|
1,819 | (2,058 | ) | (717 | ) | |||||||
Statute expirations
|
(5,303 | ) | (3,452 | ) | (937 | ) | ||||||
Settlements
|
| (3,679 | ) | | ||||||||
Balance, end of fiscal year
|
$ | 33,015 | $ | 31,759 | $ | 37,917 | ||||||
Note 9 | Acquisitions |
F-31
(In thousands) | ||||
Current assets
|
$ | 4,382 | ||
Property and equipment
|
484 | |||
Identifiable intangible assets
|
11,199 | |||
Goodwill
|
7,381 | |||
Total assets acquired
|
23,446 | |||
Current liabilities
|
(1,843 | ) | ||
Other long term liabilities
|
(2,770 | ) | ||
Total liabilities assumed
|
(4,613 | ) | ||
Total purchase price
|
$ | 18,833 | ||
Estimated |
||||||||
Weighted |
||||||||
Preliminary |
Average |
|||||||
Fair Value | Life | |||||||
(In thousands) | ||||||||
Technology
|
$ | 9,026 | 5 | |||||
Customer relationships
|
1,977 | 10 | ||||||
Non-compete agreements
|
196 | 5 | ||||||
Total identifiable intangible assets
|
$ | 11,199 | 6 | |||||
F-32
(In thousands) | ||||
Current assets
|
$ | 106,672 | ||
Property, equipment and satellites
|
378,263 | |||
Identifiable intangible assets
|
82,070 | |||
Goodwill
|
9,809 | |||
Deferred income taxes
|
22,693 | |||
Other assets
|
1,969 | |||
Total assets acquired
|
601,476 | |||
Current liabilities
|
(19,689 | ) | ||
Other long term liabilities
|
(7,168 | ) | ||
Total liabilities assumed
|
(26,857 | ) | ||
Total purchase price
|
$ | 574,619 | ||
Estimated |
||||||||
Weighted |
||||||||
Average |
||||||||
Fair Value | Life | |||||||
(In thousands) | ||||||||
Trade name
|
$ | 5,680 | 3 | |||||
Customer relationships retail
|
39,840 | 6 | ||||||
Customer relationships wholesale
|
27,950 | 8 | ||||||
Satellite co-location rights
|
8,600 | 10 | ||||||
Total identifiable intangible assets
|
$ | 82,070 | 7 | |||||
F-33
Fiscal Years Ended | ||||||||
April 2, 2010 | April 3, 2009 | |||||||
(In thousands, except per share data) | ||||||||
Total revenues
|
$ | 818,505 | $ | 792,241 | ||||
Net income attributable to ViaSat, Inc.
|
$ | 30,792 | $ | 4,921 | ||||
Basic net income per share attributable to ViaSat, Inc. common
stockholders
|
$ | 0.85 | $ | 0.14 | ||||
Diluted net income per share attributable to ViaSat, Inc. common
stockholders
|
$ | 0.81 | $ | 0.14 | ||||
Note 10 | Employee Benefits |
F-34
Note 11 | Commitments |
F-35
Fiscal Years Ending | (In thousands) | |||
2012
|
$ | 16,938 | ||
2013
|
15,525 | |||
2014
|
15,418 | |||
2015
|
14,394 | |||
2016
|
13,563 | |||
Thereafter
|
42,018 | |||
$ | 117,856 | |||
Note 12 | Contingencies |
Note 13 | Product Warranty |
F-36
Fiscal Years Ended | ||||||||||||
April 1, |
April 2, |
April 3, |
||||||||||
2011 | 2010 | 2009 | ||||||||||
(In thousands) | ||||||||||||
Balance, beginning of period
|
$ | 11,208 | $ | 11,194 | $ | 11,679 | ||||||
Change in liability for warranties issued in period
|
7,396 | 6,988 | 7,720 | |||||||||
Settlements made (in cash or in kind) during the period
|
(5,662 | ) | (6,974 | ) | (8,205 | ) | ||||||
Balance, end of period
|
$ | 12,942 | $ | 11,208 | $ | 11,194 | ||||||
Note 14 | Restructuring |
Note 15 | Segment Information |
F-37
Fiscal Years Ended | ||||||||||||
April 1, |
April 2, |
April 3, |
||||||||||
2011 | 2010 | 2009 | ||||||||||
(In thousands) | ||||||||||||
Revenues
|
||||||||||||
Government Systems
|
$ | 384,111 | $ | 385,151 | $ | 388,656 | ||||||
Commercial Networks
|
183,143 | 227,120 | 230,828 | |||||||||
Satellite Services
|
234,952 | 75,809 | 8,695 | |||||||||
Elimination of intersegment revenues
|
| | | |||||||||
Total revenues
|
$ | 802,206 | $ | 688,080 | $ | 628,179 | ||||||
Operating profits (losses)
|
||||||||||||
Government Systems
|
$ | 29,872 | $ | 55,720 | $ | 57,019 | ||||||
Commercial Networks
|
(9,482 | ) | 6,091 | 63 | ||||||||
Satellite Services
|
38,228 | (9,305 | ) | (3,978 | ) | |||||||
Elimination of intersegment operating profits
|
| | | |||||||||
Segment operating profit before corporate and amortization
|
58,618 | 52,506 | 53,104 | |||||||||
Corporate
|
44 | (2 | ) | 5 | ||||||||
Amortization of acquired intangible assets
|
(19,409 | ) | (9,494 | ) | (8,822 | ) | ||||||
Income from operations
|
$ | 39,253 | $ | 43,010 | $ | 44,287 | ||||||
April 1, |
April 2, |
April 3, |
||||||||||
2011 | 2010 | 2009 | ||||||||||
(In thousands) | ||||||||||||
Government Systems
|
$ | 2,457 | $ | 1,086 | $ | 1,088 | ||||||
Commercial Networks
|
4,001 | 4,629 | 7,734 | |||||||||
Satellite Services
|
12,951 | 3,779 | | |||||||||
Total amortization of acquired intangible assets
|
$ | 19,409 | $ | 9,494 | $ | 8,822 | ||||||
April 1, |
April 2, |
|||||||
2011 | 2010 | |||||||
(In thousands) | ||||||||
Segment assets
|
||||||||
Government Systems
|
$ | 228,194 | $ | 168,703 | ||||
Commercial Networks
|
133,158 | 146,990 | ||||||
Satellite Services
|
93,857 | 107,919 | ||||||
Total segment assets
|
455,209 | 423,612 | ||||||
Corporate assets
|
950,539 | 869,940 | ||||||
Total assets
|
$ | 1,405,748 | $ | 1,293,552 | ||||
F-38
Net Acquired Intangible Assets | Goodwill | |||||||||||||||
April 1, |
April 2, |
April 1, |
April 2, |
|||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(In thousands) | ||||||||||||||||
Government Systems
|
$ | 11,157 | $ | 1,708 | $ | 30,023 | $ | 22,161 | ||||||||
Commercial Networks
|
5,391 | 9,389 | 43,700 | 43,461 | ||||||||||||
Satellite Services
|
65,341 | 78,292 | 9,809 | 9,402 | ||||||||||||
Total
|
$ | 81,889 | $ | 89,389 | $ | 83,532 | $ | 75,024 | ||||||||
Fiscal Years Ended | ||||||||||||
April 1, |
April 2, |
April 3, |
||||||||||
2011 | 2010 | 2009 | ||||||||||
(In thousands) | ||||||||||||
United States
|
$ | 667,060 | $ | 554,522 | $ | 528,342 | ||||||
Europe, Middle East and Africa
|
95,356 | 90,838 | 49,024 | |||||||||
Asia, Pacific
|
24,203 | 25,293 | 30,716 | |||||||||
North America other than United States
|
8,321 | 9,026 | 14,840 | |||||||||
Latin America
|
7,266 | 8,401 | 5,257 | |||||||||
Total
|
$ | 802,206 | $ | 688,080 | $ | 628,179 | ||||||
Note 16 | Certain Relationships and Related-Party Transactions |
F-39
Note 17 | Financial Statements of Parent and Subsidiary Guarantors |
F-40
Issuing |
Non- |
Consolidation and |
||||||||||||||||||
Parent |
Guarantor |
Guarantor |
Elimination |
|||||||||||||||||
Company | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
ASSETS
|
||||||||||||||||||||
Current assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 24,347 | $ | 7,600 | $ | 8,543 | $ | | $ | 40,490 | ||||||||||
Accounts receivable, net
|
171,183 | 10,644 | 10,062 | | 191,889 | |||||||||||||||
Inventories
|
88,542 | 7,484 | 2,932 | (403 | ) | 98,555 | ||||||||||||||
Deferred income taxes
|
16,428 | 1,723 | 162 | 492 | 18,805 | |||||||||||||||
Prepaid expenses and other current assets
|
15,236 | 4,745 | 1,160 | | 21,141 | |||||||||||||||
Total current assets
|
315,736 | 32,196 | 22,859 | 89 | 370,880 | |||||||||||||||
Satellites, net
|
276,418 | 256,582 | | | 533,000 | |||||||||||||||
Property and equipment, net
|
122,945 | 103,410 | 7,785 | (1,001 | ) | 233,139 | ||||||||||||||
Other acquired intangible assets, net
|
6,201 | 65,341 | 10,347 | | 81,889 | |||||||||||||||
Goodwill
|
63,939 | 9,686 | 9,907 | | 83,532 | |||||||||||||||
Investments in subsidiaries and intercompany receivables
|
490,288 | 2,246 | 404 | (492,938 | ) | | ||||||||||||||
Other assets
|
89,834 | 12,922 | 552 | | 103,308 | |||||||||||||||
Total assets
|
$ | 1,365,361 | $ | 482,383 | $ | 51,854 | $ | (493,850 | ) | $ | 1,405,748 | |||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||
Current liabilities:
|
||||||||||||||||||||
Accounts payable
|
$ | 62,465 | $ | 8,164 | $ | 1,083 | $ | | $ | 71,712 | ||||||||||
Accrued liabilities
|
100,749 | 25,691 | 4,143 | | 130,583 | |||||||||||||||
Current portion of other long-term debt
|
116 | 1,012 | | | 1,128 | |||||||||||||||
Total current liabilities
|
163,330 | 34,867 | 5,226 | | 203,423 | |||||||||||||||
Senior Notes due 2016, net
|
272,296 | | | | 272,296 | |||||||||||||||
Other long-term debt
|
60,203 | 1,743 | | | 61,946 | |||||||||||||||
Intercompany payables
|
14,606 | | 11,945 | (26,551 | ) | | ||||||||||||||
Other liabilities
|
16,464 | 4,321 | 3,057 | | 23,842 | |||||||||||||||
Total liabilities
|
526,899 | 40,931 | 20,228 | (26,551 | ) | 561,507 | ||||||||||||||
Equity:
|
||||||||||||||||||||
ViaSat, Inc. stockholders equity
|
||||||||||||||||||||
Total ViaSat, Inc. stockholders equity
|
838,462 | 441,452 | 31,626 | (471,415 | ) | 840,125 | ||||||||||||||
Noncontrolling interest in subsidiary
|
| | | 4,116 | 4,116 | |||||||||||||||
Total equity
|
838,462 | 441,452 | 31,626 | (467,299 | ) | 844,241 | ||||||||||||||
Total liabilities and equity
|
$ | 1,365,361 | $ | 482,383 | $ | 51,854 | $ | (493,850 | ) | $ | 1,405,748 | |||||||||
F-41
Consolidation |
||||||||||||||||||||
Issuing |
Non- |
and |
||||||||||||||||||
Parent |
Guarantor |
Guarantor |
Elimination |
|||||||||||||||||
Company | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
ASSETS
|
||||||||||||||||||||
Current assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 66,258 | $ | 16,216 | $ | 7,157 | $ | | $ | 89,631 | ||||||||||
Accounts receivable, net
|
160,807 | 11,983 | 3,561 | | 176,351 | |||||||||||||||
Inventories
|
75,222 | 6,313 | 1,427 | | 82,962 | |||||||||||||||
Deferred income taxes
|
16,480 | 866 | | | 17,346 | |||||||||||||||
Prepaid expenses and other current assets
|
25,457 | 2,504 | 896 | | 28,857 | |||||||||||||||
Total current assets
|
344,224 | 37,882 | 13,041 | | 395,147 | |||||||||||||||
Satellites, net
|
209,431 | 286,258 | | | 495,689 | |||||||||||||||
Property and equipment, net
|
66,928 | 82,679 | 7,141 | (944 | ) | 155,804 | ||||||||||||||
Other acquired intangible assets, net
|
10,872 | 78,292 | 225 | | 89,389 | |||||||||||||||
Goodwill
|
63,940 | 9,279 | 1,805 | | 75,024 | |||||||||||||||
Investments in subsidiaries and intercompany receivables
|
596,313 | 2,324 | 7,654 | (606,291 | ) | | ||||||||||||||
Other assets
|
60,812 | 21,070 | 617 | | 82,499 | |||||||||||||||
Total assets
|
$ | 1,352,520 | $ | 517,784 | $ | 30,483 | $ | (607,235 | ) | $ | 1,293,552 | |||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||
Current liabilities:
|
||||||||||||||||||||
Accounts payable
|
$ | 71,765 | $ | 5,920 | $ | 670 | $ | | $ | 78,355 | ||||||||||
Accrued liabilities
|
85,960 | 14,602 | 1,689 | | 102,251 | |||||||||||||||
Total current liabilities
|
157,725 | 20,522 | 2,359 | | 180,606 | |||||||||||||||
Senior Notes due 2016, net
|
271,801 | | | | 271,801 | |||||||||||||||
Other long-term debt
|
60,000 | | | | 60,000 | |||||||||||||||
Intercompany payables
|
93,468 | | 14,505 | (107,973 | ) | | ||||||||||||||
Other liabilities
|
16,356 | 7,990 | 49 | | 24,395 | |||||||||||||||
Total liabilities
|
599,350 | 28,512 | 16,913 | (107,973 | ) | 536,802 | ||||||||||||||
Equity:
|
||||||||||||||||||||
ViaSat, Inc. stockholders equity
|
||||||||||||||||||||
Total ViaSat, Inc. stockholders equity
|
753,170 | 489,272 | 13,570 | (503,007 | ) | 753,005 | ||||||||||||||
Noncontrolling interest in subsidiary
|
| | | 3,745 | 3,745 | |||||||||||||||
Total equity
|
753,170 | 489,272 | 13,570 | (499,262 | ) | 756,750 | ||||||||||||||
Total liabilities and equity
|
$ | 1,352,520 | $ | 517,784 | $ | 30,483 | $ | (607,235 | ) | $ | 1,293,552 | |||||||||
F-42
Issuing |
Non- |
Consolidation and |
||||||||||||||||||||||
Parent |
Guarantor |
Guarantor |
Elimination |
|||||||||||||||||||||
Company | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Revenues:
|
||||||||||||||||||||||||
Product revenues
|
$ | 505,634 | $ | 5,546 | $ | 16,583 | $ | (3,825 | ) | $ | 523,938 | |||||||||||||
Service revenues
|
53,701 | 215,267 | 10,994 | (1,694 | ) | 278,268 | ||||||||||||||||||
Total revenues
|
559,335 | 220,813 | 27,577 | (5,519 | ) | 802,206 | ||||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||
Cost of product revenues
|
375,635 | 8,228 | 9,426 | (3,344 | ) | 389,945 | ||||||||||||||||||
Cost of service revenues
|
34,339 | 121,024 | 6,926 | (1,666 | ) | 160,623 | ||||||||||||||||||
Selling, general and administrative
|
104,235 | 50,946 | 9,123 | (39 | ) | 164,265 | ||||||||||||||||||
Independent research and development
|
27,807 | | 924 | (20 | ) | 28,711 | ||||||||||||||||||
Amortization of acquired intangible assets
|
4,672 | 12,954 | 1,783 | | 19,409 | |||||||||||||||||||
Income (loss) from operations
|
12,647 | 27,661 | (605 | ) | (450 | ) | 39,253 | |||||||||||||||||
Other income (expense):
|
||||||||||||||||||||||||
Interest income
|
687 | | 9 | (373 | ) | 323 | ||||||||||||||||||
Interest expense
|
(3,103 | ) | (49 | ) | (375 | ) | 373 | (3,154 | ) | |||||||||||||||
Income (loss) before income taxes
|
10,231 | 27,612 | (971 | ) | (450 | ) | 36,422 | |||||||||||||||||
Provision (benefit from) for income taxes
|
(10,188 | ) | 10,325 | 353 | (492 | ) | (2 | ) | ||||||||||||||||
Equity in net income (loss) of consolidated subsidiaries
|
15,654 | | | (15,654 | ) | | ||||||||||||||||||
Net income (loss)
|
36,073 | 17,287 | (1,324 | ) | (15,612 | ) | 36,424 | |||||||||||||||||
Less: Net income (loss) attributable to noncontrolling interest,
net of tax
|
| | | 309 | 309 | |||||||||||||||||||
Net income (loss) attributable to ViaSat, Inc.
|
$ | 36,073 | $ | 17,287 | $ | (1,324 | ) | $ | (15,921 | ) | $ | 36,115 | ||||||||||||
F-43
Issuing |
Non- |
Consolidation and |
||||||||||||||||||
Parent |
Guarantor |
Guarantor |
Elimination |
|||||||||||||||||
Company | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Revenues:
|
||||||||||||||||||||
Product revenues
|
$ | 581,911 | $ | 907 | $ | 4,065 | $ | (2,809 | ) | $ | 584,074 | |||||||||
Service revenues
|
34,986 | 62,499 | 7,010 | (489 | ) | 104,006 | ||||||||||||||
Total revenues
|
616,897 | 63,406 | 11,075 | (3,298 | ) | 688,080 | ||||||||||||||
Operating expenses:
|
||||||||||||||||||||
Cost of product revenues
|
405,624 | 960 | 3,851 | (1,909 | ) | 408,526 | ||||||||||||||
Cost of service revenues
|
23,070 | 36,937 | 7,316 | (493 | ) | 66,830 | ||||||||||||||
Selling, general and administrative
|
109,931 | 20,957 | 2,013 | (6 | ) | 132,895 | ||||||||||||||
Independent research and development
|
26,961 | 2 | 362 | | 27,325 | |||||||||||||||
Amortization of acquired intangible assets
|
5,178 | 3,778 | 538 | | 9,494 | |||||||||||||||
Income (loss) from operations
|
46,133 | 772 | (3,005 | ) | (890 | ) | 43,010 | |||||||||||||
Other income (expense):
|
||||||||||||||||||||
Interest income
|
658 | 3 | 12 | (52 | ) | 621 | ||||||||||||||
Interest expense
|
(7,354 | ) | | (52 | ) | 52 | (7,354 | ) | ||||||||||||
Income (loss) before income taxes
|
39,437 | 775 | (3,045 | ) | (890 | ) | 36,277 | |||||||||||||
Provision (benefit from) for income taxes
|
5,113 | 308 | 17 | | 5,438 | |||||||||||||||
Equity in net income (loss) of consolidated subsidiaries
|
(2,300 | ) | | | 2,300 | | ||||||||||||||
Net income (loss)
|
32,024 | 467 | (3,062 | ) | 1,410 | 30,839 | ||||||||||||||
Less: Net income (loss) attributable to noncontrolling interest,
net of tax
|
| | | (297 | ) | (297 | ) | |||||||||||||
Net income (loss) attributable to ViaSat, Inc.
|
$ | 32,024 | $ | 467 | $ | (3,062 | ) | $ | 1,707 | $ | 31,136 | |||||||||
F-44
Issuing |
Non- |
Consolidation and |
||||||||||||||||||
Parent |
Guarantor |
Guarantor |
Elimination |
|||||||||||||||||
Company | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Revenues:
|
||||||||||||||||||||
Product revenues
|
$ | 590,403 | $ | | $ | 6,128 | $ | (1,189 | ) | $ | 595,342 | |||||||||
Service revenues
|
27,042 | | 6,364 | (569 | ) | 32,837 | ||||||||||||||
Total revenues
|
617,445 | | 12,492 | (1,758 | ) | 628,179 | ||||||||||||||
Operating expenses:
|
||||||||||||||||||||
Cost of product revenues
|
420,653 | | 5,105 | (1,138 | ) | 424,620 | ||||||||||||||
Cost of service revenues
|
18,097 | | 4,577 | (470 | ) | 22,204 | ||||||||||||||
Selling, general and administrative
|
96,707 | | 1,917 | | 98,624 | |||||||||||||||
Independent research and development
|
29,311 | | 390 | (79 | ) | 29,622 | ||||||||||||||
Amortization of acquired intangible assets
|
8,403 | | 419 | | 8,822 | |||||||||||||||
Income (loss) from operations
|
44,274 | | 84 | (71 | ) | 44,287 | ||||||||||||||
Other income (expense):
|
||||||||||||||||||||
Interest income
|
1,325 | | 138 | | 1,463 | |||||||||||||||
Interest expense
|
(507 | ) | | (2 | ) | | (509 | ) | ||||||||||||
Income (loss) before income taxes
|
45,092 | | 220 | (71 | ) | 45,241 | ||||||||||||||
Provision (benefit from) for income taxes
|
6,791 | | 3 | | 6,794 | |||||||||||||||
Equity in net income (loss) of consolidated subsidiaries
|
100 | | | (100 | ) | | ||||||||||||||
Net income (loss)
|
38,401 | | 217 | (171 | ) | 38,447 | ||||||||||||||
Less: Net income (loss) attributable to noncontrolling interest,
net of tax
|
| | | 116 | 116 | |||||||||||||||
Net income (loss) attributable to ViaSat, Inc.
|
$ | 38,401 | $ | | $ | 217 | $ | (287 | ) | $ | 38,331 | |||||||||
F-45
Consolidation |
||||||||||||||||||||
Issuing |
Non- |
and |
||||||||||||||||||
Parent |
Guarantor |
Guarantor |
Elimination |
|||||||||||||||||
Company | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Cash flows from operating activities:
|
||||||||||||||||||||
Net cash provided by (used in) operating activities
|
$ | 57,877 | $ | 112,029 | $ | (19 | ) | $ | (270 | ) | $ | 169,617 | ||||||||
Cash flows from investing activities:
|
||||||||||||||||||||
Purchase of property, equipment and satellites, net
|
(152,416 | ) | (54,126 | ) | (2,013 | ) | 270 | (208,285 | ) | |||||||||||
Cash paid for patents, licenses and other assets
|
(15,942 | ) | | (44 | ) | | (15,986 | ) | ||||||||||||
Payments related to acquisition of businesses, net of cash
acquired
|
(14,203 | ) | | 747 | | (13,456 | ) | |||||||||||||
Investment in subsidiaries
|
(726 | ) | 100 | 1,731 | (1,105 | ) | | |||||||||||||
Net cash (used in) provided by investing activities
|
(183,287 | ) | (54,026 | ) | 421 | (835 | ) | (237,727 | ) | |||||||||||
Cash flows from financing activities:
|
||||||||||||||||||||
Proceeds from line of credit borrowings
|
40,000 | | | | 40,000 | |||||||||||||||
Payments on line of credit
|
(40,000 | ) | | | | (40,000 | ) | |||||||||||||
Payment of debt issuance costs
|
(2,775 | ) | | | | (2,775 | ) | |||||||||||||
Proceeds from issuance of common stock under equity plans
|
26,398 | | | | 26,398 | |||||||||||||||
Purchase of common stock in treasury
|
(5,880 | ) | | | | (5,880 | ) | |||||||||||||
Incremental tax benefits from stock-based compensation
|
867 | | | | 867 | |||||||||||||||
Intercompany long-term financing
|
64,889 | (66,619 | ) | 625 | 1,105 | | ||||||||||||||
Net cash provided by (used in) financing activities
|
83,499 | (66,619 | ) | 625 | 1,105 | 18,610 | ||||||||||||||
Effect of exchange rate changes on cash
|
| | 359 | | 359 | |||||||||||||||
Net (decrease) increase in cash and cash equivalents
|
(41,911 | ) | (8,616 | ) | 1,386 | | (49,141 | ) | ||||||||||||
Cash and cash equivalents at beginning of fiscal year
|
66,258 | 16,216 | 7,157 | | 89,631 | |||||||||||||||
Cash and cash equivalents at end of fiscal year
|
$ | 24,347 | $ | 7,600 | $ | 8,543 | $ | | $ | 40,490 | ||||||||||
F-46
Consolidation |
||||||||||||||||||||
Issuing |
Non- |
and |
||||||||||||||||||
Parent |
Guarantor |
Guarantor |
Elimination |
|||||||||||||||||
Company | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Cash flows from operating activities:
|
||||||||||||||||||||
Net cash provided by (used in) operating activities
|
$ | 74,032 | $ | 40,671 | $ | (1,238 | ) | $ | (919 | ) | $ | 112,546 | ||||||||
Cash flows from investing activities:
|
||||||||||||||||||||
Purchase of property, equipment and satellites, net
|
(121,497 | ) | (10,075 | ) | (3,890 | ) | 919 | (134,543 | ) | |||||||||||
Cash paid for patents, licenses and other assets
|
(13,709 | ) | | (87 | ) | | (13,796 | ) | ||||||||||||
Payments related to acquisition of businesses, net of cash
acquired
|
(442,700 | ) | 64,336 | 377 | | (377,987 | ) | |||||||||||||
Change in restricted cash, net
|
(31 | ) | 7,329 | | | 7,298 | ||||||||||||||
Investment in subsidiariess
|
(5,114 | ) | | 691 | 4,423 | | ||||||||||||||
Net cash (used in) provided by investing activities
|
(583,051 | ) | 61,590 | (2,909 | ) | 5,342 | (519,028 | ) | ||||||||||||
Cash flows from financing activities:
|
||||||||||||||||||||
Proceeds from line of credit borrowings
|
263,000 | | | | 263,000 | |||||||||||||||
Payments on line of credit
|
(203,000 | ) | | | | (203,000 | ) | |||||||||||||
Proceeds from issuance of long-term debt, net of discount
|
271,582 | | | | 271,582 | |||||||||||||||
Payment of debt issuance costs
|
(12,781 | ) | | | | (12,781 | ) | |||||||||||||
Proceeds from issuance of common stock under equity plans
|
23,085 | | | | 23,085 | |||||||||||||||
Proceeds from common stock issued under public offering, net of
issuance costs
|
100,533 | | | | 100,533 | |||||||||||||||
Purchase of common stock in treasury
|
(10,326 | ) | | | | (10,326 | ) | |||||||||||||
Intercompany long-term financing
|
85,354 | (86,045 | ) | 5,114 | (4,423 | ) | | |||||||||||||
Net cash provided by (used in) financing activities
|
517,447 | (86,045 | ) | 5,114 | (4,423 | ) | 432,093 | |||||||||||||
Effect of exchange rate changes on cash
|
| | 529 | | 529 | |||||||||||||||
Net increase in cash and cash equivalents
|
8,428 | 16,216 | 1,496 | | 26,140 | |||||||||||||||
Cash and cash equivalents at beginning of fiscal year
|
57,830 | | 5,661 | | 63,491 | |||||||||||||||
Cash and cash equivalents at end of fiscal year
|
$ | 66,258 | $ | 16,216 | $ | 7,157 | $ | | $ | 89,631 | ||||||||||
F-47
Issuing |
Non- |
Consolidation and |
||||||||||||||||||
Parent |
Guarantor |
Guarantor |
Elimination |
|||||||||||||||||
Company | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Cash flows from operating activities:
|
||||||||||||||||||||
Net cash provided by (used in) operating activities
|
$ | 64,376 | $ | | $ | (2,363 | ) | $ | (71 | ) | $ | 61,942 | ||||||||
Cash flows from investing activities:
|
||||||||||||||||||||
Purchase of property, equipment and satellites, net
|
(115,976 | ) | | (1,289 | ) | 71 | (117,194 | ) | ||||||||||||
Cash paid for patents, licenses and other assets
|
(7,921 | ) | | (107 | ) | | (8,028 | ) | ||||||||||||
Payments related to acquisition of businesses, net of cash
acquired
|
(925 | ) | | | | (925 | ) | |||||||||||||
Investment in subsidiaries
|
(3,267 | ) | | (768 | ) | 4,035 | | |||||||||||||
Net cash used in investing activities
|
(128,089 | ) | | (2,164 | ) | 4,106 | (126,147 | ) | ||||||||||||
Cash flows from financing activities:
|
||||||||||||||||||||
Proceeds from line of credit borrowings
|
10,000 | | | | 10,000 | |||||||||||||||
Payments on line of credit
|
(10,000 | ) | | | | (10,000 | ) | |||||||||||||
Proceeds from issuance of common stock under equity plans
|
6,742 | | | | 6,742 | |||||||||||||||
Purchase of common stock in treasury
|
(667 | ) | | | | (667 | ) | |||||||||||||
Incremental tax benefits from stock-based compensation
|
346 | | | | 346 | |||||||||||||||
Payment on secured borrowing
|
(4,720 | ) | | | | (4,720 | ) | |||||||||||||
Proceeds from sale of stock of majority-owned subsidiary
|
| | 3,371 | (1,871 | ) | 1,500 | ||||||||||||||
Intercompany long-term financing
|
767 | | 1,397 | (2,164 | ) | | ||||||||||||||
Net cash provided by financing activities
|
2,468 | | 4,768 | (4,035 | ) | 3,201 | ||||||||||||||
Effect of exchange rate changes on cash
|
| | (681 | ) | | (681 | ) | |||||||||||||
Net decrease in cash and cash equivalents
|
(61,245 | ) | | (440 | ) | | (61,685 | ) | ||||||||||||
Cash and cash equivalents at beginning of fiscal year
|
119,075 | | 6,101 | | 125,176 | |||||||||||||||
Cash and cash equivalents at end of fiscal year
|
$ | 57,830 | $ | | $ | 5,661 | $ | | $ | 63,491 | ||||||||||
F-48
Allowance for |
||||
Date | Doubtful Accounts | |||
(In thousands) | ||||
Balance, March 28, 2008
|
$ | 310 | ||
Charged (credited) to costs and expenses
|
377 | |||
Deductions
|
(325 | ) | ||
Balance, April 3, 2009
|
$ | 362 | ||
Charged (credited) to costs and expenses
|
416 | |||
Deductions
|
(239 | ) | ||
Balance, April 2, 2010
|
$ | 539 | ||
Charged (credited) to costs and expenses
|
813 | |||
Deductions
|
(859 | ) | ||
Balance, April 1, 2011
|
$ | 493 | ||
Deferred Tax |
||||
Asset Valuation |
||||
Date | Allowance | |||
(In thousands) | ||||
Balance, March 28, 2008
|
$ | 969 | ||
Charged (credited) to costs and expenses
|
1,093 | |||
Deductions
|
| |||
Balance, April 3, 2009
|
$ | 2,062 | ||
Charged (credited) to costs and expenses
|
1,306 | |||
Charged (credited) to goodwill*
|
9,706 | |||
Deductions
|
| |||
Balance, April 2, 2010
|
$ | 13,074 | ||
Charged (credited) to costs and expenses
|
1,445 | |||
Charged (credited) to goodwill*
|
(1,848 | ) | ||
Deductions
|
| |||
Balance, April 1, 2011
|
$ | 12,671 | ||
* | Related to the acquisition of WildBlue |
II-1
Very truly yours, UNION BANK, N.A., as Administrative Agent |
||||
By: | /s/ Mark Adelman | |||
Name: | Mark Adelman | |||
Title: | Vice President | |||
Agreed to as of the date first set forth above: VIASAT, INC. |
||||
By: | /s/ Keven K. Lippert | |||
Name: | Keven K. Lippert | |||
Title: | Vice President, General Counsel and Secretary | |||
COMPASS BANK |
||||
By: | /s/ Andrew Widmer | |||
Name: | Andrew Widmer | |||
Title: | Vice President | |||
WELLS FARGO BANK, NATIONAL ASSOCIATION |
||||
By: | /s/ Donald S. Green | |||
Name: | Donald S. Green | |||
Title: | Vice President | |||
JPMORGAN CHASE BANK, N.A., |
||||
By: | /s/ Anna C. Ruiz | |||
Name: | Anna C. Ruiz | |||
Title: | Vice President |
1. | ViaSat Worldwide Limited, a Delaware corporation.
Number of Shares issued: 1,000 shares common stock Sole Shareholder: ViaSat, Inc. |
|
2. | ViaSat China Services, Inc., a Delaware corporation
Number of Shares issued: 1,000 shares common stock Sole Shareholder: ViaSat, Inc. |
|
3. | ViaSat Europe S.r.L. an Italian limited liability company
Number of Shares issued: 10,000 shares ViaSat, Inc.: quota of Euro 9,900 ViaSat Worldwide Ltd.: quota of Euro100 |
|
4. | ViaSat Australia PTY Limited, an Australian corporation
Number of Shares issued: 1,000 Ordinary Shares Sole Member/Shareholder: ViaSat, Inc. |
|
5. | ViaSat India Pvt. Ltd., an Indian private limited company
Number of Shares issued: 70 to ViaSat, Inc. 11,039 to ViaSat Worldwide Limited |
|
6. | ViaSat Canada Company, a Nova Scotia Unlimited Liability Company
Number of Shares issued: 100,000 shares Sole Shareholder: ViaSat, Inc. |
|
7. | JAST. S.A., a Swiss corporation
Number of shares issued: 100,000 shares Sole Shareholder: ViaSat, Inc. |
|
8. | Softswitch, LLC., a Delaware limited liability company 100% Member Interests owned by ViaSat, Inc. |
|
9. | ViaSat Satellite Ventures, LLC, a Delaware limited liability company 100% Member Interests owned by ViaSat, Inc. |
|
10. | ViaSat Satellite Ventures Holdings Luxembourg S.a.r.l., a societe a responsabilite limitee
Number of Shares issued: 50,000 shares Sole Shareholder: ViaSat, Inc. |
|
11 | ViaSat Credit Corp, a Delaware corporation
Number of Shares issued: 1,000 shares Sole Shareholder: ViaSat Satellite Ventures, LLC |
|
12. | VSV I Holdings, LLC, a Delaware limited liability company 100% Member Interests owned by ViaSat Satellite Ventures, LLC |
|
13. | VSV II Holdings, LLC, a Delaware limited liability company 100% Member Interests owned by ViaSat Satellite Ventures, LLC |
1
14. | IOM Licensing Holding Company Limited, an Isle of Man company
Number of Shares issued: 1 share Sole Shareholder: ViaSat, Inc. |
|
15. | ViaSat (IOM) Limited, an Isle of Man company
Number of Shares issued: 1 share Sole Shareholder: ViaSat, Inc. |
|
16. | ViaSat Satellite Ventures Holdings France SAS, a French Societe par Actions simplifiee
Number of Shares issued: 37,000 shares Sole Shareholder: ViaSat Satellite Holdings Luxembourg S.a.r.l. |
|
17. | ViaSat Credit, LLC, a Delaware limited liability company 100% Member Interests owned by ViaSat Credit Corp. |
|
18. | ViaSat Satellite Ventures U.S. I, LLC, a Delaware limited liability company 100% Member Interests owned by VSV I Holdings, LLC. |
|
19. | ViaSat Satellite Ventures, U.S. II, LLC, a Delaware limited liability company 100% Member Interests owned by VSV II Holdings, LLC |
|
20. | ViaSat-1 Holdings, LLC, a Delaware limited liability company 100% Member Interests owned by ViaSat Satellite Ventures U.S. I, LLC |
|
21. | ViaSat Peru S.R.L., a Peruvian limited liability company Number of Shares/Equity Quota issued: 100 ViaSat, Inc.: 1 equity quota ViaSat Worldwide Ltd.: 99 equity quota |
|
22. | ViaSat Stimulus, LLC, a Delaware limited liability company 100% Member Interests owned by ViaSat, Inc |
|
23. | ViaSat, Inc. Limitada, a Chilean limited liability partnership 99.01% interests owned by ViaSat, Inc. .99% interests owned by ViaSat Worldwide Ltd. |
|
24. | TrellisWare Technologies, Inc., a Delaware corporation
Number of Shares issued: 14,737,176 shares 54% owned by ViaSat, Inc. |
|
25. | WildBlue Communications, LLC a Delaware limited liability company (formerly Satellite Broadband ARRA Application, LLC, a Delaware limited liability company) 100% Member Interests owned by WildBlue Communications, Inc. |
|
26. | WildBlue Holding, Inc., a Delaware corporation
Number of Shares issued: 1,000 shares Sole Shareholder: ViaSat, Inc. |
|
27. | WildBlue Communications, Inc., a Delaware corporation
Number of Shares issued: 1,000 shares Sole Shareholder: WildBlue Holding, Inc. |
|
28. | WB Holdings 1 LLC., a Colorado LLC 100 Member Interests Certificated Sole Member/Shareholder: WildBlue Communications, Inc. |
2
29. | WildBlue Communications Canada Corp., a Nova Scotia unlimited liability company
Number of Shares issued: 100 shares Sole Shareholder: WildBlue Communications, Inc. |
|
30. | ViaSat Satellite Holdings Limited, a UK private limited company (formerly Stonewood Sapphire Limited, a UK private limited company.) Number of Shares issued: 69,140 shares Sole Shareholder: ViaSat, Inc. |
|
31. | Stonewood Group Limited, a UK private limited company
Number of Shares issued: 59,690 Sole Shareholder: ViaSat Satellite Holdings Limited, a UK private limited company |
|
32. | Echoblue Rural Broadband, LLC., a Delaware limited liability company 50% Member Interests owned by WildBlue Communications, Inc. 50% Member Interests owned by EchoStar Broadband II LLC., a Colorado LLC |
3
1. | I have reviewed this annual report on Form 10-K of ViaSat, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
/s/ Mark D. Dankberg | ||||
Mark D. Dankberg | ||||
Chief Executive Officer |
1. | I have reviewed this annual report on Form 10-K of ViaSat, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
/s/ Ronald G. Wangerin | ||||
Ronald G. Wangerin | ||||
Chief Financial Officer |
Dated: May 26, 2011 |
/s/ Mark D. Dankberg | ||||
Mark D. Dankberg | ||||
Chief Executive Officer | ||||
Dated: May 26, 2011 |
/s/ Ronald G. Wangerin | ||||
Ronald G. Wangerin | ||||
Chief Financial Officer | ||||
Consolidated Balance Sheets (Parenthetical) (USD $)
|
Apr. 01, 2011
|
Apr. 02, 2010
|
---|---|---|
ViaSat, Inc. stockholders' equity | Â | Â |
Preferred stock , par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock , par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares outstanding | 41,664,767 | 39,792,633 |
Treasury stock at cost, shares | 560,363 | 407,137 |
Financial Statements of Parent and Subsidiary Guarantors
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2011
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Financial Statements of Parent and Subsidiary Guarantors [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Statements of Parent and Subsidiary Guarantors |
On October 22, 2009, the Company issued $275.0 million
in principal amount of Notes in a private placement to
institutional buyers. The Notes were exchanged in May 2010 for
substantially identical Notes that had been registered with the
SEC. The Notes are jointly and severally guaranteed on a full
and unconditional basis by each of the Guarantor Subsidiaries,
which are 100% owned by the Company. The indenture governing the
Notes limits, among other things, the Company’s and its
restricted subsidiaries’ ability to: incur, assume or
guarantee additional debt; issue redeemable stock and preferred
stock; pay dividends, make distributions or redeem or repurchase
capital stock; prepay, redeem or repurchase subordinated debt;
make loans and investments; grant or incur liens; restrict
dividends, loans or asset transfers from restricted
subsidiaries; sell or otherwise dispose of assets; enter into
transactions with affiliates; reduce the Company’s
satellite insurance; and consolidate or merge with, or sell
substantially all of their assets to, another person.
The following supplemental financial information sets forth, on
a condensed consolidating basis, the balance sheets, statements
of operations and statements of cash flows for the Company (as
“Issuing Parent Company”), the Guarantor Subsidiaries,
the non-guarantor subsidiaries and total consolidated Company
and subsidiaries as of April 1, 2011 and April 2, 2010
and for the fiscal years ended April 1, 2011, April 2,
2010 and April 3, 2009.
Condensed
Consolidated Balance Sheet as of April 1, 2011
Condensed
Consolidated Balance Sheet as of April 2, 2010
Condensed
Consolidated Statement of Operations for the Fiscal Year Ended
April 1, 2011
Condensed
Consolidated Statement of Operations for the Fiscal Year Ended
April 2, 2010
Condensed
Consolidated Statement of Operations for the Fiscal Year Ended
April 3, 2009
Condensed
Consolidated Statement of Cash Flows for the Fiscal Year Ended
April 1, 2011
Condensed
Consolidated Statement of Cash Flows for the Fiscal Year Ended
April 2, 2010
Condensed
Consolidated Statement of Cash Flows for the Fiscal Year Ended
April 3, 2009
|
Document and Entity Information (USD $)
|
12 Months Ended | ||
---|---|---|---|
Apr. 01, 2011
|
May 20, 2011
|
Oct. 01, 2010
|
|
Document and Entity Information [Abstract] | Â | Â | Â |
Entity Registrant Name | VIASAT INC | Â | Â |
Entity Central Index Key | 0000797721 | Â | Â |
Document Type | 10-K | Â | Â |
Document Period End Date | Apr. 01, 2011 | ||
Amendment Flag | false | Â | Â |
Document Fiscal Year Focus | 2011 | Â | Â |
Document Fiscal Period Focus | FY | Â | Â |
Current Fiscal Year End Date | --04-01 | Â | Â |
Entity Well-known Seasoned Issuer | Yes | Â | Â |
Entity Voluntary Filers | No | Â | Â |
Entity Current Reporting Status | Yes | Â | Â |
Entity Filer Category | Large Accelerated Filer | Â | Â |
Entity Public Float | Â | Â | $ 1,544,701,011 |
Entity Common Stock, Shares Outstanding | Â | 41,747,683 | Â |
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Common Stock and Stock Plans
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2011
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Common Stock and Stock Plans [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock and Stock Plans |
On March 31, 2010, the Company and certain former WildBlue
equity and debt holders (the WildBlue Investors) completed the
sale of an aggregate of 6,900,000 shares of ViaSat common
stock in an underwritten public offering, 3,173,962 of which
were sold by the Company and 3,726,038 of which were sold by
such WildBlue Investors. The Company’s net proceeds from
the offering were approximately $100.5 million after
deducting underwriting discounts and estimated offering
expenses. The shares sold by such WildBlue Investors in the
offering constituted shares of ViaSat common stock issued to
such WildBlue Investors in connection with the Company’s
acquisition of WildBlue. On April 1, 2010, the Company used
$80.0 million of the net proceeds to repay outstanding
borrowings under the Credit Facility. The remaining net proceeds
from the offering were used for general corporate purposes.
In March 2010, the Company filed a universal shelf registration
statement with the SEC for the future sale of an unlimited
amount of debt securities, common stock, preferred stock,
depositary shares, warrants, and rights. The securities may be
offered from time to time, separately or together, directly by
the Company, by selling security holders, or through
underwriters, dealers or agents at amounts, prices, interest
rates and other terms to be determined at the time of the
offering.
In November 1996, the Company adopted the 1996 Equity
Participation Plan. The 1996 Equity Participation Plan provides
for the grant to executive officers, other key employees,
consultants and non-employee directors of the Company a broad
variety of stock-based compensation alternatives such as
nonqualified stock options, incentive stock options, restricted
stock units and performance awards. From November 1996 to
September 2010 through various amendments of the 1996 Equity
Participation Plan, the Company increased the maximum number of
shares reserved for issuance under this plan from
2,500,000 shares to 17,400,000 shares. The Company
believes that such awards better align the interests of its
employees with those of its stockholders. Shares of the
Company’s common stock granted under the Plan in the form
of stock options or stock appreciation right are counted against
the Plan share reserve on a one for one basis. Shares of the
Company’s common stock granted under the Plan as an award
other than as an option or as a stock appreciation right with a
per share purchase price lower than 100% of fair market value on
the date of grant are counted against the Plan share reserve as
two shares for each share of common stock up to
September 22, 2010 and subsequently as 2.65 shares for
each share of common stock. Restricted stock units are granted
to eligible employees and directors and represent rights to
receive shares of common stock at a future date. As of
April 1, 2011, the Company had granted options and
restricted stock units, net of cancellations, to purchase
8,962,233 and 2,405,021 shares of common stock,
respectively, under the Plan.
In November 1996, the Company adopted the ViaSat, Inc. Employee
Stock Purchase Plan (the Employee Stock Purchase Plan) to assist
employees in acquiring a stock ownership interest in the Company
and to encourage them to remain in the employment of the
Company. The Employee Stock Purchase Plan is intended to qualify
under Section 423 of the Internal Revenue Code. In July of
2009, the Company amended the Employee Stock Purchase Plan to
increase the maximum number of shares reserved for issuance
under this plan from 1,500,000 shares to
2,250,000 shares. The Employee Stock Purchase Plan permits
eligible employees to purchase common stock at a discount
through payroll deductions during specified six-month offering
periods. No employee may purchase more than $25,000 worth of
stock in any calendar year. The price of shares purchased under
the Employee Stock Purchase Plan is equal to 85% of the fair
market value of the common stock on the first or last day of the
offering period, whichever is lower. As of April 1, 2011,
the Company had issued 1,710,854 shares of common stock
under this plan.
Transactions related to the Company’s stock options are
summarized as follows:
All options issued under the Company’s stock option plans
have an exercise price equal to the fair market value of the
Company’s stock on the date of the grant.
The following table summarizes all options outstanding and
exercisable by price range as of April 1, 2011:
Transactions related to the Company’s restricted stock
units are summarized as follows:
All restricted stock units awarded under the Company’s
stock plans have an exercise price equal to zero.
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Commitments
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Apr. 01, 2011
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Commitments [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments |
In January 2008, the Company entered into several agreements
with Space Systems/Loral, Inc. (SS/L), Loral Space &
Communications, Inc. (Loral) and Telesat Canada related to the
Company’s anticipated high-capacity satellite system. Under
the satellite construction contract with SS/L, the Company
purchased ViaSat-1, a new high-capacity
Ka-band
spot-beam satellite designed by the Company and currently under
construction by SS/L for approximately $209.1 million,
subject to purchase price adjustments based on satellite
performance. The total cost of the satellite is
$246.0 million, but, as part of the satellite purchase
arrangements, Loral executed a separate contract with SS/L
whereby Loral is purchasing the Canadian beams on the ViaSat-1
satellite for approximately $36.9 million (15% of the total
satellite cost). The Company has also entered into a beam
sharing agreement with Loral, whereby Loral has agreed to
reimburse the Company for 15% of the total costs associated with
launch and launch insurance, which is estimated to be
approximately $22.5 million, and in-orbit insurance and
satellite operating costs post launch. On March 1, 2011,
Loral entered into agreements with Telesat Canada pursuant to
which Loral assigned to Telesat Canada and Telesat Canada
assumed from Loral all of Loral’s rights and obligations
with respect to the Canadian beams on ViaSat-1.
In November 2008, the Company entered into a launch services
agreement with Arianespace to procure launch services for
ViaSat-1 at a cost estimated to be $107.8 million,
depending on the mass of the satellite at launch. In March 2009,
the Company substituted ILS International Launch Services, Inc.
(ILS) for Arianespace as the primary provider of launch services
for ViaSat-1, and accordingly, the Company entered into a
contract for launch services with ILS to procure launch services
for ViaSat-1 at an estimated cost of approximately
$80.0 million, subject to certain adjustments.
On May 7, 2009, the Company entered into an Amended and
Restated Launch Services Agreement with Arianespace, whereby
Arianespace has agreed to perform certain launch services to
maintain the launch capability for ViaSat-1, should the need
arise, or for launch services of a future ViaSat satellite
launch prior to December 2015. This amendment and restatement
also provides for certain cost adjustments depending on
fluctuations in foreign currencies, mass of the satellite
launched and launch period timing.
The Company has various other purchase commitments under
satellite capacity agreements which are used to provide
satellite networking services to its customers for future
minimum payments of $18.7 million, $12.1 million,
$12.3 million and $0.9 million in fiscal years 2012,
2013, 2014 and 2015, respectively, with no further commitments
thereafter.
The Company leases office and other facilities under
non-cancelable operating leases with initial terms ranging from
one to fifteen years which expire between fiscal year 2012 and
fiscal year 2022 and provide for pre-negotiated fixed rental
rates during the terms of the lease. Certain of the
Company’s facilities leases contain option provisions which
allow for extension of the lease terms.
For operating leases, minimum lease payments, including minimum
scheduled rent increases, are recognized as rent expense on a
straight-line basis over the lease term as that term is defined
in the authoritative guidance for leases (ASC
840) including any option periods considered in the lease
term and any periods during which the Company has use of the
property but is not charged rent by a landlord (“rent
holiday”). Leasehold improvement incentives paid to the
Company by a landlord are recorded as a liability and amortized
as a reduction of rent expense over the lease term. Total rent
expense was $17.1 million, $14.5 million and
$12.5 million in fiscal years 2011, 2010 and 2009,
respectively.
Future minimum lease payments are as follows:
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Composition of Certain Balance Sheet Captions
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Apr. 01, 2011
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Composition of Certain Balance Sheet Captions [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Composition of Certain Balance Sheet Captions |
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Income Taxes
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Apr. 01, 2011
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Income Taxes [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes |
The provision for income taxes includes the following:
Significant components of the Company’s net deferred tax
assets are as follows:
A reconciliation of the provision for income taxes to the amount
computed by applying the statutory federal income tax rate to
income before income taxes is as follows:
As of April 1, 2011, the Company had federal and state
research credit carryforwards of approximately
$42.3 million and $46.1 million, respectively, which
begin to expire in fiscal year 2027 and fiscal year 2018,
respectively, and federal and state net operating loss
carryforwards of approximately $211.9 million and
$278.8 million, respectively, which begin to expire in
fiscal year 2020 and fiscal year 2012, respectively.
The Company recognizes excess tax benefits associated with
share-based compensation to stockholders’ equity only when
realized. When assessing whether excess tax benefits relating to
share-based compensation have been realized, the Company follows
the
with-and-without
approach excluding any indirect effects of the excess tax
deductions. Under this approach, excess tax benefits related to
share-based compensation are not deemed to be realized until
after the utilization of all other tax benefits available to the
Company. During fiscal year 2011, the Company realized
$1.3 million of such excess state tax benefits and,
accordingly, recorded a corresponding credit to additional paid
in capital. As of April 1, 2011, the Company had
$9.6 million of unrealized excess tax benefits associated
with share-based compensation. These tax benefits will be
accounted for as a credit to additional paid-in capital if and
when realized, rather than a reduction of the provision for
income taxes.
In accordance with the authoritative guidance for income taxes
(ASC 740), net deferred tax assets are reduced by a valuation
allowance if, based on all the available evidence, it is more
likely than not that some or all of the deferred tax assets will
not be realized. A valuation allowance of $12.7 million at
April 1, 2011 and $13.1 million at April 2, 2010
has been established relating to state net operating loss
carryforwards and research credit carryforwards that, based on
management’s estimate of future taxable income attributable
to certain states and generation of additional research credits,
are considered more likely than not to expire unused.
If the Company has an “Ownership Change” as defined
under Internal Revenue Code Section 382, it may have an
annual limitation on the utilization of its net operating loss
and tax credit carryforwards.
On March 31, 2007, the Company adopted the provisions of
the authoritative guidance for accounting for uncertainty in
income taxes (ASC 740).
The following table summarizes the activity related to the
Company’s unrecognized tax benefits:
Of the total unrecognized tax benefits at April 1, 2011,
approximately $26.1 million would reduce the Company’s
annual effective tax rate if recognized, subject to valuation
allowance consideration.
Included in the balance at April 1, 2011 are
$1.4 million of tax positions for which the ultimate
deductibility is highly certain but for which there is
uncertainty about the timing of such deductibility. Because of
the impact of deferred tax accounting, other than interest and
penalties, the disallowance of the shorter deductibility period
would not affect the annual effective tax rate but would
accelerate the payment of cash to the taxing authority to an
earlier period.
In the next twelve months it is reasonably possible that the
amount of unrecognized tax benefits will decrease by
approximately $2.5 million as a result of the expiration of
the statute of limitations or settlements with tax authorities
for previously filed tax returns.
The Company is subject to periodic audits by domestic and
foreign tax authorities. By statute, the Company’s
U.S. federal returns are subject to examination by the IRS
for fiscal years 2008 through 2010. Additionally, tax credit
carryovers that were generated in prior years and utilized in
these years may also be subject to examination by the IRS. In
September 2010, the IRS commenced an examination of our fiscal
year 2009 federal income tax return. Subsequently, the IRS added
our fiscal year 2010 income tax return to the examination. With
few exceptions, fiscal years 2007 to 2010 remain open to
examination by state and foreign taxing jurisdictions. The
Company believes that it has appropriate support for the income
tax positions taken on its tax returns and its accruals for tax
liabilities are adequate for all open years based on an
assessment of many factors, including past experience and
interpretations. The Company’s policy is to recognize
interest expense and penalties related to income tax matters as
a component of income tax expense. There were no accrued
interest or penalties associated with uncertain tax positions as
of April 1, 2011. A decrease of $0.5 million of
interest and penalties was recorded in the period ended
April 1, 2011.
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Product Warranty
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Apr. 01, 2011
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Product Warranty [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranty |
The Company provides limited warranties on its products for
periods of up to five years. The Company records a liability for
its warranty obligations when products are shipped or they are
included in long-term construction
contracts based upon an estimate of expected warranty costs.
Amounts expected to be incurred within twelve months are
classified as a current liability. For mature products, the
warranty cost estimates are based on historical experience with
the particular product. For newer products that do not have a
history of warranty cost, the Company bases its estimates on its
experience with the technology involved and the type of failures
that may occur. It is possible that the Company’s
underlying assumptions will not reflect the actual experience
and in that case, future adjustments will be made to the
recorded warranty obligation. The following table reflects the
change in the Company’s warranty accrual in fiscal years
2011, 2010 and 2009.
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Acquisitions
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Apr. 01, 2011
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Acquisitions [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions |
Stonewood
acquisition
On July 8, 2010, the Company completed the acquisition of
all outstanding shares of the parent company of Stonewood.
Stonewood is a leader in the design, manufacture and delivery of
data at rest encryption products and services. Stonewood
products are used to encrypt data on computer hard drives so
that a lost or stolen laptop does not result in the compromise
of classified information or the loss of intellectual property.
The purchase price of approximately $18.8 million was
comprised of $4.6 million related to the fair value of
144,962 shares of the Company’s common stock issued at
the closing and $14.2 million in cash consideration paid to
former Stonewood stockholders. The $14.2 million in cash
consideration paid to the former Stonewood stockholders less
cash acquired of $0.7 million resulted in a net cash outlay
of approximately $13.5 million.
In accordance with the authoritative guidance for business
combinations (ASC 805), the Company allocated the purchase price
of the acquired company to the net tangible assets and
intangible assets acquired based upon their
estimated fair values. Under the authoritative guidance for
business combinations, acquisition-related transaction costs and
acquisition-related restructuring charges are not included as
components of consideration transferred but are accounted for as
expenses in the period in which the costs are incurred. Total
merger-related transaction costs incurred by the Company were
approximately $0.9 million, all of which were incurred and
recorded in selling, general and administrative expenses in
fiscal year 2011.
The preliminary purchase price allocation of the acquired assets
and assumed liabilities based on the estimated fair values as of
July 8, 2010 is as follows:
Amounts assigned to identifiable intangible assets are being
amortized on a straight-line basis over their estimated useful
lives and are as follows:
The intangible assets acquired in the Stonewood business
combination were determined, in accordance with the
authoritative guidance for business combinations, based on the
estimated fair values using valuation techniques consistent with
the market approach
and/or
income approach to measure fair value. The remaining useful
lives were estimated based on the underlying agreements
and/or the
future economic benefit expected to be received from the assets.
The acquisition of Stonewood is beneficial to the Company as it
enhances the Company’s current encryption security
offerings within the Company’s information assurance
products and provides additional solutions in the design,
manufacture and delivery of data at rest encryption products and
services. These benefits and additional opportunities were among
the factors that contributed to a purchase price resulting in
the recognition of preliminary estimated goodwill, which was
recorded within the Company’s government systems segment.
The intangible assets and goodwill recognized are not deductible
for federal income tax purposes. The purchase price allocation
is preliminary due to pending resolution of certain Stonewood
tax attributes. During the fourth quarter of fiscal year 2011,
the Company recorded a $0.5 million adjustment to the
preliminary purchase price allocation for Stonewood related to
pre-acquisition net operating loss carryovers, reducing the
Company’s government systems segment goodwill with a
corresponding adjustment to deferred tax liabilities.
The consolidated financial statements include the operating
results of Stonewood from the date of acquisition. Pro forma
results of operations have not been presented because the effect
of the acquisition was insignificant to the financial statements
for all periods presented.
WildBlue
acquisition
On December 15, 2009, the Company completed the acquisition
of all outstanding shares of WildBlue, a privately held provider
of broadband internet service, delivering two-way broadband
internet access via satellite in the contiguous United States.
The purchase price of approximately $574.6 million was
comprised primarily of $131.9 million related to the fair
value of 4,286,250 shares of the Company’s common
stock issued at the closing date and $442.7 million in cash
consideration. The $442.7 million in cash consideration
paid to the former WildBlue stockholders less cash and
restricted cash acquired of $64.7 million resulted in a net
cash outlay of approximately $378.0 million. As of
April 2, 2010, all of the acquired restricted cash had
become unrestricted. Total merger-related transaction costs
incurred by the Company related to WildBlue acquisition were
approximately $8.7 million, all of which were incurred and
recorded in selling, general and administrative expenses in
fiscal year 2010.
The purchase price allocation of the acquired assets and assumed
liabilities based on the estimated fair values is as follows:
Amounts assigned to identifiable intangible assets are being
amortized on a straight-line basis over their estimated useful
lives and are as follows:
The intangible assets acquired in the WildBlue business
combination were determined, in accordance with the
authoritative guidance for business combinations, based on the
estimated fair values using valuation techniques consistent with
the market approach, income approach
and/or cost
approach to measure fair value. The remaining useful lives were
estimated based on the underlying agreements
and/or the
future economic benefit expected to be
received from the assets. Under the terms of the co-location
right agreement, the Company has certain option periods that
begin in approximately 10 years based upon the life of Anik
F2 Ka-Band
Payload.
The acquisition of WildBlue is beneficial to the Company as it
is expected to enable the Company to integrate the extensive
bandwidth capacity of its ViaSat-1 satellite into
WildBlue’s existing distribution and fulfillment resources,
which are expected to reduce initial service costs and improve
subscriber growth. These benefits and additional opportunities
were among the factors that contributed to a purchase price
resulting in the recognition of goodwill, which was recorded
within the Company’s satellite services segment. The
intangible assets and goodwill recognized are not deductible for
federal income tax purposes. During fiscal year 2011, the
Company recorded a $0.4 million adjustment to the final
purchase price allocation for WildBlue primarily related to
pre-acquisition net operating loss carryovers, increasing the
Company’s satellite services segment goodwill with a
corresponding adjustment to deferred tax assets.
The consolidated financial statements include the operating
results of WildBlue from the date of acquisition. During fiscal
year 2010, since the acquisition date, the Company recorded
approximately $63.4 million in revenue and
$0.4 million of net income with respect to the WildBlue
business in the Company’s consolidated statements of
operations.
Unaudited
pro forma financial information
The unaudited financial information in the table below
summarizes the combined results of operations for the Company
and WildBlue on a pro forma basis, as though the companies had
been combined as of the beginning of the related fiscal years.
The pro forma financial information is presented for
informational purposes only and may not be indicative of the
results of operations that would have been achieved if the
acquisition had taken place at the beginning of the related
fiscal years. The pro forma financial information for fiscal
years 2010 and 2009 include the business combination accounting
effect on historical WildBlue revenue, elimination of the
historical ViaSat revenues and related costs of revenues derived
from sales of CPE units to WildBlue, amortization and
depreciation charges from acquired intangible and tangible
assets, the difference between WildBlue’s and ViaSat’s
historical interest expense/interest income due to ViaSat’s
new capitalization structure as a result of the acquisition,
related tax effects and adjustment to shares outstanding for
shares issued for the acquisition.
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Shares Used In Computing Diluted Net Income Per Share
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Apr. 01, 2011
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Shares Used In Computing Diluted Net Income Per Share [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares Used In Computing Diluted Net Income Per Share |
Antidilutive shares relating to stock options excluded from the
calculation were 108,637 for the fiscal year ended April 1,
2011, 496,545 for the fiscal year ended April 2, 2010 and
2,771,573 for the fiscal year ended April 3, 2009.
Antidilutive shares relating to restricted stock units excluded
from the calculation were 4,525 for the fiscal year ended April
1, 2011, 521 for the fiscal year ended April 2, 2010 and 8,490
for the fiscal year ended April 3, 2009.
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Fair Value Measurement
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Apr. 01, 2011
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Fair Value Measurement [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement |
In accordance with the authoritative guidance for financial
assets and liabilities measured at fair value on a recurring
basis (ASC 820), the Company prioritizes the inputs used to
measure fair value from market-based assumptions to entity
specific assumptions:
Effective April 4, 2009, the Company adopted the
authoritative guidance for non-financial assets and liabilities
that are remeasured at fair value on a non-recurring basis
without material impact on its consolidated financial statements
and disclosures.
The following tables present the Company’s hierarchy for
its assets and liabilities measured at fair value on a recurring
basis as of April 1, 2011 and April 2, 2010:
The following section describes the valuation methodologies the
Company uses to measure financial instruments at fair value:
Cash equivalents — The Company’s cash
equivalents consist of money market funds. Money market funds
are valued using quoted prices for identical assets in an active
market with sufficient volume and frequency of transactions
(Level 1).
Foreign currency forward exchange contracts —
The Company uses derivative financial instruments to manage
foreign currency risk relating to foreign exchange rates. The
Company does not use these instruments for speculative or
trading purposes. The Company’s objective is to reduce the
risk to earnings and cash flows associated with changes in
foreign currency exchange rates. Derivative instruments are
recognized as either assets or liabilities in the accompanying
consolidated financial statements and are measured at fair
value. Gains and losses resulting from changes in the fair
values of those derivative instruments are recorded to earnings
or other comprehensive income (loss) depending on the use of the
derivative instrument and whether it qualifies for hedge
accounting. The Company’s foreign currency forward
contracts are valued using quoted prices for similar assets and
liabilities in active markets or other inputs that are
observable or can be corroborated by observable market data.
Long-term debt — The Company’s long-term
debt consists of borrowings under the Credit Facility, reported
at the borrowed outstanding amount, capital lease obligations
reported at the present value of future minimum lease payments
with current accrued interest, and the Notes reported at
amortized cost. However, for disclosure purposes, the Company is
required to measure the fair value of outstanding debt on a
recurring basis. The fair value of the Company’s
outstanding long-term debt related to the Notes is determined
using quoted prices in active markets and was approximately
$293.6 million and $281.2 million as of April 1,
2011 and April 2, 2010, respectively. The fair value of the
Company’s long-term debt related to the Credit Facility
approximates its carrying amount due to its variable interest
rate on the revolving line of credit, which approximates a
market interest rate. The fair value of the Company’s
capital lease obligations is estimated at their carrying value
based on current rates.
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Goodwill and Acquired Intangible Assets
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Apr. 01, 2011
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Goodwill and Acquired Intangible Assets [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Acquired Intangible Assets |
Note 4 —
Goodwill and Acquired Intangible Assets
During fiscal year 2011, the Company’s goodwill increased
by approximately $8.5 million, net, of which
$7.4 million was related to the acquisition of Stonewood
recorded within the Company’s government systems segment.
In addition, the Company recorded a $0.4 million increase
to goodwill primarily for the tax effect of certain
pre-acquisition net operating loss carryovers with a
corresponding adjustment to deferred tax assets within the
Company’s satellite services segment. The Company also
recorded a $0.5 million decrease to goodwill for the tax
effect of certain pre-acquisition net operating loss carryovers
with a corresponding adjustment to deferred tax liabilities
within the Company’s government systems segment. The
remaining change relates to the effect of foreign currency
translation recorded within the Company’s government
systems and commercial networks segments.
The other acquired intangible assets are amortized using the
straight-line method over their estimated useful lives of eight
months to ten years. Amortization expense related to other
acquired intangible assets was $19.4 million,
$9.5 million and $8.8 million for the fiscal years
ended April 1, 2011, April 2, 2010 and April 3,
2009, respectively.
The expected amortization expense of amortizable acquired
intangible assets may change due to the effects of foreign
currency fluctuations as a result of the international
businesses acquired. Expected amortization expense for acquired
intangible assets for each of the following periods is as
follows:
The allocation of the other acquired intangible assets and the
related accumulated amortization as of April 1, 2011 and
April 2, 2010 is as follows:
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Contingencies
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12 Months Ended | ||||
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Apr. 01, 2011
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Contingencies [Abstract] | Â | ||||
Contingencies |
The Company is involved in a variety of claims, suits,
investigations and proceedings arising in the ordinary course of
business, including actions with respect to intellectual
property claims, breach of contract claims, labor and employment
claims, tax and other matters. Although claims, suits,
investigations and proceedings are inherently uncertain and
their results cannot be predicted with certainty, the Company
believes that the resolution of its current pending matters will
not have a material adverse effect on its business, financial
condition, results of operations or liquidity.
U.S. government agencies, including the Defense Contract
Audit Agency (DCAA) and others, routinely audit and review a
contractor’s performance on government contracts, indirect
rates and pricing practices, and compliance with applicable
contracting and procurement laws, regulations and standards.
They also review the adequacy of the contractor’s
compliance with government standards for its accounting and
management internal control systems, including: control
environment and overall accounting system, general information
technology system, budget and planning system, purchasing
system, material management and accounting system, compensation
system, labor system, indirect and other direct costs system,
billing system and estimating system.
Government audits and reviews may conclude that the
Company’s practices are not consistent with applicable laws
and regulations and result in adjustments to contract costs and
mandatory customer refunds. Such adjustments can be applied
retroactively, which could result in significant customer
refunds, penalties and sanctions against the Company, including
withholding of payments, and increased government scrutiny that
could delay or adversely affect the Company’s ability to
receive timely payment on contracts, perform contracts or
compete for contracts with the U.S. Government.
The Company’s incurred cost audits by the DCAA have not
been completed for fiscal year 2003 and subsequent fiscal years.
Although the Company has recorded contract revenues subsequent
to fiscal year 2002 based upon an estimate of costs that the
Company believes will be approved upon final audit or review,
the Company does not know the outcome of any ongoing or future
audits or reviews and adjustments, and if future adjustments
exceed the Company’s estimates, its profitability would be
adversely affected. In the fourth quarter of fiscal year 2011,
based on recent events, including communications with the DCMA,
changes in the regulatory environment for federal government
contractors and the status of current government audits, the
Company recorded an additional $5.0 million in
contract-related reserves for its estimate of potential refunds
to customers for potential cost adjustments on several
multi-year U.S. government cost reimbursable contracts,
bringing the Company’s total reserve to $6.7 million
as of April 1, 2011. This reserve is classified as either
an element of accrued liabilities or as a reduction of unbilled
accounts receivable based on status of the related contracts.
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Senior Notes and Other Long-Term Debt
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Apr. 01, 2011
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Senior Notes and Other Long-Term Debt [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior Notes and Other Long-Term Debt |
Total long-term debt consisted of the following as of
April 1, 2011 and April 2, 2010:
The aggregate payments on the Company’s long-term debt
obligations, excluding the effects of discount accretion, on its
$275.0 million of Notes and required interest payments on
the Credit Facility as of April 1, 2011 were as follows:
Senior
Notes due 2016
On October 22, 2009, the Company issued $275.0 million
in principal amount of Notes in a private placement to
institutional buyers, which Notes were exchanged in May 2010 for
substantially identical Notes that had been registered with the
SEC. The Notes bear interest at the rate of 8.875% per year,
payable semi-annually in cash in arrears, which interest
payments commenced in March 2010. The Notes were issued with an
original issue discount of 1.24%, or $3.4 million. The
Notes are recorded as long-term debt, net of original issue
discount, in the Company’s consolidated financial
statements. The original issue discount and deferred financing
cost associated with the issuance of the Notes is amortized to
interest expense on a straight-line basis over the term of the
Notes.
The Notes are guaranteed on an unsecured senior basis by each of
the Company’s existing and future subsidiaries that
guarantees the Credit Facility (the Guarantor Subsidiaries). The
Notes and the guarantees are the Company’s and the
Guarantor Subsidiaries’ general senior unsecured
obligations and rank equally in right of payment with all of the
Company’s existing and future unsecured unsubordinated
debt. The Notes and the guarantees are effectively junior in
right of payment to their existing and future secured debt,
including under the Credit Facility (to the extent of the value
of the assets securing such debt), are structurally subordinated
to all existing and future liabilities (including trade
payables) of the Company’s subsidiaries that are not
guarantors of the Notes, and are senior in right of payment to
all of their existing and future subordinated indebtedness.
The indenture agreement governing the Notes limits, among other
things, the Company’s and its restricted subsidiaries’
ability to: incur, assume or guarantee additional debt; issue
redeemable stock and preferred stock; pay dividends, make
distributions or redeem or repurchase capital stock; prepay,
redeem or repurchase subordinated debt; make loans and
investments; grant or incur liens; restrict dividends, loans or
asset transfers from restricted subsidiaries; sell or otherwise
dispose of assets; enter into transactions with affiliates;
reduce the Company’s satellite insurance; and consolidate
or merge with, or sell substantially all of their assets to,
another person.
Prior to September 15, 2012, the Company may redeem up to
35% of the Notes at a redemption price of 108.875% of the
principal amount thereof, plus accrued and unpaid interest, if
any, thereon to the redemption date, from the net cash proceeds
of specified equity offerings. The Company may also redeem the
Notes prior to September 15, 2012, in whole or in part, at
a redemption price equal to 100% of the principal amount thereof
plus the applicable premium and any accrued and unpaid interest,
if any, thereon to the redemption date. The applicable premium
is calculated as the greater of: (i) 1.0% of the principal
amount of such Notes and (ii) the excess, if any, of
(a) the present value at such date of redemption of
(1) the redemption price of such Notes on
September 15, 2012
plus (2) all required interest payments due on such Notes
through September 15, 2012 (excluding accrued but unpaid
interest to the date of redemption), computed using a discount
rate equal to the treasury rate (as defined under the indenture)
plus 50 basis points, over (b) the then-outstanding
principal amount of such Notes. The Notes may be redeemed, in
whole or in part, at any time during the twelve months beginning
on September 15, 2012 at a redemption price of 106.656%,
during the twelve months beginning on September 15, 2013 at
a redemption price of 104.438%, during the twelve months
beginning on September 15, 2014 at a redemption price of
102.219%, and at any time on or after September 12, 2015 at
a redemption price of 100%, in each case plus accrued and unpaid
interest, if any, thereon to the redemption date.
In the event a change of control occurs (as defined under the
indenture), each holder will have the right to require the
Company to repurchase all or any part (equal to $2,000 or larger
integral multiples of $1,000) of such holder’s Notes at a
purchase price in cash equal to 101% of the aggregate principal
amount of the Notes repurchased plus accrued and unpaid
interest, if any, to the date of purchase (subject to the right
of holders of record on the relevant record date to receive
interest due on the relevant interest payment date).
Credit
Facility
As of April 1, 2011, the Credit Facility provided a
revolving line of credit of $325.0 million (including up to
$35.0 million of letters of credit), with a maturity date
of January 25, 2016. On January 25, 2011, the Company
amended the Credit Facility to (1) increase the
Company’s revolving line of credit from $275.0 million
to $325.0 million, (2) extend the maturity date of the
Credit Facility from July 1, 2012 to January 25, 2016,
(3) decrease the commitment fee and the applicable margin
for Eurodollar and base rate loans under the Credit Facility,
and (4) amend certain financial and other covenants to
provide the Company with increased flexibility. Borrowings under
the Credit Facility bear interest, at the Company’s option,
at either (1) the highest of the Federal Funds rate plus
0.50%, the Eurodollar rate plus 1.00% or the administrative
agent’s prime rate as announced from time to time, or
(2) at the Eurodollar rate plus, in the case of each of
(1) and (2), an applicable margin that is based on the
ratio of the Company’s debt to earnings before interest,
taxes, depreciation and amortization (EBITDA). At April 1,
2011, the weighted average effective interest rate on the
Company’s outstanding borrowings under the Credit Facility
was 3.29%. The Company has capitalized certain amounts of
interest expense on the Credit Facility in connection with the
construction of ViaSat-1, related gateway and networking
equipment and other assets currently under construction. The
Credit Facility is guaranteed by certain of the Company’s
domestic subsidiaries and collateralized by substantially all of
the Company’s and the Guarantor Subsidiaries’ assets.
The Credit Facility contains financial covenants regarding a
maximum leverage ratio, a maximum senior secured leverage ratio
and a minimum interest coverage ratio. In addition, the Credit
Facility contains covenants that restrict, among other things,
the Company’s ability to sell assets, make investments and
acquisitions, make capital expenditures, grant liens, pay
dividends and make certain other restricted payments.
The Company was in compliance with its financial covenants under
the Credit Facility as of April 1, 2011. At April 1,
2011, the Company had $60.0 million in principal amount of
outstanding borrowings under the Credit Facility and
$14.3 million outstanding under standby letters of credit,
leaving borrowing availability under the Credit Facility as of
April 1, 2011of $250.7 million.
Capital
leases
Occasionally the Company may enter into capital lease agreements
for various machinery, equipment, computer-related equipment,
software, furniture or fixtures. As of April 1, 2011, the
Company had approximately $3.1 million outstanding under
capital leases payable over a weighted average period of
36 months. These lease agreements bear interest at a
weighted average rate of 4.69% and can be extended on a
month-to-month
basis after the original term. The Company had no material
capital lease arrangements as of April 2, 2010.
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Segment Information
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Apr. 01, 2011
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Segment Information [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information |
The Company’s reporting segments, comprised of the
government systems, commercial networks and satellite services
segments, are primarily distinguished by the type of customer
and the related contractual requirements. The Company’s
government systems segment develops and produces
network-centric,
IP-based
secure government communications systems, products and
solutions. The more regulated government environment is subject
to unique contractual requirements and possesses economic
characteristics which differ from the commercial networks and
satellite services segments. The Company’s commercial
networks segment develops and produces a variety of advanced
end-to-end
satellite communication systems and ground networking equipment
and products. The Company’s satellite services segment
complements both the government systems and commercial networks
segments by providing wholesale and retail satellite-based
broadband internet services in the United States via the
Company’s satellite and capacity agreements, as well as
managed network services for the satellite communication systems
of the Company’s consumer, enterprise and mobile broadband
customers. The Company’s satellite services segment
includes the Company’s acquired WildBlue business and the
Company’s ViaSat-1 satellite-related activities. The
Company’s segments are determined consistent with the way
management currently organizes and evaluates financial
information internally for making operating decisions and
assessing performance.
As discussed further in Note 1, included in the government
systems segment operating profit for fiscal year 2011 is an
$8.5 million forward loss recorded during the first quarter
of fiscal year 2011 on a government satellite communications
program. As discussed in Note 1, also included in the
government systems segment operating profit for fiscal year 2011
is an additional $5.0 million in contract related reserves
for potential cost adjustments on several multi-year
U.S. government cost reimbursable contracts, which resulted
in a decrease to revenues and earnings. The Company’s
satellite services segment operating profit for fiscal year 2011
reflects a $5.2 million
benefit to cost of service revenues related to a WildBlue
satellite capacity contract liability acquired and release of
future payment liabilities related thereto.
Amortization of acquired intangible assets by segment for the
fiscal years ended April 1, 2011, April 2, 2010 and
April 3, 2009 was as follows:
Assets identifiable to segments include: accounts receivable,
unbilled accounts receivable, inventory, acquired intangible
assets and goodwill. Segment assets as of April 1, 2011 and
April 2, 2010 were as follows:
Net acquired intangible assets and goodwill included in segment
assets as of April 1, 2011 and April 2, 2010 were as
follows:
Revenue information by geographic area for the fiscal years
ended April 1, 2011, April 2, 2010 and April 3,
2009 was as follows:
The Company distinguishes revenues from external customers by
geographic area based on customer location.
The net book value of long-lived assets located outside the
United States was $7.9 million and $4.4 million at
April 1, 2011 and April 2, 2010, respectively.
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Certain Relationships and Related-Party Transactions
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12 Months Ended | ||||
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Apr. 01, 2011
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Certain Relationships and Related-Party Transactions [Abstract] | Â | ||||
Certain Relationships and Related-Party Transactions |
Michael Targoff, a director of the Company since February 2003,
currently serves as the Chief Executive Officer and the Vice
Chairman of the board of directors of Loral Space &
Communications, Inc. (Loral), the parent of Space Systems/Loral,
Inc. (SS/L), and is also a director of Telesat Holdings Inc., a
joint venture company formed by Loral and the Public Sector
Pension Investment Board to acquire Telesat Canada in October
2007. John Stenbit, a director of the Company since August 2004,
also currently serves on the board of directors of Loral.
In January 2008, the Company entered into a satellite
construction contract with SS/L under which the Company
purchased a new high-capacity
Ka-band
spot-beam satellite (ViaSat-1) designed by the Company and
currently under construction by SS/L for approximately
$209.1 million, subject to purchase price adjustments based
on satellite performance. In addition, the Company entered into
a beam sharing agreement with Loral, whereby Loral is
responsible for contributing 15% of the total costs (estimated
at approximately $57.6 million) associated with the
ViaSat-1 satellite project. The Company’s purchase of the
ViaSat-1 satellite from SS/L was approved by the disinterested
members of the Company’s Board of Directors, after a
determination by the disinterested members of the Company’s
Board that the terms and conditions of the purchase were fair to
and in the best interests of the Company and its stockholders.
On March 1, 2011, Loral entered into agreements with
Telesat Canada pursuant to which Loral assigned to Telesat
Canada and Telesat Canada assumed from Loral all of Loral’s
rights and obligations with respect to the Canadian beams on
ViaSat-1.
During the fiscal years ended April 1, 2011, April 2,
2010 and April 3, 2009, under the satellite construction
contract, the Company paid $25.0 million,
$62.9 million and $92.7 million, respectively, to SS/L
and had no payable to SS/L as of April 1, 2011 and
$3.8 million payable to SS/L as of April 2, 2010.
During the fiscal years ended April 1, 2011, April 2,
2010 and April 3, 2009, the Company also received
$8.2 million, $2.6 million and $0.9 million,
respectively, from SS/L under the beam sharing agreement with
Loral. Accounts receivable due from SS/L under the beam sharing
agreement with Loral were less than $0.1 million and
$3.8 million as of April 1, 2011 and April 2,
2010, respectively.
From time to time the Company enters into various contracts in
the ordinary course of business with SS/L and Telesat Canada.
Under a contract with SS/L, the Company recognized
$3.3 million in revenue during fiscal year 2011 and
received $3.9 million of cash during fiscal year 2011.
During fiscal years 2010 and 2009, the Company recognized no
revenue and had no cash receipts related to a contract with
SS/L. Accounts receivable due under a contract with SS/L was
$0.8 million as of April 1, 2011 and there was no
accounts receivable outstanding as of April 2, 2010.
Collections in excess of revenues and deferred revenues related
to a contract with SS/L were $1.4 million and
$0.8 million as of April 1, 2011 and April 2,
2010, respectively. The Company recognized an immaterial amount
of revenue related to Telesat Canada for the fiscal years ended
April 1, 2011 and April 2, 2010, and approximately
$2.0 million for the fiscal year ended April 3, 2009.
The Company received $1.2 million, $1.9 million and
$2.5 million, respectively, from Telesat Canada during the
fiscal years ended April 1, 2011, April 2, 2010 and
April 3, 2009. Accounts receivable due from Telesat Canada
as of April 1, 2011 and April 2, 2010 were an
immaterial amount and $0.9 million, respectively. The
Company also recognized $2.2 million and $2.1 million
of expense related to Telesat Canada for the fiscal years ended
April 1, 2011 and April 2, 2010, respectively, and no
material amounts for the fiscal year ended April 3, 2009.
During the fiscal years ended April 1, 2011 and
April 2, 2010, the Company paid $7.2 million and
$2.1 million, respectively, to Telesat Canada. There were
no material amounts paid to Telesat Canada during the fiscal
year ended April 3, 2009. All other amounts related to SS/L
and Telesat Canada, excluding activities under the ViaSat-1
related satellite contracts, were not material.
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Valuation and Qualifying Accounts
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Apr. 01, 2011
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Valuation and Qualifying Accounts [Abstract] | Â | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
VALUATION AND QUALIFYING ACCOUNTS |
VALUATION
AND QUALIFYING ACCOUNTS
For the Three Fiscal Years Ended April 1, 2011
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The Company and a Summary of Its Significant Accounting Policies
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Apr. 01, 2011
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The Company and a Summary of Its Significant Accounting Policies [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Company and a Summary of Its Significant Accounting Policies |
The
Company
ViaSat, Inc. (also referred to hereafter as the
“Company” or “ViaSat”) designs, produces and
markets advanced innovative satellite and other wireless
communication and secure networking systems, products and
services.
Principles
of consolidation
The Company’s consolidated financial statements include the
assets, liabilities and results of operations of ViaSat and its
wholly owned subsidiaries and of TrellisWare Technologies, Inc.
(TrellisWare), a majority-owned subsidiary. All significant
intercompany amounts have been eliminated.
The Company’s fiscal year is the 52 or 53 weeks ending
on the Friday closest to March 31 of the specified year. For
example, references to fiscal year 2011 refer to the fiscal year
ending on April 1, 2011. The Company’s quarters for
fiscal year 2011 ended on July 2, 2010, October 1,
2010, December 31, 2010 and April 1, 2011. This
results in a 53 week fiscal year approximately every four
to five years. Fiscal years 2011 and 2010 are both 52 week
years, compared with a 53 week year in fiscal year 2009. As
a result of the shift in the fiscal calendar, the second quarter
of fiscal year 2009 included an additional week. The Company
does not believe that the extra week results in any material
impact on its financial results.
Certain prior period amounts have been reclassified to conform
to the current period presentation.
During the second quarter of fiscal year 2011, the Company
completed the acquisition of Stonewood Group Limited
(Stonewood), a privately held company registered in England and
Wales. During the third quarter of fiscal year 2010, the Company
completed the acquisition of WildBlue Holding, Inc. (WildBlue),
a privately held Delaware corporation. These acquisitions were
accounted for as purchases and accordingly, the consolidated
financial statements include the operating results of Stonewood
and WildBlue from the dates of acquisition (see Note 9).
On April 4, 2009, the beginning of the Company’s first
quarter of fiscal year 2010, the Company adopted the
authoritative guidance for noncontrolling interests (ASC
810-10-65-1)
on a prospective basis, except for the presentation and
disclosure requirements which were applied retrospectively for
all periods presented. As a result, the Company reclassified to
noncontrolling interest, a component of equity, what was
previously reported as minority interest in consolidated
subsidiary in the mezzanine section of the Company’s
consolidated balance sheets and reported as a separate caption
within the Company’s consolidated statements of operations,
net income, net income attributable to the noncontrolling
interest, and net income attributable to ViaSat, Inc. In
addition, the Company utilized net income which now includes
noncontrolling interest, as the starting point on the
Company’s consolidated statements of cash flows in order to
reconcile net income to net cash provided by operating
activities. These reclassifications had no effect on previously
reported consolidated income from operations, net income
attributable to ViaSat, Inc. or net cash provided by operating
activities. Also, net income per share continues to be based on
net income attributable to ViaSat, Inc.
Management
estimates and assumptions
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the financial statements and reported amounts of revenues and
expenses during the reporting period. Estimates have been
prepared on the basis of the most current and best available
information and actual results could differ from those
estimates. Significant estimates made by management include
revenue recognition, stock-based compensation, self-insurance
reserves, allowance for doubtful accounts, warranty accrual,
valuation of goodwill and other intangible assets, patents,
orbital slots and orbital licenses, software development,
property,
equipment and satellites, long-lived assets, derivatives,
contingencies and income taxes including the valuation allowance
on deferred tax assets.
Cash
equivalents
Cash equivalents consist of highly liquid investments with
original maturities of 90 days or less at the date of
purchase.
Accounts
receivable, unbilled accounts receivable and allowance for
doubtful accounts
The Company records receivables at net realizable value
including an allowance for estimated uncollectible accounts. The
allowance for doubtful accounts is based on the Company’s
assessment of the collectability of customer accounts. The
Company regularly reviews the allowance by considering factors
such as historical experience, credit quality, the age of
accounts receivable balances and current economic conditions
that may affect a customer’s ability to pay. Amounts
determined to be uncollectible are charged or written off
against the reserve. Historically, the Company’s allowance
for doubtful accounts has been minimal primarily because a
significant portion of its sales has been to the
U.S. government or with respect to its satellite service
commercial business, the Company bills and collects in advance.
Unbilled receivables consist of costs and fees earned and
billable on contract completion or other specified events.
Unbilled receivables are generally expected to be billed and
collected within one year.
Concentration
of risk
Financial instruments that potentially subject the Company to
significant concentrations of credit risk consist primarily of
cash equivalents and trade accounts receivable which are
generally not collateralized. The Company limits its exposure to
credit loss by placing its cash equivalents with high credit
quality financial institutions and investing in high quality
short-term debt instruments. The Company establishes customer
credit policies related to its accounts receivable based on
historical collection experiences within the various markets in
which the Company operates, historical past due amounts and any
specific information that the Company becomes aware of such as
bankruptcy or liquidity issues of customers.
Revenues from the U.S. government comprised 24.5%, 30.3%
and 36.0% of total revenues for fiscal years 2011, 2010 and
2009, respectively. Billed accounts receivable to the
U.S. government as of April 1, 2011 and April 2,
2010 were 35.3% and 28.7%, respectively, of total billed
receivables. In addition, none of the Company’s commercial
customers comprised 10.0% or more of total revenues for fiscal
years 2011 and 2010. In fiscal year 2009 one commercial customer
comprised 10.3% of total revenues and as of April 3, 2009
represented 9.8% of total billed receivables. The Company’s
five largest contracts generated approximately 21.2%, 25.4% and
34.8% of the Company’s total revenues for the fiscal years
ended April 1, 2011, April 2, 2010 and April 3,
2009, respectively.
The Company relies on a limited number of contract manufacturers
to produce its products.
Inventory
Inventory is valued at the lower of cost or market, cost being
determined by the weighted average cost method.
Property,
equipment and satellites
Equipment, computers and software, furniture and fixtures, the
Company’s satellite under construction and related gateway
and networking equipment under construction are recorded at
cost, net of accumulated depreciation. The Company computes
depreciation using the straight-line method over the estimated
useful lives of the assets ranging from two to twenty-four
years. Leasehold improvements are capitalized and amortized
using the straight-line method over the shorter of the lease
term or the life of the improvement. Additions to property,
equipment and satellites, together with major renewals and
betterments, are capitalized. Maintenance, repairs and minor
renewals and betterments are charged to expense. When assets are
sold or otherwise disposed of, the cost and related accumulated
depreciation or amortization are removed from the accounts and
any resulting gain or loss is recognized in operations.
Satellite construction costs, including launch services and
insurance, are generally procured under long-term contracts that
provide for payments over the contract periods and are
capitalized as incurred. The Company is also constructing
gateway facilities and network operations systems to support the
satellite under construction and these construction costs are
capitalized as incurred. Interest expense is capitalized on the
carrying value of the satellite, related gateway and networking
equipment and other assets during the construction period, in
accordance with the authoritative guidance for the
capitalization of interest (ASC
835-20).
With respect to ViaSat-1 (the Company’s high-capacity
satellite), related gateway and networking equipment and other
assets currently under construction, the Company capitalized
$28.3 million and $8.8 million of interest expense
during the fiscal years ended April 1, 2011 and
April 2, 2010, respectively.
As a result of the acquisition of WildBlue on December 15,
2009 (see Note 9), the Company acquired the WildBlue-1
satellite (which was placed into service in March 2007), an
exclusive prepaid lifetime capital lease of
Ka-band
capacity over the continental United States on Telesat
Canada’s Anik F2 satellite (which was placed into service
in April 2005) and related gateway and networking equipment
on both satellites. The acquired assets also included the indoor
and outdoor customer premise equipment (CPE) units leased to
subscribers under WildBlue’s retail leasing program. The
Company depreciates the satellites, gateway and networking
equipment, CPE units and related installation costs over their
estimated useful lives. The total cost and accumulated
depreciation of CPE units included in property and equipment,
net as of April 1, 2011 was $61.6 million and
$19.2 million, respectively. The total cost and accumulated
depreciation of CPE units included in property and equipment,
net as of April 2, 2010 was $41.5 million and
$4.2 million, respectively.
Occasionally, the Company may enter into capital lease
arrangements for various machinery, equipment, computer-related
equipment, software, furniture or fixtures. As of April 1,
2011, assets under capital leases totaled approximately
$3.1 million and there was an immaterial amount of
accumulated amortization. The Company had no material capital
lease arrangements as of April 2, 2010. The Company records
amortization of assets leased under capital lease arrangements
within depreciation expense.
Goodwill
and intangible assets
The authoritative guidance for business combinations (ASC
805) requires that all business combinations be accounted
for using the purchase method. The authoritative guidance for
business combinations also specifies criteria for recognizing
and reporting intangible assets apart from goodwill; however,
acquired workforce must be recognized and reported in goodwill.
The authoritative guidance for goodwill and other intangible
assets (ASC 350) requires that intangible assets with an
indefinite life should not be amortized until their life is
determined to be finite. All other intangible assets must be
amortized over their useful life. The authoritative guidance for
goodwill and other intangible assets prohibits the amortization
of goodwill and indefinite-lived intangible assets, but instead
requires these assets to be tested for impairment at least
annually and more frequently upon the occurrence of specified
events. In addition, all goodwill must be assigned to reporting
units for purposes of impairment testing.
Patents,
orbital slots and other licenses
The Company capitalizes the costs of obtaining or acquiring
patents, orbital slots and other licenses. Amortization of
intangible assets that have finite lives is provided for by the
straight-line method over the shorter of the legal or estimated
economic life. Total capitalized costs of $3.2 million and
$3.0 million related to patents were included in other
assets as of April 1, 2011 and April 2, 2010,
respectively. Accumulated amortization related to these patents
was $0.3 million as of each of April 1, 2011 and
April 2, 2010. Amortization expense related to these
patents was less than $0.1 million for each of the fiscal
years ended April 1, 2011, April 2, 2010, and
April 3,
2009. As of April 1, 2011 and April 2, 2010, the
Company had capitalized costs of $5.7 million and
$5.2 million related to acquiring and obtaining orbital
slots and other licenses, included in other assets, that have
not yet been placed into service. If a patent, orbital slot or
orbital license is rejected, abandoned or otherwise invalidated,
the unamortized cost is expensed in that period. During fiscal
years 2011, 2010 and 2009, the Company did not write off any
material costs due to abandonment or impairment.
Debt
issuance costs
Debt issuance costs are amortized and recognized as interest
expense on a straight-line basis over the expected term of the
related debt, which is not materially different from an
effective interest rate basis. During fiscal years 2011 and
2010, the Company paid and capitalized approximately
$2.8 million and $12.8 million, respectively, in debt
issuance costs related to the Company’s revolving credit
facility (the Credit Facility) and 8.875% Senior Notes due
2016 (the Notes). During fiscal year 2009, the Company did not
pay or capitalize any material amounts of debt issuance costs
related to the Credit Facility. Unamortized debt issuance costs
are recorded in prepaid expenses and other current assets and in
other long-term assets in the consolidated balance sheets,
depending on the amounts expected to be amortized to interest
expense within the next twelve months.
Software
development
Costs of developing software for sale are charged to research
and development expense when incurred, until technological
feasibility has been established. Software development costs
incurred from the time technological feasibility is reached
until the product is available for general release to customers
are capitalized and reported at the lower of unamortized cost or
net realizable value. Once the product is available for general
release, the software development costs are amortized based on
the ratio of current to future revenue for each product with an
annual minimum equal to straight-line amortization over the
remaining estimated economic life of the product, generally
within five years. The Company capitalized $15.8 million
and $8.0 million of costs related to software developed for
resale for fiscal years ended April 1, 2011 and
April 2, 2010, respectively. There was no amortization
expense of software development costs during fiscal years 2011
and 2010. Amortization expense of software development costs was
$1.1 million for fiscal year 2009.
Impairment
of long-lived assets (property, equipment, and satellites, and
other assets)
In accordance with the authoritative guidance for impairment or
disposal of long-lived assets (ASC 360), the Company assesses
potential impairments to long-lived assets, including property,
equipment and satellites, and other assets, when there is
evidence that events or changes in circumstances indicate that
the carrying value may not be recoverable. An impairment loss is
recognized when the undiscounted cash flows expected to be
generated by an asset (or group of assets) is less than its
carrying value. Any required impairment loss would be measured
as the amount by which the asset’s carrying value exceeds
its fair value, and would be recorded as a reduction in the
carrying value of the related asset and charged to results of
operations. No material impairments were recorded by the Company
for fiscal years 2011, 2010 and 2009.
Impairment
of goodwill
The Company accounts for its goodwill under the authoritative
guidance for goodwill and other intangible assets (ASC 350). The
guidance for the goodwill impairment model is a two-step
process. First, it requires a comparison of the book value of
net assets to the fair value of the reporting units that have
goodwill assigned to them. Reporting units within the
Company’s government systems, commercial networks and
satellite services segments have goodwill assigned to them. The
Company estimates the fair values of the reporting units using
discounted cash flows and other indicators of fair value. The
cash flow forecasts are adjusted by an appropriate discount rate
in order to determine the present value of the cash flows. If
the fair value is determined to be less than book value, a
second step is performed to compute the amount of the
impairment. In this process, a fair value for
goodwill is estimated, based in part on the fair value of the
reporting unit used in the first step, and is compared to its
carrying value. The shortfall of the fair value below carrying
value, if any, represents the amount of goodwill impairment.
The forecast of future cash flows is based on the Company’s
best estimate of the future revenues and operating costs, based
primarily on existing firm orders, expected future orders,
contracts with suppliers, labor agreements and general market
conditions. Changes in these forecasts could cause a particular
reporting unit to either pass or fail the first step in the
goodwill impairment model, which could significantly influence
whether goodwill impairment charge needs to be recorded.
In accordance with the authoritative guidance for goodwill and
other intangible assets, Company tests goodwill for impairment
during the fourth quarter every fiscal year, and when an event
occurs or circumstances change such that it is reasonably
possible that an impairment may exist. No impairments were
recorded by the Company related to goodwill and other intangible
assets for fiscal years 2011, 2010 and 2009.
Warranty
reserves
The Company provides limited warranties on its products for
periods of up to five years. The Company records a liability for
its warranty obligations when products are shipped or they are
included in long-term construction contracts based upon an
estimate of expected warranty costs. Amounts expected to be
incurred within twelve months are classified as a current
liability.
Fair
value of financial instruments
The carrying amounts of the Company’s financial
instruments, including cash equivalents, short-term investments,
trade receivables, accounts payable and accrued liabilities,
approximate their fair values due to their short-term
maturities. The estimated fair value of the Company’s
long-term borrowings is determined by using available market
information for those securities or similar financial
instruments (see Note 3).
Self-insurance
liabilities
The Company has self-insurance plans to retain a portion of the
exposure for losses related to employee medical benefits and
workers’ compensation. The self-insurance policies provide
for both specific and aggregate stop-loss limits. The Company
utilizes internal actuarial methods as well as other historical
information for the purpose of estimating ultimate costs for a
particular policy year. Based on these actuarial methods, along
with currently available information and insurance industry
statistics, the Company’s self-insurance liability for the
plans was $1.5 million as of April 1, 2011 and
$1.4 million as of April 2, 2010. The Company’s
estimate, which is subject to inherent variability, is based on
average claims experience in the Company’s industry and its
own experience in terms of frequency and severity of claims,
including asserted and unasserted claims incurred but not
reported, with no explicit provision for adverse fluctuation
from year to year. This variability may lead to ultimate
payments being either greater or less than the amounts presented
above. Self-insurance liabilities have been classified as
current in accordance with the estimated timing of the projected
payments.
Secured
borrowing customer arrangements
Occasionally, the Company enters into secured borrowing
arrangements in connection with customer financing in order to
provide additional sources of funding. As of April 1, 2011
and April 2, 2010, the Company had no secured borrowing
arrangements with customers. In the first quarter of fiscal year
2009, the Company paid all obligations related to its secured
borrowing, under which the Company pledged a note receivable
from a customer to serve as collateral for the obligation under
the borrowing arrangement, totaling $4.7 million plus
accrued interest.
During fiscal year 2008, due to the customer’s payment
default under the note receivable, the Company wrote down the
note receivable by approximately $5.3 million related to
the principal and interest accrued to date. During the fourth
quarter of fiscal year 2009, the Company entered into certain
agreements with the note receivable insurance carrier providing
the Company approximately $1.7 million in cash payments.
Pursuant to these agreements, the Company received cash payments
totaling $2.0 million during fiscal year 2010 and as of
April 2, 2010 recorded a current asset of approximately
$1.0 million and a long-term asset of approximately
$0.5 million. During fiscal year 2011, pursuant to these
agreements, the Company received additional cash payments
totaling $1.2 million and as of April 1, 2011 recorded
a current asset of approximately $0.5 million.
Indemnification
provisions
In the ordinary course of business, the Company includes
indemnification provisions in certain of its contracts,
generally relating to parties with which the Company has
commercial relations. Pursuant to these agreements, the Company
will indemnify, hold harmless and agree to reimburse the
indemnified party for losses suffered or incurred by the
indemnified party, including but not limited to losses relating
to third-party intellectual property claims. To date, there have
not been any costs incurred in connection with such
indemnification clauses. The Company’s insurance policies
do not necessarily cover the cost of defending indemnification
claims or providing indemnification, so if a claim was filed
against the Company by any party that the Company has agreed to
indemnify, the Company could incur substantial legal costs and
damages. A claim would be accrued when a loss is considered
probable and the amount can be reasonably estimated. At
April 1, 2011 and April 2, 2010, no such amounts were
accrued.
Simultaneously with the execution of the merger agreement
relating to the acquisition of WildBlue, the Company entered
into an indemnification agreement dated September 30, 2009
with several of the former stockholders of WildBlue pursuant to
which such former stockholders agreed to indemnify the Company
for costs which result from, relate to or arise out of potential
claims and liabilities under various WildBlue contracts, an
existing appraisal action regarding WildBlue’s 2008
recapitalization, certain rights to acquire securities of
WildBlue and a severance agreement. Under the indemnification
agreement, the Company is required to pay up to
$0.5 million and has recorded a liability of
$0.5 million in the consolidated balance sheets as of
April 1, 2011 and April 2, 2010 as an element of
accrued liabilities.
Noncontrolling
interest
A noncontrolling interest represents the equity interest in a
subsidiary that is not attributable, either directly or
indirectly, to the Company and is reported as equity of the
Company, separately from the Company’s controlling
interest. Revenues, expenses, gains, losses, net income or loss
and other comprehensive income are reported in the consolidated
financial statements at the consolidated amounts, which include
the amounts attributable to both the controlling and
noncontrolling interest.
In April 2008, the Company’s majority-owned subsidiary,
TrellisWare, issued additional shares of preferred stock in
which the Company invested $1.8 million in order to retain
a constant ownership interest. As a result of the transaction,
TrellisWare also received $1.5 million in cash proceeds
from the issuance of preferred stock to its other principal
stockholders.
Common
stock held in treasury
During fiscal years 2011 and 2010, the Company issued 433,173
and 234,039 shares of common stock, respectively, based on
the vesting terms of certain restricted stock unit agreements.
In order for employees to satisfy minimum statutory employee tax
withholding requirements related to the issuance of common stock
underlying these restricted stock unit agreements, the Company
repurchased 153,226 and 88,438 shares of common stock with
a total value of $5.9 million and $2.3 million during
fiscal year 2011 and fiscal year 2010, respectively.
On January 4, 2010, the Company repurchased
251,731 shares of the Company’s common stock from
Intelsat USA Sales Corp for $8.0 million in cash.
Repurchased shares of common stock of 560,363 and 407,137 were
held in treasury as of April 1, 2011 and April 2,
2010, respectively.
Derivatives
The Company enters into foreign currency forward and option
contracts from time to time to hedge certain forecasted foreign
currency transactions. Gains and losses arising from foreign
currency forward and option contracts not designated as hedging
instruments are recorded in other income (expense) as gains
(losses) on derivative instruments. Gains and losses arising
from the effective portion of foreign currency forward and
option contracts which are designated as cash-flow hedging
instruments are recorded in accumulated other comprehensive
income (loss) as unrealized gains (losses) on derivative
instruments until the underlying transaction affects the
Company’s earnings, at which time they are then recorded in
the same income statement line as the underlying transaction.
The fair values of the Company’s outstanding foreign
currency forward contracts as of April 1, 2011 were as
follows:
The Company had no foreign currency forward contracts
outstanding as of April 2, 2010. The notional value of
foreign currency forward contracts outstanding as of
April 1, 2011 was $4.6 million.
The effects of foreign currency forward contracts in cash flow
hedging relationships during fiscal year 2011 were as follows:
During fiscal year 2010, the Company did not settle any foreign
currency forward contracts.
The effects of foreign currency forward contracts in cash flow
hedging relationships during fiscal year 2009 were as follows:
At April 1, 2011, the estimated net existing income that is
expected to be reclassified into income within the next twelve
months is approximately $0.2 million. Foreign currency
forward contracts usually mature within approximately twelve
months from their inception. There were no gains or losses from
ineffectiveness of these derivative instruments recorded for
fiscal years 2011, 2010 and 2009.
Foreign
currency
In general, the functional currency of a foreign operation is
deemed to be the local country’s currency. Consequently,
assets and liabilities of operations outside the United States
are generally translated into U.S. dollars, and the effects
of foreign currency translation adjustments are included as a
component of accumulated other comprehensive income (loss)
within ViaSat, Inc. stockholders’ equity.
Revenue
recognition
A substantial portion of the Company’s revenues are derived
from long-term contracts requiring development and delivery of
complex equipment built to customer specifications. Sales
related to long-term contracts are accounted for under the
authoritative guidance for the
percentage-of-completion
method of accounting (ASC
605-35).
Sales and earnings under these contracts are recorded either
based on the ratio of actual costs incurred to date to total
estimated costs expected to be incurred related to the contract
or as products are shipped under the
units-of-delivery
method. Anticipated losses on contracts are recognized in full
in the period in which losses become probable and estimable.
Changes in estimates of profit or loss on contracts are included
in earnings on a cumulative basis in the period the estimate is
changed.
In June 2010, the Company performed extensive integration
testing of numerous system components that had been separately
developed as part of a government satellite communication
program. As a result of this testing and subsequent internal
reviews and analyses, the Company determined that significant
additional rework was required in order to complete the program
requirements and specifications and to prepare for a scheduled
customer test in the Company’s fiscal second quarter. This
additional rework and engineering effort resulted in a
substantial increase in estimated labor and material costs to
complete the program. Accordingly, the Company recorded an
additional forward loss of $8.5 million in the three months
ended July 2, 2010 related to this estimate of program
costs. While the Company believes the additional forward loss is
adequate to cover known risks to date and that steps taken to
improve the program performance will be effective, the program
is ongoing and the Company’s efforts and the end results
must be satisfactory to the customer. The Company believes that
its estimate of costs to complete the program is appropriate
based on known information, however, additional future losses
could be required. Including
this program, in fiscal years 2011, 2010 and 2009, the Company
recorded losses of approximately $12.1 million,
$9.3 million and $5.4 million, respectively, related
to loss contracts.
The Company also derives a substantial portion of its revenues
from contracts and purchase orders where revenue is recorded on
delivery of products or performance of services in accordance
with authoritative guidance for revenue recognition (ASC 605).
Under this standard, the Company recognizes revenue when an
arrangement exists, prices are determinable, collectability is
reasonably assured and the goods or services have been delivered.
The Company also enters into certain leasing arrangements with
customers and evaluates the contracts in accordance with the
authoritative guidance for leases (ASC 840). The Company’s
accounting for equipment leases involves specific determinations
under the authoritative guidance for leases, which often involve
complex provisions and significant judgments. In accordance with
the authoritative guidance for leases, the Company classifies
the transactions as sales type or operating leases based on
(1) review for transfers of ownership of the property to
the lessee by the end of the lease term, (2) review of the
lease terms to determine if it contains an option to purchase
the leased property for a price which is sufficiently lower than
the expected fair value of the property at the date of the
option, (3) review of the lease term to determine if it is
equal to or greater than 75% of the economic life of the
equipment and (4) review of the present value of the
minimum lease payments to determine if they are equal to or
greater than 90% of the fair market value of the equipment at
the inception of the lease. Additionally, the Company considers
the cancelability of the contract and any related uncertainty of
collections or risk in recoverability of the lease investment at
lease inception. Revenue from sales type leases is recognized at
the inception of the lease or when the equipment has been
delivered and installed at the customer site, if installation is
required. Revenues from equipment rentals under operating leases
are recognized as earned over the lease term, which is generally
on a straight-line basis.
When a sale involves multiple elements, such as sales of
products that include services, the entire fee from the
arrangement is allocated to each respective element based on its
relative fair value in accordance with authoritative guidance
for accounting for multiple element revenue arrangements, (ASC
605-25), and
recognized when the applicable revenue recognition criteria for
each element have been met. The amount of product and service
revenue recognized is impacted by the Company’s judgments
as to whether an arrangement includes multiple elements and, if
so, whether sufficient objective and reliable evidence of fair
value exists for those elements. Changes to the elements in an
arrangement and the Company’s ability to establish evidence
of fair value for those elements could affect the timing of the
revenue recognition.
In accordance with authoritative guidance for shipping and
handling fees and costs (ASC
605-45), the
Company records shipping and handling costs billed to customers
as a component of revenues, and shipping and handling costs
incurred by the Company for inbound and outbound freight are
recorded as a component of cost of revenues.
Collections in excess of revenues and deferred revenues
represent cash collected from customers in advance of revenue
recognition and are recorded in accrued liabilities for
obligations within the next twelve months. Amounts for
obligations extending beyond the twelve months are recorded
within other liabilities in the consolidated financial
statements.
Contract costs on U.S. government contracts are subject to
audit and negotiations with U.S. government
representatives. The Company’s incurred cost audits by the
DCAA have not been completed for fiscal year 2003 and subsequent
fiscal years. Although the Company has recorded contract
revenues subsequent to fiscal year 2002 based upon an estimate
of costs that the Company believes will be approved upon final
audit or review, the Company does not know the outcome of any
ongoing or future audits or reviews and adjustments, and if
future adjustments exceed the Company’s estimates, its
profitability would be adversely affected. In the fourth quarter
of fiscal year 2011, based on recent events, including
communications with the DCMA, changes in the regulatory
environment for federal government contractors and the status of
current government audits, the Company recorded an additional
$5.0 million in contract-related reserves for its estimate
of potential refunds to customers for potential cost adjustments
on several multi-year U.S. government cost reimbursable
contracts, bringing the Company’s total
reserve to $6.7 million as of April 1, 2011. This
reserve is classified as either an element of accrued
liabilities or as a reduction of unbilled accounts receivable
based on status of related contracts.
Commissions
We compensate third parties based on specific commission
programs directly related to certain product and service sales.
These commission costs are recorded as an element of selling,
general and administrative expense as incurred.
Stock-based
compensation
In accordance with the authoritative guidance for share-based
payments (ASC 718), the Company measures stock-based
compensation cost at the grant date, based on the estimated fair
value of the award, and recognizes expense over the
employee’s requisite service period. Stock-based
compensation expense is recognized in the consolidated statement
of operations for fiscal years 2011, 2010 and 2009 only for
those awards ultimately expected to vest, with forfeitures
estimated at the date of grant. The authoritative guidance for
share-based payments requires forfeitures to be estimated at the
time of grant and revised, if necessary, in subsequent periods
if actual forfeitures differ from those estimates.
Total stock-based compensation expense recognized in accordance
with the authoritative guidance for share-based payments was as
follows:
For fiscal year 2011 the Company recorded an incremental tax
benefit from stock options exercised and restricted stock unit
awards vesting of $0.9 million which was classified as part
of cash flows from financing activities in the consolidated
statements of cash flows. For fiscal year 2010 the Company
recorded no incremental tax benefits from stock options
exercised and restricted stock unit award vesting as the excess
tax benefit from stock options exercised and restricted stock
unit award vesting increased the Company’s net operating
loss carryforward. For fiscal year 2009 the Company recorded an
incremental tax benefit from stock options exercised and
restricted stock unit awards vesting of $0.3 million which
was classified as part of cash flows from financing activities
in the consolidated statements of cash flows.
The Company has no awards with market or performance conditions.
On April 1, 2011, the Company had one principal equity
compensation plan and employee stock purchase plan described
below. The compensation cost that has been charged against
income for the equity plan under the authoritative guidance for
share-based payments was $16.2 million, $10.9 million
and $8.7 million, and for the stock purchase plan was
$1.2 million, $1.3 million and $1.1 million, for
the fiscal years ended April 1, 2011, April 2, 2010
and April 3, 2009, respectively. There was no material
compensation cost capitalized as part of the cost of an asset
for fiscal years 2011, 2010 and 2009.
As of April 1, 2011, there was total unrecognized
compensation cost related to unvested stock-based compensation
arrangements granted under the Equity Participation Plan
(including stock options and restricted stock units) and the
Employee Stock Purchase Plan of $47.2 million and
$0.3 million, respectively. These costs are expected to be
recognized over a weighted average period of 2.5 years,
2.7 years and less than six months for stock options,
restricted stock units and the Employee Stock Purchase Plan,
respectively. The total fair value of shares vested during the
fiscal years ended April 1, 2011, April 2, 2010 and
April 3, 2009, including stock options and restricted stock
units, was $15.3 million, $9.3 million and
$6.3 million, respectively.
Stock options and employee stock purchase
plan. The Company’s employee stock options
typically have a simple four-year vesting schedule and a six to
ten year contractual term. The weighted average estimated fair
value
of employee stock options granted and employee stock purchase
plan shares issued during fiscal year 2011 was $14.24 and $8.55
per share, respectively, during fiscal year 2010 was $10.55 and
$7.84 per share, respectively, and during fiscal year 2009 was
$7.24 and $6.70 per share, respectively, using the Black-Scholes
model with the following weighted average assumptions
(annualized percentages):
The Company’s expected volatility is a measure of the
amount by which its stock price is expected to fluctuate over
the expected term of the stock-based award. The estimated
volatilities for stock options are based on the historical
volatility calculated using the daily stock price of the
Company’s stock over a recent historical period equal to
the expected term. The risk-free interest rate that the Company
uses in determining the fair value of its stock-based awards is
based on the implied yield on U.S. Treasury zero-coupon
issues with remaining terms equivalent to the expected term of
its stock-based awards.
The expected life of employee stock options represents the
calculation using the simplified method consistent with the
authoritative guidance for share-based payments. Due to
significant changes in the Company’s option terms in
October of 2006, the Company will continue to use the simplified
method until it has the historical data necessary to provide a
reasonable estimate of expected life. For the expected option
life, the Company has “plain-vanilla” stock options,
and therefore used a simple average of the vesting period and
the contractual term for options as permitted by the
authoritative guidance for share-based payments. The expected
term or life of employee stock purchase rights issued represents
the expected period of time from the date of grant to the
estimated date that the stock purchase right under the
Company’s Employee Stock Purchase Plan would be fully
exercised.
A summary of employee stock option activity for fiscal year 2011
is presented below:
The total intrinsic value of stock options exercised during
fiscal years 2011, 2010 and 2009 was $21.3 million,
$11.3 million and $3.9 million, respectively.
Restricted stock units. Restricted stock units
represent a right to receive shares of common stock at a future
date determined in accordance with the participant’s award
agreement. There is no exercise price and no monetary payment
required for receipt of restricted stock units or the shares
issued in settlement of the award. Instead, consideration is
furnished in the form of the participant’s services to the
Company. Restricted stock units generally vest over four years
and have a six-year contractual term. Compensation cost for
these awards is based on the fair value on the date of grant and
recognized as compensation expense on a straight-line basis over
the requisite service period. For fiscal years 2011, 2010 and
2009, the Company recognized $12.6 million,
$7.4 million and $4.8 million, respectively, in
stock-based compensation expense related to these restricted
stock unit awards.
The per unit weighted average grant date fair value of
restricted stock units granted during fiscal years 2011, 2010
and 2009 was $41.48, $29.19 and $20.41, respectively. A summary
of restricted stock unit activity for fiscal year 2011 is
presented below:
During fiscal years 2011, 2010 and 2009, 433,173 restricted
stock units vested with a total intrinsic value of
$16.7 million; 234,039 restricted stock units vested with a
total intrinsic value of $6.2 million; and 94,181
restricted stock units vested with a total intrinsic value of
$1.9 million, respectively.
Independent
research and development
Independent research and development (IR&D), which is not
directly funded by a third party, is expensed as incurred.
IR&D expenses consist primarily of salaries and other
personnel-related expenses, supplies, prototype materials and
other expenses related to research and development programs.
Rent
expense, deferred rent obligations and deferred lease
incentives
The Company leases all of its facilities under operating leases.
Some of these lease agreements contain tenant improvement
allowances funded by landlord incentives, rent holidays and rent
escalation clauses. GAAP requires rent expense to be recognized
on a straight-line basis over the lease term. The difference
between the rent due under the stated periods of the lease
compared to that of the straight-line basis is recorded as
deferred rent within accrued and other long-term liabilities in
the consolidated balance sheet.
For purposes of recognizing landlord incentives and minimum
rental expenses on a straight-line basis over the terms of the
leases, the Company uses the date that it obtains the legal
right to use and control the leased space to begin amortization,
which is generally when the Company enters the space and begins
to make improvements in preparation of occupying new space. For
tenant improvement allowances funded by landlord incentives and
rent holidays, the Company records a deferred lease incentive
liability in accrued and other long-term liabilities on the
consolidated balance sheet and amortizes the deferred liability
as a reduction to rent expense on the consolidated statement of
operations over the term of the lease.
Certain lease agreements contain rent escalation clauses which
provide for scheduled rent increases during the lease term or
for rental payments commencing at a date other than the date of
initial occupancy. Such increasing rent expense is recorded in
the consolidated statement of operations on a straight-line
basis over the lease term.
At April 1, 2011 and April 2, 2010, deferred rent
included in accrued liabilities in the Company’s
consolidated balance sheets was $0.6 million and
$0.5 million, respectively, and deferred rent included in
other long-term liabilities in the Company’s consolidated
balance sheets was $6.3 million and $6.1 million,
respectively.
Income
taxes
Accruals for uncertain tax positions are provided for in
accordance with the authoritative guidance for accounting for
uncertainty in income taxes (ASC 740). The Company may recognize
the tax benefit from an uncertain tax position only if it is
more likely than not that the tax position will be sustained on
examination by the taxing authorities, based on the technical
merits of the position. The tax benefits recognized in the
financial statements from such a position should be measured
based on the largest benefit that has a greater than 50%
likelihood of being realized upon ultimate settlement. The
authoritative guidance for accounting for uncertainty in income
taxes also provides guidance on derecognition of income tax
assets and liabilities, classification of current and deferred
income tax assets and liabilities, accounting for interest and
penalties associated with tax positions, and income tax
disclosures. The Company’s policy is to recognize interest
expense and penalties related to income tax matters as a
component of income tax expense.
Current income tax expense is the amount of income taxes
expected to be payable for the current year. A deferred
income tax asset or liability is established for the expected
future tax consequences resulting from differences in the
financial reporting and tax bases of assets and liabilities and
for the expected future tax benefit to be derived from tax
credit and loss carryforwards. Deferred tax assets are reduced
by a valuation allowance when, in the opinion of management, it
is more likely than not that some portion or all of the deferred
tax assets will not be realized. Deferred income tax expense
(benefit) is the net change during the year in the deferred
income tax asset or liability.
Earnings
per share
Basic earnings per share is computed based upon the weighted
average number of common shares outstanding during the period.
Diluted earnings per share is based upon the weighted average
number of common shares outstanding and potential common stock,
if dilutive during the period. Potential common stock includes
options granted and restricted stock units awarded under the
Company’s equity compensation plan which are included in
the earnings per share calculations using the treasury stock
method, common shares expected to be issued under the
Company’s employee stock purchase plan, other conditions
denoted in the Company’s agreements with the predecessor
stockholders of certain acquired companies at April 3,
2009, and shares potentially issuable under the amended ViaSat
401(k) Profit Sharing Plan in connection with the Company’s
decision to pay a discretionary match in common stock or cash.
Segment
reporting
The Company’s government systems, commercial networks and
satellite services segments are primarily distinguished by the
type of customer and the related contractual requirements. The
Company’s government systems segment develops and produces
network-centric,
IP-based
secure government communications systems, products and
solutions. The more regulated government environment is subject
to unique contractual requirements and possesses economic
characteristics which differ from the commercial networks and
satellite services segments. The Company’s commercial
networks segment develops and produces a variety of advanced
end-to-end
satellite communication systems and ground networking equipment
and products. The Company’s satellite services segment
complements both the government systems and commercial networks
segments by providing wholesale and retail satellite-based
broadband internet services in the United States via the
Company’s satellite and capacity agreements, as well as
managed network services for the satellite communication systems
of the Company’s consumer, enterprise and mobile broadband
customers. The Company’s satellite services segment
includes the Company’s WildBlue business (which it acquired
in December 2009) and the Company’s ViaSat-1
satellite-related activities. The Company’s segments are
determined consistent with the way management currently
organizes and evaluates financial information internally for
making operating decisions and assessing performance.
Recent
authoritative guidance
In October 2009, the Financial Accounting Standards Board (FASB)
issued authoritative guidance for revenue recognition with
multiple deliverables (ASU
2009-13,
which updated
ASC 605-25).
This new guidance impacts the determination of when the
individual deliverables included in a multiple-element
arrangement may be treated as separate units of accounting.
Additionally, this guidance modifies the manner in which the
transaction consideration is allocated across the separately
identified deliverables by no longer permitting the residual
method of allocating arrangement consideration. This guidance
will be effective for the Company beginning in the first quarter
of fiscal year 2012; however, early adoption is permitted. The
Company is currently evaluating the impact that the
authoritative guidance may have on its consolidated financial
statements and disclosures.
In May 2011, the FASB issued ASU
2011-04,
Fair Value Measurement (ASC 820): Amendments to Achieve Common
Fair Value Measurement and Disclosure Requirements in
U.S. GAAP and IFRSs. The new authoritative guidance results
in a consistent definition of fair value and common requirements
for measurement of and disclosure about fair value between
U.S. GAAP and International Financial Reporting Standards.
While many of the amendments to U.S. GAAP are not expected
to have a significant effect on practice, the new guidance
changes some fair value measurement principles and disclosure
requirements. This guidance is effective for the Company
beginning in the fourth quarter of fiscal year 2012. Adoption of
this authoritative guidance is not expected to have a material
impact on the Company’s consolidated financial statements
and disclosures.
|
Employee Benefits
|
12 Months Ended | ||||
---|---|---|---|---|---|
Apr. 01, 2011
|
|||||
Employee Benefits [Abstract] | Â | ||||
Employee Benefits |
The Company is a sponsor of a voluntary deferred compensation
plan under Section 401(k) of the Internal Revenue Code
which was amended during the fourth quarter of fiscal year 2009.
Under the amended plan, the Company may make discretionary
contributions to the plan which vest over six years. The
Company’s discretionary matching contributions to the plan
are based on the amount of employee contributions and can be
made in cash or the Company’s common stock at the
Company’s election. Subsequent to the fiscal year-end, the
Company elected to settle the discretionary contributions
liability in stock. Based on the year-end common stock closing
price, the
Company would issue 161,865 shares of common stock at this
time. Discretionary contributions accrued by the Company as of
April 1, 2011 and April 2, 2010 amounted to
$6.3 million and $5.2 million, respectively.
|
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