þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 33-0174996 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
2
As of | As of | |||||||
July 1, 2011 | April 1, 2011 | |||||||
(In thousands) | ||||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 26,113 | $ | 40,490 | ||||
Accounts receivable, net |
177,066 | 191,889 | ||||||
Inventories |
124,439 | 98,555 | ||||||
Deferred income taxes |
18,805 | 18,805 | ||||||
Prepaid expenses and other current assets |
24,066 | 21,141 | ||||||
Total current assets |
370,489 | 370,880 | ||||||
Satellites, net |
533,197 | 533,000 | ||||||
Property and equipment, net |
243,223 | 233,139 | ||||||
Other acquired intangible assets, net |
77,088 | 81,889 | ||||||
Goodwill |
83,702 | 83,532 | ||||||
Other assets |
106,546 | 103,308 | ||||||
Total assets |
$ | 1,414,245 | $ | 1,405,748 | ||||
LIABILITIES AND EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 64,545 | $ | 71,712 | ||||
Accrued liabilities |
115,124 | 130,583 | ||||||
Current portion of other long-term debt |
1,366 | 1,128 | ||||||
Total current liabilities |
181,035 | 203,423 | ||||||
Senior Notes due 2016, net |
272,420 | 272,296 | ||||||
Other long-term debt |
76,710 | 61,946 | ||||||
Other liabilities |
24,546 | 23,842 | ||||||
Total liabilities |
554,711 | 561,507 | ||||||
Commitments and contingencies (Note 8) |
||||||||
Equity: |
||||||||
ViaSat, Inc. stockholders equity |
||||||||
Common stock |
4 | 4 | ||||||
Paid-in capital |
616,713 | 601,029 | ||||||
Retained earnings |
256,481 | 254,722 | ||||||
Common stock held in treasury |
(20,072 | ) | (17,907 | ) | ||||
Accumulated other comprehensive income |
2,457 | 2,277 | ||||||
Total ViaSat, Inc. stockholders equity |
855,583 | 840,125 | ||||||
Noncontrolling interest in subsidiary |
3,951 | 4,116 | ||||||
Total equity |
859,534 | 844,241 | ||||||
Total liabilities and equity |
$ | 1,414,245 | $ | 1,405,748 | ||||
3
Three Months Ended | ||||||||
July 1, 2011 | July 2, 2010 | |||||||
(In thousands, except per share data) | ||||||||
Revenues: |
||||||||
Product revenues |
$ | 122,546 | $ | 125,002 | ||||
Service revenues |
72,555 | 67,002 | ||||||
Total revenues |
195,101 | 192,004 | ||||||
Operating expenses: |
||||||||
Cost of product revenues |
92,285 | 94,714 | ||||||
Cost of service revenues |
49,316 | 39,062 | ||||||
Selling, general and administrative |
41,733 | 38,921 | ||||||
Independent research and development |
5,694 | 7,314 | ||||||
Amortization of acquired intangible assets |
4,772 | 4,610 | ||||||
Income from operations |
1,301 | 7,383 | ||||||
Other income (expense): |
||||||||
Interest income |
26 | 139 | ||||||
Interest expense |
| (2,141 | ) | |||||
Income before income taxes |
1,327 | 5,381 | ||||||
(Benefit from) provision for income taxes |
(267 | ) | 1,981 | |||||
Net income |
1,594 | 3,400 | ||||||
Less: Net (loss) income attributable to the noncontrolling interest, net of tax |
(165 | ) | 139 | |||||
Net income attributable to ViaSat, Inc. |
$ | 1,759 | $ | 3,261 | ||||
Basic net income per share attributable to ViaSat, Inc. common stockholders |
$ | 0.04 | $ | 0.08 | ||||
Diluted net income per share attributable to ViaSat, Inc. common stockholders |
$ | 0.04 | $ | 0.08 | ||||
Shares used in computing basic net income per share |
41,803 | 39,968 | ||||||
Shares used in computing diluted net income per share |
43,749 | 42,125 |
4
Three Months Ended | ||||||||
July 1, 2011 | July 2, 2010 | |||||||
(In thousands) | ||||||||
Cash flows from operating activities: |
||||||||
Net income |
$ | 1,594 | $ | 3,400 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation |
24,372 | 20,409 | ||||||
Amortization of intangible assets |
6,109 | 4,618 | ||||||
Deferred income taxes |
| 1,764 | ||||||
Stock-based compensation expense |
4,175 | 4,167 | ||||||
Loss on disposition of fixed assets |
1,329 | 1,088 | ||||||
Other non-cash adjustments |
253 | 446 | ||||||
Increase (decrease) in cash resulting from changes in operating assets and liabilities |
||||||||
Accounts receivable |
14,649 | 14,271 | ||||||
Inventories |
(22,591 | ) | (5,538 | ) | ||||
Other assets |
(2,773 | ) | 4,345 | |||||
Accounts payable |
(3,616 | ) | (6,540 | ) | ||||
Accrued liabilities |
(15,071 | ) | (4,795 | ) | ||||
Other liabilities |
479 | 1,043 | ||||||
Net cash provided by operating activities |
8,909 | 38,678 | ||||||
Cash flows from investing activities: |
||||||||
Purchase of property, equipment and satellites, net |
(36,567 | ) | (41,306 | ) | ||||
Cash paid for patents, licenses and other assets |
(4,119 | ) | (3,851 | ) | ||||
Net cash used in investing activities |
(40,686 | ) | (45,157 | ) | ||||
Cash flows from financing activities: |
||||||||
Proceeds from line of credit borrowings |
15,000 | | ||||||
Payments on line of credit |
| (30,000 | ) | |||||
Proceeds from issuance of common stock under equity plans |
4,469 | 6,198 | ||||||
Purchase of common stock in treasury |
(2,165 | ) | (1,816 | ) | ||||
Net cash provided by (used in) financing activities |
17,304 | (25,618 | ) | |||||
Effect of exchange rate changes on cash |
96 | (203 | ) | |||||
Net decrease in cash and cash equivalents |
(14,377 | ) | (32,300 | ) | ||||
Cash and cash equivalents at beginning of period |
40,490 | 89,631 | ||||||
Cash and cash equivalents at end of period |
$ | 26,113 | $ | 57,331 | ||||
Non-cash investing and financing activities: |
||||||||
Issuance of common stock in satisfaction of certain accrued employee compensation
liabilities |
$ | 6,340 | $ | 5,096 |
5
ViaSat, Inc. Stockholders | ||||||||||||||||||||||||||||||||||||||||
Common Stock | Common Stock Held | Accumulated | ||||||||||||||||||||||||||||||||||||||
Number of | in Treasury | Other | Noncontrolling | |||||||||||||||||||||||||||||||||||||
Shares | Paid-in | Retained | Number of | Comprehensive | Interest in | Comprehensive | ||||||||||||||||||||||||||||||||||
Issued | Amount | Capital | Earnings | Shares | Amount | Income | Subsidiary | Total | Income | |||||||||||||||||||||||||||||||
Balance at April 1, 2011 |
42,225,130 | $ | 4 | $ | 601,029 | $ | 254,722 | (560,363 | ) | $ | (17,907 | ) | $ | 2,277 | $ | 4,116 | $ | 844,241 | ||||||||||||||||||||||
Exercise of stock options |
130,258 | | 2,390 | | | | | | 2,390 | |||||||||||||||||||||||||||||||
Issuance of stock under
Employee Stock Purchase
Plan |
56,523 | | 2,079 | | | | | | 2,079 | |||||||||||||||||||||||||||||||
Stock-based compensation
expense |
| | 4,875 | | | | | | 4,875 | |||||||||||||||||||||||||||||||
Shares issued in
settlement of certain
accrued employee
compensation liabilities |
156,825 | | 6,340 | | | | | | 6,340 | |||||||||||||||||||||||||||||||
RSU awards vesting |
129,470 | | | | | | | | | |||||||||||||||||||||||||||||||
Purchase of treasury
shares pursuant to
vesting of certain RSU
agreements |
| | | | (48,918 | ) | (2,165 | ) | | | (2,165 | ) | ||||||||||||||||||||||||||||
Net income |
| | | 1,759 | | | | (165 | ) | 1,594 | $ | 1,594 | ||||||||||||||||||||||||||||
Hedging transactions,
net of tax |
| | | | | | (128 | ) | | (128 | ) | (128 | ) | |||||||||||||||||||||||||||
Foreign currency
translation, net of tax |
| | | | | | 308 | | 308 | 308 | ||||||||||||||||||||||||||||||
Comprehensive income |
$ | 1,774 | ||||||||||||||||||||||||||||||||||||||
Balance at July 1, 2011 |
42,698,206 | $ | 4 | $ | 616,713 | $ | 256,481 | (609,281 | ) | $ | (20,072 | ) | $ | 2,457 | $ | 3,951 | $ | 859,534 | ||||||||||||||||||||||
6
7
8
9
10
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 | $ | 54 | Not applicable | $ | | ||||||
Total derivatives designated as hedging instruments |
$ | 54 | $ | | ||||||||
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 | $ | | ||||||||
11
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 | Derivatives | ||||||||||||
Recognized | Reclassified | Reclassified | Income on | (Ineffective | ||||||||||||
in Accumulated | from | from | Derivatives | Portion and | ||||||||||||
OCI | Accumulated | Accumulated | (Ineffective | Amount | ||||||||||||
on | OCI into | OCI into | Portion and | Excluded | ||||||||||||
Derivatives | Income | Income | Amount Excluded | from | ||||||||||||
(Effective | (Effective | (Effective | from Effectiveness | Effectiveness | ||||||||||||
Derivatives in Cash Flow Hedging Relationships | Portion) | Portion) | Portion) | Testing) | Testing) | |||||||||||
(In thousands) | ||||||||||||||||
Foreign currency forward contracts |
$ | 54 | Cost of product revenues | $ | 160 | Not applicable | $ | | ||||||||
Total |
$ | 54 | $ | 160 | $ | | ||||||||||
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 | Derivatives | ||||||||||||
Recognized | Reclassified | Reclassified | Income on | (Ineffective | ||||||||||||
in Accumulated | from | from | Derivatives | Portion and | ||||||||||||
OCI | Accumulated | Accumulated | (Ineffective | Amount | ||||||||||||
on | OCI into | OCI into | Portion and | Excluded | ||||||||||||
Derivatives | Income | Income | Amount Excluded | from | ||||||||||||
(Effective | (Effective | (Effective | from Effectiveness | Effectiveness | ||||||||||||
Derivatives in Cash Flow Hedging Relationships | Portion) | Portion) | Portion) | Testing) | Testing) | |||||||||||
(In thousands) | ||||||||||||||||
Foreign currency forward contracts |
$ | (89 | ) | Cost of product revenues | $ | (9 | ) | Not applicable | $ | | ||||||
Total |
$ | (89 | ) | $ | (9 | ) | $ | | ||||||||
12
13
As of | As of | |||||||
July 1, 2011 | April 1, 2011 | |||||||
(In thousands) | ||||||||
Accounts receivable, net: |
||||||||
Billed |
$ | 84,475 | $ | 100,863 | ||||
Unbilled |
93,275 | 91,519 | ||||||
Allowance for doubtful accounts |
(684 | ) | (493 | ) | ||||
$ | 177,066 | $ | 191,889 | |||||
Inventories: |
||||||||
Raw materials |
$ | 51,637 | $ | 46,651 | ||||
Work in process |
23,140 | 18,713 | ||||||
Finished goods |
49,662 | 33,191 | ||||||
$ | 124,439 | $ | 98,555 | |||||
Prepaid expenses and other current assets: |
||||||||
Prepaid expenses |
$ | 21,152 | $ | 18,235 | ||||
Income tax receivable |
168 | 26 | ||||||
Other |
2,746 | 2,880 | ||||||
$ | 24,066 | $ | 21,141 | |||||
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 |
283,923 | 276,418 | ||||||
578,903 | 571,398 | |||||||
Less accumulated depreciation and amortization |
(45,706 | ) | (38,398 | ) | ||||
$ | 533,197 | $ | 533,000 | |||||
Property and equipment, net: |
||||||||
Machinery and equipment (estimated useful life of 2-5 years) |
$ | 127,325 | $ | 122,113 | ||||
Computer equipment and software (estimated useful life of 2-7 years) |
95,284 | 66,768 | ||||||
CPE leased equipment (estimated useful life of 3-5 years) |
64,542 | 61,610 | ||||||
Furniture and fixtures (estimated useful life of 7 years) |
12,611 | 13,053 | ||||||
Leasehold improvements (estimated useful life of 2-11 years) |
24,765 | 24,550 | ||||||
Building (estimated useful life of 24 years) |
8,923 | 8,923 | ||||||
Land |
4,384 | 4,384 | ||||||
Construction in progress |
69,025 | 80,976 | ||||||
406,859 | 382,377 | |||||||
Less accumulated depreciation and amortization |
(163,636 | ) | (149,238 | ) | ||||
$ | 243,223 | $ | 233,139 | |||||
Other acquired intangible assets, net: |
||||||||
Technology (weighted average useful life of 6 years) |
$ | 54,456 | $ | 54,344 | ||||
Contracts and customer relationships (weighted average useful life of 7 years) |
88,843 | 88,834 | ||||||
Non-compete agreements (weighted average useful life of 4 years) |
9,352 | 9,332 | ||||||
Satellite co-location rights (weighted average useful life of 9 years) |
8,600 | 8,600 | ||||||
Trade name (weighted average useful life of 3 years) |
5,680 | 5,680 | ||||||
Other (weighted average useful life of 6 years) |
9,335 | 9,331 | ||||||
176,266 | 176,121 | |||||||
Less accumulated amortization |
(99,178 | ) | (94,232 | ) | ||||
$ | 77,088 | $ | 81,889 | |||||
Accrued liabilities: |
||||||||
Warranty reserve, current portion |
$ | 7,630 | $ | 8,014 | ||||
Accrued vacation |
16,076 | 15,600 | ||||||
Accrued employee compensation |
4,035 | 18,804 | ||||||
Collections in excess of revenues and deferred revenues |
59,223 | 61,916 | ||||||
Other |
28,160 | 26,249 | ||||||
$ | 115,124 | $ | 130,583 | |||||
Other liabilities: |
||||||||
Unrecognized tax position liabilities |
$ | 2,217 | $ | 2,217 | ||||
Deferred rent, long-term portion |
6,494 | 6,267 | ||||||
Deferred revenue, long-term portion |
7,380 | 6,960 | ||||||
Deferred income taxes, long-term portion |
3,363 | 3,374 | ||||||
Warranty reserve, long-term portion |
5,028 | 4,928 | ||||||
Other |
64 | 96 | ||||||
$ | 24,546 | $ | 23,842 | |||||
14
| 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 as of | ||||||||||||||||
July 1, 2011 | Level 1 | Level 2 | Level 3 | |||||||||||||
(In thousands) | ||||||||||||||||
Assets |
||||||||||||||||
Cash equivalents |
$ | 367 | $ | 367 | $ | | $ | | ||||||||
Foreign currency forward contracts |
54 | | 54 | | ||||||||||||
Total assets measured at fair value on a recurring basis |
$ | 421 | $ | 367 | $ | 54 | $ | | ||||||||
Fair Value as of | ||||||||||||||||
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 | $ | | ||||||||
15
Three Months Ended | ||||||||
July 1, 2011 | July 2, 2010 | |||||||
(In thousands) | ||||||||
Weighted average: |
||||||||
Common shares outstanding used in
calculating basic net income per share
attributable to ViaSat, Inc. common
stockholders |
41,803 | 39,968 | ||||||
Options to purchase common stock as
determined by application of the
treasury stock method |
1,435 | 1,615 | ||||||
Restricted stock units to acquire
common stock as determined by
application of the treasury stock
method |
373 | 381 | ||||||
Potentially issuable shares in
connection with certain terms of the
amended ViaSat 401(k) Profit Sharing
Plan |
136 | 149 | ||||||
Employee Stock Purchase Plan equivalents |
2 | 12 | ||||||
Shares used in computing diluted net
income per share attributable to
ViaSat, Inc. common stockholders |
43,749 | 42,125 | ||||||
Amortization | ||||
(In thousands) | ||||
For the three months ended July 1, 2011 |
$ | 4,772 | ||
Expected for the remainder of fiscal year 2012 |
$ | 13,970 | ||
Expected for fiscal year 2013 |
15,615 | |||
Expected for fiscal year 2014 |
13,869 | |||
Expected for fiscal year 2015 |
13,793 | |||
Expected for fiscal year 2016 |
10,200 | |||
Thereafter |
9,641 | |||
$ | 77,088 | |||
16
As of | As of | |||||||
July 1, 2011 | April 1, 2011 | |||||||
(In thousands) | ||||||||
Senior Notes due 2016 (the Notes) |
||||||||
Notes |
$ | 275,000 | $ | 275,000 | ||||
Unamortized discount on the Notes |
(2,580 | ) | (2,704 | ) | ||||
Total Notes, net of discount |
272,420 | 272,296 | ||||||
Less: current portion of the Notes |
| | ||||||
Total Notes long-term, net |
272,420 | 272,296 | ||||||
Other Long-Term Debt |
||||||||
Line of credit |
75,000 | 60,000 | ||||||
Capital lease obligations |
3,076 | 3,074 | ||||||
Total other long-term debt |
78,076 | 63,074 | ||||||
Less: current portion of other long-term debt |
1,366 | 1,128 | ||||||
Other long-term debt, net |
76,710 | 61,946 | ||||||
Total debt |
350,496 | 335,370 | ||||||
Less: current portion |
1,366 | 1,128 | ||||||
Long-term debt, net |
$ | 349,130 | $ | 334,242 | ||||
17
Three Months Ended | ||||||||
July 1, 2011 | July 2, 2010 | |||||||
(In thousands) | ||||||||
Balance, beginning of period |
$ | 12,942 | $ | 11,208 | ||||
Change in liability for warranties issued in period |
1,619 | 2,393 | ||||||
Settlements made (in cash or in kind) during the period |
(1,903 | ) | (1,357 | ) | ||||
Balance, end of period |
$ | 12,658 | $ | 12,244 | ||||
18
19
Three Months Ended | ||||||||
July 1, 2011 | July 2, 2010 | |||||||
(In thousands) | ||||||||
Revenues |
||||||||
Government Systems |
$ | 86,169 | $ | 88,845 | ||||
Commercial Networks |
52,069 | 45,619 | ||||||
Satellite Services |
56,863 | 57,540 | ||||||
Elimination of intersegment revenues |
| | ||||||
Total revenues |
$ | 195,101 | $ | 192,004 | ||||
Operating profits (losses) |
||||||||
Government Systems |
$ | 7,380 | $ | 1,658 | ||||
Commercial Networks |
(3,240 | ) | (1,170 | ) | ||||
Satellite Services |
1,933 | 11,461 | ||||||
Elimination of intersegment operating profits |
| | ||||||
Segment operating profit before corporate and
amortization of acquired intangible assets |
6,073 | 11,949 | ||||||
Corporate |
| 44 | ||||||
Amortization of acquired intangible assets |
(4,772 | ) | (4,610 | ) | ||||
Income from operations |
$ | 1,301 | $ | 7,383 | ||||
As of | As of | |||||||
July 1, 2011 | April 1, 2011 | |||||||
(In thousands) | ||||||||
Segment assets |
||||||||
Government Systems |
$ | 225,948 | $ | 228,194 | ||||
Commercial Networks |
141,310 | 133,158 | ||||||
Satellite Services |
94,657 | 93,857 | ||||||
Total segment assets |
461,915 | 455,209 | ||||||
Corporate assets |
952,330 | 950,539 | ||||||
Total assets |
$ | 1,414,245 | $ | 1,405,748 | ||||
Acquired Intangible | ||||||||||||||||
Assets, Net | Goodwill | |||||||||||||||
July 1, 2011 | April 1, 2011 | July 1, 2011 | April 1, 2011 | |||||||||||||
(In thousands) | ||||||||||||||||
Government Systems |
$ | 10,468 | $ | 11,157 | $ | 29,988 | $ | 30,023 | ||||||||
Commercial Networks |
4,517 | 5,391 | 43,905 | 43,700 | ||||||||||||
Satellite Services |
62,103 | 65,341 | 9,809 | 9,809 | ||||||||||||
Total |
$ | 77,088 | $ | 81,889 | $ | 83,702 | $ | 83,532 | ||||||||
Three Months Ended | ||||||||
July 1, 2011 | July 2, 2010 | |||||||
(In thousands) | ||||||||
Government Systems |
$ | 651 | $ | 269 | ||||
Commercial Networks |
883 | 1,103 | ||||||
Satellite Services |
3,238 | 3,238 | ||||||
Total amortization of acquired intangible assets |
$ | 4,772 | $ | 4,610 | ||||
20
Three Months Ended | ||||||||
July 1, 2011 | July 2, 2010 | |||||||
(In thousands) | ||||||||
United States |
$ | 154,201 | $ | 161,165 | ||||
Europe, Middle East and Africa |
26,904 | 20,614 | ||||||
Asia, Pacific |
7,178 | 6,833 | ||||||
North America other than United States |
4,224 | 1,322 | ||||||
Latin America |
2,594 | 2,070 | ||||||
Total revenues |
$ | 195,101 | $ | 192,004 | ||||
21
Consolidation and | ||||||||||||||||||||
Issuing Parent | Guarantor | Non-Guarantor | Elimination | |||||||||||||||||
Company | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
(Unaudited, in thousands) | ||||||||||||||||||||
ASSETS |
||||||||||||||||||||
Current assets: |
||||||||||||||||||||
Cash and cash equivalents |
$ | 12,910 | $ | 3,555 | $ | 9,648 | $ | | $ | 26,113 | ||||||||||
Accounts receivable, net |
158,763 | 11,752 | 6,551 | | 177,066 | |||||||||||||||
Inventories |
107,911 | 8,955 | 8,588 | (1,015 | ) | 124,439 | ||||||||||||||
Deferred income taxes |
16,428 | 1,723 | 162 | 492 | 18,805 | |||||||||||||||
Prepaid expenses and other current assets |
16,208 | 6,240 | 1,618 | | 24,066 | |||||||||||||||
Total current assets |
312,220 | 32,225 | 26,567 | (523 | ) | 370,489 | ||||||||||||||
Satellites, net |
283,923 | 249,274 | | | 533,197 | |||||||||||||||
Property and equipment, net |
140,552 | 97,110 | 5,604 | (43 | ) | 243,223 | ||||||||||||||
Other acquired intangible assets, net |
5,230 | 62,103 | 9,755 | | 77,088 | |||||||||||||||
Goodwill |
63,939 | 9,687 | 10,076 | | 83,702 | |||||||||||||||
Investments in subsidiaries and
intercompany receivables |
480,692 | 2,869 | 563 | (484,124 | ) | | ||||||||||||||
Other assets |
93,078 | 12,885 | 583 | | 106,546 | |||||||||||||||
Total assets |
$ | 1,379,634 | $ | 466,153 | $ | 53,148 | $ | (484,690 | ) | $ | 1,414,245 | |||||||||
LIABILITIES AND EQUITY |
||||||||||||||||||||
Current liabilities: |
||||||||||||||||||||
Accounts payable |
$ | 58,481 | $ | 5,329 | $ | 735 | $ | | $ | 64,545 | ||||||||||
Accrued liabilities |
89,169 | 22,644 | 3,311 | | 115,124 | |||||||||||||||
Current portion of other long-term debt |
125 | 1,241 | | | 1,366 | |||||||||||||||
Total current liabilities |
147,775 | 29,214 | 4,046 | | 181,035 | |||||||||||||||
Senior Notes due 2016, net |
272,420 | | | | 272,420 | |||||||||||||||
Other long-term debt |
75,172 | 1,538 | | | 76,710 | |||||||||||||||
Intercompany payables |
11,191 | | 16,029 | (27,220 | ) | | ||||||||||||||
Other liabilities |
16,932 | 4,691 | 2,923 | | 24,546 | |||||||||||||||
Total liabilities |
523,490 | 35,443 | 22,998 | (27,220 | ) | 554,711 | ||||||||||||||
Equity: |
||||||||||||||||||||
ViaSat, Inc. stockholders equity |
||||||||||||||||||||
Total ViaSat, Inc. stockholders equity |
856,144 | 430,710 | 30,150 | (461,421 | ) | 855,583 | ||||||||||||||
Noncontrolling interest in subsidiary |
| | | 3,951 | 3,951 | |||||||||||||||
Total equity |
856,144 | 430,710 | 30,150 | (457,470 | ) | 859,534 | ||||||||||||||
Total liabilities and equity |
$ | 1,379,634 | $ | 466,153 | $ | 53,148 | $ | (484,690 | ) | $ | 1,414,245 | |||||||||
22
Consolidation and | ||||||||||||||||||||
Issuing Parent | Guarantor | Non-Guarantor | Elimination | |||||||||||||||||
Company | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
(Unaudited, 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 | |||||||||
23
Consolidation and | ||||||||||||||||||||
Issuing Parent | Guarantor | Non-Guarantor | Elimination | |||||||||||||||||
Company | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
(Unaudited, in thousands) | ||||||||||||||||||||
Revenues: |
||||||||||||||||||||
Product revenues |
$ | 118,913 | $ | 652 | $ | 3,250 | $ | (269 | ) | $ | 122,546 | |||||||||
Service revenues |
17,697 | 53,351 | 2,226 | (719 | ) | 72,555 | ||||||||||||||
Total revenues |
136,610 | 54,003 | 5,476 | (988 | ) | 195,101 | ||||||||||||||
Operating expenses: |
||||||||||||||||||||
Cost of product revenues |
89,564 | 757 | 2,573 | (609 | ) | 92,285 | ||||||||||||||
Cost of service revenues |
10,892 | 37,136 | 1,958 | (670 | ) | 49,316 | ||||||||||||||
Selling, general and administrative |
26,615 | 13,077 | 2,044 | (3 | ) | 41,733 | ||||||||||||||
Independent research and development |
5,365 | | 338 | (9 | ) | 5,694 | ||||||||||||||
Amortization of acquired intangible assets |
970 | 3,238 | 564 | | 4,772 | |||||||||||||||
Income (loss) from operations |
3,204 | (205 | ) | (2,001 | ) | 303 | 1,301 | |||||||||||||
Other income (expense): |
||||||||||||||||||||
Interest income |
133 | | 2 | (109 | ) | 26 | ||||||||||||||
Interest expense |
| | (109 | ) | 109 | | ||||||||||||||
Income (loss) before income taxes |
3,337 | (205 | ) | (2,108 | ) | 303 | 1,327 | |||||||||||||
Provision for (benefit from) income taxes |
(20 | ) | (90 | ) | (157 | ) | | (267 | ) | |||||||||||
Equity in net income (loss) of consolidated
subsidiaries |
(1,901 | ) | | | 1,901 | | ||||||||||||||
Net income (loss) |
1,456 | (115 | ) | (1,951 | ) | 2,204 | 1,594 | |||||||||||||
Less: Net income (loss) attributable to
noncontrolling interest, net of tax |
| | | (165 | ) | (165 | ) | |||||||||||||
Net income (loss) attributable to ViaSat, Inc. |
$ | 1,456 | $ | (115 | ) | $ | (1,951 | ) | $ | 2,369 | $ | 1,759 | ||||||||
24
Consolidation | ||||||||||||||||||||
Issuing | Non- | and | ||||||||||||||||||
Parent | Guarantor | Guarantor | Elimination | |||||||||||||||||
Company | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
(Unaudited, in thousands) | ||||||||||||||||||||
Revenues: |
||||||||||||||||||||
Product revenues |
$ | 125,141 | $ | 551 | $ | 1,342 | $ | (2,032 | ) | $ | 125,002 | |||||||||
Service revenues |
11,222 | 53,543 | 2,655 | (418 | ) | 67,002 | ||||||||||||||
Total revenues |
136,363 | 54,094 | 3,997 | (2,450 | ) | 192,004 | ||||||||||||||
Operating expenses: |
||||||||||||||||||||
Cost of product revenues |
95,288 | 475 | 944 | (1,993 | ) | 94,714 | ||||||||||||||
Cost of service revenues |
8,004 | 29,681 | 1,765 | (388 | ) | 39,062 | ||||||||||||||
Selling, general and administrative |
25,561 | 12,478 | 882 | | 38,921 | |||||||||||||||
Independent research and development |
7,261 | | 53 | | 7,314 | |||||||||||||||
Amortization of acquired intangible assets |
1,260 | 3,238 | 112 | | 4,610 | |||||||||||||||
Income (loss) from operations |
(1,011 | ) | 8,222 | 241 | (69 | ) | 7,383 | |||||||||||||
Other income (expense): |
||||||||||||||||||||
Interest income |
225 | | 3 | (89 | ) | 139 | ||||||||||||||
Interest expense |
(2,141 | ) | | (89 | ) | 89 | (2,141 | ) | ||||||||||||
Income (loss) before income taxes |
(2,927 | ) | 8,222 | 155 | (69 | ) | 5,381 | |||||||||||||
Provision for (benefit from) income taxes |
(1,544 | ) | 3,309 | 216 | | 1,981 | ||||||||||||||
Equity in net income (loss) of consolidated subsidiaries |
4,713 | | | (4,713 | ) | | ||||||||||||||
Net income (loss) |
3,330 | 4,913 | (61 | ) | (4,782 | ) | 3,400 | |||||||||||||
Less: Net income (loss) attributable to noncontrolling
interest, net of tax |
| | | 139 | 139 | |||||||||||||||
Net income (loss) attributable to ViaSat, Inc. |
$ | 3,330 | $ | 4,913 | $ | (61 | ) | $ | (4,921 | ) | $ | 3,261 | ||||||||
25
Consolidation | ||||||||||||||||||||
and | ||||||||||||||||||||
Issuing Parent | Guarantor | Non-Guarantor | Elimination | |||||||||||||||||
Company | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
(Unaudited, in thousands) | ||||||||||||||||||||
Cash flows from operating activities: |
||||||||||||||||||||
Net cash provided by (used in) operating activities |
$ | (4,303 | ) | $ | 12,921 | $ | 291 | $ | | $ | 8,909 | |||||||||
Cash flows from investing activities: |
||||||||||||||||||||
Purchase of property, equipment and satellites, net |
(30,440 | ) | (5,897 | ) | (230 | ) | | (36,567 | ) | |||||||||||
Cash paid for patents, licenses and other assets |
(4,112 | ) | | (7 | ) | | (4,119 | ) | ||||||||||||
Investment in subsidiaries |
(955 | ) | | | 955 | | ||||||||||||||
Net cash provided by (used in) investing
activities |
(35,507 | ) | (5,897 | ) | (237 | ) | 955 | (40,686 | ) | |||||||||||
Cash flows from financing activities: |
||||||||||||||||||||
Proceeds from line of credit borrowings |
15,000 | | | | 15,000 | |||||||||||||||
Proceeds from issuance of common stock under equity
plans |
4,469 | | | | 4,469 | |||||||||||||||
Purchase of common stock in treasury |
(2,165 | ) | | | | (2,165 | ) | |||||||||||||
Intercompany long-term financing |
11,069 | (11,069 | ) | 955 | (955 | ) | | |||||||||||||
Net cash provided by (used in) financing activities |
28,373 | (11,069 | ) | 955 | (955 | ) | 17,304 | |||||||||||||
Effect of exchange rate changes on cash |
| | 96 | | 96 | |||||||||||||||
Net increase (decrease) in cash and cash equivalents |
(11,437 | ) | (4,045 | ) | 1,105 | | (14,377 | ) | ||||||||||||
Cash and cash equivalents at beginning of period |
24,347 | 7,600 | 8,543 | | 40,490 | |||||||||||||||
Cash and cash equivalents at end of period |
$ | 12,910 | $ | 3,555 | $ | 9,648 | $ | | $ | 26,113 | ||||||||||
26
Consolidation and | ||||||||||||||||||||
Issuing Parent | Guarantor | Non-Guarantor | Elimination | |||||||||||||||||
Company | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
(Unaudited, in thousands) | ||||||||||||||||||||
Cash flows from operating activities: |
||||||||||||||||||||
Net cash provided by (used in) operating
activities |
$ | 7,153 | $ | 31,192 | $ | 416 | $ | (83 | ) | $ | 38,678 | |||||||||
Cash flows from investing activities: |
||||||||||||||||||||
Purchase of property, equipment and satellites,
net |
(32,065 | ) | (8,601 | ) | (723 | ) | 83 | (41,306 | ) | |||||||||||
Cash paid for patents, licenses and other assets |
(3,851 | ) | | | | (3,851 | ) | |||||||||||||
Investment in subsidiaries |
(1,046 | ) | 100 | (148 | ) | 1,094 | | |||||||||||||
Net cash
provided by (used in) investing
activities |
(36,962 | ) | (8,501 | ) | (871 | ) | 1,177 | (45,157 | ) | |||||||||||
Cash flows from financing activities: |
||||||||||||||||||||
Payments on line of credit |
(30,000 | ) | | | | (30,000 | ) | |||||||||||||
Proceeds from issuance of common stock under
equity plans |
6,198 | | | | 6,198 | |||||||||||||||
Purchase of common stock in treasury |
(1,816 | ) | | | | (1,816 | ) | |||||||||||||
Intercompany long-term financing |
31,475 | (31,427 | ) | 1,046 | (1,094 | ) | | |||||||||||||
Net cash provided by (used in) financing
activities |
5,857 | (31,427 | ) | 1,046 | (1,094 | ) | (25,618 | ) | ||||||||||||
Effect of exchange rate changes on cash |
| | (203 | ) | | (203 | ) | |||||||||||||
Net increase (decrease) in cash and cash
equivalents |
(23,952 | ) | (8,736 | ) | 388 | | (32,300 | ) | ||||||||||||
Cash and cash equivalents at beginning of period |
66,258 | 16,216 | 7,157 | | 89,631 | |||||||||||||||
Cash and cash equivalents at end of period |
$ | 42,306 | $ | 7,480 | $ | 7,545 | $ | | $ | 57,331 | ||||||||||
27
| Government satellite communication systems, including 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, satellite networking services, as well as products designed for manpacks, aircraft, unmanned aerial vehicles (UAVs), seagoing vessels, ground mobile vehicles and fixed applications. |
| Information security and 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 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. |
28
| 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 Very Small Aperture Terminal (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 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. |
29
30
31
32
33
Three Months Ended | ||||||||
July 1, 2011 | July 2, 2010 | |||||||
Revenues: |
100.0 | % | 100.0 | % | ||||
Product revenues |
62.8 | 65.1 | ||||||
Service revenues |
37.2 | 34.9 | ||||||
Operating expenses: |
||||||||
Cost of product revenues |
47.3 | 49.3 | ||||||
Cost of service revenues |
25.3 | 20.3 | ||||||
Selling, general and administrative |
21.4 | 20.3 | ||||||
Independent research and development |
2.9 | 3.8 | ||||||
Amortization of acquired intangible assets |
2.4 | 2.4 | ||||||
Income from operations |
0.7 | 3.9 | ||||||
Income before income taxes |
0.7 | 2.8 | ||||||
Net income |
0.8 | 1.8 | ||||||
Net income attributable to ViaSat, Inc. |
0.9 | 1.7 |
Three Months Ended | Dollar | Percentage | ||||||||||||||
July 1, | July 2, | Increase | Increase | |||||||||||||
(In millions, except percentages) | 2011 | 2010 | (Decrease) | (Decrease) | ||||||||||||
Product revenues |
$ | 122.5 | $ | 125.0 | $ | (2.5 | ) | (2.0 | )% | |||||||
Percentage of total revenues |
62.8 | % | 65.1 | % |
Three Months Ended | Dollar | Percentage | ||||||||||||||
July 1, | July 2, | Increase | Increase | |||||||||||||
(In millions, except percentages) | 2011 | 2010 | (Decrease) | (Decrease) | ||||||||||||
Service revenues |
$ | 72.6 | $ | 67.0 | $ | 5.6 | 8.3 | % | ||||||||
Percentage of total revenues |
37.2 | % | 34.9 | % |
34
Three Months Ended | Dollar | Percentage | ||||||||||||||
July 1, | July 2, | Increase | Increase | |||||||||||||
(In millions, except percentages) | 2011 | 2010 | (Decrease) | (Decrease) | ||||||||||||
Cost of product revenues |
$ | 92.3 | $ | 94.7 | $ | (2.4 | ) | (2.6 | )% | |||||||
Percentage of product revenues |
75.3 | % | 75.8 | % |
Three Months Ended | Dollar | Percentage | ||||||||||||||
July 1, | July 2, | Increase | Increase | |||||||||||||
(In millions, except percentages) | 2011 | 2010 | (Decrease) | (Decrease) | ||||||||||||
Cost of service revenues |
$ | 49.3 | $ | 39.1 | $ | 10.3 | 26.3 | % | ||||||||
Percentage of service revenues |
68.0 | % | 58.3 | % |
Three Months Ended | Dollar | Percentage | ||||||||||||||
July 1, | July 2, | Increase | Increase | |||||||||||||
(In millions, except percentages) | 2011 | 2010 | (Decrease) | (Decrease) | ||||||||||||
Selling, general and administrative |
$ | 41.7 | $ | 38.9 | $ | 2.8 | 7.2 | % | ||||||||
Percentage of total revenues |
21.4 | % | 20.3 | % |
35
Three Months Ended | Dollar | Percentage | ||||||||||||||
July 1, | July 2, | Increase | Increase | |||||||||||||
(In millions, except percentages) | 2011 | 2010 | (Decrease) | (Decrease) | ||||||||||||
Independent research and development |
$ | 5.7 | $ | 7.3 | $ | (1.6 | ) | (22.1 | )% | |||||||
Percentage of total revenues |
2.9 | % | 3.8 | % |
Amortization | ||||
(In thousands) | ||||
For the three months ended July 1, 2011 |
$ | 4,772 | ||
Expected for the remainder of fiscal year 2012 |
$ | 13,970 | ||
Expected for fiscal year 2013 |
15,615 | |||
Expected for fiscal year 2014 |
13,869 | |||
Expected for fiscal year 2015 |
13,793 | |||
Expected for fiscal year 2016 |
10,200 | |||
Thereafter |
9,641 | |||
$ | 77,088 | |||
36
Three Months Ended | Dollar | Percentage | ||||||||||||||
July 1, | July 2, | Increase | Increase | |||||||||||||
(In millions, except percentages) | 2011 | 2010 | (Decrease) | (Decrease) | ||||||||||||
Revenues |
$ | 86.2 | $ | 88.8 | $ | (2.7 | ) | (3.0 | )% |
Three Months Ended | Dollar | Percentage | ||||||||||||||
July 1, | July 2, | Increase | Increase | |||||||||||||
(In millions, except percentages) | 2011 | 2010 | (Decrease) | (Decrease) | ||||||||||||
Operating profit |
$ | 7.4 | $ | 1.7 | $ | 5.7 | 345.1 | % | ||||||||
Percentage of segment revenues |
8.6 | % | 1.9 | % |
Three Months Ended | Dollar | Percentage | ||||||||||||||
July 1, | July 2, | Increase | Increase | |||||||||||||
(In millions, except percentages) | 2011 | 2010 | (Decrease) | (Decrease) | ||||||||||||
Revenues |
$ | 52.1 | $ | 45.6 | $ | 6.5 | 14.1 | % |
37
Three Months Ended | Dollar | Percentage | ||||||||||||||
July 1, | July 2, | (Increase) | (Increase) | |||||||||||||
(In millions, except percentages) | 2011 | 2010 | Decrease | Decrease | ||||||||||||
Operating loss |
$ | (3.2 | ) | $ | (1.2 | ) | $ | (2.1 | ) | (176.9 | )% | |||||
Percentage of segment revenues |
(6.2 | )% | (2.6 | )% |
Three Months Ended | Dollar | Percentage | ||||||||||||||
July 1, | July 2, | Increase | Increase | |||||||||||||
(In millions, except percentages) | 2011 | 2010 | (Decrease) | (Decrease) | ||||||||||||
Revenues |
$ | 56.9 | $ | 57.5 | $ | (0.7 | ) | (1.2 | )% |
Three Months Ended | Dollar | Percentage | ||||||||||||||
July 1, | July 2, | Increase | Increase | |||||||||||||
(In millions, except percentages) | 2011 | 2010 | (Decrease) | (Decrease) | ||||||||||||
Operating profit |
$ | 1.9 | $ | 11.5 | $ | (9.5 | ) | (83.1 | )% | |||||||
Percentage of segment revenues |
3.4 | % | 19.9 | % |
As of | As of | |||||||
July 1, 2011 | April 1, 2011 | |||||||
(In millions) | ||||||||
Firm backlog |
||||||||
Government Systems segment |
$ | 269.3 | $ | 283.8 | ||||
Commercial Networks segment |
281.7 | 216.7 | ||||||
Satellite Services segment |
17.2 | 28.2 | ||||||
Total |
$ | 568.2 | $ | 528.7 | ||||
Funded backlog |
||||||||
Government Systems segment |
$ | 219.7 | $ | 235.6 | ||||
Commercial Networks segment |
281.7 | 216.7 | ||||||
Satellite Services segment |
17.2 | 28.2 | ||||||
Total |
$ | 518.6 | $ | 480.5 | ||||
38
39
40
41
For the | ||||||||||||||||||||
Remainder of | ||||||||||||||||||||
Fiscal Year | For the Fiscal Years Ending | |||||||||||||||||||
(In thousands) | Total | 2012 | 2013-2014 | 2015-2016 | Thereafter | |||||||||||||||
Operating leases and satellite capacity agreements |
$ | 167,742 | $ | 28,514 | $ | 61,220 | $ | 34,392 | $ | 43,616 | ||||||||||
Capital lease |
3,243 | 1,148 | 2,095 | | | |||||||||||||||
The Notes (1) |
402,117 | 18,306 | 48,813 | 48,813 | 286,185 | |||||||||||||||
Line of credit |
75,000 | | | 75,000 | | |||||||||||||||
Standby letters of credit |
10,185 | 7,417 | 2,768 | | | |||||||||||||||
Purchase commitments including satellite-related agreements |
520,482 | 185,643 | 137,435 | 100,721 | 96,683 | |||||||||||||||
Total |
$ | 1,178,769 | $ | 241,028 | $ | 252,331 | $ | 258,926 | $ | 426,484 | ||||||||||
(1) | Includes total interest payments on the Notes of $18.3 million for the remainder of fiscal year 2012, $48.8 million in fiscal years 2013-2014, $48.8 million in fiscal years 2015-2016 and $11.2 million thereafter. |
42
43
44
August 10, 2011 | VIASAT, INC. |
|||
/s/ Mark D. Dankberg | ||||
Mark D. Dankberg | ||||
Chairman of the Board and Chief Executive Officer (Principal Executive Officer) |
||||
/s/ Ronald G. Wangerin | ||||
Ronald G. Wangerin | ||||
Vice President, Chief Financial Officer (Principal Financial and Accounting Officer) |
45
Exhibit | Incorporated by Reference | Filed | ||||||||||
Number | Exhibit Description | Form | File No. | Exhibit | Filing Date | Herewith | ||||||
31.1
|
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||||||||
31.2
|
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | 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 |
* | 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. |
46
1. | I have reviewed this quarterly report on Form 10-Q 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 quarterly report on Form 10-Q 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 |
(a) the accompanying quarterly report on Form 10-Q of the Company for the quarterly period ended July 1, 2011 (the Report) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and | |
(b) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Mark D. Dankberg | ||||
Mark D. Dankberg | ||||
Chief Executive Officer | ||||
(a) the accompanying quarterly report on Form 10-Q of the Company for the quarterly period ended July 1, 2011 (the Report) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and | |
(b) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Ronald G. Wangerin | ||||
Ronald G. Wangerin | ||||
Chief Financial Officer | ||||
Shares Used In Computing Diluted Net Income Per Share (Tables)
|
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 01, 2011
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares Used In Computing Diluted Net Income Per Share (Tables) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares used in computing diluted net income per share |
|
Document and Entity Information
|
3 Months Ended | |
---|---|---|
Jul. 01, 2011
|
Jul. 29, 2011
|
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | VIASAT INC | |
Entity Central Index Key | 0000797721 | |
Document Type | 10-Q | |
Document Period End Date | Jul. 01, 2011 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2012 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --03-30 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 42,128,864 |
Product Warranty (Tables)
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 01, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranty (Tables) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in the Company's warranty accrual |
|
Certain Relationships and Related-Party Transactions (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 01, 2011
|
Jul. 02, 2010
|
Apr. 01, 2011
|
Jan. 31, 2008
Space Systems Loral [Member]
Satellite Construction Contract [Member]
|
Jul. 01, 2011
Space Systems Loral [Member]
Satellite Construction Contract [Member]
|
Jul. 02, 2010
Space Systems Loral [Member]
Satellite Construction Contract [Member]
|
Jul. 01, 2011
Space Systems Loral [Member]
Beam Sharing Agreement [Member]
|
Jul. 02, 2010
Space Systems Loral [Member]
Beam Sharing Agreement [Member]
|
Jul. 01, 2011
Telesat Canada [Member]
|
Jul. 02, 2010
Telesat Canada [Member]
|
Jan. 31, 2008
Beam Sharing Agreement [Member]
|
|
Certain Relationships and Related-Party Transactions (Textuals) [Abstract] | |||||||||||
Satellite construction contract price to purchase satellite | $ 209.1 | $ 57.6 | |||||||||
Beam Sharing agreement amount as a percent | 15.00% | ||||||||||
Cash Paid to Related Party | 1.3 | 10.6 | 2.4 | 2.8 | |||||||
Related party transaction cash received | 0.1 | 3.8 | 1.0 | 0.8 | |||||||
Revenue related to SS/L | 1.5 | 0.1 | |||||||||
Related party collections in excess of revenues and deferred revenues | $ 0.3 | $ 1.4 |
"+ text.join( "
\n" ) +"
" + text[p] + "
\n"; } } }else{ formatted = '' + raw + '
'; } html = ''+ "\n"+''+ "\n"+''+ "\n"+' formatted: '+ ( this.Default == 'raw' ? 'as Filed' : 'with Text Wrapped' ) +''+ "\n"+' | '+ "\n"+'
'+ "\n"+' | '+ "\n"+' '+ "\n"+'
'+ "\n"+' | '+ "\n"+' '+ "\n"+'
Product Warranty
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 01, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranty [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Product Warranty |
Note 7 — 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 during the three months ended July 1,
2011 and July 2, 2010.
|
Segment Information (Tables)
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 01, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information (Tables) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment information |
Assets identifiable to segments include: accounts receivable, unbilled accounts receivable,
inventory, acquired intangible assets and goodwill. Segment assets as of July 1, 2011 and April 1,
2011 were as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other net acquired intangible assets and goodwill included in segment assets |
Other acquired intangible assets, net and goodwill included in segment assets as of July 1,
2011 and April 1, 2011 were as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization of acquired intangibles by segment |
Amortization of acquired intangible assets by segment for the three months ended July 1, 2011
and July 2, 2010 was as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue information by geographic area |
Revenue information by geographic area for the three months ended July 1, 2011 and July 2,
2010 was as follows:
|
Segment Information (Details 1) (USD $)
In Thousands |
Jul. 01, 2011
|
Apr. 01, 2011
|
---|---|---|
Other net acquired intangible assets and goodwill included in segment assets | ||
Other acquired intangible assets, net | $ 77,088 | $ 81,889 |
Goodwill | 83,702 | 83,532 |
Government Systems [Member]
|
||
Other net acquired intangible assets and goodwill included in segment assets | ||
Other acquired intangible assets, net | 10,468 | 11,157 |
Goodwill | 29,988 | 30,023 |
Commercial Networks [Member]
|
||
Other net acquired intangible assets and goodwill included in segment assets | ||
Other acquired intangible assets, net | 4,517 | 5,391 |
Goodwill | 43,905 | 43,700 |
Satellite Services [Member]
|
||
Other net acquired intangible assets and goodwill included in segment assets | ||
Other acquired intangible assets, net | 62,103 | 65,341 |
Goodwill | $ 9,809 | $ 9,809 |
Product Warranty (Details) (USD $)
In Thousands |
3 Months Ended | |
---|---|---|
Jul. 01, 2011
|
Jul. 02, 2010
|
|
Change in the Company's warranty accrual | ||
Balance, beginning of period | $ 12,942 | $ 11,208 |
Change in liability for warranties issued in period | 1,619 | 2,393 |
Settlements made (in cash or in kind) during the period | (1,903) | (1,357) |
Balance, end of period | $ 12,658 | $ 12,244 |
Senior Notes and Other Long-Term Debt (Tables)
|
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 01, 2011
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior Notes And Other Long Term Debt (Tables) [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Long-Term Debt |
Total long-term debt consisted of the following as of July 1, 2011 and April 1, 2011:
|
Certain Relationships and Related-Party Transactions
|
3 Months Ended |
---|---|
Jul. 01, 2011
|
|
Certain Relationships and Related-Party Transactions [Abstract] | |
Certain Relationships and Related-Party Transactions |
Note 12 — 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 three months ended July 1, 2011 and July 2, 2010, under the satellite construction
contract, the Company paid $1.3 million and $10.6 million, respectively, to SS/L. During the three
months ended July 1, 2011 and July 2, 2010, the Company also received less than $0.1 million and
$3.8 million of cash, respectively, from SS/L under the beam sharing agreement with Loral. All
other amounts related to SS/L under the ViaSat-1 related satellite contracts were not material.
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 $1.5
million and $0.1 million in revenue during the three months ended July 1, 2011 and July 2, 2010,
respectively, related to a contract with SS/L. Collections in excess of revenues and deferred
revenues related to a contract with SS/L were $0.3 million and $1.4 million as of July 1, 2011 and
April 1, 2011, respectively. The Company received cash of $1.0 million and $0.8 million from
Telesat Canada during the three months ended July 1, 2011 and July 2, 2010, respectively. During
the three months ended July 1, 2011 and July 2, 2010, the Company paid $2.4 million and $2.8
million, respectively, to Telesat Canada. All other amounts related to SS/L and Telesat Canada,
excluding activities under the ViaSat-1 related satellite contracts, were not material.
|
Fair Value Measurements
|
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 01, 2011
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements |
Note 3 — Fair Value Measurements
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:
The following tables present the Company’s hierarchy for its assets and liabilities measured
at fair value on a recurring basis as of July 1, 2011 and April 1, 2011:
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 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 condensed
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 revolving
credit facility (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 Company’s 8.875% Senior Notes due 2016 (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 $291.5 million
and $293.6 million as of July 1, 2011 and April 1, 2011, 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.
|
Goodwill and Acquired Intangible Assets (Details) (USD $)
|
3 Months Ended | |
---|---|---|
Jul. 01, 2011
NumberOfMonths
Years
|
Jul. 02, 2010
|
|
Current and expected amortization expense for acquired intangibles | ||
For the three months ended July 1, 2011 | $ 4,772,000 | $ 4,610,000 |
Expected for the remainder of fiscal year 2012 | 13,970,000 | |
Expected for fiscal year 2013 | 15,615,000 | |
Expected for fiscal year 2014 | 13,869,000 | |
Expected for fiscal year 2015 | 13,793,000 | |
Expected for fiscal year 2016 | 10,200,000 | |
Thereafter, future amortization expense after Year Five | 9,641,000 | |
Total future amortization expense | 77,088,000 | |
Goodwill and Acquired Intangible Assets (Textuals) [Abstract] | ||
Change in goodwill related to foreign currency translation | 200,000 | |
Estimated useful lives, minimum | 8 | |
Estimated useful lives, maximum | 10 | |
Amortization of acquired intangible assets | $ 4,772,000 | $ 4,610,000 |
Income Taxes
|
3 Months Ended |
---|---|
Jul. 01, 2011
|
|
Income Taxes [Abstract] | |
Income Taxes |
Note 9 — Income Taxes
The Company currently
estimates its annual effective income tax rate to be a benefit of
approximately 0.8% for fiscal year 2012, compared to the actual zero effective income tax rate in
fiscal year 2011. The estimated annual effective income tax rate reflects the December
31, 2011 expiration of the federal research and development tax credit. If the federal research and
development tax credit is reinstated, the Company may have a lower annual effective tax rate for
fiscal year 2012, and the amount of any such tax rate reduction will depend on the effective date
of any such reinstatement, the terms of the reinstatement, as well as the amount of eligible
research and development expenses in the reinstated period. The estimated effective tax rate is
different from the expected statutory rate primarily due to research and development tax credits.
For the three months ended July 1, 2011, the Company’s gross unrecognized tax benefits
increased by $0.9 million. In the next twelve months, it is reasonably possible that the amount of
unrecognized tax benefits will decrease by up to approximately $3.1 million as a result of the
expiration of the statute of limitations or settlements with tax authorities for previously filed
tax returns.
|
Basis of Presentation (Policies)
|
3 Months Ended |
---|---|
Jul. 01, 2011
|
|
Basis of Presentation (Policies) [Abstract] | |
Revenue recognition percentage of completion method |
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 (Accounting Standards Codification (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.
|
Revenue recognition sale of goods and services |
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 the 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.
|
Revenue recognition leases |
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 equipment 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 equipment for a price which is sufficiently lower than the expected fair value
of the equipment 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.
|
Revenue recognition multiple element arrangements |
Beginning in the first quarter of fiscal year 2012, the Company adopted Accounting Standards
Update (ASU) 2009-13 (ASU 2009-13), Revenue Recognition (Topic 605) Multiple-Deliverable Revenue
Arrangements, which updates ASC Topic 605-25, Revenue Recognition-Multiple element arrangements, of
the Financial Accounting Standards Board (FASB) codification. ASU 2009-13 amended accounting
guidance for revenue recognition to eliminate the use of the residual method and requires entities
to allocate revenue using the relative selling price method. For substantially all of the
arrangements with multiple deliverables, the Company allocates revenue to each element based on a
selling price hierarchy at the arrangement inception. The selling price for each element is based
upon the following selling price hierarchy: vendor specific objective evidence (VSOE) if available,
third party evidence (TPE) if VSOE is not available, or estimated selling price (ESP) if neither
VSOE nor TPE are available (a description as to how the Company determines VSOE, TPE and ESP is
provided below). If a tangible hardware systems product includes software, the Company determines
whether the tangible hardware systems product and the software work together to deliver the
product’s essential functionality and, if so, the entire product is treated as a nonsoftware
deliverable. The total arrangement consideration is allocated to each separate unit of accounting
for each of the nonsoftware deliverables using the relative selling prices of each unit based on
the aforementioned selling price hierarchy. Revenue for each separate unit of accounting is
recognized when the applicable revenue recognition criteria for each element have been met.
To determine the selling price in multiple-element arrangements, the Company establishes VSOE
of the selling price using the price charged for a deliverable when sold separately and for
software license updates and product support and hardware systems support, based on the renewal
rates offered to customers. For nonsoftware multiple-element arrangements, TPE is established by
evaluating similar and/or interchangeable competitor products or services in standalone
arrangements with similarly situated customers and/or agreements. If the Company is unable to
determine the selling price because VSOE or TPE doesn’t exist, the Company determines ESP for the
purposes of allocating the arrangement by reviewing historical transactions, including transactions
whereby the deliverable was sold on a standalone basis and considers several other external and
internal factors including, but not limited to, pricing practices including discounting, margin
objectives, competition, the geographies in which the Company offers its products and services, the
type of customer (i.e., distributor, value added reseller, government agency and direct end user,
among others) and the stage of the product lifecycle. The determination of ESP considers the
Company’s pricing model and go-to-market strategy. As the Company, or its competitors’, pricing and
go-to-market strategies evolve, the Company may modify its pricing practices in the future, which
could result in changes to its determination of VSOE, TPE and ESP. As a result, the Company’s
future revenue recognition for multiple-element arrangements could differ materially from those in
the current period. The adoption of ASU 2009-13 did not have a material impact on the Company’s
financial condition or results of operations for the three months ended July 1, 2011.
|
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. Costs incurred for additions to property, equipment and
satellites, together with major renewals and betterments, are capitalized and depreciated over the
remaining life of the underlying asset. Costs incurred for maintenance, repairs and minor renewals
and betterments are charged to expense as incurred. 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.
|
Patents, orbital slots and other licenses |
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 related to patents were included in other assets as of July 1, 2011 and April
1, 2011. Accumulated amortization related to these patents was $0.3 million as of July 1, 2011 and
April 1, 2011. Amortization expense related to these patents was less than $0.1 million for the
three months ended July 1, 2011 and July 2, 2010. The Company had capitalized costs of $5.9 million
and $5.7 million related to acquiring and obtaining orbital slots and other licenses, included in
other assets as of July 1, 2011 and April 1, 2011, respectively. Accumulated amortization related
to certain other licenses placed in service during the first quarter of fiscal year 2012 was $0.1
million as of July 1, 2011 and there was no accumulated amortization as of April 1, 2011.
Amortization expense related to certain other licenses placed in service during the first quarter
of fiscal year 2012 was $0.1 million for the three months ended July 1, 2011 and there was no
amortization expense for the three months ended July 2, 2010. If a patent, orbital slot or orbital
license is rejected, abandoned or otherwise invalidated, the unamortized cost is expensed in that
period. During the three months ended July 1, 2011 and July 2, 2010, the Company did not write off
any material costs due to abandonment or impairment.
|
Software development |
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. Capitalized costs, net, of $28.5 million and $24.5 million
related to software developed for resale were included in other assets as of July 1, 2011 and April
1, 2011, respectively. The Company capitalized $5.2 million and $4.0 million of costs related to
software developed for resale for the three months ended July 1, 2011 and July 2, 2010,
respectively. Amortization expense for software development costs was $1.2 million for the three
months ended July 1, 2011. There was no amortization expense of software development costs for the
three months ended July 2, 2010.
|
Self-insurance liabilities |
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
July 1, 2011 and April 1, 2011. 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 a current liability in accrued liabilities in
accordance with the estimated timing of the projected payments.
|
Indemnification provisions |
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 July 1,
2011 and April 1, 2011, no such amounts were accrued.
|
Noncontrolling interest |
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 condensed consolidated financial
statements at the consolidated amounts, which include the amounts attributable to both the
controlling and noncontrolling interest.
|
Derivatives |
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.
|
Stock-based compensation |
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 on a straight-line basis over the requisite service period of the
employee’s award. Stock-based compensation expense is recognized in the condensed consolidated
statement of operations for the three months ended July 1, 2011 and July 2, 2010 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. The Company recognized $4.2 million of stock-based compensation expense for each of the
three months ended July 1, 2011 and July 2, 2010.
|
Income taxes |
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.
|
Revenue recognition shipping and handling fees and costs |
In accordance with the 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.
|
Revenue recognition collections in excess of revenues and deferred 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 twelve months are recorded
within other liabilities in the condensed consolidated financial statements.
|
Fair value measurements policy |
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 GAAP and International
Financial Reporting Standards (IFRS). The new authoritative guidance results in a consistent
definition of fair value and common requirements for measurement of and disclosure about fair value
between GAAP and IFRS. While many of the amendments to 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.
|
Acquisition
|
3 Months Ended |
---|---|
Jul. 01, 2011
|
|
Acquisition [Abstract] | |
Acquisition |
Note 10 — Acquisition
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. These products enhance the Company’s current encryption
security offerings within the Company’s information assurance products in the government systems
segment. 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. The acquisition was accounted for as a
purchase and accordingly, the condensed consolidated financial statements include the operating
results of Stonewood from the date of acquisition. The purchase price allocation is preliminary due
to pending resolution of certain Stonewood tax attributes.
|
Commitments and Contingencies
|
3 Months Ended |
---|---|
Jul. 01, 2011
|
|
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies |
Note 8 — Commitments and 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.
The Company has contracts with various U.S. government agencies. Accordingly, the Company is
routinely subject to audit and review by the DCAA and other U.S. government agencies for its
performance on government contracts, indirect rates and pricing practices, accounting and
management internal control systems, and compliance with applicable contracting and procurement
laws, regulations and standards. Such audits or reviews could result in significant customer
refunds, penalties and sanctions against the Company, and could 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. As of July 1, 2011, the Company had $6.7 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. 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.
|
Basis of Presentation
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 01, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation |
Note 1 — Basis of Presentation
The accompanying condensed consolidated balance sheet at July 1, 2011, the condensed
consolidated statements of operations for the three months ended July 1, 2011 and July 2, 2010, the
condensed consolidated statements of cash flows for the three months ended July 1, 2011 and July 2,
2010, and the condensed consolidated statement of equity and comprehensive income for the three
months ended July 1, 2011 have been prepared by the management of ViaSat, Inc. (also referred to
hereafter as the Company or ViaSat), and have not been audited. These financial statements have
been prepared on the same basis as the audited consolidated financial statements for the fiscal
year ended April 1, 2011 and, in the opinion of management, include all adjustments (consisting
only of normal recurring adjustments) necessary for a fair statement of the Company’s results for
the periods presented. These financial statements should be read in conjunction with the financial
statements and notes thereto for the fiscal year ended April 1, 2011 included in the Company’s
Annual Report on Form 10-K. Interim operating results are not necessarily indicative of operating
results for the full year. The year-end condensed consolidated balance sheet data was derived from
audited financial statements, but does not include all disclosures required by accounting
principles generally accepted in the United States of America (GAAP).
The Company’s condensed consolidated financial statements include the assets, liabilities and
results of operations of ViaSat, its wholly owned subsidiaries and 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 2012 refer to the fiscal year ending on
March 30, 2012. The Company’s quarters for fiscal year 2012 end on July 1, 2011, September 30,
2011, December 30, 2011 and March 30, 2012. This results in a 53 week fiscal year approximately
every four to five years. Fiscal years 2012 and 2011 are both 52 week years.
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. This
acquisition was accounted for as a purchase and accordingly, the condensed consolidated financial
statements include the operating results of Stonewood from the date of acquisition (see Note 10).
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.
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 (Accounting Standards Codification (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 the first quarter of fiscal year 2011, after the Company performed extensive integration
testing of numerous system components that had been separately developed as part of a government
satellite communication program, the Company recorded an additional forward loss of $8.5 million
for the significant additional labor and material costs for rework and testing required to complete
the program requirements and specifications. Including this program, during the three months ended
July 1, 2011 and July 2, 2010, the Company recorded losses of approximately $0.3 million and $8.7
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 the 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 equipment 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 equipment for a price which is sufficiently lower than the expected fair value
of the equipment 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.
Beginning in the first quarter of fiscal year 2012, the Company adopted Accounting Standards
Update (ASU) 2009-13 (ASU 2009-13), Revenue Recognition (Topic 605) Multiple-Deliverable Revenue
Arrangements, which updates ASC Topic 605-25, Revenue Recognition-Multiple element arrangements, of
the Financial Accounting Standards Board (FASB) codification. ASU 2009-13 amended accounting
guidance for revenue recognition to eliminate the use of the residual method and requires entities
to allocate revenue using the relative selling price method. For substantially all of the
arrangements with multiple deliverables, the Company allocates revenue to each element based on a
selling price hierarchy at the arrangement inception. The selling price for each element is based
upon the following selling price hierarchy: vendor specific objective evidence (VSOE) if available,
third party evidence (TPE) if VSOE is not available, or estimated selling price (ESP) if neither
VSOE nor TPE are available (a description as to how the Company determines VSOE, TPE and ESP is
provided below). If a tangible hardware systems product includes software, the Company determines
whether the tangible hardware systems product and the software work together to deliver the
product’s essential functionality and, if so, the entire product is treated as a nonsoftware
deliverable. The total arrangement consideration is allocated to each separate unit of accounting
for each of the nonsoftware deliverables using the relative selling prices of each unit based on
the aforementioned selling price hierarchy. Revenue for each separate unit of accounting is
recognized when the applicable revenue recognition criteria for each element have been met.
To determine the selling price in multiple-element arrangements, the Company establishes VSOE
of the selling price using the price charged for a deliverable when sold separately and for
software license updates and product support and hardware systems support, based on the renewal
rates offered to customers. For nonsoftware multiple-element arrangements, TPE is established by
evaluating similar and/or interchangeable competitor products or services in standalone
arrangements with similarly situated customers and/or agreements. If the Company is unable to
determine the selling price because VSOE or TPE doesn’t exist, the Company determines ESP for the
purposes of allocating the arrangement by reviewing historical transactions, including transactions
whereby the deliverable was sold on a standalone basis and considers several other external and
internal factors including, but not limited to, pricing practices including discounting, margin
objectives, competition, the geographies in which the Company offers its products and services, the
type of customer (i.e., distributor, value added reseller, government agency and direct end user,
among others) and the stage of the product lifecycle. The determination of ESP considers the
Company’s pricing model and go-to-market strategy. As the Company, or its competitors’, pricing and
go-to-market strategies evolve, the Company may modify its pricing practices in the future, which
could result in changes to its determination of VSOE, TPE and ESP. As a result, the Company’s
future revenue recognition for multiple-element arrangements could differ materially from those in
the current period. The adoption of ASU 2009-13 did not have a material impact on the Company’s
financial condition or results of operations for the three months ended July 1, 2011.
In accordance with the 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 twelve months are recorded
within other liabilities in the condensed 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 Defense Contract Audit Agency
(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. As of
July 1, 2011, the Company had $6.7 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 (see Note 8).
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. Costs incurred for additions to property, equipment and
satellites, together with major renewals and betterments, are capitalized and depreciated over the
remaining life of the underlying asset. Costs incurred for maintenance, repairs and minor renewals
and betterments are charged to expense as incurred. 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 $7.6 million of interest expense during the
three months ended July 1, 2011, and $6.0 million of interest expense during the three months ended
July 2, 2010.
As a result of the acquisition of WildBlue Holding, Inc. (WildBlue) in December 2009, 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 July 1, 2011
was $64.5 million and $22.9 million, respectively. 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.
Occasionally, the Company may enter into capital lease arrangements for various machinery,
equipment, computer-related equipment, software, furniture or fixtures. As of July 1, 2011, assets
under capital leases totaled approximately $3.1 million and accumulated amortization related to
such capital leases was $0.2 million. 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 records amortization of assets leased under capital lease arrangements within depreciation
expense.
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 related to patents were included in other assets as of July 1, 2011 and April
1, 2011. Accumulated amortization related to these patents was $0.3 million as of July 1, 2011 and
April 1, 2011. Amortization expense related to these patents was less than $0.1 million for the
three months ended July 1, 2011 and July 2, 2010. The Company had capitalized costs of $5.9 million
and $5.7 million related to acquiring and obtaining orbital slots and other licenses, included in
other assets as of July 1, 2011 and April 1, 2011, respectively. Accumulated amortization related
to certain other licenses placed in service during the first quarter of fiscal year 2012 was $0.1
million as of July 1, 2011 and there was no accumulated amortization as of April 1, 2011.
Amortization expense related to certain other licenses placed in service during the first quarter
of fiscal year 2012 was $0.1 million for the three months ended July 1, 2011 and there was no
amortization expense for the three months ended July 2, 2010. If a patent, orbital slot or orbital
license is rejected, abandoned or otherwise invalidated, the unamortized cost is expensed in that
period. During the three months ended July 1, 2011 and July 2, 2010, the Company did not write off
any material costs due to abandonment or impairment.
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. Capitalized costs, net, of $28.5 million and $24.5 million
related to software developed for resale were included in other assets as of July 1, 2011 and April
1, 2011, respectively. The Company capitalized $5.2 million and $4.0 million of costs related to
software developed for resale for the three months ended July 1, 2011 and July 2, 2010,
respectively. Amortization expense for software development costs was $1.2 million for the three
months ended July 1, 2011. There was no amortization expense of software development costs for the
three months ended July 2, 2010.
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
July 1, 2011 and April 1, 2011. 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 a current liability in accrued liabilities in
accordance with the estimated timing of the projected payments.
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 July 1,
2011 and April 1, 2011, 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 condensed
consolidated balance sheets as of July 1, 2011 and April 1, 2011 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 condensed consolidated financial
statements at the consolidated amounts, which include the amounts attributable to both the
controlling and noncontrolling interest.
Common stock held in treasury
During the first three months of fiscal year 2012 and 2011, the Company issued 129,470 and
143,860 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 48,918 and 56,368 shares of common stock with a total value of
$2.2 million and $1.8 million during the first three months of fiscal year 2012 and 2011,
respectively. Repurchased shares of common stock of 609,281 and 560,363 were held in treasury as of
July 1, 2011 and April 1, 2011, 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 July 1,
2011 were as follows:
The fair values of the Company’s outstanding foreign currency forward contracts as of April 1,
2011 were as follows:
The notional value of foreign currency forward contracts outstanding as of July 1, 2011 and
April 1, 2011 was $2.9 million and $4.6 million, respectively.
The effects of foreign currency forward contracts in cash flow hedging relationships during
the three months ended July 1, 2011 were as follows:
The effects of foreign currency forward contracts in cash flow hedging relationships during
the three months ended July 2, 2010 were as follows:
At July 1, 2011, the estimated net existing income that is expected to be reclassified into
income within the next twelve months is approximately $0.1 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 the three months
ended July 1, 2011 and July 2, 2010.
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 on a straight-line basis over the requisite service period of the
employee’s award. Stock-based compensation expense is recognized in the condensed consolidated
statement of operations for the three months ended July 1, 2011 and July 2, 2010 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. The Company recognized $4.2 million of stock-based compensation expense for each of the
three months ended July 1, 2011 and July 2, 2010.
For the three months ended July 1, 2011 and July 2, 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.
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.
Recent authoritative guidance
In October 2009, the 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. The Company adopted this
guidance in the first quarter of fiscal year 2012 without a material impact 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 GAAP and International
Financial Reporting Standards (IFRS). The new authoritative guidance results in a consistent
definition of fair value and common requirements for measurement of and disclosure about fair value
between GAAP and IFRS. While many of the amendments to 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.
In June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic 220): Presentation of
Comprehensive Income. The new authoritative guidance requires an entity to present the total of
comprehensive income, the components of net income, and the components of other comprehensive
income either in a single continuous statement of comprehensive income or in two separate but
consecutive statements. The new authoritative guidance eliminates the option to present the
components of other comprehensive income as part of the statement of equity. This guidance will be
effective for the Company beginning in the fourth quarter of fiscal year 2012 and should be applied
retrospectively; 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.
|
Shares Used In Computing Diluted Net Income Per Share
|
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 01, 2011
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares Used In Computing Diluted Net Income Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares Used In Computing Diluted Net Income Per Share |
Note 4 — Shares Used In Computing Diluted Net Income Per Share
Antidilutive shares relating to stock options excluded from the calculation were 241,525 and
345,700 shares for the three months ended July 1, 2011 and July 2, 2010, respectively. Antidilutive
shares relating to restricted stock units excluded from the calculation were 4,824 and none for the
three months ended July 1, 2011 and July 2, 2010, respectively.
|
Income Taxes (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jul. 01, 2011
|
Jun. 30, 2012
|
Mar. 30, 2012
|
Apr. 01, 2011
|
|
Income Taxes (Textuals) [Abstract] | ||||
Effective income tax rate | 0.80% | 0.00% | ||
Increase in gross unrecognized tax benefits | $ 0.9 | |||
Reasonably possible decrease in unrecognized tax benefits in the next twelve months | $ 3.1 |
Basis of Presentation (Details Textuals) (USD $)
|
3 Months Ended | ||
---|---|---|---|
Jul. 01, 2011
NumberOfMonths
Years
|
Jul. 02, 2010
|
Apr. 01, 2011
|
|
Revenue Recognition [Line Items] | |||
Forward loss related to loss contracts | $ 300,000 | $ 8,700,000 | |
Property, Plant and Equipment [Line Items] | |||
Total accumulated depreciation of CPE | 163,636,000 | 149,238,000 | |
Equity, Class of Treasury Stock [Line Items] | |||
Purchase of treasury shares pursuant to vesting of certain RSU agreements | (2,165,000) | ||
Basis of Presentation (Textuals) [Abstract] | |||
Total US government contract-related reserves balance | 6,700,000 | ||
Property, equipment and satellites, estimated useful life minimum (years) | 2 | ||
Property, equipment and satellites, estimated useful life maximum (years) | 24 | ||
DCCA Completed Cost Audits | 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 Defense Contract Audit Agency (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. | ||
CPE leased equipment, total cost | 64,542,000 | 61,610,000 | |
Capitalized interest expense | 7,600,000 | 6,000,000 | |
Capital Leases | 3,100,000 | 3,100,000 | |
Capital lease accumulated amortization | 200,000 | ||
Total capitalized costs related to patents | 3,200,000 | 3,200,000 | |
Total capitalized costs related to licenses | 5,900,000 | 5,700,000 | |
Accumulated amortization of patents | 300,000 | 400,000 | |
Accumulated amortization of orbital slots and other licenses | 100,000 | 0 | |
Amortization expense related to patents | 100,000 | 100,000 | |
Accumulated amortization of other licenses | 100,000 | 0.0 | |
Amortization expense related to other licenses | 100,000 | 0.0 | |
Amortization expense related to patents orbital slots and other licenses | 100,000 | 0 | |
Capitalized costs, net, related to software developed for resale | 28,500,000 | 24,500,000 | |
Capitalized cost related to software development for resale | 5,200,000 | 4,000,000 | |
Amortization expense of software development costs | 1,200,000 | 0.0 | |
Self-insurance liability | 1,500,000 | 1,500,000 | |
Accrued indemnification losses | 0 | 0 | |
Amount payable under indemnification agreement recorded as accrued liability | 500,000 | ||
Maximum amount payable under indemnification agreement | 500,000 | ||
Common stock issued based on the vesting terms of certain restricted stock unit agreements | 129,470 | 143,860 | |
Notional value of foreign currency forward contracts | 2,900,000 | 4,600,000 | |
Estimated net existing income expected to be reclassified into income within the next twelve months | 100,000 | ||
Gains or losses from ineffectiveness of derivative instruments | 0 | 0 | |
Stock-based compensation expense | 4,175,000 | 4,167,000 | |
Incremental tax benefit from stock options exercised and restricted stock unit awards vesting | 0 | 0 | |
Life over which software development costs are amortized once product is available for general release | 5 | ||
Accounting Standards Update No 2009-13 [Member]
|
|||
Recent authoritative guidance | |||
Description of new accounting pronouncements | In October 2009, the 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. The Company adopted this guidance in the first quarter of fiscal year 2012 without a material impact on its consolidated financial statements and disclosures. | ||
Accounting Standards Update No 2011-04 [Member]
|
|||
Recent authoritative guidance | |||
Description of new accounting pronouncements | 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 GAAP and International Financial Reporting Standards (IFRS). The new authoritative guidance results in a consistent definition of fair value and common requirements for measurement of and disclosure about fair value between GAAP and IFRS. While many of the amendments to 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. | ||
Accounting Standards Update No 2011-05 [Member]
|
|||
Recent authoritative guidance | |||
Description of new accounting pronouncements | ASU 2011-05 | ||
Government satellite communication program [Member]
|
|||
Revenue Recognition [Line Items] | |||
Forward loss related to loss contracts | 8,500,000 | ||
Customer Premise Equipment [Member]
|
|||
Property, Plant and Equipment [Line Items] | |||
Total accumulated depreciation of CPE | 22,900,000 | 19,200,000 | |
Basis of Presentation (Textuals) [Abstract] | |||
Property, equipment and satellites, estimated useful life minimum (years) | 3 | ||
Property, equipment and satellites, estimated useful life maximum (years) | 5 | ||
Common Stock Held in Treasury
|
|||
Equity, Class of Treasury Stock [Line Items] | |||
Purchase of treasury shares pursuant to vesting of certain RSU agreements, shares | (48,918) | (56,368) | |
Purchase of treasury shares pursuant to vesting of certain RSU agreements | $ (2,165,000) | $ (1,800,000) | |
Repurchased shares of common stock held in treasury | (609,281) | (560,363) |
Financial Statements of Parent and Subsidiary Guarantors (Details Textuals) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | |||
---|---|---|---|---|
Jul. 01, 2011
|
Apr. 01, 2011
|
Oct. 31, 2009
|
Oct. 22, 2009
|
|
Financial Statements of Parent and Subsidiary Guarantors (Textuals) [Abstract] | ||||
Principle amounts of notes issued | $ 275,000 | $ 275,000 | $ 275,000 | $ 275,000 |
Percentage of guarantor subsidiaries owned by company | 100.00% |
Goodwill and Acquired Intangible Assets
|
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 01, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Acquired Intangible Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Acquired Intangible Assets |
Note 5 — Goodwill and Acquired Intangible Assets
During the first quarter of fiscal year 2012, the Company’s change in goodwill of
approximately $0.2 million related to the effect of foreign currency translation recorded within
the Company’s government systems and commercial networks segments. 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 $4.8 million and
$4.6 million for the three months ended July 1, 2011 and July 2, 2010, respectively.
The expected amortization expense of amortizable acquired intangible assets may change due to
the effects of foreign currency fluctuations as a result of the international businesses acquired.
Current and expected amortization expense for acquired intangible assets for each of the following
periods is as follows:
|
\SMO4M3NWZ_'$;L2VD@5O]]H;[4VF(@#% ;J_/SFBLU!<;^RF"24:ZX0=Q^P5LDXLI%R;(H4L5U7[`I
MDEOV2\]AMA%KRVWQ`U)R$X?R@UB]%RX5R2^($H*D*R7T4VE'$$N,A9I*.:=0
M#D15YT3)0G<^$;R716$8,;!GH+XPK9!`)\O5$VE'@E"TKDN+#)-[F7Q<[,Z:
MB6AL=B1'VB2-ZE(I"6NMSJZBY9X,T7J^8(!$#Y![)X%4)\5]XV!%O.UQ/PZE
M0RSM7CZ*\X8PR(Y[GKO/O72T2B<4)`4B2U?\O63L``;?O!56S980%WS*9U?0
M# ZEKBQC9H4-I(FZ/IHF[FG)$QB:@1ICT)7%=O%IC^(]>
MZN/3&G([!)`BJ8JAQ7MJ9Y&H=P&\Z\P<5#6P&_!Y4M`E`I3K?'7I/2?F610X
M(U)A.1ASSQOVG>-BW"KRW^$,QCA@TJ4%JS8C41KR`6*,^1TP+C$3+#`&'P)S
M@;0>>>P$P3R01ISX[#VH?TS+/>">C@'ZF?V#8A$RM$,!A$"^3OR5!A)&]MRA
M,>KT(L%\\+5-!F?)\X"I,,@1;0$LK>;Z(!5E)"*)QX;OC7O$$%]!V`/)0 P/4!N/',\)XS0D7A0:_">U67=7C-.(7C#_4:818-!([)/
MXE>-::_6'K"AM3.G*FE07,,' .P`D1A>\V\\?RKHP=,;L`
MERPF.^)Z$LE`)G8N+)30SNJFDXV=;@+3QZ?W4R-C88R;OMF[EF;C5^3?3H%.
M2^:EV.\"R'ZACWF&HT%U#(+2"DFTI6RTC52Q(YQA>B(3+&&`]XCJ6\="L%I">
M/$_=8Q>< E((4/5
M-$8K7J@CD3I<:A%%TOR!DG^'*CZ#[I0>Q:":DM>\O.^A47F[G#T^%
M^$J>#C7;^85C#7C/&*J#,`FX*?:1ZV"4/[3=!MPRLV@F`C^/!LRUR@S&@XEK
M:!R)3>OL!.BMP7Z*4P(+U;&W\IMBDY4I-.)3W+DWRDD!ZEJTU_+W\W@[3Y"D
M/FT5LZU?G1X.*F87I[,HM2D\+/Z=E]HB,/MOROF!X87>-)5%%X+)CO=@R_P[
MDT'P+%]`;H<3)C#+#I+RXE124_5Q4Y1EOYOO24G6(Q928]FA/.6+Y6O_8W&;
M0^(H_.V`*K<<"KW7F.2[R2K;TSXV2AL1EXEV!^YDV$577=2
M3]V)@ACJ+3RM,Z_Z
&^P^6OUH`N*+'T13XV+&41X8/C7ABJ:V9U2M/G8G-"@.JQ%RPF1M
MZ]!EPL<5$Y]QKG3"+4HQA<6ZNX\8J!?05E\'L+?R"93(*YT*'D?3,"(_%HB0
MJH*.R+#+S`8Y(D,0(+N;R2$T;H
M23QPI>2%A<&'&L>X[G$*VZS5;XC!T>JH='-^1WFQP6923UJ8K-_>V