1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the quarterly period ended September 30, 1999.
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period
from ____________ to____________.
Commission File Number ( 0-21767 )
VIASAT, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 33-0174996
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2290 COSMOS COURT, CARLSBAD, CALIFORNIA 92009
(760) 438-8099
(Address, including zip code, and telephone number,
including area code, of principal executive offices)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
The number of shares outstanding of the issuer's common stock, $.0001
par value, as of November 8, 1999 was 8,120,843.
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VIASAT, INC.
INDEX
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheet at September 30, 1999 and
March 31, 1999 3
Condensed Statement of Income for the three and six months
ended September 30, 1999 and 1998 4
Condensed Statement of Cash Flows for the six months
ended September 30, 1999 and 1998 5
Condensed Statement of Stockholders' Equity for the
six months ended September 30, 1999 6
Notes to Condensed Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures About Market
Risk 13
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 6. Exhibits and Reports on Form 8-K 14
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VIASAT, INC.
CONDENSED BALANCE SHEET
SEPTEMBER 30, MARCH 31,
1999 1999
----------- -----------
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $12,482,000 $ 6,005,000
Short-term investments 6,206,000 14,788,000
Accounts receivable 21,229,000 16,176,000
Inventory 3,142,000 2,525,000
Deferred income taxes 2,335,000 2,358,000
Other current assets 574,000 446,000
----------- -----------
Total current assets 45,968,000 42,298,000
Property and equipment, net 5,883,000 6,630,000
Other assets 795,000 1,088,000
----------- -----------
Total assets $52,646,000 $50,016,000
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,949,000 $ 3,754,000
Accrued liabilities 5,025,000 6,027,000
Current portion of notes payable 1,034,000 1,219,000
----------- -----------
Total current liabilities 10,008,000 11,000,000
----------- -----------
Notes payable 726,000 1,243,000
Other liabilities 1,074,000 926,000
----------- -----------
Total long-term liabilities 1,800,000 2,169,000
----------- -----------
Contingencies (Note 6)
Stockholders' equity:
Common stock 81,000 81,000
Paid in capital 17,991,000 17,609,000
Retained earnings 22,766,000 19,157,000
----------- -----------
Total stockholders' equity 40,838,000 36,847,000
----------- -----------
Total liabilities and stockholders' equity $52,646,000 $50,016,000
=========== ===========
See accompanying notes to condensed financial statements
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VIASAT, INC.
CONDENSED STATEMENT OF INCOME
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------------- -----------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
Revenues $ 17,017,000 $ 18,037,000 $ 34,052,000 $ 34,341,000
Cost of revenues 9,558,000 11,228,000 19,267,000 21,060,000
------------ ------------ ------------ ------------
Gross profit 7,459,000 6,809,000 14,785,000 13,281,000
Operating expenses:
Selling, general and
administrative 2,433,000 2,520,000 5,381,000 4,875,000
Independent research and
development 2,290,000 2,162,000 3,880,000 4,102,000
------------ ------------ ------------ ------------
Income from operations 2,736,000 2,127,000 5,524,000 4,304,000
Other income (expense):
Interest income 223,000 268,000 479,000 408,000
Interest expense (42,000) (66,000) (89,000) (136,000)
------------ ------------ ------------ ------------
Income before income taxes 2,917,000 2,329,000 5,914,000 4,576,000
Provision for income taxes 1,113,000 952,000 2,305,000 1,810,000
------------ ------------ ------------ ------------
Net income $ 1,804,000 $ 1,377,000 $ 3,609,000 $ 2,766,000
============ ============ ============ ============
Basic net income per share $ .22 $ .17 $ .45 $ .35
============ ============ ============ ============
Diluted net income per share $ .22 $ .17 $ .44 $ .34
============ ============ ============ ============
Shares used in basic net income
per share computation 8,075,837 7,974,103 8,079,360 7,947,843
============ ============ ============ ============
Shares used in diluted net income
per share computation 8,379,251 8,192,121 8,298,486 8,197,548
============ ============ ============ ============
See accompanying notes to condensed financial statements.
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VIASAT, INC.
CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDED
SEPTEMBER 30,
-----------------------------
1999 1998
------------ ------------
Cash flows from operating activities:
Net income $ 3,609,000 $ 2,766,000
Adjustments to reconcile net income
to net cash provided by (used in) operating
activities:
Depreciation 1,731,000 1,357,000
Deferred taxes 321,000 (341,000)
Increase (decrease) in cash
resulting from changes in:
Accounts receivable (5,053,000) 1,173,000
Inventory (617,000) (374,000)
Other assets (133,000) 336,000
Accounts payable 195,000 394,000
Accrued liabilities (1,002,000) (479,000)
Other liabilities 148,000 (119,000)
------------ ------------
Net cash (used in) provided by operating activities (801,000) 4,713,000
------------ ------------
Cash flows from investing activities:
Purchases and sales of short-term investments, net 8,582,000 (4,693,000)
Purchases of property and equipment (984,000) (1,747,000)
------------ ------------
Net cash provided by (used in) investing activities 7,598,000 (6,440,000)
------------ ------------
Cash flows from financing activities:
Proceeds from issuance of notes payable -- 1,092,000
Repayment of notes payable (702,000) (498,000)
Proceeds from issuance of common stock 382,000 565,000
------------ ------------
Net cash (used in) provided by financing activities (320,000) 1,159,000
------------ ------------
Net increase (decrease) in cash and cash equivalents 6,477,000 (568,000)
Cash and cash equivalents at beginning of period 6,005,000 3,290,000
------------ ------------
Cash and cash equivalents at end of period $ 12,482,000 $ 2,722,000
============ ============
Supplemental information:
Cash paid for interest $ 89,000 $ 136,000
============ ============
Cash paid for income taxes $ 2,017,000 $ 2,187,000
============ ============
See accompanying notes to condensed financial statements.
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VIASAT, INC.
CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY
(UNAUDITED)
COMMON STOCK
---------------------------
NUMBER OF PAID IN RETAINED
SHARES AMOUNT CAPITAL EARNINGS
----------- ----------- ----------- -----------
Balance at March 31, 1999 8,034,204 $ 81,000 $17,609,000 $19,157,000
Exercise of stock options 40,127 136,000
Issuance of shares for Employee
Stock Purchase Plan 28,810 246,000
Net income 3,609,000
----------- ----------- ----------- -----------
Balance at September 30, 1999 8,103,141 $ 81,000 $17,991,000 $22,766,000
=========== =========== =========== ===========
See accompanying notes to condensed financial statements.
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VIASAT, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying condensed balance sheet as of September 30, 1999, the condensed
statements of income for the three and six month periods ended September 30,
1999 and 1998, the condensed statement of cash flows for the six month periods
ended September 30, 1999 and 1998, and the condensed statement of stockholders'
equity for the six months ended September 30, 1999 have been prepared by ViaSat,
Inc. (the "Company"), and have not been audited. These financial statements, in
the opinion of management, include all adjustments (consisting only of normal
recurring accruals) necessary for a fair presentation of the financial position,
results of operations and cash flows for all periods presented. These financial
statements should be read in conjunction with the financial statements and notes
thereto for the year ended March 31, 1999 included in the Company's 1999 Annual
Report on Form 10-K. Interim operating results are not necessarily indicative of
operating results for the full year.
NOTE 2 - MANAGEMENT ESTIMATES AND ASSUMPTIONS
The preparation of financial statements in conformity with generally accepted
accounting principles 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.
NOTE 3 - REVENUE RECOGNITION
The majority of the Company's revenues are derived from services performed for
the United States Government and its prime contractors under a variety of
contracts including cost-plus-fixed fee, fixed-price, and time and materials
type contracts. Generally, revenues are recognized as services are performed
using the percentage of completion method, measured primarily by costs incurred
to date compared with total estimated costs at completion or based on the number
of units delivered. The Company provides for anticipated losses on contracts by
a charge to income during the period in which they are first identified.
Contract costs, including indirect costs, are subject to audit and negotiations
with Government representatives. These audits have been completed and agreed
upon through fiscal year 1996. Contract revenues and accounts receivable are
stated at amounts which are expected to be realized upon final settlement.
NOTE 4 - EARNINGS PER SHARE
Common stock equivalents of 303,414 and 218,018 shares for the three months
ended September 30, 1999 and 1998, respectively, and 219,126 and 249,705 for the
six months ended September 30, 1999 and 1998 respectively, were used to
calculate diluted earnings per share. Antidilutive shares excluded from the
calculation were 61,174 and 249,065 shares for the three months ended September
30, 1999 and 1998, respectively. Antidilutive shares excluded from the
calculation were 273,286 and 146,443 shares for the six months ended September
30, 1999 and 1998, respectively. Common stock equivalents are primarily
comprised of options granted under the Company's stock option plan. There are no
reconciling items in calculating the numerator for basic and diluted earnings
per share for any of the periods presented.
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VIASAT, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 5 - COMPOSITION OF CERTAIN BALANCE SHEET CAPTIONS
SEPTEMBER 30, MARCH 31,
1999 1999
----------- -----------
(UNAUDITED)
Accounts receivable:
Billed $13,733,000 $ 7,765,000
Unbilled 7,496,000 8,411,000
----------- -----------
$21,229,000 $16,176,000
=========== ===========
Inventory:
Raw materials $ 1,709,000 $ 914,000
Work in process 1,115,000 1,157,000
Finished goods 318,000 454,000
----------- -----------
$ 3,142,000 $ 2,525,000
=========== ===========
Accrued liabilities:
Current portion of warranty reserve $ 928,000 $ 1,440,000
Accrued vacation 1,116,000 1,143,000
Accrued bonus 507,000 1,195,000
Accrued 401(k) matching contribution 582,000 791,000
Income taxes payable 72,000 694,000
Collections in excess of revenues 1,166,000 527,000
Other 654,000 237,000
----------- -----------
$ 5,025,000 $ 6,027,000
=========== ===========
NOTE 6 - CONTINGENCIES
The Company is currently a party to various government and commercial contracts
which require the Company to meet performance covenants and project milestones.
Under the terms of these contracts, failure by the Company to meet such
performance covenants and milestones permit the other party to terminate the
contract and, under certain circumstances, recover liquidated damages or other
penalties. The Company is currently not in compliance, or in the past was not in
compliance, with the performance or milestone requirements of certain of these
contracts. Historically, the Company's customers have not elected to terminate
such contracts or seek liquidated damages from the Company and management does
not believe that its existing customers will do so; therefore, the Company has
not accrued for any potential liquidated damages or penalties.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
When used in this discussion, the words "believes," "anticipated" and similar
expressions are intended to identify forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Such statements
are subject to certain risks and uncertainties which could cause actual results
to differ materially from those projected. Readers are cautioned not to place
undue reliance on these forward-looking statements which speak only as of the
date hereof. The Company undertakes no obligation to republish revised
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events. Readers are also
urged to carefully review and consider the various disclosures made by the
Company which attempt to advise interested parties of the factors which affect
the Company's business, including without limitation the disclosures made under
the caption "Risk Factors" in the Company's Annual Report on Form 10-K for its
fiscal year ended March 31, 1999 filed with the Securities and Exchange
Commission.
RESULTS OF OPERATIONS
The following table sets forth, as a percentage of total revenues, certain
income data for the periods indicated.
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------- -----------------
1999 1998 1999 1998
----- ----- ----- -----
Revenue 100.0% 100.0% 100.0% 100.0%
Cost of revenue 56.2 62.2 56.6 61.3
----- ----- ----- -----
Gross profit 43.8 37.8 43.4 38.7
Operating expenses:
Selling, general and administrative 14.3 14.0 15.8 14.2
Independent research and development 13.5 12.0 11.4 11.9
Income from operations 16.1 11.8 16.2 12.5
----- ----- ----- -----
Income before income taxes 17.1 12.9 17.4 13.3
Net income 10.6 7.6 10.6 8.1
THREE MONTHS ENDED SEPTEMBER 30, 1999 VS. THREE MONTHS ENDED SEPTEMBER 30, 1998
Revenues. Revenues decreased 5.7% from $18.0 million for the three
months ended September 30, 1998 to $17.0 million for the three months ended
September 30, 1999. This decrease was primarily due to lower volumes of defense
products offset in part by improvements in revenues generated by commercial
products.
Gross Profit. Gross profit increased 9.5% from $6.8 million (37.8% of
revenues) for the three months ended September 30, 1998 to $7.5 million (43.8%
of revenues) for the three months ended September 30, 1999. The increase in
gross profit was primarily due to a favorable product mix including volume
related improvements in commercial programs.
Selling, General and Administrative Expenses. Selling, general and
administrative ("SG&A") expenses decreased 3.5% from $2.5 million (14.0% of
revenues) for the three months ended September 30, 1998 to $2.4 million (14.3%
of revenues) for the three months ended September 30, 1999. The decrease in SG&A
expenses reflects reductions in indirect expenditures offset in part by
increases in bid and proposal costs, and additional administrative staffing to
support the Company's growth. SG&A expenses consist primarily of personnel costs
and expenses for business development, marketing and sales, bid and proposal,
finance, contract administration and general management. Certain SG&A expenses
are difficult to predict and vary based on specific government and commercial
sales opportunities.
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Independent Research and Development. Independent research and
development ("IR&D") expenses increased 5.9% from $2.2 million (12.0% of
revenues) for the three months ended September 30, 1998 to $2.3 million (13.5%
of revenues) for the three months ended September 30, 1999. This increase
resulted from work related to the Company's defense products.
Interest Expense. Interest expense decreased from $66,000 for the three
months ended September 30, 1998 to $42,000 for the three months ended September
30, 1999. Interest expense relates to loans for the purchase of capital
equipment, which are generally three year variable-rate term loans, and to
short-term borrowings under the Company's line of credit to cover working
capital requirements. Total outstanding equipment loans were $3.2 million at
September 30, 1998 and $1.8 million at September 30, 1999. There were no
outstanding borrowings under the Company's line of credit as of September 30,
1998 and 1999.
Interest Income. Interest income decreased from $268,000 for the three
months ended September 30, 1998 to $223,000 for the three months ended September
30, 1999. This decrease resulted from lower interest income on U.S Government
receivables partially offset by higher average cash balances. Interest income
relates largely to interest earned on short-term deposits of cash.
Provision for Income Taxes. The Company's effective income tax rate
decreased from 40.9% for the three months ended September 30, 1998 to 38.2% for
the three months ended September 30, 1999. The decrease relates primarily to
increased tax credits.
SIX MONTHS ENDED SEPTEMBER 30, 1999 VS. SIX MONTHS ENDED SEPTEMBER 30, 1998
Revenues. Revenues decreased 0.8% from $34.3 million for the six months
ended September 30, 1998 to $34.1 million for the six months ended September 30,
1999. This decrease was primarily due to lower volumes of defense products
offset in part by improvements in revenues generated by commercial products.
Gross Profit. Gross profit increased 11.3% from $13.3 million (38.7% of
revenues) for the six months ended September 30, 1998 to $14.8 million (43.4% of
revenues) for the six months ended September 30, 1999. The increase in gross
profit was primarily due to a favorable product mix including volume related
improvement in commercial programs.
Selling, General and Administrative Expenses. SG&A expenses increased
10.4% from $4.9 million (14.2% of revenues) for the six months ended September
30, 1998 to $5.4 million (15.8% of revenues) for the six months ended September
30, 1999. The increase in SG&A expenses reflects increased expenditures relating
to marketing of commercial products, increased business development and bid and
proposal efforts for defense programs, and additional administrative staffing to
support the Company's growth. SG&A expenses consist primarily of personnel
costs and expenses for business development, marketing and sales, bid and
proposal, finance, contract administration and general management. Certain SG&A
expenses are difficult to predict and vary based on specific government and
commercial sales opportunities.
Independent Research and Development. IR&D expenses decreased 5.4% from
$4.1 million (11.9% of revenues) for the six months ended September 30, 1998 to
$3.9 million (11.4% of revenues) for the six months ended September 30, 1999.
This decrease resulted from the award of funded development contracts related to
both the Company's defense and commercial products.
Interest Expense. Interest expense decreased from $136,000 for the six
months ended September 30, 1998 to $89,000 for the six months ended September
30, 1999. Interest expense relates to loans for the purchase of capital
equipment, which are generally three year variable-rate term loans, and to
short-term borrowings under the Company's line of credit to cover working
capital requirements. There were no outstanding borrowings under the Company's
line of credit as of September 30, 1998 and 1999.
Interest Income. Interest income increased from $408,000 for the six
months ended September 30, 1998 to $479,000 for the six months ended September
30, 1999. This increase resulted from higher average invested cash balances.
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Provision for Income Taxes. The Company's effective income tax rate
decreased from 39.6% for the six months ended September 30, 1998 to 39.0% for
the six months ended September 30, 1999. The decrease relates primarily to
increased tax credits.
BACKLOG
At September 30, 1999, the Company had firm backlog of $39.9 million, of which
$28.7 million was funded. The firm backlog of $39.9 million does not include
contract options of $56.3 million. These options include $48.0 million of
Indefinite Delivery/Indefinite Quantity (IDIQ) UHF Satcom products and $6.6
million of IDIQ awards for other Company products. As a result of the Federal
Acquisition Streamlining Act of 1994, the trend in U.S. Government procurement
has been toward more off the shelf products and technology. More of the
Company's backlog is expected to come from this type of order with shorter
lead-times. Consequently the Company's backlog is expected to remain lower than
historical trends would indicate. Of the $39.9 million in firm backlog,
approximately $24.2 million is expected to be delivered in the fiscal year
ending March 31, 2000, $8.6 million is expected to be delivered in the fiscal
year ending March 31, 2001 and the balance is expected to be delivered in the
fiscal year ending March 31, 2002 and thereafter. The Company had firm backlog
of $44.9 million at March 31, 1999, of which $36.8 million was funded, not
including options of $45.2 million. The Company includes in its backlog only
those orders for which it has accepted purchase orders. However, backlog is not
necessarily indicative of future sales. A majority of the Company's backlog
scheduled for delivery can be terminated at the convenience of the government
since orders are often made substantially in advance of delivery, and the
Company's contracts typically provide that orders may be terminated with limited
or no penalties. In addition, purchase orders may set forth product
specifications that would require the Company to complete additional product
development. A failure to develop products meeting such specifications could
lead to a termination of the related purchase order.
The backlog amounts as presented are comprised of funded and unfunded
components. Funded backlog represents the sum of contract amounts for which
funds have been specifically obligated by customers to contracts. Unfunded
backlog represents future amounts that customers may obligate over the specified
contract performance periods. The Company's customers allocate funds for
expenditures on long-term contracts on a periodic basis. The ability of the
Company to realize revenues from government contracts in backlog is dependent
upon adequate funding for such contracts. Although funding of its government
contracts is not within the Company's control, the Company's experience
indicates that actual contract fundings have ultimately been approximately equal
to the aggregate amounts of the contracts.
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LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations to date primarily from cash flows from
operations, bank line of credit financing, equity financing and loans for the
purchase of capital equipment. Cash used by operating activities for the six
months ended September 30, 1999 was $801,000 and cash provided by operating
activities was $4.7 million for the six months ended September 30, 1998. The
relative decrease in cash provided by operating activities for the six months
ended September 30, 1999 compared to the same period of the prior year was
primarily due to the timing of receivable collections.
Cash provided by investing activities for the six months ended September 30,
1999 was $7.6 million and cash used in investing activities for the six months
ended September 30, 1998 was $6.4 million. During the six months ended September
30, 1999, $8.6 million in short term investments matured and were reinvested
into investments classified as cash equivalents. The Company purchased $984,000
and $1.8 million of property and equipment during the six months ended September
30, 1999 and 1998, respectively. The Company's purchases of property and
equipment primarily consist of test equipment and computers.
Cash used by financing activities for the six months ended September 30, 1999
was $320,000 and cash provided by financing activities for the six months ended
September 30, 1998 was $1.2 million. This decrease was primarily the result of
reduced borrowings for equipment financing.
At September 30, 1999, the Company had $18.7 million in cash, cash equivalents
and short-term investments, $36.0 million in working capital and $1.8 million in
equipment financing. The Company had a zero balance under its line of credit at
September 30, 1999.
The Company's credit facilities, including the line of credit and equipment
financing, expired on December 15, 1998. The Company is in the process of
renegotiating the terms of the commitment with Union Bank of California.
The Company's future capital requirements will depend upon many factors,
including the progress of the Company's research and development efforts,
expansion of the Company's marketing efforts, and the nature and timing of
orders. The Company believes that its current cash balances and net cash
expected to be provided by operating activities will be sufficient to meet its
working capital and capital expenditure requirements for at least the next 12
months. Management invests the Company's cash in excess of current operating
requirements in short-term, interest-bearing, investment-grade securities.
YEAR 2000 ISSUE
Many computer programs have been written using two digits rather than four to
define the applicable year. This poses a problem when 1/1/00 could represent
either year 2000 or year 1900. This, in turn, could result in system failures or
miscalculations, and is generally referred to as the "Year 2000 issue." The
Company's Year 2000 Plan includes four phases--evaluation, implementation of any
required changes, testing and release/installation.
The Company has completed the evaluation and implementation of modifications for
its business systems software and has completed testing of Company computers.
Because the Company's fiscal year 2000 began April 1, 1999, applications which
depend upon the fiscal year instead of the calendar year were required to be
free of any Year 2000 issues by April 1,1999. All critical business systems
dependent upon the fiscal year 2000 were compliant before April 1, 1999, and
subsequently there have been no related issues. A few personal computers were
found to need modifications and/or replacement to be Year 2000 compliant. All
necessary modifications and replacements will be complete before January 1,
2000.
The Company has conducted evaluations of its products to determine if they are
Year 2000 compliant. The Company does not believe that there are any material
Year 2000 defects in its products. The Company has been asked by some customers
to complete tests on products to determine if there are any Year 2000 issues.
The products have passed these tests. The Company does not believe that any Year
2000 compliance issues
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related to its products will result in a material adverse effect on the
financial position or results of operations of the Company.
The Company has completed extensive inquiries with significant suppliers to
evaluate their Year 2000 status to determine the extent to which the Company is
vulnerable to those third parties' failure to remedy their own Year 2000 issues.
The Company does not believe that any Year 2000 compliance issues related to its
suppliers will result in a material adverse effect on the financial position or
results of operations of the Company.
The Company currently estimates that the total cost of implementing its Year
2000 Plan will be less than $100,000.
The Company anticipates that the Year 2000 issue will not have a material
adverse effect on the financial position or results of operations of the
Company. There can be no assurances, however, that the systems of other
companies or the U.S. Government, on which the Company relies for supplies, cash
payments, and future business, will be timely converted, or that a failure to
convert by another company or the U.S. Government would not have a material
adverse effect on the financial position or results of operations of the
Company. If third party service providers and vendors, due to the Year 2000
issue, fail to provide the Company with components or materials which are
necessary to manufacture its products, with sufficient electrical power and
other utilities to sustain its manufacturing process, or with adequate, reliable
means of transporting its products to its customers worldwide, then any such
failure could have a material adverse effect on the Company's ability to conduct
business, as well as on the Company's financial position and results of
operations.
Because the Company has adopted a plan to address Year 2000 issues, it has not
developed a comprehensive contingency plan for dealing with the most reasonably
likely worst case scenario. However, if the Company identifies significant risks
in the future or is unable to meet its anticipated schedule for completion of
its Year 2000 compliance, the Company will develop contingency plans to the
extent necessary at that time.
The foregoing discussion of Year 2000 issues contains forward-looking statements
and should be read, along with all other forward-looking statements herein, in
conjunction with the Company's disclosures in the first paragraph under the
caption "Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations" above.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
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PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
(a) The Company held its Annual Meeting of Stockholders on September
15, 1999
(b) Not applicable
(c) The matters voted upon at the meeting and the votes cast with
respect thereto were as follows:
Votes Votes Broker
For Against/Withheld Abstentions Non-Votes
--------- ---------------- ----------- ---------
Election of Directors:
Mark D. Dankberg 7,245,817 10,814 -0- -0-
James F. Bunker 7,234,076 22,555 -0- -0-
Amendment to Employee
Stock Purchase Plan 7,189,383 37,734 29,514 -0-
(d) Not applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 10.1 - Satellite Network and Ordering Agreement by and between
ViaSat, Inc. and Science Applications International Corporation, dated
October 12, 1999
Exhibit 27.1 - Financial Data Schedule
(b) The Company filed no reports on Form 8-K during the quarter ended
September 30, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VIASAT, INC.
Date: November 15, 1999
/s/ Mark D. Dankberg
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MARK D. DANKBERG
President
Chief Executive Officer
/s/ Richard Baldridge
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RICHARD BALDRIDGE
Vice President
Chief Financial Officer
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