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Form 8-K Vizio Holding Corp. For: May 11

May 11, 2021 4:06 PM EDT


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (date of earliest event reported): May 11, 2021

VIZIO HOLDING CORP.
(Exact name of registrant as specified in its charter)
Delaware
 001-40271
84-4185335
(State or other jurisdiction of incorporation or organization)
(Commission File Number)
(I.R.S. Employer Identification No.)
39 Tesla
Irvine, CA 92618
(Address of Principal Executive Offices and Zip Code
(949) 428-2525
Registrant's telephone number, including area code


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A common stock, par value $0.0001 per shareVZIONew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to
Section 13(a) of the Exchange Act. o



Item 2.02    Results of Operations.

On May 11, 2021, VIZIO Holding Corp. (“VIZIO”) announced its financial results for the quarter ended March 31, 2021. VIZIO’s press release, which is attached hereto as Exhibit 99.1, is incorporated herein by reference.
Item 7.01    Regulation FD Disclosure.

On May 11, 2021, VIZIO posted supplemental investor materials on the investor relations section of its website (investors.vizio.com). VIZIO announces material information to the public about VIZIO, its products and services, and other matters through a variety of means, including filings with the Securities and Exchange Commission, press releases, public conference calls, webcasts, the investor relations section of its website (investors.vizio.com), its blog (accessible via vizio.com/en/newsroom) and its Twitter account (@VIZIO) in order to achieve broad, non-exclusionary distribution of information to the public and for complying with its disclosure obligations under Regulation FD.
The information in Item 2.02 and Item 7.01 of this Current Report on Form 8-K and Exhibit 99.1 attached hereto, is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01     Financial Statements and Exhibits.
(d) Exhibits.
Exhibit NumberDescription
99.1



SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on behalf of the undersigned hereunto duly authorized.
Date: May 11, 2021By:/s/ Adam Townsend
Adam Townsend
Chief Financial Officer



Exhibit 99.1

VIZIO HOLDING CORP.
Reports Q1 2021 Financial Results

Irvine, CA., May 11, 2021—VIZIO Holding Corp. (NYSE: VZIO) today announced its financial results for the quarter ended March 31, 2021.
“Our first quarter results demonstrate the success of our investments in our Device and Platform business," said William Wang, Founder and Chief Executive Officer of VIZIO Holding Corp. “We see tremendous opportunity ahead as we continue to invest in the quality of our execution, the quality of our products, and most importantly, the quality of our team. The evolution of TV is calling for a revolution, and VIZIO is here to answer it.”
First Quarter 2021 Highlights

Financial and operational highlights include:

Net revenue increased 52% year over year to $505.7 million
Platform+ net revenue increased 120% year over year to $52.2 million
Gross profit increased 82% year over year to $86.7 million
Net income declined 64% year over year to $3.3 million
Adjusted EBITDA increased 218% year over year to $40.4 million
SmartCast Active Accounts grew 57% year over year to 13.4 million
SmartCast Hours grew 70% year over year to 3.6 billion
Average Revenue Per User (ARPU) increased 76% year over year to $14.52
Business highlights include:
Ranked #2 best-selling TV brand in the US during Q1 20211
Ranked #1 best-selling Sound Bar in the US during Q1 20212
Named Best Connected TV Platform by Digiday
Awarded IGN's Best 4K TV for Gaming (P-Series Quantum 9)
Editors' Choice Award from IGN, Reviewed and Newsweek (OLED, P-Series Quantum X and Quantum 9)
Editors' Choice Award from Reviewed and WIRED Recommends (V-Series, M-Series and Elevate Sound Bar)
Added 32 free ad-supported channels, including HSN/QVC, Fuse Sweat, and several from AMC Networks
Univision joined Project OAR as the first Spanish-language network
Launched The CW, FOX NOW, and FOX Nation streaming apps


1 The NPD Group, Inc., Retail Tracking Service, U.S., LCD TVs, based on unit share, Jan. - Mar. 2021.
2 The NPD Group, Inc., Retail Tracking Service, U.S., Sound Bars, based on unit share, Jan. - Mar. 2021.




Selected Quarterly Financial Results
(Unaudited, in millions, except percentages and ARPU)

Three Months Ended
March 31,
Change
20212020%
Financial Highlights:(1)
Net revenue:
Device$453.5 $308.9 47 %
Platform+52.2 23.7 120 %
Total net revenue505.7 332.5 52 %
Gross profit:
Device48.2 32.5 48 %
Platform+38.4 15.2 152 %
Total gross profit86.7 47.7 82 %
Operating expenses72.9 37.0 97 %
Net income3.3 9.3 (64)%
Adjusted EBITDA(2)
$40.4 $12.7 218 %
Operational Metrics:
Smart TV Shipments1.51.228 %
SmartCast Active Accounts (as of)13.48.557 %
Total VIZIO Hours6,9514,91242 %
SmartCast Hours3,6222,13770 %
SmartCast ARPU$14.52 $8.23 76 %
_________________________
(1) some subtotals may not add due to rounding
(2) a reconciliation of Net Income to Adjusted EBITDA is provided below

Financial Outlook
(In millions)
 
Second Quarter 2021
Platform+ Net Revenue $55 - $59
Platform+ Gross Profit$36 - $40
Adjusted EBITDA$12 - $18




Virtual Investor Event – Tuesday, May 11, 2021
VIZIO management will hold a live question and answer webcast at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) to discuss VIZIO's quarterly results and outlook. To listen to the webcast please visit this link. Following the live audio webcast, a playback will be available on VIZIO's Investor Relations website (investors.vizio.com) through June 1, 2021 at 11:59 p.m (ET).

About VIZIO
Founded and headquartered in Orange County, California, VIZIO’s mission is to deliver immersive entertainment and compelling lifestyle enhancements that make our products the center of the connected home. VIZIO is driving the future of televisions through its integrated platform of cutting-edge Smart TVs and powerful SmartCast operating system. VIZIO also offers a portfolio of innovative sound bars that deliver consumers an elevated audio experience. VIZIO’s platform gives content providers more ways to distribute their content and advertisers more tools to target and dynamically serve ads to a growing audience that is increasingly transitioning away from linear TV.
Supplemental Financial and Other Information
Supplemental financial and other information can be accessed through VIZIO’s Investor Relations website at investors.vizio.com. VIZIO announces material information to the public about VIZIO, its products and services, and other matters through a variety of means, including filings with the Securities and Exchange Commission, press releases, public conference calls, webcasts, its Investor Relations website (investors.vizio.com), its blog (accessible via vizio.com/en/newsroom) and its Twitter account (@VIZIO) in order to achieve broad, non-exclusionary distribution of information to the public and for complying with its disclosure obligations under Regulation FD.
Key Operational and Financial Metrics
We review certain key operational and financial metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions. We regularly review and may adjust our processes for calculating our internal metrics to improve their accuracy.
Smart TV Shipments. We define Smart TV Shipments as the number of Smart TV units shipped to retailers or direct to consumers in a given period. Smart TV Shipments currently drive the majority of our revenue and provide the foundation for increased adoption of our SmartCast operating system and the growth of our Platform+ revenue. The growth rate between Smart TV units shipped and Device net revenue is not directly correlated because VIZIO’s Device net revenue can be impacted by other variables, such as the series and sizes of Smart TVs sold during the period, the introduction of new products as well as the number of sound bars shipped.
SmartCast Active Accounts. We define SmartCast Active Accounts as the number of VIZIO Smart TVs where a user has activated the SmartCast operating system through an internet connection at least once in the past 30 days. We believe that the number of SmartCast Active Accounts is an important metric to measure the size of our engaged user base, the attractiveness and usability of our operating system, and subsequent monetization opportunities to increase our Platform+ net revenue.
Total VIZIO Hours. We define Total VIZIO Hours as the aggregate amount of time users spend utilizing our Smart TVs in any capacity. We believe this usage metric is critical to understanding our total potential monetization opportunities.
SmartCast Hours. We define SmartCast Hours as the aggregate amount of time viewers engage with our SmartCast platform to stream content or access other applications. This metric reflects the size of the audience engaged with our operating system as well as indicates the growth and awareness of our platform. It is also a measure of the success of our offerings in addressing increased user demand for OTT streaming. Greater user engagement translates into increased revenue opportunities as we earn a significant portion of our Platform+ net revenue through advertising, which is influenced by the amount of time users spend on our platform.



SmartCast ARPU. We define SmartCast ARPU as total Platform+ net revenue, less revenue attributable to legacy VIZIO V.I.A. Plus units, during the preceding four quarters divided by the average of (i) the number of SmartCast Active Accounts at the end of the current period; and (ii) the number of SmartCast Active Accounts at the end of the corresponding prior year period. SmartCast ARPU indicates the level at which we are monetizing our SmartCast Active Account user base. Growth in SmartCast ARPU is driven significantly by our ability to add users to our platform and our ability to monetize those users.
Device gross profit. We define Device gross profit as Device net revenue less Device cost of goods sold in a given period. Device gross profit is directly influenced by consumer demand, device offerings, and our ability to maintain a cost-efficient supply chain.
Platform+ gross profit. We define Platform+ gross profit as Platform+ net revenue less Platform+ cost of goods sold in a given period. As we continue to grow and scale our business, we expect Platform+ gross profit to increase over the long term.

Non-GAAP Financial Measures
To supplement our financial information presented in accordance with generally accepted accounting principles in the United States of America, or GAAP, VIZIO considers certain financial measures that are not prepared in accordance with GAAP, including Adjusted EBITDA. We define Adjusted EBITDA as total net income before interest income, other (expense) income, net, provision for income taxes, depreciation and amortization and share-based compensation. We consider Adjusted EBITDA to be an important metric to assess our operating performance and help us to manage our working capital needs. Utilizing Adjusted EBITDA, we can identify and evaluate trends in our business as well as provide investors with consistency and comparability to facilitate period-to-period comparisons of our business. We believe that providing users with non-GAAP measures such as Adjusted EBITDA may assist investors in seeing VIZIO’s operating results through the eyes of management and in comparing VIZIO’s operating results over multiple periods with other companies in our industry.
We use Adjusted EBITDA in conjunction with net income as part of our overall assessment of our operating performance and the management of our working capital needs. Our definition of Adjusted EBITDA may differ from the definition used by other companies and therefore comparability may be limited. In addition, other companies may not publish Adjusted EBITDA or similar metrics. Furthermore, Adjusted EBITDA has certain limitations in that it does not include the impact of certain expenses that are reflected in our consolidated statement of operations that are necessary to run our business. Thus, Adjusted EBITDA should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP, including net income.
We compensate for these limitations by providing a reconciliation of Adjusted EBITDA to net income. We encourage investors and others not to rely on any single financial measure and to view Adjusted EBITDA in conjunction with net income.

Forward-looking information

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally relate to future events or VIZIO’s future financial or operating performance. In some cases, you can identify forward looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “going to,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, priorities, plans, or intentions.




Forward-looking statements in this press release include, but are not limited to, statements regarding VIZIO’s future financial and operating performance, including our outlook and guidance, our expectations regarding the impact of the COVID-19 pandemic, and our ability to keep pace with technological advances in our industry and successfully compete in highly competitive markets. Our expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties, including changes in our plans or assumptions, that could cause actual results to differ materially from those projected. These risks include the possibility that: we are not able to keep pace with technological advances in our industry and successfully compete in highly competitive markets; we do not have the ability to continue to increase the sales of our Smart TVs; we cannot attract and maintain SmartCast Active Accounts; we cannot increase SmartCast Hours; we are not able to attract and maintain popular content on our platform; we are not able to maintain relationships with advertisers; and cannot adapt to market conditions and technological developments, including with respect to our platform's compatibility with applications developed by content providers.

The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in our filings with the Securities and Exchange Commission, including our prospectus filed pursuant to Rule 424(b) under the Securities Act of 1933, as amended, on March 24, 2021, and in our Quarterly Report on Form 10-Q that will be filed following this earnings release. The forward-looking statements in this press release are based on information available to VIZIO as of the date hereof, and VIZIO disclaims any obligation to update any forward-looking statements, except as required by law.

Contact Information

Investors and Analysts:
Michael Marks
IR@vizio.com

Media:
Jodie McAfee
PR@vizio.com

Source: VIZIO Holding Corp.








Condensed Consolidated Statement of Operations
(Unaudited, in thousands except per share amounts)

Three Months Ended
March 31,
20212020
Net revenue:
Device$453,460 $308,855 
Platform+52,196 23,685 
Total net revenue505,656 332,540 
Cost of goods sold:
Device405,238 276,357 
Platform+13,753 8,456 
Total cost of goods sold418,991 284,813 
Gross profit:
Device48,222 32,498 
Platform+38,443 15,229 
Total gross profit86,665 47,727 
Operating expenses:
Selling, general and administrative67,851 30,116 
Marketing4,404 6,248 
Depreciation and amortization614 660 
Total operating expenses72,869 37,024 
Income from operations13,796 10,703 
Interest income82 348 
Other (expense) income, net (189)345 
Total non-operating (expense) income(107)693 
Income before income taxes13,689 11,396 
Provision for income taxes10,344 2,109 
Net income $3,345 $9,287 
Net income attributable to Class A and Class B stockholders:
Basic$0.02 $0.05 
Diluted$0.02 $0.05 
Weighted-average Class A and Class B common shares outstanding:
Basic145,730 144,268 
Diluted157,174 146,944 



Condensed Consolidated Balance Sheets
(In thousands except per share amounts)
As of
March 31,
2021
December 31,
2020
Assets(Unaudited)(Audited)
Current assets:
Cash and cash equivalents$435,135 $207,728 
Accounts receivable, net248,503 405,609 
Other receivables due from related parties815 978 
Inventories9,743 10,545 
Income tax receivable— 1,315 
Other current assets56,599 55,460 
Total current assets750,795 681,635 
Property, equipment and software, net9,829 7,929 
Goodwill, net44,788 44,788 
Intangible assets, net102 131 
Deferred income taxes25,424 26,652 
Other assets13,218 13,847 
Total assets$844,156 $774,982 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable due to related parties$159,680 $209,362 
Accounts payable128,365 166,805 
Accrued expenses146,043 154,959 
Accrued royalties77,223 81,143 
Other current liabilities12,081 5,272 
Total current liabilities523,392 617,541 
Other long-term liabilities7,810 8,210 
Total liabilities531,202 625,751 
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value; 100,000 and 0 shares authorized and no shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively— — 
Series A convertible preferred stock, $0.0001 par value; 0 and 250 shares authorized and 0 and 135 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively— 2,565 
Common stock, $0.0001 par value; 1,000,000 and 675,000 Class A shares authorized, 85,470 and 150,831 Class A shares issued, and 85,036 and 150,831 Class A shares outstanding as of March 31, 2021 and December 31, 2020, respectively; 200,000 and 0 Class B shares authorized and 98,633 and 0 Class B shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively; 150,000 and 0 Class C shares authorized, 0 Class C shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively18 15 
Additional paid-in capital262,799 98,885 
Accumulated other comprehensive (loss) income (72)873 
Retained earnings 50,209 46,893 
Total stockholders’ equity312,954 149,231 
Total liabilities and stockholders' equity$844,156 $774,982 





Condensed Consolidated Statement of Cash Flows
(Unaudited, in thousands)
Three Months Ended
March 31,
20212020
Cash flows from operating activities:
Net income$3,345 $9,287 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization614 660 
Deferred income taxes1,228 — 
Share-based compensation expense26,019 1,339 
Changes in operating assets and liabilities:
Accounts receivable157,102 172,180 
Other receivables due from related parties164 2,486 
Inventories808 3,889 
Income taxes receivable1,323 778 
Other current assets(1,338)(1,381)
Other assets628 (2,719)
Accounts payable due to related parties(49,680)(107,415)
Accounts payable(38,249)(69,752)
Accrued expenses(19,659)(38,892)
Accrued royalties(3,920)(115)
Income taxes payable6,823 1,339 
Other current liabilities(17)471 
Other long-term liabilities(400)2,419 
Net cash provided by (used in) operating activities84,791 (25,426)
Cash flows from investing activities:
Purchase of property and equipment(2,353)(280)
Net cash used in investing activities(2,353)(280)
Cash flows from financing activities:
Proceeds from exercise of stock options— 158 
Payment of dividends on Series A convertible preferred stock(594)— 
Proceeds from IPO, net of $10,700 underwriting fees148,044 — 
Payments of offering costs(1,363)— 
Net cash provided by financing activities146,087 158 
Effects of exchange rate changes on cash and cash equivalents(1,118)(2)
Net increase (decrease) in cash and cash equivalents227,407 (25,550)
Cash and cash equivalents at beginning of year207,728 176,579 
Cash and cash equivalents at end of year$435,135 $151,029 
Supplemental disclosure of cash flow information:
Net cash paid (received) during the period for income taxes$69 $(56)
Cash paid for interest$47 $38 
Supplemental disclosure of non-cash investing and financing activities:
Right-of-use assets obtained in exchange for new operating lease liabilities$— $3,366 
Cash paid for amounts included in the measurement of operating lease liabilities$720 $551 
Payment to taxing authority in connection with shares directly withheld from
   employees not yet made
$9,121 $— 
IPO costs not yet paid$1,663 $— 




Reconciliation of Net Income to Adjusted EBITDA
Three Months Ended
March 31,
20212020
(Unaudited, in thousands)
Net income $3,345 $9,287 
Adjusted to exclude the following:
Interest income(82)(348)
Other expense (income), net189 (345)
Provision for income taxes10,344 2,109 
Depreciation and amortization614 660 
Share-based compensation26,019 1,339 
Adjusted EBITDA$40,429 $12,702 






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