Will not require replacement for ViaSat-3
F1
Expects to achieve synergies
from Inmarsat transaction earlier than planned
Expects to materially lower capital expense
profile moving forward
Company reaffirms FY24 and FY25
guidance
CARLSBAD, Calif., Oct. 12,
2023 /PRNewswire/ -- Viasat, Inc. (NASDAQ:
VSAT), a global leader in satellite communications, today announced
key financial developments that are expected to materially enhance
Viasat's cash generation profile. As a result of these
developments, Viasat now expects to reach the inflection point of
sustainable positive free cash flow during the first half of
calendar 2025, rather than the second half, as previously
announced, excluding the positive impact of satellite insurance
proceeds.
Since the closing of the Inmarsat transaction in May 2023, and during the subsequent integration,
Viasat has engaged in a comprehensive assessment of its operating
cost structure and capital allocation strategy. This assessment has
also been intertwined with the root cause analysis related to the
ViaSat-3 F1 satellite, which, as previously announced, encountered
a mechanical deployment issue. As this work progresses, Viasat has
updated its views on operating and capital expenses, and resulting
cash flow expectations as follows:
ViaSat-3 F1 Update -- In connection with
the ongoing root cause analysis, Viasat has determined that while
the satellite payload is functional, it expects to recover less
than 10% of the planned throughput on ViaSat-3 F1. With the
flexibility and agility of its integrated satellite fleet, the
limited ViaSat-3 F1 capacity, the addition of the next two ViaSat-3
generation satellites, ground network mitigations, and third-party
bandwidth commitments, the Company remains confident that it will
meet the current and future needs of its mobility customers and is
well-positioned to achieve its financial growth objectives. Viasat
also confirmed that it has insurance coverage of $420 million in place for ViaSat-3 F1 and will
finalize its claim before the end of the year. The Company will not
require a replacement satellite for ViaSat-3 F1.
Inmarsat Acquisition Synergies Update --
The integration of the Inmarsat acquisition is proceeding well and
is ahead of plan. Viasat synergy estimates of approximately
$80 million in annual operating
expenses and approximately $110
million in annual capital expenditures are now anticipated
to be fully realized in FY25, versus over an approximate three-year
period as originally planned. Further, Viasat expects to identify
and realize additional savings in subsequent phases of the synergy
program.
Capital Expense Planning -- Following
Viasat's determination that a replacement for ViaSat-3 F1 is not
necessary, the majority of the capital expenditures related to the
ViaSat-3 constellation have been completed. Viasat is forecasting
capital expenditures in FY25 to decline from FY24 and to be in the
range of $1.4 billion to $1.5 billion, including completion of the final
stages of the ViaSat-3 constellation and the continued build of GX
satellites. This range is inclusive of capitalized interest and
funding for the replacement of the capabilities of the I6 F2
satellite. Viasat is committed to meaningfully reducing aggregate
capital expenditures and expects accelerated, continued declines in
capital expenditures as satellites currently under construction are
completed. The Company confirms that it has insurance coverage of
$348 million in place for the I6 F2
satellite and will finalize its claim before the end of the
year.
Viasat expects to report more than $3
billion of liquidity as of September
30, 2023, including approximately $2.0 billion of cash, cash equivalents and
short-term investments with no near-term outstanding debt
maturities. These preliminary estimates are subject to the closing
of the second fiscal quarter of FY2024 and finalization of
financial and accounting procedures and may change.
In addition to the developments announced today, Viasat will
provide more details on its next earnings call, planned for
November 2023.
Fiscal year guidance confirmed
Viasat remains on track
to achieve its outlook for FY2024, excluding integration and
related costs, as indicated in its Letter to Shareholders in
August 2023. Viasat continues to
expect revenue growth in the high single-digits over FY2023 for the
combined company (including Inmarsat historical results in FY2023
for comparative purposes) and slightly lower growth in Adjusted
EBITDA over FY2023. In addition, Viasat expects to grow revenue and
Adjusted EBITDA again in FY2025.
Viasat will share additional information on its performance,
outlook and the developments announced today during its next
earnings call, planned for November
2023.
About Viasat
Viasat is a global communications
company that believes everyone and everything in the world can be
connected. With offices in 24 countries around the world, our
mission shapes how consumers, businesses, governments, and
militaries around the world communicate and connect. Viasat is
developing the ultimate global communications network to power
high-quality, reliable, secure, affordable, fast connections to
positively impact people's lives anywhere they are—on the ground,
in the air or at sea, while building a sustainable future in space.
On May 30, 2023, Viasat completed its
acquisition of Inmarsat, combining the teams, technologies, and
resources of the two companies to create a new global
communications partner. Learn more at www.viasat.com, the
Viasat News Room or follow us on
Facebook, Instagram, LinkedIn, X
or YouTube.
Copyright © 2023 Viasat, Inc. All rights reserved. Viasat,
the Viasat logo and the Viasat Signal are registered in the U.S and
in other countries to Viasat, Inc. All other product or company
names mentioned are used for identification purposes only and may
be trademarks of their respective owners.
Forward-Looking Statements
This press release contains
forward-looking statements that are subject to the safe harbors
created under the Securities Act of 1933 and the Securities
Exchange Act of 1934. Forward-looking statements include statements
that refer to future financial results and performance, including
the attainment and sustainability of positive free cash flow and
expected capital expenditure levels; the achievement of synergies
from the Inmarsat acquisition and the timing and amount thereof;
the expected performance and throughput of the ViaSat-3 F1
satellite and Viasat's ability to minimize the impact of the
mechanical deployment issue through contingency plans and other
mitigation strategies; the availability and recovery of insurance
proceeds for the ViaSat-F1 and I6 F2 satellites and the making of
any claims in respect thereof; and Viasat's ability to realize the
anticipated benefits of the remaining ViaSat-3 satellites and any
future satellite it may construct or acquire. Readers are cautioned
that actual results could differ materially and adversely from
those expressed in any forward-looking statements. Factors that
could cause actual results to differ include: risks associated with
the construction, launch and operation of satellites, including the
effect of any anomaly, operational failure or degradation in
satellite performance; the ability of Viasat to successfully
integrate Inmarsat operations, technologies and employees following
the closing of the Inmarsat acquisition; the ability to realize
anticipated benefits and synergies of the Inmarsat acquisition,
including the expectation of enhancements to Viasat's products and
services, greater revenue or growth opportunities, operating
efficiencies and cost savings; the ability to ensure continued
performance and market growth of Viasat's business; changes in the
global business environment and economic conditions; the
availability and cost of credit; Viasat's ability to successfully
develop, introduce and sell new technologies, products and
services; Viasat's reliance on a limited number of third parties to
manufacture and supply its products; the risk of litigation or
regulatory actions; Viasat's level of indebtedness and ability to
comply with applicable debt covenants; and other factors affecting
the communications industry generally. In addition, please refer to
the risk factors contained in Viasat's SEC filings available at
www.sec.gov, including Viasat's most recent Annual Report on Form
10-K, Quarterly Reports on Form 10-Q and other reports filed with
the SEC. Readers are cautioned not to place undue reliance on any
forward-looking statements, which speak only as of the date on
which they are made. Viasat undertakes no obligation to update or
revise any forward-looking statements for any reason.
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SOURCE Viasat, Inc.