Maxar Technologies (NYSE:MAXR) (TSX:MAXR) (“Maxar” or the
“Company”), a trusted partner and innovator in Earth Intelligence
and Space Infrastructure, today announced financial results for the
quarter ended September 30, 2021. All dollar amounts in this press
release are expressed in U.S. dollars, unless otherwise noted.
Key points from the quarter include:
- Net income from continuing operations of $14 million
- Diluted net income per share of $0.19
- Consolidated revenues of $437 million
- Adjusted EBITDA1 of $113 million
(1)
This is a non-GAAP financial measure.
Refer to section “Non-GAAP Financial Measures” in this earnings
release.
“We continued to make progress on our strategic growth plans
this quarter, with solid bookings in both Earth Intelligence and
Space Infrastructure generating a book-to-bill over two times.
Notable awards included the 11th renewal of the EnhancedView
program, another renewal of the Global-EGD program, and an award to
continue development and operations of a classified big data
analytics program,” stated Dan Jablonsky, President and Chief
Executive Officer. “Importantly, we also signed a contract with a
fifth U.S. ally to upgrade the country’s ground infrastructure to
be Legion ready and we were awarded contracts to build two new GEO
satellites for Sirius XM. Finally, we advanced the Legion
construction program and continue to expect the launch of the first
two satellites in the March to June 2022 window.”
“We generated solid cash flow in the quarter and good
year-over-year revenue and Adjusted EBITDA growth when you consider
the deferred revenue included in last year’s results,” stated Biggs
Porter, Chief Financial Officer. “Earth Intelligence performance
was driven by growth from commercial and international defense and
intelligence customers, while Space Infrastructure benefited from
recent commercial awards offset by the timing of work on certain
government programs. Importantly, we are raising our full-year
guidance for both Adjusted EBITDA and cash flow.”
Total revenues remained relatively unchanged as they increased
to $437 million, or by $1 million, for the three months ended
September 30, 2021, compared to the same period of 2020. Revenue in
our Earth Intelligence segment was inclusive of a $20 million
decrease in the recognition of deferred revenue related to the
EnhancedView Contract.
For the three months ended September 30, 2021, our net income
from continuing operations was $14 million compared to $84 million
for the three months ended September 30, 2020. The decrease was
primarily driven by a decrease in other income of $98 million,
driven by an $85 million gain on remeasurement of the previously
held equity interest in Vricon for the three months ended September
30, 2020. The decrease was partially offset by a $21 million
decrease in depreciation and amortization expense for the three
months ended September 30, 2021, compared to the same period in
2020.
For the three months ended September 30, 2021, Adjusted EBITDA
was $113 million and Adjusted EBITDA margin was 25.9%. This is
compared to Adjusted EBITDA of $112 million and Adjusted EBITDA
margin of 25.7% for the same period of 2020. The increase was
primarily driven by higher Adjusted EBITDA from the Space
Infrastructure segment and lower corporate and other expenses,
partially offset by lower Adjusted EBITDA from the Earth
Intelligence segment given the decrease in the recognition of
deferred revenue related to the EnhancedView Contract as mentioned
above.
We had total order backlog of $2.1 billion as of September 30,
2021 compared to $1.9 billion as of December 31, 2020. The increase
in backlog was driven by increases in both the Earth Intelligence
and Space Infrastructure segments. Our unfunded contract options
totaled $0.6 billion and $0.9 billion as of September 30, 2021 and
December 31, 2020, respectively. Unfunded contracts options
primarily decreased as a result of the execution of option periods
associated with the EnhancedView Contract and the Global Enhanced
GEOINT Delivery program, which increased total backlog.
Financial Highlights
In addition to results reported in accordance with U.S. GAAP, we
use certain non-GAAP financial measures as supplemental indicators
of its financial and operating performance. These non-GAAP
financial measures include EBITDA and Adjusted EBITDA. We believe
these supplementary financial measures reflect our ongoing business
in a manner that allows for meaningful period-to-period comparisons
and analysis of trends in its business.
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
($ millions, except per share amounts)
Revenues
$
437
$
436
$
1,302
$
1,256
Income (loss) from continuing
operations
14
84
(25
)
6
Income from discontinued operations, net
of tax
—
1
—
337
Net income (loss)
$
14
$
85
$
(25
)
$
343
EBITDA1
112
192
311
725
Total Adjusted EBITDA1
113
112
312
327
Diluted net income (loss) per common
share:
Income (loss) from continuing
operations
$
0.19
$
1.32
$
(0.36
)
$
0.10
Income from discontinued operations, net
of tax
—
0.02
—
5.39
Diluted net income (loss) per common
share
$
0.19
$
1.34
$
(0.36
)
$
5.49
Weighted average number of common shares
outstanding (millions):
Basic
72.6
61.0
69.9
60.6
Diluted
74.7
63.4
69.9
62.5
(1)
This is a non-GAAP financial measure.
Refer to section “Non-GAAP Financial Measures” in this earnings
release.
Revenues by segment were as follows:
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
($ millions)
Revenues:
Earth Intelligence
$
271
$
274
$
804
$
823
Space Infrastructure
180
181
541
497
Intersegment eliminations
(14
)
(19
)
(43
)
(64
)
Total revenues
$
437
$
436
$
1,302
$
1,256
We analyze financial performance by segment, which combine
related activities within the Company.
Three Months Ended
Nine Months Ended
September 30,
September 30,
($ millions)
2021
2020
2021
2020
Adjusted EBITDA:
Earth Intelligence
$
124
$
128
$
362
$
407
Space Infrastructure
14
12
29
(16
)
Intersegment eliminations
(5
)
(7
)
(17
)
(21
)
Corporate and other expenses
(20
)
(21
)
(62
)
(43
)
Total Adjusted EBITDA1
$
113
$
112
$
312
$
327
(1)
This is a non-GAAP financial measure.
Refer to section “Non-GAAP Financial Measures” in this earnings
release.
Earth Intelligence
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
($ millions)
Revenues
$
271
$
274
$
804
$
823
Adjusted EBITDA
$
124
$
128
$
362
$
407
Adjusted EBITDA margin (as a % of total
revenues)
45.8
%
46.7
%
45.0
%
49.5
%
Revenues from the Earth Intelligence segment decreased to $271
million from $274 million, or by $3 million, for the three months
ended September 30, 2021, compared to the same period in 2020. The
decrease was primarily driven by a $20 million decrease in the
recognition of deferred revenue related to the EnhancedView
Contract and a $6 million decrease in revenue with the U.S.
government. We recognized $20 million of deferred revenue from the
EnhancedView Contract for the three months ended September 30,
2020, compared to none for the three months ended September 30,
2021, as it was fully recognized as of August 31, 2020. The
decrease was partially offset by a $20 million increase in
commercial programs primarily driven by the expansion of contracts
with existing customers and a $4 million increase in revenue from
international defense and intelligence customers.
Adjusted EBITDA from the Earth Intelligence segment decreased to
$124 million from $128 million, or by $4 million, for the three
months ended September 30, 2021, compared to the same period of
2020. The decrease was primarily driven by a decrease in the
recognition of deferred revenue related to the EnhancedView
Contract as mentioned above. The decrease was also driven by an
increase in service costs for the three months ended September 30,
2021, as compared to the same period of 2020. These decreases were
partially offset by the expansion of contracts with existing
commercial and international defense and intelligence customers
contributing to positive program margin growth.
Space Infrastructure
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
($ millions)
Revenues
$
180
$
181
$
541
$
497
Adjusted EBITDA
$
14
$
12
$
29
$
(16
)
Adjusted EBITDA margin (as a % of total
revenues)
7.8
%
6.6
%
5.4
%
(3.2
)
%
Revenues from the Space Infrastructure segment decreased to $180
million from $181 million, or by $1 million, for the three months
ended September 30, 2021, compared to the same period in 2020.
Revenues decreased primarily as a result of a $16 million decrease
in revenues from U.S. government contracts. The decrease is
partially offset by an increase in revenues from commercial
programs of $14 million due to higher volumes related to new
programs and lower EAC growth for the three months ended September
30, 2021
Adjusted EBITDA from the Space Infrastructure segment increased
to $14 million from $12 million, or by $2 million, for the three
months ended September 30, 2021, compared to the same period of
2020. The increase in the Space Infrastructure segment was
primarily related to a $10 million increase driven by increased
volumes on commercial programs which resulted in increased margins
and fewer negative EAC impacts during the period as compared to the
three months ended September 30, 2020. The increase in commercial
program margins has been driven by a change in program mix related
to the completion of less profitable programs offset by more
profitable programs. The remaining $8 million change is related to
an increase in indirect costs and selling, general and
administrative costs.
Corporate and other expenses
Corporate and other expenses include items such as corporate
office costs, regulatory costs, executive and director
compensation, foreign exchange gains and losses, retention costs,
and fees for legal and consulting services.
Corporate and other expenses remained relatively unchanged
period over period as they decreased to $20 million from $21
million, or by $1 million, for the three months ended September 31,
2021, compared to the same period in 2020.
Intersegment eliminations
Intersegment eliminations are related to projects between our
segments, including our WorldView Legion satellite constellation.
Intersegment eliminations decreased to $5 million from $7 million,
or by $2 million, for the three months ended September 30, 2021,
compared to the same period in 2021, primarily related to a
decrease in intersegment satellite construction activity.
MAXAR TECHNOLOGIES INC.
Unaudited Condensed Consolidated Statements of Operations (In
millions, except per share amounts)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
Revenues:
Product
$
166
$
161
$
498
$
425
Service
271
275
804
831
Total revenues
437
436
1,302
1,256
Costs and expenses:
Product costs, excluding depreciation and
amortization
144
145
448
434
Service costs, excluding depreciation and
amortization
93
95
286
275
Selling, general and administrative
89
90
261
237
Depreciation and amortization
74
95
221
274
Impairment loss
—
—
—
14
Reduction of gain on sale leaseback
—
4
—
4
Operating income
37
7
86
18
Interest expense, net
25
36
127
133
Other income, net
(2
)
(91
)
(6
)
(98
)
Income (loss) before taxes
14
62
(35
)
(17
)
Income tax benefit
—
(22
)
(10
)
(22
)
Equity in income from joint ventures, net
of tax
—
—
—
(1
)
Income (loss) from continuing
operations
14
84
(25
)
6
Discontinued operations:
Income from operations of discontinued
operations, net of tax
—
—
—
32
Gain on disposal of discontinued
operations, net of tax
—
1
—
305
Income from discontinued operations, net
of tax
—
1
—
337
Net income (loss)
$
14
$
85
$
(25
)
$
343
Basic net income (loss) per common
share:
Income (loss) from continuing
operations
$
0.19
$
1.38
$
(0.36
)
$
0.10
Income from discontinued operations, net
of tax
—
0.02
—
5.56
Basic net income (loss) per common
share
$
0.19
$
1.40
$
(0.36
)
$
5.66
Diluted net income (loss) per common
share:
Income (loss) from continuing
operations
$
0.19
$
1.32
$
(0.36
)
$
0.10
Income from discontinued operations, net
of tax
—
0.02
—
5.39
Diluted net income (loss) per common
share
$
0.19
$
1.34
$
(0.36
)
$
5.49
MAXAR TECHNOLOGIES INC. Unaudited
Condensed Consolidated Balance Sheets (In millions, except per
share amounts)
September 30,
December 31,
2021
2020
Assets
Current assets:
Cash and cash equivalents
$
36
$
27
Trade and other receivables, net
365
327
Inventory, net
42
31
Advances to suppliers
17
24
Prepaid and other current assets
51
59
Total current assets
511
468
Non-current assets:
Orbital receivables, net
324
361
Property, plant and equipment, net
902
883
Intangible assets, net
812
895
Non-current operating lease assets
143
163
Goodwill
1,627
1,627
Other non-current assets
95
86
Total assets
$
4,414
$
4,483
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable
$
92
$
115
Accrued liabilities
72
65
Accrued compensation and benefits
81
105
Contract liabilities
259
278
Current portion of long-term debt
18
8
Current operating lease liabilities
42
41
Other current liabilities
42
51
Total current liabilities
606
663
Non-current liabilities:
Pension and other postretirement
benefits
183
192
Operating lease liabilities
136
158
Long-term debt
2,064
2,414
Other non-current liabilities
95
120
Total liabilities
3,084
3,547
Commitments and contingencies
Stockholders’ equity:
Common stock ($0.0001 par value, 240
million common shares authorized; 72.6 million and 61.2 million
issued and outstanding at September 30, 2021 and December 31, 2020,
respectively)
—
—
Additional paid-in capital
2,224
1,818
Accumulated deficit
(790
)
(763
)
Accumulated other comprehensive loss
(105
)
(120
)
Total Maxar stockholders' equity
1,329
935
Noncontrolling interest
1
1
Total stockholders' equity
1,330
936
Total liabilities and stockholders'
equity
$
4,414
$
4,483
MAXAR TECHNOLOGIES INC.
Unaudited Condensed Consolidated Statements of Cash Flows (In
millions)
Nine Months Ended
September 30,
2021
2020
Cash flows (used in) provided by:
Operating activities:
Net (loss) income
$
(25
)
$
343
Income from operations of discontinued
operations, net of tax
—
32
Gain on disposal of discontinued
operations, net of tax
—
305
(Loss) income from continuing
operations
(25
)
6
Adjustments to reconcile net (loss) income
to net cash provided by (used in) operating activities:
Depreciation and amortization
221
274
Stock-based compensation expense
31
24
Amortization of debt issuance costs and
other non-cash interest expense
11
12
Gain from remeasurement of Vricon equity
interest
—
(85
)
Loss from extinguishment of debt
41
7
Cumulative adjustment to SXM-7 revenue
30
—
Impairment loss
—
14
Deferred income tax expense (benefit)
2
(17
)
Other
(3
)
3
Changes in operating assets and
liabilities:
Trade and other receivables
(33
)
(3
)
Accounts payable and liabilities
(57
)
(35
)
Contract liabilities
(20
)
1
Other
(12
)
(20
)
Cash provided by operating activities -
continuing operations
186
181
Cash used in operating activities -
discontinued operations
(1
)
(49
)
Cash provided by operating activities
185
132
Investing activities:
Purchase of property, plant and equipment
and development or purchase of software
(156
)
(224
)
Acquisition, net of cash acquired
—
(118
)
Return of capital from discontinued
operations
—
20
Cash used in investing activities -
continuing operations
(156
)
(322
)
Cash provided by investing activities -
discontinued operations
—
723
Cash (used in) provided by investing
activities
(156
)
401
Financing activities:
Repurchase of 2023 Notes, including
premium
(384
)
(169
)
Net proceeds from issuance of common
stock
380
—
Net proceeds from issuance of 2027
Notes
—
147
Settlement of securitization liability
(9
)
(7
)
Repayments of long-term debt
(7
)
(523
)
Other
(4
)
2
Cash used in financing activities -
continuing operations
(24
)
(550
)
Cash used in financing activities -
discontinued operations
—
(24
)
Cash used in financing activities
(24
)
(574
)
Increase (decrease) in cash, cash
equivalents, and restricted cash
5
(41
)
Effect of foreign exchange on cash, cash
equivalents, and restricted cash
—
(5
)
Cash, cash equivalents, and restricted
cash, beginning of year
31
110
Cash, cash equivalents, and restricted
cash, end of period
$
36
$
64
Reconciliation of cash flow
information:
Cash and cash equivalents
$
36
$
60
Restricted cash included in prepaid and
other current assets
—
4
Restricted cash included in other
non-current assets
—
—
Total cash, cash equivalents, and
restricted cash
$
36
$
64
NON-GAAP FINANCIAL MEASURES
In addition to results reported in accordance with U.S. GAAP, we
use certain non-GAAP financial measures as supplemental indicators
of our financial and operating performance. These non-GAAP
financial measures include EBITDA, Adjusted EBITDA and Adjusted
EBITDA margin.
We define EBITDA as earnings before interest, taxes,
depreciation and amortization, Adjusted EBITDA as EBITDA adjusted
for certain items affecting the comparability of our ongoing
operating results as specified in the calculation and Adjusted
EBITDA margin as Adjusted EBITDA divided by revenue. Certain items
affecting the comparability of our ongoing operating results
between periods include restructuring, impairments, satellite
insurance recovery, gain (loss) on sale of assets, CEO severance
and transaction and integration related expense. Transaction and
integration related expense includes costs associated with
de-leveraging activities, acquisitions and dispositions and the
integration of acquisitions. Management believes that exclusion of
these items assists in providing a more complete understanding of
our underlying results and trends, and management uses these
measures along with the corresponding U.S. GAAP financial measures
to manage our business, evaluate our performance compared to prior
periods and the marketplace, and to establish operational goals.
Adjusted EBITDA is a measure being used as a key element of our
incentive compensation plan. The Syndicated Credit Facility also
uses Adjusted EBITDA in the determination of our debt leverage
covenant ratio. The definition of Adjusted EBITDA in the Syndicated
Credit Facility includes a more comprehensive set of adjustments
that may result in a different calculation therein.
We believe that these non-GAAP measures, when read in
conjunction with our U.S. GAAP results, provide useful information
to investors by facilitating the comparability of our ongoing
operating results over the periods presented, the ability to
identify trends in our underlying business, and the comparison of
our operating results against analyst financial models and
operating results of other public companies.
EBITDA, Adjusted EBITDA and Adjusted EBITDA margin are not
recognized terms under U.S. GAAP and may not be defined similarly
by other companies. EBITDA and Adjusted EBITDA should not be
considered alternatives to net (loss) income as indications of
financial performance or as alternate to cash flows from operations
as measures of liquidity. EBITDA and Adjusted EBITDA have
limitations as an analytical tool and should not be considered in
isolation or as a substitute for our results reported under U.S.
GAAP. The table below reconciles our net income to EBITDA and Total
Adjusted EBITDA and presents Total Adjusted EBITDA margin for the
three and nine months ended September 30, 2021 and 2020.
Three Months Ended September
30,
Nine Months Ended September
30,
2021
2020
2021
2020
($ millions)
Net income (loss)
$
14
$
85
$
(25)
$
343
Income tax benefit
—
(22)
(10)
(22)
Interest expense, net
25
36
127
133
Interest income
(1)
(2)
(2)
(3)
Depreciation and amortization
74
95
221
274
EBITDA
$
112
$
192
$
311
$
725
Income from discontinued operations, net
of tax
—
(1)
—
(337)
Transaction and integration related
expense
1
2
1
6
Impairment loss
—
—
—
14
Reduction of gain on sale leaseback
—
4
—
4
Gain on remeasurement of Vricon equity
interest
—
(85)
—
(85)
Total Adjusted EBITDA
$
113
$
112
$
312
$
327
Adjusted EBITDA:
Earth Intelligence
124
128
362
407
Space Infrastructure
14
12
29
(16)
Intersegment eliminations
(5)
(7)
(17)
(21)
Corporate and other expenses
(20)
(21)
(62)
(43)
Total Adjusted EBITDA
$
113
$
112
$
312
$
327
Net income (loss) margin
3.2
%
19.5
%
(1.9)
%
27.3
%
Total Adjusted EBITDA margin
25.9
%
25.7
%
24.0
%
26.0
%
Cautionary Note Regarding Forward-Looking Statements
Certain statements and other information included in this
release constitute "forward-looking information" or
"forward-looking statements" (collectively, "forward-looking
statements") under applicable securities laws. Statements including
words such as "may", "will", "could", "should", "would", "plan",
"potential", "intend", "anticipate", "believe", "estimate" or
"expect" and other words, terms and phrases of similar meaning are
often intended to identify forward-looking statements, although not
all forward-looking statements contain these identifying words.
Forward-looking statements involve estimates, expectations,
projections, goals, forecasts, assumptions, risks and
uncertainties, as well as other statements referring to or
including forward-looking information included in this
presentation.
Forward-looking statements are subject to various risks and
uncertainties which could cause actual results to differ materially
from the anticipated results or expectations expressed in this
presentation. As a result, although management of the Company
believes that the expectations and assumptions on which such
forward-looking statements are based are reasonable, undue reliance
should not be placed on the forward-looking statements because the
Company can give no assurance that they will prove to be correct.
The risks that could cause actual results to differ materially from
current expectations include, but are not limited to, the risk
factors and other disclosures about the Company and its business
included in the Company's continuous disclosure materials filed
from time to time with U.S. securities and Canadian regulatory
authorities, which are available online under the Company's EDGAR
profile at www.sec.gov, under the Company's SEDAR profile at
www.sedar.com or on the Company's website at www.maxar.com.
The forward-looking statements contained in this release are
expressly qualified in their entirety by the foregoing cautionary
statements. All such forward-looking statements are based upon data
available as of the date of this presentation or other specified
date and speak only as of such date. The Company disclaims any
intention or obligation to update or revise any forward-looking
statements in this presentation as a result of new information or
future events, except as may be required under applicable
securities legislation.
Unless stated otherwise or the context otherwise requires,
references to the terms “Company,” “Maxar,” “we,” “us,” and “our”
to refer collectively to Maxar Technologies Inc. and its
consolidated subsidiaries.
Investor/Analyst Conference Call
Maxar President and Chief Executive Officer, Dan Jablonsky, and
Executive Vice President and Chief Financial Officer, Biggs Porter,
will host an earnings conference call Wednesday, November 3, 2021,
reviewing the third quarter results, followed by a question and
answer session. The call is scheduled to begin promptly at 3:00
p.m. MT (5:00 p.m. ET).
Investors and participants must register for the call in advance
by visiting:
http://www.directeventreg.com/registration/event/7888106
After registering, participants will receive dial-in
information, a passcode, and registrant ID. At the time of the
call, participants must dial in using the numbers in the
confirmation email and enter their passcode and ID.
The Conference Call will be Webcast live and then archived at:
http://investor.maxar.com/events-and-presentations/default.aspx
Telephone replay of the conference call will also be available
from Wednesday, November 3, 2021 at 6:00 p.m. MT (8:00 p.m. ET) to
Wednesday, November 17, 2021 at 9:59 p.m. MT (11:59 p.m. ET) at the
following numbers:
Toll free North America: 1-800-585-8367 International Dial-In:
1-416-621-4642 Passcode: 7888106#
About Maxar
Maxar is a trusted partner and innovator in Earth Intelligence
and Space Infrastructure. We deliver disruptive value to government
and commercial customers to help them monitor, understand and
navigate our changing planet; deliver global broadband
communications; and explore and advance the use of space. Our
unique approach combines decades of deep mission understanding and
a proven commercial and defense foundation to deploy solutions and
deliver insights with speed, scale, and cost effectiveness. Maxar’s
4,400 team members in more than 20 global locations are inspired to
harness the potential of space to help our customers create a
better world. Maxar’s stock trades on the New York Stock Exchange
and Toronto Stock Exchange under the symbol “MAXR”. For more
information, visit www.maxar.com.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211103006132/en/
Jason Gursky | VP Investor Relations and Corporate Treasurer |
1-303-684-2207 | jason.gursky@maxar.com Turner Brinton | Media
Relations | 1-303-684-4545 | turner.brinton@maxar.com
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