Maxar Technologies (NYSE:MAXR) (TSX:MAXR) (“Maxar” or the
“Company”), a provider of comprehensive space solutions and secure,
precise, geospatial intelligence, today announced financial results
for the quarter ended March 31, 2022. All dollar amounts in this
press release are expressed in U.S. dollars, unless otherwise
noted.
Key points from the quarter include:
- Consolidated revenues of $405 million
- Net loss of $7 million
- Diluted net loss per share of $0.10
- Adjusted EBITDA1 of $84 million
- Operating cash flows of $48 million
- This is a non-GAAP financial measure. Refer to section
“Non-GAAP Financial Measures” in this earnings release.
“This was a historic quarter for Maxar and the geospatial
industry as we helped to provide transparency on the conflict in
Ukraine. We believe the world not only better understands what is
going on in that region because of our efforts, but it also better
appreciates the value of the geospatial data that we provide to our
customers every day,” said Dan Jablonsky, President and Chief
Executive Officer. “My thanks to our teams who have been working
twenty-four seven. This not only puts us on the right side of
history, but it also positions our industry, and Maxar
specifically, for an increased role in better serving customer
missions in the future.”
“We grew revenue, Adjusted EBITDA and trailing twelve-month free
cash flow year-over-year in the first quarter despite a shift in
the timing of expected revenue in the Earth Intelligence segment
and higher than expected stock-based compensation driven by the
performance of our shares since the onset of the Ukrainian conflict
in February,” said Biggs Porter, Chief Financial Officer. “We
expect to execute on the shifted revenue in the coming quarters and
our pipeline of opportunities continues to grow. As such, our
guidance ranges for 2022 remain materially unchanged.”
Total revenues increased to $405 million from $392 million, or
by $13 million, for the three months ended March 31, 2022, compared
to the same period of 2021. The increase in revenues was driven by
an increase in product revenues within our Space Infrastructure
segment.
For the three months ended March 31, 2022, our net loss was $7
million compared to a net loss of $84 million for the same period
of 2021. The decrease was primarily driven by a decrease in
interest expense of $55 million and a decrease of product costs
within our Space Infrastructure segment of $21 million. The
decrease in interest expense was primarily driven by a $41 million
loss on debt extinguishment during the three months ended March 31,
2021 from the partial redemption of our 9.75% Senior Secured Notes
due 2023 (“2023 Notes”) using proceeds from the March 2021 public
offering of our common stock, compared to no loss on debt
extinguishment for the same period of 2022. The decrease in
interest expense was also driven by an $11 million decrease in
interest expense on long-term debt primarily due to a lower
principal balance on the 2023 Notes due to the partial redemption
of the 2023 Notes in the first quarter of 2021. There was also a
$13 million increase in revenues driven by an increase in product
revenues within our Space Infrastructure segment. These decreases
were partially offset by an increase in selling, general and
administrative costs of $20 million.
The increase in selling, general and administrative costs of $20
million was primarily due to a $7 million increase in labor related
expenses driven by annual merit increases, increases in fringe
benefits and an increase in efforts related to internal business
projects, including our enterprise resource planning (“ERP”)
project for the three months ended March 31, 2022 compared to the
same period of 2021. There was also an increase in stock-based
compensation expense of $4 million for the three months ended March
31, 2022. The increase in stock-based compensation was primarily
due to incremental expense related to liability classified awards
driven by an increase in stock price. There was also an increase of
$3 million in sales and marketing expenses primarily within our
Space Infrastructure segment, a $3 million increase in professional
service expenses primarily driven by our ERP project and a $2
million increase in research and development expenses within our
Space Infrastructure segment for the three months ended March 31,
2022, compared to the same period of 2021.
For the three months ended March 31, 2022, Adjusted EBITDA was
$84 million and Adjusted EBITDA margin was 20.7%. This is compared
to Adjusted EBITDA of $67 million and Adjusted EBITDA margin of
17.1 % for the same period of 2021. The increase was primarily
driven by higher Adjusted EBITDA from the Space Infrastructure
segment, which was partially offset by lower Adjusted EBITDA from
the Earth Intelligence segment.
We had total order backlog of $1,621 million as of March 31,
2022 compared to $1,893 million as of December 31, 2021. The
decrease in backlog was driven by decreases in both the Earth
Intelligence and Space Infrastructure segments. Our unfunded
contract options totaled $763 million and $650 million as of March
31, 2022 and December 31, 2021, respectively. Unfunded contract
options represent estimated amounts of revenue to be earned in the
future from negotiated contracts with unexercised contract options
and indefinite delivery/indefinite quantity contracts. Unfunded
contract options as of March 31, 2022, were primarily comprised of
the option year in the EnhancedView Contract (September 1, 2022
through July 12, 2023) and other U.S. government contracts. In
November 2021, the National Reconnaissance Office (“NRO”) announced
the release of the Electro-Optical Commercial Layer (“EOCL”)
contract Request for Proposal (“RFP”) which is expected to replace
the existing EnhancedView Contract. In December 2021, we submitted
our response to the EOCL RFP and anticipate the NRO to award EOCL
contracts prior to the expiration of the EnhancedView Contract,
including remaining option years.
Financial Highlights
In addition to results reported in accordance with U.S. GAAP, we
use certain non-GAAP financial measures as supplemental indicators
of its financial and operating performance. These non-GAAP
financial measures include EBITDA, Adjusted EBITDA and Adjusted
EBITDA margin. We believe these supplementary financial measures
reflect our ongoing business in a manner that allows for meaningful
period-to-period comparisons and analysis of trends in its
business.
Three Months Ended
March 31,
2022
2021
($ millions, except per share amounts)
Revenues
$
405
$
392
Net loss
$
(7
)
$
(84
)
EBITDA1
83
67
Total Adjusted EBITDA1
84
67
Diluted net loss per share
$
(0.10
)
$
(1.30
)
Weighted average number of common shares
outstanding (millions):
Basic
73.2
64.8
Diluted
73.2
64.8
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
March 31,
2022
2021
($ millions)
Revenues:
Earth Intelligence
$
251
$
250
Space Infrastructure
177
155
Intersegment eliminations
(23
)
(13
)
Total revenues
$
405
$
392
We analyze financial performance by segment, which combine
related activities within the Company.
Three Months Ended
March 31,
($ millions)
2022
2021
Adjusted EBITDA:
Earth Intelligence
$
99
$
107
Space Infrastructure
19
(12
)
Intersegment eliminations
(9
)
(5
)
Corporate and other expenses
(25
)
(23
)
Total Adjusted EBITDA1
$
84
$
67
1 This is a non-GAAP financial measure.
Refer to section “Non-GAAP Financial Measures” in this earnings
release.
Earth Intelligence
Three Months Ended
March 31,
2022
2021
($ millions)
Revenues
$
251
$
250
Adjusted EBITDA
$
99
$
107
Adjusted EBITDA margin (as a % of total
revenues)
39.4
%
42.8
%
Revenues from the Earth Intelligence segment increased to $251
million from $250 million, or by $1 million, for the three months
ended March 31, 2022, compared to the same period in 2021. The
increase was primarily driven by a $2 million increase in revenues
from international defense and intelligence customers and a $1
million increase in revenues from commercial programs. These
increases were partially offset by a $2 million decrease in
revenues from the U.S. government.
Adjusted EBITDA decreased to $99 million from $107 million, or
by $8 million, for the three months ended March 31, 2022, compared
to the same period of 2021. The decrease was primarily related to
an increase in selling, general and administrative costs, compared
to the same period of 2021. The increase in selling, general and
administrative costs was primarily due to an increase in labor
related expenses driven by employee compensation and fringe
benefits.
Space Infrastructure
Three Months Ended
March 31,
2022
2021
($ millions)
Revenues
$
44177
$
155
Adjusted EBITDA
$
19
$
(12
)
Adjusted EBITDA margin (as a % of total
revenues)
10.7
%
(7.7
)%
Revenues from the Space Infrastructure segment increased to $177
million from $155 million, or by $22 million, for the three months
ended March 31, 2022, compared to the same period in 2021. Revenues
increased primarily as a result of a $28 million aggregate impact
due to the non-performance of the SXM-7 satellite during the three
months ended March 31, 2021, which did not reoccur in the same
period in 2022. This increase was partially offset by a $3 million
decrease in revenues from U.S. government contracts and a $2
million decrease in revenues from recurring commercial programs
during the three months ended March 31, 2022.
Adjusted EBITDA in the Space Infrastructure segment increased to
$19 million from a loss of $12 million, or by $31 million, for the
three months ended March 31, 2022, compared to the same period of
2021. The increase was primarily related to the above-mentioned
SXM-7 satellite impacts which did not reoccur in the same period in
2022. The increase was also driven by an $11 million decrease in
indirect costs primarily due to reduced overhead costs during the
three months ended March 31, 2022. These increases were partially
offset by a $9 million increase in selling, general and
administrative costs primarily due to an increase in labor related
expenses driven by employee compensation, fringe benefits and an
increase in efforts related to internal business projects. There
was also an increase in sales and marketing expenses and research
and development expenses.
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 increased to $25 million from $23
million, or by $2 million, for the three months ended March 31,
2022, compared to the same period in 2021. The increase was
primarily driven by an increase in stock-based compensation expense
of $3 million for the three months ended March 31, 2022, which was
primarily due to incremental expense related to liability
classified awards.
Intersegment eliminations
Intersegment eliminations are related to projects between our
segments, including the construction of our WorldView Legion
satellites. Intersegment eliminations increased to $9 million from
$5 million, or by $4 million, for the three months ended March 31,
2022, compared to the same period in 2021, primarily related to an
increase in intersegment satellite construction activity.
MAXAR TECHNOLOGIES INC.
Unaudited Condensed Consolidated
Statements of Operations
(In millions, except per share
amounts)
Three Months Ended
March 31,
2022
2021
Revenues:
Product
$
154
$
142
Service
251
250
Total revenues
405
392
Costs and expenses:
Product costs, excluding depreciation and
amortization
127
148
Service costs, excluding depreciation and
amortization
93
93
Selling, general and administrative
104
84
Depreciation and amortization
68
74
Operating income (loss)
13
(7
)
Interest expense, net
23
78
Other income, net
(3
)
(1
)
Loss before taxes
(7
)
(84
)
Income tax (benefit) expense
—
—
Net loss
$
(7
)
$
(84
)
Net loss per common share:
Basic
$
(0.10
)
$
(1.30
)
Diluted
$
(0.10
)
$
(1.30
)
MAXAR TECHNOLOGIES INC.
Unaudited Condensed Consolidated Balance
Sheets
(In millions, except per share
amounts)
March 31,
December 31,
2022
2021
Assets
Current assets:
Cash and cash equivalents
$
22
$
47
Trade and other receivables, net
333
355
Inventory, net
36
39
Advances to suppliers
25
31
Prepaid assets
31
35
Other current assets
22
22
Total current assets
469
529
Non-current assets:
Orbital receivables, net
362
368
Property, plant and equipment, net
968
940
Intangible assets, net
761
787
Non-current operating lease assets
138
145
Goodwill
1,627
1,627
Other non-current assets
115
102
Total assets
$
4,440
$
4,498
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable
$
81
$
75
Accrued liabilities
62
43
Accrued compensation and benefits
71
111
Contract liabilities
250
289
Current portion of long-term debt
29
24
Current operating lease liabilities
40
42
Other current liabilities
37
38
Total current liabilities
570
622
Non-current liabilities:
Pension and other postretirement
benefits
131
134
Operating lease liabilities
133
138
Long-term debt
2,060
2,062
Other non-current liabilities
71
79
Total liabilities
2,965
3,035
Commitments and contingencies
Stockholders’ equity:
Common stock ($0.0001 par value, 240
million common shares authorized; 73.4 million and 72.7 million
issued and outstanding at March 31, 2022 and December 31, 2021,
respectively)
—
—
Additional paid-in capital
2,243
2,235
Accumulated deficit
(727
)
(720
)
Accumulated other comprehensive loss
(42
)
(53
)
Total Maxar stockholders' equity
1,474
1,462
Noncontrolling interest
1
1
Total stockholders' equity
1,475
1,463
Total liabilities and stockholders'
equity
$
4,440
$
4,498
MAXAR TECHNOLOGIES INC.
Unaudited Condensed Consolidated
Statements of Cash Flows
(In millions)
Three Months Ended
March 31,
2022
2021
Cash flows (used in) provided by:
Operating activities:
Net loss
$
(7
)
$
(84
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization
68
74
Stock-based compensation expense
15
11
Amortization of debt issuance costs and
other non-cash interest expense
3
4
Loss from early extinguishment of debt
—
41
Cumulative adjustment to SXM-7 revenue
—
25
Other
5
4
Changes in operating assets and
liabilities:
Trade and other receivables, net
29
3
Accounts payable and liabilities
(25
)
(49
)
Contract liabilities
(39
)
6
Other
(1
)
(8
)
Cash provided by operating activities
48
27
Investing activities:
Purchase of property, plant and equipment
and development or purchase of software
(64
)
(50
)
Acquisition of investment
(2
)
—
Cash used in investing activities
(66
)
(50
)
Financing activities:
Net proceeds of revolving credit
facility
—
25
Repurchase of 2023 Notes, including
premium
—
(384
)
Net proceeds from issuance of common
stock
—
380
Settlement of securitization liability
(4
)
(3
)
Repayments of long-term debt
(1
)
(2
)
Other
(2
)
1
Cash (used in) provided by financing
activities
(7
)
17
Decrease in cash, cash equivalents, and
restricted cash
(25
)
(6
)
Effect of foreign exchange on cash, cash
equivalents, and restricted cash
—
—
Cash, cash equivalents, and restricted
cash, beginning of year
48
32
Cash, cash equivalents, and restricted
cash, end of period
$
23
$
26
Reconciliation of cash flow
information:
Cash and cash equivalents
$
22
$
22
Restricted cash included in prepaid and
other current assets
1
4
Total cash, cash equivalents, and
restricted cash
$
23
$
26
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, insurance
recoveries, gain (loss) on sale of assets, (gain) loss on orbital
receivables allowance 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. Our
senior secured syndicated credit facility (“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 months ended March 31, 2022 and 2021.
Three Months Ended March
31,
2022
2021
($ millions)
Net loss
$
(7
)
$
(84
)
Income tax (benefit) expense
—
—
Interest expense, net
23
78
Interest income
(1
)
(1
)
Depreciation and amortization
68
74
EBITDA
$
83
$
67
Restructuring
1
—
Total Adjusted EBITDA
$
84
$
67
Adjusted EBITDA:
Earth Intelligence
99
107
Space Infrastructure
19
(12
)
Intersegment eliminations
(9
)
(5
)
Corporate and other expenses
(25
)
(23
)
Total Adjusted EBITDA
$
84
$
67
Net loss margin
(1.7
)%
(21.4
)%
Total Adjusted EBITDA margin
20.7
%
17.1
%
Cautionary Note Regarding Forward-Looking Statements
This release contains "forward-looking statements" as defined in
Section 27A of the U.S. Securities Act of 1933, as amended, and
Section 21E of the U.S. Securities Exchange Act of 1934, as
amended. Forward-looking statements usually relate to future events
and include statements regarding, among other things, our
anticipated revenues, cash flows or other aspects of our operations
or operating results. Forward-looking statements are often
identified by the words “believe,” “expect,” “anticipate,” “plan,”
“intend,” “foresee,” “should,” “would,” “could,” “may,” “estimate,”
“outlook” and similar expressions, including the negative
thereof.
These forward-looking statements are based on management’s
current expectations and assumptions based on information currently
known to us and our projections of the future, about which we
cannot be certain. 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 press release. As a result, although we believe
we have a reasonable basis for each forward-looking statement
contained in this press release, undue reliance should not be
placed on the forward-looking statements because the Company can
give no assurance that they will prove to be accurate. Risks and
uncertainties that could cause actual results to differ materially
from current expectations include: risks related to the conflict in
Ukraine or related geopolitical tensions; the COVID-19 pandemic and
its impact on our business operations, financial performance,
results of operations and stock price; our ability to generate a
sustainable order rate for our satellite and space manufacturing
operations within our Space Infrastructure segment, including our
ability to develop new technologies to meet the needs of existing
or potential customers; risks related to our business with various
governmental entities, which is subject to the policies,
priorities, regulations, mandates and funding levels of such
governmental entities; our ability to meet our contractual
requirements and the risk that our products contain defects or fail
to operate in the expected manner; the risk of any significant
disruption in or unauthorized access to our computer systems or
those of third parties that we utilize in our operations; the
ability of our satellites to operate as intended and risks related
to launch delays, launch failures or damage or destruction to our
satellites during launch; risks related to the interruption or
failure of our infrastructure or national infrastructure; and the
risk factors set forth in Part II, Item 1A, “Risk Factors” in the
Company’s Annual Report on Form 10-K for the year ended December
31, 2021 and filed with the Securities and Exchange Commission (the
“SEC”) on February 22, 2022, as such risks and uncertainties may be
updated or superseded from time to time by subsequent reports we
file with the SEC.
The forward-looking statements contained in this press release
speak only as of the date hereof are expressly qualified in their
entirety by the foregoing risks and uncertainties. Additional risks
and uncertainties not currently known to us or that we currently
deem to be immaterial may also materially adversely affect our
business, prospects, financial condition, results of operations and
cash flows. The Company undertakes no obligation to publicly update
or revise any of its forward-looking statements after the date they
are made, whether as a result of new information, future events or
otherwise, except to the extent required by law.
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 Monday, May 9, 2022,
reviewing the first 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: https://conferencingportals.com/event/poKRyurD
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
A replay of the conference call will also be available from
Monday, May 9, 2022 at 6:00 p.m. MT (8:00 p.m. ET) to Monday, May
23, 2022 at 9:59 p.m. MT (11:59 p.m. ET) at the following
numbers:
Toll free North America: 1-800-770-2030 International Dial-In:
1-647-362-9199 Passcode: 81317#
About Maxar
Maxar Technologies (NYSE:MAXR) (TSX:MAXR) is a provider of
comprehensive space solutions and secure, precise, geospatial
intelligence. We help government and commercial customers monitor,
understand and navigate our changing planet; deliver global
broadband communications; and explore and advance the use of space.
Our 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 over 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20220509006081/en/
Jason Gursky | VP Investor Relations and Corporate Treasurer |
1-303-684-2207 | jason.gursky@maxar.com Fernando Vivanco | Media
Relations | 1-720-877-5220 | fernando.vivanco@maxar.com
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