Maxar Technologies has announced financial results for the quarter ended March 31, 2020 and a multi-hundred million dollar contract award to build multiple 1300-Class communications satellites for an undisclosed customer, the company reported on Monday.
“Our results this quarter reflect progress on our multi-year strategy to strengthen our company and position it for revenue, profit and cash flow growth. Importantly, we closed the MDA divestiture, which helped improve our balance sheet. We generated solid revenue growth in Earth Intelligence, and quarter-over-quarter consolidated backlog growth, demonstrating solid demand from customers and continued success of our diversification strategy,” said Dan Jablonsky, CEO.
Maxar has reported consolidated revenues from continuing operations of $381 million and net loss of $48 million. The company’s diluted loss per share from continuing operations of $1.30 and Adjusted EBITDA from continuing operations of $77 million and Adjusted EBITDA margin of 20.2 percent.
The report is compared to Adjusted EBITDA of $99 million and Adjusted EBITDA margin percentage of 22.9 percent for the first quarter of 2019. The decrease was driven largely by lower Adjusted EBITDA from the Space Infrastructure segment, partially offset by higher Adjusted EBITDA from the Earth Intelligence segment.
The company reported a net loss and adjusted EBITDA included charges of $18 million related to COVID-19 and $14 million related to a recent design anomaly detected in a final satellite test procedure.
“The bookings momentum has continued into the second quarter with today’s signing of a contract to build multiple 1300-Class communications satellites. This brings our bookings total in Space Infrastructure to over $700 million year-to-date and puts us on a path for another year of backlog growth for this segment,” added Jablonsky.
The company noted that, in April 2020, Maxar completed sale of the MDA Business to Neptune Acquisition for $729 million, subject to customary purchase price adjustments, including for working capital, cash and debt.
The purchase represents a strategic shift in Maxar’s business and qualifies as a discontinued operation. As a result, the operating results and cash flows related to the MDA Business have been reflected as discontinued operations in the Unaudited Condensed Consolidated Statements of Operations.
Total revenues from continuing operations decreased to $381 million from $431 million, or by $50 million, compared to the same period of 2019. The decrease was primarily driven by a $78 million decrease in the Space Infrastructure segment which was partially offset by a $17 million increase in the Earth Intelligence segment.
The increase in net loss is primarily driven by a decrease in revenue of $50 million for the three months ended March 31, 2020 compared to the same period in 2019. The increase is also driven by a $14 million recognition of impairment on orbital receivables, primarily due to an increase in credit risk associated with the company’s largest orbital customer.
Maxar had COVID-19 related EAC growth of $18 million within the Space Infrastructure segment which negatively impacted the company’s earnings. The changes in the EACs are due to increases in estimated program costs associated with the COVID-19 operating posture and the estimated impact of certain items such as supplier delays and increased labor hours.
The company had total order backlog of $1.7 billion compared to $1.6 billion as of Dec. 2019. Backlog increased primarily due to an increase in Maxar’s Space Infrastructure segment backlog as a result of new awards during the year, partially offset by declines in the Earth Intelligence segment.
The decrease in backlog within the Earth Intelligence segment is primarily driven by the timing of the exercise of the EnhancedView Contract option year. The decrease was partially offset by increases in geospatial services.
Jablonsky continued, “As we respond to the global Coronavirus pandemic, we are focused on protecting the health and safety of our team members, families, customers and communities while continuing to deliver the products and services needed by our partners to complete their critical missions.”
Maxar is a leading provider of solutions in Earth Intelligence and Space Infrastructure. We help government and commercial customers to monitor, understand and navigate the changing planet; deliver global broadband communications infrastructure; and explore and advance the use of space. Our approach combines decades of deep mission understanding and a proven commercial and defense foundation to deliver our services with speed, scale and cost effectiveness.
Maxar’s 4,000 team members in more than 20 global locations work to help our customers harness the potential of space. Maxar’s stock trades on the New York Stock Exchange and Toronto Stock Exchange under the symbol “MAXR”.