Maxar Technologies has reported financial results for the third quarter, which ended Sept. 30th, noting total revenues increased to $436 million from $413 million from the same period of 2019. The increase was primarily driven by an increase in the Space Infrastructure segment which was partially offset by a decrease in the Earth Intelligence segment.
“We generated solid year-over-year revenue growth this quarter as demand has remained resilient and our customers continue to rely on us for important national security and commercial missions,” said Dan Jablonsky, CEO of Maxar.
Maxar closed the acquisition of Vricon Inc. in July 2020 and purchased the remaining 50 percent of ownership interest in the company for $142 million, or $119 million, net of cash at closing. To fund the transaction, Maxar issued $150 million in aggregate principal amount of new senior secured notes due 2027.
“We also enjoyed significant backlog growth on a diversified set of awards with both government and commercial customers across our Earth Intelligence and Space Infrastructure segments,” added Jablonsky.
Maxar’s net income from continuing operations was $85 million compared to a net loss of $25 million in the same period of 2019. The increase was primarily driven by an $85 million gain on remeasurement of the previously held equity interest in Vricon and an increase in revenues.
Adjusted EBITDA was $112 million and Adjusted EBITDA as a percentage of consolidated revenues was 25.7 percent. This is compared to Adjusted EBITDA of $109 million and Adjusted EBITDA margin percentage of 26.4 percent for the third quarter of 2019.
Maxar’s results of operations for the three months ended September 30, 2020 include the current estimated impact of COVID-19. The company had COVID-19 related EAC growth of $3 million within the Space Infrastructure segment, which negatively impacted its earnings during the three months ended September 30, 2020.
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 along with actuals realized during the three months ended September 30, 2020.
“We are executing well against our strategic priorities for the year while continuing to respond to the global COVID-19 pandemic by focusing on the protection of the health and safety of our team members, families, customers and communities,” Jablonsky stated.
Maxar had a total order backlog of $2.2 billion as of September 30, 2020 compared to $1.6 billion as of December 31, 2019. The increase in backlog was primarily driven by a $532 million increase in the Space Infrastructure segment due to new contracts and expansion of existing programs with the U.S. government.
There was also an increase in the Earth Intelligence segment driven by the exercise of the $300 million EnhancedView Contract option, partially offset by revenue recognized during the year.
“Our results this quarter further reflect progress on our multi-year strategy to position Maxar for sustained revenue, profit and cash flow growth,” concluded Jablonsky.