Maxar Technologies Released Third Quarter 2020 Results

Westminster, Colo., November 5, 2020--Maxar Technologies (NYSE:MAXR) (TSX:MAXR) a today announced financial results for the quarter ended September 30, 2020. Key points from the quarter include:

• Consolidated revenues from continuing operations of US$ 436 million
• Net income of US$ 85 million, including an US$ 85 million gain on remeasurement of the previously held equity interest in Vricon
• Diluted income per share from continuing operations of US$1.32
• Adjusted EBITDA¹from continuing operations of US$ 112 million and Adjusted EBITDA¹ margin of 25.7%
• Closed the acquisition of Vricon, Inc. to purchase the remaining 50% ownership interest on July 1, 2020

“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. 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,” said Dan Jablonsky, CEO. “Our results this quarter further reflect progress on our multi-year strategy to position Maxar for sustained revenue, profit and cash flow growth. 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.”

“Our leverage continued to improve this quarter and we ended the quarter with over US$ 500 million in liquidity, which we believe provides ample flexibility to execute on our multi-year growth plan,” stated Biggs Porter, CFO. “Performance in the quarter was solid, with both year-over-year revenue and profit growth on a consolidated basis and positive free cash flow. While the existence of the COVID pandemic remains a risk to our operations and the operations of our customers, we have thus far been able to manage the crisis roughly in line with expectations. Given that, we are maintaining our outlook for 2020 consolidated revenue, Adjusted EBITDA, and Capex, and we are tightening the range of guidance for operating cash flow.”

On July 1, 2020, Maxar closed the acquisition of Vricon Inc. and purchased the remaining 50% ownership interest in Vricon for US$ 142 million, or US$ 119 million, net of cash at closing. To fund the transaction, the company issued US$ 150 million in aggregate principal amount of new senior secured notes due 2027.

Total revenues from continuing operations increased to US$ 436 million from US$ 413 million, or by US$ 23 million, for the three months ended September 30, 2020, compared to 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.

For the three months ended September 30, 2020, net income from continuing operations was US$ 85 million compared to a net loss of US$ 25 million in the same period of 2019. The increase was primarily driven by an US$ 85 million gain on remeasurement of the previously held equity interest in Vricon and an increase in revenues.

For the third quarter of 2020, Adjusted EBITDA was US$ 112 million and Adjusted EBITDA as a percentage of consolidated revenues  was 25.7%. This is compared to Adjusted EBITDA of US$ 109 million and Adjusted EBITDA margin percentage of 26.4% for the third quarter of 2019. The increase was driven largely by higher Adjusted EBITDA from the Space Infrastructure segment partially offset by lower Adjusted EBITDA from the Earth Intelligence segment.

The 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 US$ 3 million within the Space Infrastructure segment, which negatively impacted our 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.

The company had total order backlog of US$ 2.2 billion as of September 30, 2020 compared to $1.6 billion as of December 31, 2019. The increase in backlog was primarily driven by a US$ 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 US$ 300 million EnhancedView Contract option, partially offset by revenue recognized during the year. The company's unfunded contract options totaled US$ 0.9 billion and US$ 1.4 billion as of September 30, 2020 and December 31, 2019, respectively.