WESTMINSTER, Colo. — (BUSINESS WIRE) — August 5, 2020 — 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 June 30, 2020. All dollar amounts in this press release are expressed in U.S. dollars, unless otherwise noted.

Key points from the quarter include:

• Consolidated revenues from continuing operations of $439 million
• Net income of $306 million which included an after-tax gain on disposal of discontinued operations of $304 million, net of $25 million in taxes, from the sale of the MDA Business which closed on April 8, 2020
• Breakeven diluted income per share from continuing operations of $0.00
• Adjusted EBITDA¹ from continuing operations of $138 million and Adjusted EBITDA¹ margin of 31%
• Repurchased $511 million of Term Loan B, closed the sale of $150 million senior secured notes and settled the repurchase of $150 million aggregate principal amount of existing 2023 Notes
• Exercised call option on June 25, 2020 to purchase the remaining 50% ownership interest in Vricon which closed on July 1, 2020

“Demand has remained resilient in the current environment as our customers continue to rely on us for important national security and commercial missions. We generated another quarter of solid revenue growth in Earth Intelligence while Space Infrastructure returned to growth on the heels of recent diversified bookings from both civil and commercial customers,” said Dan Jablonsky, CEO. “Importantly, we exercised our call option on the remaining 50% of 3D-data provider Vricon that we did not already own, bolstering our lead in Earth Intelligence and the long-term growth profile of the company.”

Jablonsky continued, “Our results this quarter further reflect progress on our multi-year strategy to strengthen our company and position it for sustained revenue, profit and cash flow growth. We are executing well against our strategic priorities for 2020 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.”

“We reduced our indebtedness and leverage given the recent closure of the MDA divestiture and ended the quarter with over $500 million in liquidity. Importantly, we extended our debt maturity schedule with the swap of $150 million of our 2023 notes with new bonds due 2027,” stated Biggs Porter, CFO. “Performance in the quarter was solid, with revenue growth across both segments and improved Adjusted EBITDA margins and 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, and the recent addition of Vricon, we are modestly increasing our revenue guidance to flat to mid-single digit growth for 2020 and increasing and narrowing our outlook for Adjusted EBITDA to a range of $415 million to $445 million.²”

On April 8, 2020, we completed the previously announced sale of the MDA Business to Neptune Acquisition Inc., a corporation existing under the laws of the Province of British Columbia and an affiliate of Northern Private Capital Ltd., for an aggregate purchase price of $729 million (C$1.0 billion) subject to customary purchase price adjustments, including for working capital, cash and debt. We recognized an after-tax gain on disposal of discontinued operations of $304 million, net of $25 million in taxes, on the MDA Transaction for the quarter ended June 30, 2020. This divestiture represents a strategic shift in our business and, in accordance with U.S. GAAP, qualified 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.

On June 23, 2020, we announced our intent to exercise our call option to take full ownership of 3D data and analytics firm Vricon, Inc., (“Vricon Acquisition”) for approximately $140 million, or approximately $117 million net of estimated cash at closing. To fund the transaction, we issued $150 million in aggregate principal amount of new senior secured notes, discussed below. The call option was exercised on June 25, 2020, and the Vricon Acquisition closed on July 1, 2020.

On June 25, 2020, we issued $150 million aggregate principal amount of 7.54% senior secured notes due 2027 (“2027 Notes”). The 2027 Notes were offered and sold to qualified institutional buyers in the United States pursuant to Rule 144A and outside the United States pursuant to Regulation S under the Securities Act of 1933, as amended. The 2027 Notes have an interest rate of 7.54% per annum and were issued at a price equal to 98.25% of their face value. Proceeds from the 2027 Notes were used to finance the Vricon Acquisition and the remainder will be used for general corporate purposes.

Separately, on June 25, 2020, we repurchased, in a privately negotiated transaction, $150 million aggregate principal amount of our 9.75% Senior Secured Notes due 2023 (“2023 Notes”). The 2023 Notes were repurchased (the “2023 Notes Repurchase”) at approximately 112.45% of the principal amount on June 25, 2020.

During the three months ended June 30, 2020, we repaid $511 million of borrowings under the Term Loan B facility using proceeds from the MDA Transaction.

Total revenues from continuing operations increased to $439 million from $412 million, or by $27 million, for the three months ended June 30, 2020, compared to the same period of 2019. The increase was primarily driven by a $15 million increase in the Earth Intelligence segment and a $3 million increase in the Space Infrastructure segment.

For the three months ended June 30, 2020, net income from continuing operations was $0 compared to net income of $139 million in the same period of 2019. The decrease is primarily driven by the receipt of satellite insurance proceeds in the second quarter of 2019 that did not reoccur in the same period of 2020. The decrease was partially offset by an increase in revenue of $27 million for the three months ended June 30, 2020 compared to the same period in 2019.

For the second quarter of 2020, Adjusted EBITDA was $138 million and Adjusted EBITDA as a percentage of consolidated revenues (“Adjusted EBITDA margin percentage”) was 31.4%. This is compared to Adjusted EBITDA of $108 million and Adjusted EBITDA margin percentage of 26.2% for the second quarter of 2019. The increase was driven largely by higher Adjusted EBITDA from the Earth Intelligence segment and the Space Infrastructure segment.

Our results of operations for the three months ended June 30, 2020 include the current estimated impact of COVID-19. We had COVID-19 related EAC growth of $6 million within the Space Infrastructure segment which negatively impacted our earnings during the three months ended June 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 June 30, 2020.

We had total order backlog of $1.9 billion as of June 30, 2020 compared to $1.6 billion as of December 31, 2019. Backlog increased primarily due to an increase in our Space Infrastructure segment backlog as a result of new awards during the year, partially offset by declines in our 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. Our unfunded contract options totaled $1.3 billion and $1.4 billion as of June 30, 2020 and December 31, 2019, respectively.