WESTMINSTER, Colo. — (BUSINESS WIRE) — February 24, 2021 — 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 and year ended December 31, 2020. All dollar amounts in this press release are expressed in U.S. dollars, unless otherwise noted.
Key points from the year include:
- Consolidated revenues from continuing operations of $1,723 million
- Net income of $303 million
- Diluted loss per share from continuing operations of $0.76
- Adjusted EBITDA1 from continuing operations of $422 million and Adjusted EBITDA1 margin of 24.5%
- Completed the sale of the MDA Business on April 8, 2020
- Closed the acquisition of Vricon, Inc. to purchase the remaining 50% ownership interest on July 1, 2020
- 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
1 This is a non-GAAP financial measure. Refer to section “Non-GAAP Financial Measures” in this earnings release.
“We made solid progress during 2020 toward achieving our longer-term targets, including efforts to drive sustainable growth in both our Earth Intelligence and Space Infrastructure segments and to reduce our debt and leverage, as evidenced by solid 17% year-over-year backlog growth and the closure of the MDA divestiture and subsequent repayment of debt” stated Dan Jablonsky, President and Chief Executive Officer.
Jablonsky continued, “In Earth Intelligence we had key wins and deepened our relationships with the most discriminating and innovative customers in the world, including the National Reconnaissance Office, National Geospatial-Intelligence Agency, U.S. Army, U.S. Air Force, U.S. Space Force, Department of Homeland Security, and a multitude of commercial customers, including a recent award that expanded our relationship with a long-time technology customer by adding a multi-year contract including Maxar’s 3D Elevation data. In Space Infrastructure, we booked six new GEO Comsat awards and several civil programs, including development work for NASA’s Human Landing System.”
“Full year revenue, Adjusted EBITDA and free cash flow results were consistent with our guidance ranges despite absorbing higher than expected stock-based compensation in the fourth quarter given our share performance through the end of the year and the timing of an award that slipped into early 2021,” stated Biggs Porter, Chief Financial Officer. “For 2021, we expect to see revenue and Adjusted EBITDA growth and an improvement in free cash flow,” he continued. “Importantly, we have also increased our 2023 targets to better reflect the earnings and cash generation power we see ahead.”
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 $317 million, net of $12 million in taxes, on the MDA Transaction for the year ended December 31, 2020. This divestiture represented a strategic shift in our business and, in accordance with U.S. GAAP, 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 Consolidated Statements of Operations and the Consolidated Statements of Cash Flows.
On July 1, 2020, we closed the acquisition of Vricon Inc. (“Vricon”) and purchased the remaining 50% ownership interest in Vricon (“Vricon Acquisition”) for $143 million, or $120 million, net of cash at closing. To fund the transaction, we issued $150 million in aggregate principal amount of new senior secured notes due 2027.
Total revenues from continuing operations increased to $467 million from $410 million, or by $57 million, for the three months ended December 31, 2020, compared to the same period in 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. The decrease in Earth Intelligence is primarily driven by a $30 million decrease in the recognition of revenue related to the EnhancedView Contract. We recognized $30 million of deferred revenue from the EnhancedView Contract for the three months ended December 31, 2019, compared to none for the three months ended December 31, 2020.
Total revenues from continuing operations increased to $1,723 million from $1,666 million, or by $57 million, for the year ended December 31, 2020 compared to the same period in 2019. The increase was primarily driven by an increase in the Space Infrastructure segment partially offset by a decrease in the Earth Intelligence segment. The decrease was primarily driven by a $40 million decrease in the recognition of deferred revenue related to the EnhancedView Contract. We recognized $120 million of deferred revenue from the EnhancedView Contract for the year ended December 31, 2019, compared to $80 million for the year ended December 31, 2020, as it was fully recognized as of August 31, 2020.
For the three months ended December 31, 2020, net loss (income) from continuing operations decreased to a net loss of $52 million from net income of $53 million, or by $105 million, compared to the same period in 2019. The decrease was primarily driven by a gain on sale of assets of $136 million in 2019 that did not reoccur in 2020 partially offset by increases in revenues in the Space Infrastructure segment.
For the year ended December 31, 2020, net loss (income) from continuing operations decreased to a net loss of $46 million from net income of $83 million, or by $129 million, compared to the same period in 2019. The decrease was primarily driven by the receipt of satellite insurance proceeds of $183 million and a gain on sale of assets of $136 million in 2019 that did not reoccur in 2020. The decrease was partially offset by an $85 million gain on remeasurement of the previously held equity interest in Vricon and increases in revenues in the Space Infrastructure segment.
For the three months ended December 31, 2020, Adjusted EBITDA was $95 million and Adjusted EBITDA as a percentage of consolidated revenues (“Adjusted EBITDA margin percentage”) was 20.3%. This is compared to Adjusted EBITDA of $100 million and Adjusted EBITDA margin percentage of 24.4% for the fourth quarter of 2019. The decrease was driven by lower Adjusted EBITDA from the Earth Intelligence segment primarily as a result of a $30 million decrease in deferred revenue recognized related to the EnhancedView Contract discussed above, partially offset by higher Adjusted EBITDA from the Space Infrastructure segment.
For the year ended December 31, 2020, Adjusted EBITDA was $422 million and Adjusted EBITDA as a percentage of consolidated revenues was 24.5%. This is compared to Adjusted EBITDA of $416 million and Adjusted EBITDA margin percentage of 25.0% for the year ended 2019. The increase was driven by higher Adjusted EBITDA from the Space Infrastructure segment and lower corporate and other expenses partially offset by lower Adjusted EBITDA from the Earth Intelligence segment primarily as a result of a $40 million decrease in deferred revenue recognized related to the EnhancedView Contract discussed above.
Our results of operations for the year ended December 31, 2020 include the current estimated impact of COVID-19. We had COVID-19 related EAC growth of $27 million within the Space Infrastructure segment, which negatively impacted earnings for the year ended December 31, 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 year ended December 31, 2020.
