Maxar Technologies Reports Fourth Quarter and Full-Year 2021 Results

Revenues from the Space Infrastructure segment decreased to $199 million from $224 million, or by $25 million, for the three months ended December 31, 2021, compared to the same period in 2020. Revenues decreased primarily as a result of a $24 million decrease in revenues from U.S. government contracts driven by a decrease in volumes.

Revenues from the Space Infrastructure segment increased to $740 million from $721 million, or by $19 million, for the year ended December 31, 2021, compared to 2020. Revenues increased primarily as a result of an increase in revenues from commercial programs of $87 million due to higher volumes and lower EAC growth primarily due to no COVID-19 program impacts for the year ended December 31, 2021. Revenues were negatively impacted by a $19 million decrease year over year related to our contract with Sirius XM Holdings Inc. (“Sirius XM”). The year ended December 31, 2021, included a $30 million cumulative adjustment to revenue primarily related to the loss of final milestone and expected orbital payments from Sirius XM due to the non-performance of the SXM-7 satellite and other adjustments that were recorded in 2021. After exhausting efforts to fully recover the SXM-7 satellite and further discussions with Sirius XM, in April 2021, we made the determination to record the cumulative adjustment to revenue. In addition, there were $3 million of costs incurred in the first quarter of 2021 related to attempts to repair and fully recover the SXM-7 satellite. The aggregate impact for the year ended December 30, 2021, was $33 million. The $33 million decrease was partially offset by the non-reoccurrence of a $14 million adjustment to revenue due to the identification of a design anomaly on the commercial satellite program, which was recorded for the year ended December 31, 2020. In addition, the total increase in revenues from the Space Infrastructure segment was partially offset by a $49 million decrease in revenues from U.S. government contracts.

Adjusted EBITDA for the Space Infrastructure segment increased to $17 million from $13 million, or by $4 million, for the three months ended December 31, 2021, compared to the same period in 2020. The increase in the Space Infrastructure segment was primarily driven by a $13 million increase related to margins on commercial programs for the three months ended December 31, 2021, compared to the same period in 2020. The increase in commercial program margins was primarily driven by a change in program mix related to the completion of less profitable programs offset by more profitable programs. These increases were partially offset by a $6 million increase in indirect costs and selling, general and administrative costs.

Adjusted EBITDA increased to $46 million from a loss of $3 million, or by $49 million, for the year ended December 31, 2021, compared to 2020. The increase in the Space Infrastructure segment was primarily related to a $92 million increase driven by increased volumes on commercial programs which resulted in increased margins and fewer negative EAC impacts during the year as compared to the year ended December 31, 2020, which included negative EAC impacts due to COVID-19. The increase in commercial program margins has been driven by a change in program mix related to the completion of less profitable programs offset by new, more profitable programs. These increases were partially offset by the $19 million reduction in revenue related to the above-mentioned SXM-7 satellite impacts and a $19 million increase in indirect costs and selling, general and administrative costs which was primarily driven by an $11 million increase in research and development expenses.

Corporate and other expenses

Corporate and other expenses include items such as corporate office costs, regulatory costs, executive and director compensation, foreign exchange gains and losses, retention costs, and fees for legal and consulting services.

Corporate and other expenses for the three months ended December 31, 2021 increased to $27 million from $18 million, or by $9 million, for the three months ended December 31, 2021, compared to the same period in 2020. The increase was primarily driven by a $6 million increase in labor related expenses driven by an increase in employee compensation and fringe benefits.

Corporate and other expenses for the year ended December 31, 2021 increased to $89 million from $61 million, or by $28 million, compared to 2020. The increase was primarily driven by a $14 million increase in selling, general and administrative costs primarily due to an increase in labor related expenses driven by an increase in employee compensation and fringe benefits. There was also an increase in stock-based compensation expense of $5 million primarily due to a higher fair market value of equity awards granted. The increase was also driven by a $3 million foreign exchange loss for the year ended December 31, 2021, compared to a $5 million foreign exchange gain for the year ended December 31, 2020.

Intersegment eliminations

Intersegment eliminations are related to projects between our segments, including WorldView Legion. Intersegment eliminations increased to $8 million from $6 million, or by $2 million, for the three months ended December 31, 2021 compared to the same period in 2020, primarily related to an increase in intersegment satellite construction activity.

Intersegment eliminations decreased to $25 million from $27 million, or by $2 million, for the year ended December 31, 2021 compared to 2020, primarily related to a decrease in intersegment satellite construction activity.

MAXAR TECHNOLOGIES INC.

Consolidated Statements of Operations

(In millions, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

December 31,

 

 

2021

 

 

2020

 

 

 

2019

 

Revenues:

 

 

 

 

 

 

 

 

 

Product

 

$

678

 

 

$

633

 

 

$

560

 

Service

 

 

1,092

 

 

 

1,090

 

 

 

1,106

 

Total revenues

 

 

1,770

 

 

 

1,723

 

 

 

1,666

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

Product costs, excluding depreciation and amortization

 

 

601

 

 

 

615

 

 

 

593

 

Service costs, excluding depreciation and amortization

 

 

383

 

 

 

378

 

 

 

382

 

Selling, general and administrative

 

 

369

 

 

 

332

 

 

 

325

 

Depreciation and amortization

 

 

290

 

 

 

348

 

 

 

376

 

(Gain) loss on orbital receivables allowance

 

 

(49

)

 

 

14

 

 

 

14

 

Impairment loss

 

 

 

 

 

33

 

 

 

 

Satellite insurance recovery

 

 

 

 

 

 

 

 

(183

)

Loss (gain) on sale of assets

 

 

 

 

 

1

 

 

 

(136

)

Operating income

 

 

176

 

 

 

2

 

 

 

295

 

Interest expense, net

 

 

151

 

 

 

175

 

 

 

219

 

Other income, net

 

 

(8

)

 

 

(104

)

 

 

(1

)

Income (loss) before taxes

 

 

33

 

 

 

(69

)

 

 

77

 

Income tax (benefit) expense

 

 

(13

)

 

 

(22

)

 

 

5

 

Equity in income from joint ventures, net of tax

 

 

 

 

 

(1

)

 

 

(11

)

Income (loss) from continuing operations

 

 

46

 

 

 

(46

)

 

 

83

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

Income from operations of discontinued operations, net of tax

 

 

 

 

 

32

 

 

 

26

 

Gain on disposal of discontinued operations, net of tax

 

 

 

 

 

317

 

 

 

 

Income from discontinued operations, net of tax

 

 

 

 

 

349

 

 

 

26

 

Net income

 

$

46

 

 

$

303

 

 

$

109

 

 

 

 

 

 

 

 

 

 

 

Basic net income per common share:

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

$

0.65

 

 

$

(0.76

)

 

$

1.39

 

Income from discontinued operations, net of tax

 

 

 

 

 

5.75

 

 

 

0.44

 

Basic net income per common share

 

$

0.65

 

 

$

4.99

 

 

$

1.83

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per common share:

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

$

0.63

 

 

$

(0.76

)

 

$

1.38

 

Income from discontinued operations, net of tax

 

 

 

 

 

5.75

 

 

 

0.43

 

Diluted net income per common share

 

$

0.63

 

 

$

4.99

 

 

$

1.81

 

MAXAR TECHNOLOGIES INC.

Consolidated Balance Sheets

(In millions, except per share amounts)

 

 

 

 

 

 

 

 

 

December 31,

 

December 31,

 

 

2021

 

 

2020

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

47

 

 

$

27

 

Trade and other receivables, net

 

 

355

 

 

 

327

 

Inventory, net

 

 

39

 

 

 

31

 

Advances to suppliers

 

 

31

 

 

 

24

 

Prepaid assets

 

 

35

 

 

 

38

 

Other current assets

 

 

22

 

 

 

21

 

Total current assets

 

 

529

 

 

 

468

 

Non-current assets:

 

 

 

 

 

 

Orbital receivables, net

 

 

368

 

 

 

361

 

Property, plant and equipment, net

 

 

940

 

 

 

883

 

Intangible assets, net

 

 

787

 

 

 

895

 

Non-current operating lease assets

 

 

145

 

 

 

163

 

Goodwill

 

 

1,627

 

 

 

1,627

 

Other non-current assets

 

 

102

 

 

 

86

 

Total assets

 

$

4,498

 

 

$

4,483

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

75

 

 

$

115

 

Accrued liabilities

 

 

43

 

 

 

65

 

Accrued compensation and benefits

 

 

111

 

 

 

105

 

Contract liabilities

 

 

289

 

 

 

278

 

Current portion of long-term debt

 

 

24

 

 

 

8

 

Current operating lease liabilities

 

 

42

 

 

 

41

 

Other current liabilities

 

 

38

 

 

 

51

 

Total current liabilities

 

 

622

 

 

 

663

 

Non-current liabilities:

 

 

 

 

 

 

Pension and other postretirement benefits

 

 

134

 

 

 

192

 

Operating lease liabilities

 

 

138

 

 

 

158

 

Long-term debt

 

 

2,062

 

 

 

2,414

 

Other non-current liabilities

 

 

79

 

 

 

120

 

Total liabilities

 

 

3,035

 

 

 

3,547

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock ($0.0001 par value, 240 million common shares authorized; 72.7 million and 61.2 million issued and outstanding at December 31, 2021 and 2020, respectively)

 

 

 

 

 

 

Additional paid-in capital

 

 

2,235

 

 

 

1,818

 

Accumulated deficit

 

 

(720

)

 

 

(763

)

Accumulated other comprehensive loss

 

 

(53

)

 

 

(120

)

Total Maxar stockholders' equity

 

 

1,462

 

 

 

935

 

Noncontrolling interest

 

 

1

 

 

 

1

 

Total stockholders' equity

 

 

1,463

 

 

 

936

 

Total liabilities and stockholders' equity

 

$

4,498

 

 

$

4,483

 

MAXAR TECHNOLOGIES INC.

Consolidated Statements of Cash Flows

(In millions)

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

December 31,

 

 

2021

 

 

2020

 

 

2019

 

Cash flows (used in) provided by:

 

 

 

 

 

 

 

 

 

Operating activities:

 

 

 

 

 

 

 

 

 

Net income

 

$

46

 

 

$

303

 

 

$

109

 

Income from operations of discontinued operations, net of tax

 

 

 

 

 

(32

)

 

 

(26

)

Gain on disposal of discontinued operations, net of tax

 

 

 

 

 

(317

)

 

 

 

Income (loss) from continuing operations

 

 

46

 

 

 

(46

)

 

 

83

 

Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

290

 

 

 

348

 

 

 

376

 

Stock-based compensation expense

 

 

45

 

 

 

43

 

 

 

20

 

Amortization of debt issuance costs and other non-cash interest expense

 

 

15

 

 

 

16

 

 

 

11

 

Gain on remeasurement of Vricon equity interest

 

 

 

 

 

(85

)

 

 

 

Loss from early extinguishment of debt

 

 

41

 

 

 

7

 

 

 

22

 

(Gain) loss on orbital receivables allowance

 

 

(49

)

 

 

14

 

 

 

14

 

Cumulative adjustment to SXM-7 revenue

 

 

30

 

 

 

 

 

 

 

Impairment losses, including inventory

 

 

 

 

 

33

 

 

 

3

 

Deferred income tax benefit

 

 

 

 

 

(17

)

 

 

 

Loss (gain) on sale of assets

 

 

 

 

 

1

 

 

 

(136

)

Other

 

 

15

 

 

 

1

 

 

 

(4

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

Trade and other receivables, net

 

 

(20

)

 

 

33

 

 

 

(20

)

Accounts payable and liabilities

 

 

(95

)

 

 

(84

)

 

 

17

 

Contract liabilities

 

 

10

 

 

 

5

 

 

 

(117

)

Prepaid and other assets

 

 

(18

)

 

 

(19

)

 

 

(21

)

Other

 

 

(16

)

 

 

(7

)

 

 

10

 

Cash provided by operating activities - continuing operations

 

 

294

 

 

 

243

 

 

 

258

 

Cash (used in) provided by operating activities - discontinued operations

 

 

(13

)

 

 

(54

)

 

 

59

 

Cash provided by operating activities

 

 

281

 

 

 

189

 

 

 

317

 

Investing activities:

 

 

 

 

 

 

 

 

 

Purchase of property, plant and equipment and development or purchase of software

 

 

(234

)

 

 

(308

)

 

 

(314

)

Acquisition, net of cash acquired

 

 

 

 

 

(120

)

 

 

 

Return of capital from discontinued operations

 

 

 

 

 

20

 

 

 

28

 

Sale of assets

 

 

 

 

 

 

 

 

280

 

Other

 

 

 

 

 

2

 

 

 

 

Cash used in investing activities - continuing operations

 

 

(234

)

 

 

(406

)

 

 

(6

)

Cash provided by (used in) investing activities - discontinued operations

 

 

 

 

 

723

 

 

 

(7

)

Cash (used in) provided by investing activities

 

 

(234

)

 

 

317

 

 

 

(13

)

Financing activities:

 

 

 

 

 

 

 

 

 

Repurchase of 2023 Notes, including premium

 

 

(384

)

 

 

(169

)

 

 

 

Net proceeds from issuance of common stock

 

 

380

 

 

 

 

 

 

 

Net proceeds from issuance of 2027 Notes and 2023 Notes

 

 

 

 

 

147

 

 

 

980

 

Net payment from Revolving Credit Facility

 

 

 

 

 

 

 

 

(595

)

Settlement of securitization liability

 

 

(13

)

 

 

(11

)

 

 

(20

)

Repurchase of orbital receivables

 

 

 

 

 

 

 

 

(24

)

Refinancing fees paid to creditors

 

 

 

 

 

 

 

 

(20

)

Repayments of long-term debt

 

 

(10

)

 

 

(525

)

 

 

(523

)

Other

 

 

(4

)

 

 

3

 

 

 

(6

)

Cash used in financing activities - continuing operations

 

 

(31

)

 

 

(555

)

 

 

(208

)

Cash used in financing activities - discontinued operations

 

 

 

 

 

(24

)

 

 

(30

)

Cash used in financing activities

 

 

(31

)

 

 

(579

)

 

 

(238

)

Increase (decrease) in cash, cash equivalents, and restricted cash

 

 

16

 

 

 

(73

)

 

 

66

 

Effect of foreign exchange on cash, cash equivalents, and restricted cash

 

 

 

 

 

(5

)

 

 

 

Cash, cash equivalents, and restricted cash, beginning of year

 

 

31

 

 

 

109

 

 

 

43

 

Cash, cash equivalents, and restricted cash, end of period

 

$

47

 

 

$

31

 

 

$

109

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of cash flow information:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

47

 

 

$

27

 

 

$

105

 

Restricted cash included in prepaid and other current assets

 

 

 

 

 

4

 

 

 

1

 

Restricted cash included in other non-current assets

 

 

 

 

 

 

 

 

3

 

Total cash, cash equivalents, and restricted cash

 

$

47

 

 

$

31

 

 

$

109

 


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