Maxar Technologies Reports Second Quarter 2019 Results

Services segment revenues increased to $74 million from $66 million, or by $8 million, for the three months ended June 30, 2019, compared to the same period of 2018. The increase was primarily driven by growth from new contract awards and expansion of programs with the U.S. government.

Adjusted EBITDA was $6 million for both the three months ended June 30, 2019 and 2018. The impact of the increase in revenues on Adjusted EBITDA which was partially offset by a change in an expense related to a lease.

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 June 30, 2019, were $18 million compared to $12 million for the same period of 2018. The increase of $6 million or 50% is primarily attributable to a $6 million increase in retention costs, a $2 million increase in selling, general and administrative expenses which were partially offset by $6 million in higher foreign exchange gains.

MAXAR TECHNOLOGIES INC.
Unaudited Condensed Consolidated Statements of Operations
(In millions of United States dollars, except per share amounts)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2019			2018			2019			2018
Revenues:
Product	$	190		$	257		$	384		$	485
Service		300			322			610			651
Total revenues	$	490		$	579		$	994		$	1,136
Costs and expenses:
Product costs, excluding depreciation and amortization	$	165		$	254		$	362		$	441
Service costs, excluding depreciation and amortization		121			77			231			196
Selling, general and administrative		80			133			183			236
Depreciation and amortization		99			113			197			224
Impairment losses		12			—			12			—
Satellite insurance recovery		(183	)		—			(183	)		—
Operating income		196			2			192			39
Interest expense, net		49			50			98			103
Other (income) expense, net		(3	)		4			3			5
Income (loss) before taxes		150			(52	)		91			(69	)
Income tax expense (benefit)		2			(9	)		1			(41	)
Equity in loss (income) from joint ventures, net of tax		2			(3	)		3			(3	)
Net income (loss)	$	146		$	(40	)	$	87		$	(25	)

Income (loss) per common share:
Basic	$	2.45		$	(0.70	)	$	1.46		$	(0.44	)
Diluted	$	2.45		$	(0.70	)	$	1.46		$	(0.44	)

MAXAR TECHNOLOGIES INC.
Unaudited Condensed Consolidated Balance Sheets
(In millions of United States dollars, except per share amounts)

	June 30,			December 31,
	2019			2018
Assets
Current assets:
Cash and cash equivalents	$	63		$	35
Trade and other receivables, net		490			464
Inventory		24			31
Advances to suppliers		10			42
Income taxes receivable		24			14
Prepaid and other current assets		54			51
Total current assets		665			637
Non-current assets:
Orbital receivables		405			407
Deferred tax assets		112			103
Property, plant and equipment, net		785			747
Intangible assets, net		1,120			1,232
Non-current operating lease assets		124			—
Goodwill		1,763			1,751
Other assets		109			124
Total assets	$	5,083		$	5,001
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	172		$	209
Accrued liabilities		58			116
Accrued compensation and benefits		82			100
Contract liabilities		267			361
Current portion of long-term debt		17			17
Current operating lease liabilities		33			—
Other current liabilities		56			46
Total current liabilities		685			849
Non-current liabilities:
Pension and other postretirement benefits		192			196
Contract liabilities		29			60
Operating lease liabilities		133			—
Long-term debt		3,127			3,030
Other non-current liabilities		186			222
Total liabilities		4,352			4,357
Stockholders’ equity:
Common stock ($0.0001 par value, 240 million common shares authorized and 59.6 million outstanding at June 30, 2019; nil par value, unlimited authorized common shares and 59.4 million outstanding at December 31, 2018)		—			1,713
Additional paid-in capital		1,776			59
Accumulated deficit		(1,125	)		(1,211	)
Accumulated other comprehensive income		79			82
Total Maxar stockholders' equity		730			643
Noncontrolling interest		1			1
Total stockholders' equity		731			644
Total liabilities and stockholders' equity	$	5,083		$	5,001

MAXAR TECHNOLOGIES INC.
Unaudited Condensed Consolidated Statements of Cash Flows
(In millions of United States dollars)

	Six Months Ended
	June 30,
	2019			2018
Cash flows provided by (used in):
Operating activities:
Net income (loss)	$	87		$	(25	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation of property, plant and equipment		60			78
Amortization of intangible assets		137			146
Stock-based compensation expense		4			9
Amortization of debt issuance costs and other noncash interest expense		4			5
Impairment losses		15			—
Foreign exchange losses		3			8
Deferred income tax expense (benefit)		6			(26	)
Other		(3	)		6
Changes in operating assets and liabilities:
Trade and other receivables		(12	)		(64	)
Accrued compensation and benefits		(22	)		(15	)
Trade and other payables		(35	)		(31	)
Accrued liabilities		(60	)		24
Contract liabilities		(126	)		(113	)
Advances to suppliers		32			20
Deferred tax assets		(9	)		(14	)
Deferred tax liabilities		(5	)		27
Other liabilities		(7	)		(17	)
Other		(10	)		(19	)
Cash provided by (used in) operating activities		59			(1	)

Investing activities:
Purchase of property, plant and equipment		(99	)		(83	)
Purchase or development of software		(28	)		(37	)
Cash collected on note receivable		—			5
Disposal of subsidiary and short-term investments		3			5
Cash used in investing activities		(124	)		(110	)

Financing activities:
Net proceeds from revolving credit facility		112			141
Repayments of long-term debt		(13	)		(13	)
Settlement of securitization liability		(8	)		(6	)
Payment of dividends		(1	)		(32	)
Change in overdraft balance		—			1
Cash provided by financing activities		90			91
Increase (decrease) in cash, cash equivalents, and restricted cash		25			(20	)
Effect of foreign exchange on cash, cash equivalents, and restricted cash		1			—
Cash, cash equivalents, and restricted cash, beginning of year		43			42
Cash, cash equivalents, and restricted cash, end of period	$	69		$	22

Reconciliation of cash flow information:
Cash and cash equivalents	$	63		$	12
Restricted cash included in prepaid and other current assets		5			9
Restricted cash included in other assets		1			1
Total cash, cash equivalents, and restricted cash	$	69		$	22

« Previous Page 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 Next Page »