Tuesday, May 07, 2013

MDA Releases Financial Results

          by Brian Orlotti

Accounting isn't often included within the traditional conception of "rocket science," but an accurate accounting of fiscal activities is important for every business, even BC based MacDonald, Dettwiler (MDA), which last week released its financial results for the fiscal quarter ending March 31st.

The report was included as part of the May 2nd, 2013 Canadian News Wire (CNW) press release "MDA reports first quarter 2013 results."

As outlined in the report, earnings this quarter were $41.8Mln CDN ($1.30 per share) on revenues of $428.6Mln CDN. For comparison, earnings for the first quarter of 2012 were $28.9Mln CDN ($0.91 per share) with revenues of $172Mln CDN. The results for this past quarter include three months of activity from Space Systems/Loral (SSL), which MDA acquired on November 2, 2012.

Order bookings were strong, with a record order backlog of $3.0Bln CDN as of March 31, 2013, as compared to $2.2Bln CDN in December 31, 2012.

Notable MDA milestones this past quarter included:
  • A contract with a subsidiary of EchoStar Corporation to build Jupiter 2/EchoStar XIX, a Ka-band satellite that will help meet the growing demand for high-speed satellite Internet service in North America.
  • A $2.6 million contract from NASA's Johnson Space Center to extend its support of the Robotic Work Station on the ISS.
  • A $15.8 million contract from the CSA for the preliminary design of an advanced instrument for
    NASA's New Frontiers Program-OSIRIS-REx, a spacecraft that will travel to the near-Earth asteroid (101955) Bennu, study it in detail, and bring back a sample of at least 60 grams (2.1 ounces) to Earth. Total contract value for initial phases received to date is $19Mln CDN.
MDA’s statement went on to say that earnings for the first quarter of 2013 had been impacted by “certain large, non-operational expenses.” As a result, net earnings this past quarter were $2.2Mln CDN ($0.07 per share) compared to $33.2Mln CDN ($1.04 per share) for the first quarter of 2012.

There is a possibility that these "large non-operational" expenses are related to negotiations with Ontario based Magellan Aerospace over the buss component of RCM, which has led to a slight delay in the revenue ramp on the project. As outlined in the May 27th, 2009 Canadian News Wire (CNW) press release "Magellan Aerospace awarded contract for RADARSAT Constellation Mission bus development," the firm was originally awarded a "phase-B" development contract in 2009, but has received no formal work since.

On March 27, 2013, the company closed its public offering of 4,145,750 common shares at a price of $69.40 per share for gross proceeds of $287.7Mln CDN. These proceeds have been used to reduce debt in preparation for future growth initiatives.

Overall, it might not be rocket science, but it is a useful report on the fiscal health of one of Canada's most iconic space companies.

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