Maxar Technologies Reports $504Mln US Consolidated Revenues and Net Loss of $0.99 US per share for Q1 2019

          By Chuck Black

Westminster CO based Maxar Technologies has reported a decrease in quarterly revenues due to "lackluster geostationary communication satellite sales," the wind down of new Canadian procurement requirements related to the now ready to launch RADARSAT Constellation Mission (RCM) and the recent loss of its Worldview-4 high-resolution imaging satellite.

The front cover of the twenty-three page powerpoint deck covering its Q1 2019 quarterly conference call. For the complete deck, check out the MAy 10th, 2019 Seeking Alpha post, "Maxar Technologies Inc. 2019 Q1 - Results - Earnings Call Slides." For a transcript of the call, check out the May 10th, 2019 Seeking Alpha post, "Maxar Technologies Inc. (MAXR) CEO Dan Jablonsky on Q1 2019 Results - Earnings Call Transcript." Graphic c/o Maxar. 

The comments were made by Maxar CEO Dan Jablonsky during a May 9th, 2019 Maxar earnings call. Other Maxar participants on the call included EVP/CFO  Biggs Porter and VP of investor relations Jason Gursky.

As outlined in the May 9th, 2019 Maxar press release, "Maxar Technologies Reports First Quarter 2019 Results," key points of the quarterly report included:

• Consolidated revenues of $504Mln US ($677Mln CDN).
• A net loss of $0.99 US ($1.33CDN) per share.
• A adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA1) of $117Mln US ($157Mln CDN) with a adjusted EBITDA1 margin of 23%.

As outlined in the May 8th, 2019 Maxar Press release, "Maxar Board of Directors Approves Quarterly Dividend," Maxar has also issued a quarterly dividend of $0.01 US per share payable on June 28th, 2019 to shareholders of record as of the close of business on June 14th, 2019.

According to CEO Jablonsky, the company remains "laser focused" on reducing the $3.18Bln US ($4.27Bln CDN) debt load, built up during its acquisition of Westminster CO based DigitalGlobe in 2017.

Maxar stock prices dropped sharply after the release of the earnings report from a May 9th, 2019 high of $6.71 US to $5.98 on May 10th, but have since recovered slightly in moderate trading.

The jury is still out on whether Maxar acted prudently by retaining its geostationary communication satellite manufacturing facility and its quarterly dividend. Both cost money to retain and with a growing debt load, the company will likely need to reassess its choices in the near future.

Here's hoping that Maxar can pull a rabbit out of the hat sometime soon.

Chuck Black.

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Chuck Black is the editor of the Commercial Space blog. 

DARPA Still Looking to Build Out US On-Orbit Satellite Servicing Capabilities

          By Chuck Black

Westminster CO based Maxar Technologies may have dropped out of the Robotic Servicing of Geosynchronous Satellites (RSGS) program, a public-private partnership with the US Defense Advanced Research Projects Agency (DARPA) in January 2019, but that doesn't mean that DARPA isn't looking to replace Maxar with new private sector partners able to help them develop this emerging technology.

As outlined in the April 19th, 2019 Next Gov post, "The Pentagon is Investing in Space Robots to Repair Satellites," the latest DARPA RSGS plans calls for lots and lots of space robots orbiting silently and prepared for action.

As outlined in the post, DARPA currently believes that:

...space-based robots offer the best bet for inspecting and repairing high-altitude satellites, especially with the number of satellites set to skyrocket due to a budding Space Force and federal agencies and industry ramping up operations in outer space. 

Under the Robotic Servicing of Geosynchronous Satellites program, DARPA will partner with teams to build both robots that can maintain and upgrade satellites, as well as the spacecraft to move the bots through space. Once deployed, the tech would periodically check in on different satellites and service them as needed.

As outlined in the January 30th, 2019 post, "Why did Maxar Subsidiary SSL "Terminate" its Participation in the DARPA GEOsynchronous Satellite Servicing Program?," the original Maxar plan was to test a single robotic servicing vehicle (RSV) capable of repairing large GEOsynchronous orbiting satellites as required.

The current plan is focused around smaller but more numerous repair satellites built to different designs and capable of performing different repairs and refueling functions. According to the post:

The robotic repairmen would “both provide increased resilience for the current U.S. space infrastructure and be the first concrete step toward a transformed space architecture with revolutionary capabilities,” DARPA officials wrote in the solicitation. Ultimately, each system would be expected to perform “dozens of missions over several years.”

The program is scheduled to last roughly five years, and DARPA will host a "Proposers Day" on May 22nd for those interested in competing in the program.

While its dropped out of the DARPA program, a Maxar subsidiary, the Palo Alto CA based SSL, retains its role as prime contractor for the NASA RESTORE-L robotic satellite servicing mission. The RESTORE-L is a fixed price NASA contract worth between $600 - $700Mln US ($800 - $925Mln CDN) designed around an SSL 1300 satellite bus equipped to service orbiting satellites.

But SSL, as outlined most recently in the April 10th, 2019 Space News post, "Maxar’s path to growth runs through Worldview Legion" has had its workforce slashed and is in the process of being integrated into the larger Maxar corporate structure. After dropping out of the DARPA RSGS program it will be interesting to see if Maxar can retain its lead role in the RESOLVE-L program.

The first RESOLVE-L on-orbit satellite servicer is currently scheduled for launch sometime in 2020.

Chuck Black.

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Chuck Black is the editor of the Commercial Space blog. 

Maxar Technologies Misses Q4 Revenue Estimates; Will Retain SSL Subsidiary & Drop Dividend to $.01 US per Share

          By Chuck Black

Shareholders of Westminster CO based Maxar Technologies will be waiting patiently over the next few days to see how the market reacts to Maxar's latest quarterly earning report.

The complete slide deck used for the February 28th, 2019 Maxar Q4 2018 Earnings call is available online here. A transcript of the call was published in the March 1st, 2019 Seeking Alpha post, "Maxar Technologies Inc (MAXR) CEO Dan Jablonsky on Q4 2018 Results - Earnings Call Transcript." Graphic c/o Maxar.

Initial signs are not good. As outlined in the February 28th, 2019 Maxar press release, "Maxar Technologies Reports 2018 Year End Results," the company has reported:

• Consolidated revenues of $2,141Mln US ($2.813Mln CDN), which was a rough miss on Q4 revenue expectations. Revenues fell 9% due to shortfalls at Maxar's Palo Alta CA based SSL GEO satellite manufacturing facility, which was mitigated somewhat by gains in imagery revenue from the US government.

• A net loss under US generally accepted accounting principles (GAAP) of $1,264Mln US ($1.661Mln CDN) including $1,096Mln US ($1.440Mln CDN) in impairment losses.

• A net loss under US GAAP of $21.76 US ($28.59 CDN) per share excluding impairment losses of $2.90 per share.

• An adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to sales ratio (EBITDA1) of $472Mln US ($620Mln CDN) with an adjusted EBITDA1 margin of 22%.

• A quarterly dividend reduced from $0.02764 US to $0.01 US per share and an organizational restructuring.

Maxar, which seems to have been unable to sell SSL for any reasonable amount, has decided to continue its operations while "rightsizing the organization to better align its costs with revenue."

As outlined in the February 13th, 2019 Seeking Alpha post, "Maxar Technologies: Betting On Space," most analysts had felt that Maxar needed to cut the quarterly stock dividend plus sell SSL for a reasonable amount of money, perhaps around $500Mln US ($660Mln CDN), in order to turn around the company.

Since new Maxar President and CEO Daniel Jablonsky and recently appointed Executive VP and CFO Biggs Porter were able to only address one of those two issues, the company is still treading on dangerous ground.

Does the new "Maxar" arm use Canadarm technology? As noted previously in this blog, NASA administrator Jim Bridenstine is a big advocate of Maxar/MDA.  Photo's c/o @JimBridenstine.

On the upside, the organizational restructuring did take note of potential future revenue expected to come from Canada as a result of Prime Minister Justin Trudeau's Thursday announcement that Canada has made a formal commitment to the US led Lunar Gateway

As outlined in the February 28th, 2019 post, "Canada Becomes the First Nation to Formally Commit to the NASA Lunar Gateway Plan," much of the $2Bln CDN allocated to the program over the next 24 years will eventually filter down to Maxar's Brampton ON based MDA Space Systems subsidiary.

But not today.

Canadian's won't likely know the funding details of the new Federal program until after the 2019 Federal Budget is tabled on March 19th, 2019 and won't be able to take advantage of the potential new opportunity until then, or maybe later.

Chuck Black.

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Chuck Black is the editor of the Commercial Space blog. 

Airbus and Thales Athena Maxar Teams Complete System Requirements Reviews for Telesat LEO Constellation

          By Henry Stewart

Ottawa ON based Telsat has announced that the two teams developing competing designs for Telesat’s global low earth orbit (LEO) satellite constellation have successfully completed their system requirements reviews.

As outlined in the January 24th, 2019 Telesat press release, "System Requirements Review Completed for Telesat’s LEO Constellation" both teams, the first led by Leiden Netherlands based Airbus Defence and Space (Airbus) with a second composed of Cannes France based Thales Alenia Space and Westminster CO based Maxar Technologies, are "continuing to advance their detailed designs for the complete LEO system, both space and ground segments."

Systems requirement reviews typically examine functional and performance requirements to insure that the concept proposal will satisfy the mission. They are a critical component in the design review.

As outlined on its website, the Telesat global LEO constellation is a proposed:

... state-of-the-art satellite constellation of highly advanced satellites in low-earth-orbit (~1,000 km from earth; ~35 times closer than traditional satellites) that will seamlessly integrate with terrestrial networks. 

The global network will deliver fiber quality throughput (Gbps links; low latency) anywhere on earth. This is a highly flexible system that dynamically allocates capacity where there’s demand, thus maximizing system efficiency.

Telesat has worldwide rights to the ≈4 GHz of Ka-band spectrum the constellation will use. Initial funding for the LEO constellation was provided by the Canadian and Ontario governments.

As outlined in the August 2nd, 2018 post, "Airbus Competing Against Thales/ Maxar to Design and Build the 117 Satellite Telesat Constellation," two Telesat development satellites using slightly different design philosophies were initially contracted for testing. However:

... the low Earth orbit prototype 2 (LEO-2) built by Palo Alto, CA based SSL (a Maxar subsidiary) with Toronto ON based University of Toronto Institute of Aerospace Studies (UTIAS) Spaceflight Laboratories (SFL) acting as prime contractor, was lost when the Soyuz-2.1b rocket carrying the satellite failed to reach orbit in November 2017.  

LEO Vantage-1, built by Guildford UK based Surrey Satellite Technology Ltd. (SSTL), a world leader in small satellites and part of Airbus Defence and Space, launched successfully in January 2018.

While it's not clear how the LEO-2 team completed their reviews without a satellite to test, it seems that both teams are still in the running.

Telsat has promised that a final decision on which team will build the Telesat LEO constellation will be made later this year.

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Henry Stewart is the pseudonym of a Toronto based aerospace writer.

For the Want of a Nail...

          By Henry Stewart

The recent loss of Westminster CO based Maxar Technologies WorldView-4 satellite and the resulting catastrophic drop in Maxar stock prices, is a reminder to some that on-orbit satellite servicing is an idea whose time has come.

As outlined in the January 10th, 2019 The Verge post, "Fixing broken satellites in space could save companies big money," when your satellite breaks in space, "there isn’t an easy way to repair it."

Fortunately, "technology that’s currently on the horizon may change that." Or, it may not.

The post noted several organizations and corporations currently working to commercialize on-orbit satellite servicing technologies including  Broomfield CO based Altius Space Machines and Singapore based Astroscale Space Debris. 

The post also noted Maxar expertise in this area and its contribution to NASA's long-proposed but little funded RESTORE-L program, a "free-flying mission projected to launch in 2020 to perform in-orbit satellite servicing on an operational government asset in low-Earth orbit," according to Gunter's Space page.

As outlined in the March 19th, 2017 post, "American MDA Subsidiary Promotes "DEXTRE" for US as NASA RESTORE-L Satellite Servicing Budget Slashed," NASA cut funding for RESTORE-L from $133Mln US ($178Mln CDN) to $45Mln US ($60Mln CDN) in fiscal year 2018 and scaled back development work on the program.

The Restore-L program has been languishing in development "purgatory" ever since.

As mentioned many times before in this blog, Maxar and its predecessor organization, Richmond BC based MacDonald Dettwiler have been working for years to repurpose well understood Canadarm technologies for on-orbit satellite servicing but the stars never aligned and nothing ever moved forward.

Kinda reminds you of that old proverb, reminding us that seemingly unimportant acts or omissions can have grave and unforeseen consequences over the long-term.

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Henry Stewart is the pseudonym of a Toronto based aerospace writer.

Maxar Stock Drops to New Lows After DigitalGlobe Subsidiary Reports Loss of WorldView-4 Satellite

          By Chuck Black

Just about the time when reasonable people thought the news on Westminster CO based Maxar Technologies couldn't get any worse, another Maxar catastrophe bubbles to the surface.

Today's crisis, as outlined in the January 7th, 2019 Maxar press release, "Maxar Technologies Reports Failure of its WorldView-4 Imaging Satellite," is the announcement from Maxar subsidiary DigitalGlobe, that its WorldView-4 Earth imaging satellite has malfunctioned and is no longer operational.

As outlined in the press release, the "WorldView-4 satellite experienced a failure in its control moment gyros ("CMGs"), preventing the satellite from collecting imagery due to the loss of an axis of stability."

Efforts to repair the satellite are ongoing, but so far unsuccessful. According to the press release, "at this time, Maxar believes that WorldView-4 will likely not be recoverable and will no longer produce usable imagery."

WorldView-4, originally known as GeoEye-2, is a sophisticated, third generation commercial imaging/surveillance satellite featuring a large telescope capable of resolving features on the ground just a bit larger than a football.

Maxar advertised the satellite as operating in conjunction with a constellation of other DigitalGlobe owned satellites including the DigitalGlobe WorldView-3, the WorldView-2, the GeoEye-1 and several others.

WorldView-4 sales efforts were primarily targeted at international defense and intelligence customers who were considered to be US allies. Maxar said WorldView-4 generated approximately $85Mln US  ($113Mln CDN) of the company’s 2018 revenue, which is expected to total roughly $2Bln US ($2.67Mln CDN) when the company reports full-year earnings in coming weeks.

The WorldView-4 satellite was insured for $183Mln US ($242Mln CDN) and carried a net-book value of approximately $155Mln US ($206Mln CDN), including related assets.

According to its press release, Maxar intends to write off the net-book value of the satellite in the fourth quarter of 2018 and to "seek full recovery for the loss of WorldView-4 under its insurance policies."

For some, the loss was a catastrophe.

As outlined in the January 7th, 2019 Toronto Star post, "Maxar shares fall to Earth after Canadarm maker loses satellite," a large chunk of Maxar's near-term growth "was dependent on WorldView-4, which will result in a loss of sales and potential earnings growth in 2019 and 2020," according to Toronto ON based Stephen Li, an analyst for St. Petersburg FL based investment firm Raymond James.

The January 7th, 2019 Globe and Mail post, "Shares spiral as Maxar Technologies loses major revenue-producing satellite," quoted Vancouver BC based Canaccord Genuity analyst Doug Taylor, who said he believed WorldView-4, which cost $835Mln US ($1.1Bln CDN) and took several years to build, “is Maxar’s most valuable satellite in orbit. … It represents one of the company’s most significant assets and was the flagship of the DigitalGlobe constellation."

For others, it was simply more of the same.

As outlined in the December 21st, 2018 post, "BREAKING NEWS: RADARSAT-2 Offline for Most of the Week. RADARSAT Constellation February 2019 Launch Date in Doubt," Maxar has already had to deal with the recent, if temporary, failure of its Canadian RADARSAT-2 satellite and with multiple postponements of the launch of the RADARSAT Constellation Mission (RCM).

And while the Canadian government has allowed Maxar real-time access to RADARSAT-2 data for resale, the Feds have also pledged to provide RCM data to the public through their Canadian Open Government initiative, which would certainly cut back on Maxar's ability to generate revenue from the sale of RCM generated Earth imaging data. Expect further details on that initiative to shake out over the next few months.

Maxar stock being traded on the New York Stock Exchange (NYSE) reached a new low of $8.03 US ($10.69 CDN) during the September 7th, 2019 trading session on news of the failed satellite.

Maxar stock on the Toronto Stock Exchange (TSE) also reach a new low during the September 7th, 2019 trading session, bottoming out at $10.62 CDN per share as the exchange closed for the day.

As outlined in the January 1st, 2019 post, "2018: The Year in Space for Canada," Maxar stock on the NYSE was trading at $65.25 US ($88.97 CDN) per share at the beginning of last year, before bottoming out with a December 24th, 2018 low of $9.55 US ($13.02) per share.

Chuck Black.

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Chuck Black is the editor of the Commercial Space blog.