WESTMINSTER, Colo. — (BUSINESS WIRE) — August 9, 2022 — Maxar Technologies (NYSE: MAXR) (TSX: MAXR) (“Maxar” or the “Company”), a provider of comprehensive space solutions and secure, precise, geospatial intelligence, today announced financial results for the quarter ended June 30, 2022.

Key points from the quarter include:

• Consolidated revenues of $438 million
• Net loss of $30 million, inclusive of a $53 million loss on debt extinguishment
• Diluted net loss per share of $0.41
• Adjusted EBITDA¹ of $119 million
• Operating cash flows of $67 million
• Awarded a 10-year contract worth up to $3.24 billion as part of the Electro-Optical Commercial Layer Program
• Refinanced our Credit Facility with new maturities in 2027 and 2029, retired our 2023 Notes and issued new 7.75% Notes due 2027

1. This is a non-GAAP financial measure. Refer to section “Non-GAAP Financial Measures” in this earnings release.

“We made solid progress this quarter on our strategic growth plans,” said Dan Jablonsky, President and Chief Executive Officer. “Our Earth Intelligence segment had a diversified set of bookings across the U.S. government, international allies, and enterprise customers. The Electro-Optical Commercial Layer Program award provides great revenue visibility for Maxar over the next decade and provides multiple paths for growth with our diversified customer base in the years ahead. In our Space Infrastructure business, we’re seeing momentum and growth opportunities as we execute our strategy of customer and product diversification for national defense, commercial and civil missions.”

“We performed in-line with our expectations for the quarter. Earth Intelligence continues to drive growth in high margin imagery revenue and Space Infrastructure continues to generate healthy margins. Both businesses see a solid pipeline of opportunities,” stated Biggs Porter, Chief Financial Officer. “We are maintaining the 2022 guidance ranges for Revenue and Adjusted EBITDA. Although the interest cost is higher than expected coming into the year, we are pleased to have successfully executed a refinancing of our debt structure and significantly extend maturities.”

Total revenues decreased to $438 million from $473 million, or by $35 million, for the three months ended June 30, 2022, compared to the same period of 2021. The decrease in revenues was driven by a decrease in product revenues within our Space Infrastructure segment.

For the three months ended June 30, 2022, our net loss was $30 million compared to net income of $45 million for the same period of 2021. The decrease was primarily due to an increase in interest expense of $52 million driven by a $53 million loss on debt extinguishment, a decrease in product revenues of $36 million with our Space Infrastructure segment and an increase in selling, general and administrative costs of $18 million. This decrease was partially offset by a decrease in product costs of $28 million within our Space Infrastructure segment for the three months ended June 30, 2022 compared to the same period of 2021.

For the three months ended June 30, 2022, Adjusted EBITDA was $119 million and Adjusted EBITDA margin was 27.2%. This is compared to Adjusted EBITDA of $132 million and Adjusted EBITDA margin of 27.9 % for the same period of 2021. The decrease was primarily driven by lower Adjusted EBITDA from the Space Infrastructure segment.

We had total order backlog of $2,945 million as of June 30, 2022 compared to $1,893 million as of December 31, 2021. The increase in backlog was primarily driven by an increase in the Earth Intelligence segment partially offset by a decrease in the Space Infrastructure segment. Our unfunded contract options totaled $2,204 million and $650 million as of June 30, 2022 and December 31, 2021, respectively. Unfunded contract options represent estimated amounts of revenue to be earned in the future from negotiated contracts with unexercised contract options and indefinite delivery/indefinite quantity contracts. Unfunded contract options as of June 30, 2022, were primarily comprised of option years in the EOCL Contract (for the periods June 15, 2027 through June 14, 2032) and other U.S. government contracts. Unfunded contract options as of December 31, 2021 were primarily comprised of the option year in the EnhancedView Contract (September 1, 2022 through July 12, 2023) and other U.S. government contracts.

On May 25, 2022, the National Reconnaissance Office (“NRO”) awarded us a 10-year contract worth up to $3.24 billion, inclusive of a firm 5-year base contract commitment worth $1.5 billion and options worth up to $1.74 billion, as part of the Electro-Optical Commercial Layer Program (“EOCL Contract”). The EOCL Contract transitioned the imagery acquisition requirements previously addressed by the EnhancedView Follow-On contract (“EnhancedView Contract”) and replaces the scope of the EnhancedView Contract with respect to such requirements.

On June 14, 2022, we issued $500 million aggregate principal amount of 7.75% Senior Secured Notes due 2027 (“7.75% 2027 Notes”) in a private placement to qualified institutional buyers in the U.S. pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the U.S. pursuant to Regulation S under the Securities Act. On June 14, 2022, we used proceeds from issuance of the 7.75% 2027 Notes, along with cash on hand, to redeem the remaining $500 million aggregate principal amount of our 9.75% Senior Secured Notes due 2023 (“9.75% 2023 Notes”).

Additionally, on June 14, 2022, we refinanced our Credit Facility, including a $500 million revolving credit facility, maturing in 2027, and a $1.5 billion Term Loan B issued at an original issue discount of 4.5%. The Term Loan B matures in 2029, provided that if the 7.75% 2027 Notes are not repaid in full by the date that is 91 days prior to maturity date of the 7.75% 2027 Notes, the maturity date for the Term Loan B will be the maturity date of the 7.75% 2027 Notes. Borrowings under Term Loan B will bear interest at a rate equal to, at the Company’s option, either Adjusted Term SOFR plus an applicable margin ranging from 4.00% to 4.25% or adjusted base rate (“ABR”) plus an applicable margin ranging from 3.00% to 3.25%, in each case depending on the company’s leverage ratio. This Credit Facility replaced our prior $1.44 billion Term Loan B, maturing in 2024, and at an applicable spread of, at the Company’s option, LIBOR plus an applicable margin of 2.75% or ABR plus an applicable margin of 1.75%.

We recognized a total loss on extinguishment of the 9.75% 2023 Notes of $42 million. Also on June 14, 2022, we amended the terms of our syndicated credit facility (“Syndicated Credit Facility”) pursuant to an amended and restated credit agreement. We recognized a total loss on extinguishment of $11 million from the amendment of our Syndicated Credit Facility.

Financial Highlights

In addition to results reported in accordance with U.S. GAAP, we use certain non-GAAP financial measures as supplemental indicators of its financial and operating performance. These non-GAAP financial measures include EBITDA, Adjusted EBITDA and Adjusted EBITDA margin. We believe these supplementary financial measures reflect our ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in its business.