8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 9, 2019

MAXAR TECHNOLOGIES INC.

(Exact name of Registrant as specified in its charter)

Delaware	001-38228	83-2809420
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
1300 W. 120th Avenue, Westminster, Colorado		80234
(Address of principal executive offices)		(Zip Code)
303-684-2207
(Registrant’s telephone number, including area code)

N/A

(Former name or address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, at $0.0001 par value	MAXR	New York Stock Exchange, Toronto Stock Exchange

Item 2.02 Results of Operations and Financial Condition.

On May 9, 2019, Maxar Technologies Inc. (“Company”) issued a press release announcing its financial results for the first quarter ended March 31, 2019.  A copy of the press release is furnished herewith as Exhibit 99.1.

The information contained in this Current Report on Form 8-K, including Exhibits 99.1 through Exhibit 99.3, are being furnished and shall not be deemed ”filed” for the purposes of Section 18 of the U.S. Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liabilities under that section and shall not be deemed incorporated by reference into any filing by the Company under the U.S. Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language contained in such filing, unless otherwise expressly stated in such filing.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit No.	Description
99.1	Press Release dated May 9, 2019

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

Date:  May 9, 2019	Maxar Technologies Inc.
	By:	/s/ Biggs C. Porter
	Name:	Biggs C. Porter
	Title:	Executive Vice President, Chief Financial Officer

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EX-99.1

Exhibit 99.1

NEWS RELEASE

FOR IMMEDIATE RELEASE:

May 9, 2019

Maxar Technologies Reports First Quarter 2019 Results

Westminster, CO –Maxar Technologies Inc. (“Maxar” or the “Company”), a global technology innovator powering the new space economy, today reported financial results for the quarter ended March 31, 2019. All dollar amounts in this press release are expressed in U.S. dollars.

Key points from the quarter include:

· Consolidated revenues of $504 million

· Net loss of $0.99 per share

· Adjusted EBITDA1 of $117 million and Adjusted EBITDA1 margin of 23 percent

· Quarterly dividend of  $0.01

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

“We remain focused on our near-term priorities to position Maxar for sustained top and bottom-line growth. We are working on reducing debt and leverage levels, re-engineering the satellite business based out of Palo Alto, positioning our Imagery, Services, and MDA businesses for long-term growth, and creating a leaner, more agile organization with a reduced cost structure,” stated Dan Jablonsky, President and Chief Executive Officer. 

Jablonsky continued, “This quarter, our Palo Alto satellite business experienced quarter-over-quarter profit improvement, Imagery signed on several new subscription-based customers, Services captured a number of new wins, and MDA garnered its first contract for work on the Canadian Surface Combatant program. We continued to advance our organizational restructuring to strengthen our financial position and drive long-term value for our shareholders and customers.”

“First quarter results were consistent with expectations,” stated Biggs Porter, Chief Financial Officer. “Cash flows and capital expenditures reflect the timing of interest and milestone payments and the ramp of the WorldView Legion program. After the quarter end, our insurance carriers accepted the Company’s $183 million claim for loss arising from the WorldView-4 satellite on-orbit failure and we have collected $154 million in proceeds. We expect a full recovery of the remaining balance by the end of the second quarter.”

Consolidated revenues for the first quarter of 2019 were $504 million compared to $557 million for the same period of last year. The decrease in revenues was primarily driven by the Space Systems segment given lower GEO Comsat revenues and the expected wind-down of work on the multi-year RCM project, and a decrease in the Imagery Segment given the loss of the Company’s WorldView-4 satellite.

For the quarter ended March 31, 2019, net loss of $59 million compared to net income of $15 million in the comparative period of 2018. The decrease is primarily driven by a lower tax benefit, higher restructuring costs, and lower Adjusted EBITDA from the Imagery segment given the loss of the Company’s WorldView-4 satellite.

For the first quarter of 2019, Adjusted EBITDA was $117 million and Adjusted EBITDA as a percentage of consolidated revenues (“Adjusted EBITDA margin percentage”) was 23.2%. This is compared to Adjusted EBITDA of $151 million and Adjusted EBITDA margin percentage of 27.1% for the first quarter of 2018. The decline was driven largely by lower Adjusted EBITDA from the Imagery segment given the loss of the Company’s WorldView-4 satellite and lower revenues and profits in the Space Systems segment.

1

The Company had total order backlog of $1.9 billion as of March 31, 2019 compared to $2.4 billion as at December 31, 2018.  Backlog decreased primarily due to declines in backlog in our Space Systems and Imagery segments. Space Systems backlog decreased primarily as a result of revenue recognized on existing contracts and no new satellite awards during the quarter.  Imagery backlog declined primarily due to the recognition of EnhancedView revenue during the quarter and the loss of our WorldView-4 satellite. Unfunded contract options as of March 31, 2019 totaled $1.3 billion vs. $1.2 billion in 2018. The increase in unfunded contract options was primarily driven by awards in our Services segment.

Financial Highlights

In addition to results reported in accordance with U.S. GAAP, the Company uses certain non-GAAP financial measures as supplemental indicators of its financial and operating performance. These non-GAAP financial measures include EBITDA and Adjusted EBITDA. The Company believes these supplementary financial measures reflect the Company’s ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in its business.

		Three months ended
		March 31,
		2019		2018
($ millions, except per share amounts)
Revenue	$	504	$	557
Net (loss) earnings		(59)		15
Adjusted EBITDA1		117		151
Net (loss) earnings per share, diluted	$	(0.99)	$	0.26
Weighted average number of common shares outstanding (millions):
Basic		59.5		56.4
Diluted		59.5		56.7

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

Revenue by segment is as follows:

	Reported
	Three months ended
	March 31,
		2019		2018
($ millions)
Revenue
Space Systems	$	274	$	293
Imagery		200		211
Services		68		70
Intersegment eliminations		(38)		(17)
Total Revenue	$	504	$	557

The Company analyzes financial performance by segment, which combine related activities within the Company.

	Three months ended
	March 31,
		2019		2018
Adjusted EBITDA:
Space Systems		10		28
Imagery		121		134
Services		7		4
Intersegment eliminations		(3)		(2)
Corporate and other unallocated expenses		(18)		(13)
Adjusted EBITDA1	$	117	$	151

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

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Space Systems Results

		Reported
		Three months ended
		March 31,
		2019		2018
($ millions)
Revenue	$	274	$	293
Adjusted EBITDA	$	10	$	28
Adjusted EBITDA margin percentage		3.6	%	9.6	%

Space Systems segment revenues decreased $19 million in the first quarter of 2019 compared to the same period of 2018. Revenues decreased primarily due to an increase in estimated costs to complete programs as well as impacts of lower volume in our Palo Alto factory and lower revenues on the RADARSAT Constellation Mission (“RCM”) program in Canada. These decreases were partially offset by increased intercompany revenue on the construction of the Company’s WorldView Legion constellation.

Adjusted EBITDA decreased $18 million in the Space Systems segment in the first quarter of 2019 compared to the same period of 2018. The decrease from 2018 to 2019 is primarily related to an increase in estimated costs to complete certain satellite build programs, as well as impacts of lower volume in our Palo Alto factory. Adjusted EBITDA was also lower due to a decrease in RCM revenue and the change in product mix. These increases were partially offset by a decrease in selling, general and administrative expense due to headcount reductions as a result of prior year restructuring initiatives.

Imagery Segment Results

		Reported
		Three months ended
		March 31,
		2019		2018
($ millions)
Revenue	$	200	$	211
Adjusted EBITDA	$	121	$	134
Adjusted EBITDA Margin		60.5	%	63.5	%

Revenues from the Imagery segment decreased $11 million in the first quarter of 2019 compared to the same period of 2018. The decrease was primarily driven by the loss of WorldView-4 revenue and higher than normal seasonal revenue from international defense and intelligence customers in first quarter of 2018, in part offset by growth from our commercial customers and the U.S. government.

Adjusted EBITDA decreased $13 million in the first quarter of 2019 compared to the same period of 2018. The decrease was primarily driven by the loss of WorldView-4 which had higher margins.

Services Results

		Reported
		Three months ended
		March 31,
		2019		2018
($ millions)
Revenue	$	68	$	70
Adjusted EBITDA	$	7	$	4
Adjusted EBITDA Margin		10.3	%	5.7	%

Services segment revenues remained relatively unchanged in the first quarter of 2019 compared to the same period in 2018. Adjusted EBITDA increased for the first quarter of 2019 compared to the same period of 2018 primarily as a result of the loss on the sale of a subsidiary recognized in the first quarter of 2018 and did not recur in 2019.

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MAXAR TECHNOLOGIES INC.

Unaudited Condensed Consolidated Statements of Operations

(In millions of United States dollars, except per share amounts)

	Three Months Ended
	March 31,
	2019		2018
Revenues:
Product	$	194	$	228
Service		310		329
Total revenues		504		557
Costs and expenses:
Product costs, excluding depreciation and amortization		197		187
Service costs, excluding depreciation and amortization		110		119
Selling, general and administrative		103		103
Depreciation and amortization		98		111
Operating (loss) income		(4)		37
Interest expense, net		49		53
Other expense, net		6		1
(Loss) before taxes		(59)		(17)
Income tax benefit		(1)		(32)
Equity in loss from joint ventures, net of tax		1		—
Net (loss) income	$	(59)	$	15
(Loss) earnings per common share:
Basic	$	(0.99)	$	0.27
Diluted	$	(0.99)	$	0.26

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MAXAR TECHNOLOGIES INC.

Unaudited Condensed Consolidated Balance Sheets

(In millions of United States dollars, except per share amounts)

	March 31,		December 31,
	2019		2018
Assets
Current assets:
Cash and cash equivalents	$	45	$	35
Trade and other receivables, net		467		464
Inventory		26		31
Advances to suppliers		17		42
Income taxes receivable		16		14
Prepaid and other current assets		61		51
Total current assets		632		637
Non-current assets:
Orbital receivables		400		407
Deferred tax assets		108		103
Property, plant and equipment, net		768		747
Intangible assets, net		1,175		1,232
Non-current operating lease assets		129		—
Goodwill		1,751		1,751
Other assets		115		124
Total assets	$	5,078	$	5,001
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	190	$	209
Accrued liabilities		62		116
Accrued compensation and benefits		101		100
Contract liabilities		309		361
Current portion of long-term debt		19		17
Current operating lease liabilities		33		—
Other current liabilities		52		46
Total current liabilities		766		849
Non-current liabilities:
Pension and other postretirement benefits		194		196
Contract liabilities		43		60
Operating lease liabilities		137		—
Long-term debt		3,174		3,030
Other non-current liabilities		184		222
Total liabilities		4,498		4,357
Stockholders’ equity:
Common stock ($0.0001 par value, 240 million common shares authorized and 59.6 million outstanding at March 31, 2019; nil par value, unlimited authorized common shares and 59.4 million outstanding at December 31, 2018)		—		1,713
Additional paid-in capital		1,774		59
Accumulated deficit		(1,271)		(1,211)
Accumulated other comprehensive income		76		82
Total Maxar stockholders' equity		579		643
Noncontrolling interest		1		1
Total stockholders' equity		580		644
Total liabilities and stockholders' equity	$	5,078	$	5,001

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MAXAR TECHNOLOGIES INC.

Unaudited Condensed Consolidated Statements of Cash Flows

(In millions of United States dollars)

	Three Months Ended
	March 31,
	2019		2018
Cash flows provided by (used in):
Operating activities:
Net (loss) income	$	(59)	$	15
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation of property, plant and equipment		30		37
Amortization of intangible assets		68		74
Stock-based compensation expense (recovery)		1		(1)
Amortization of debt issuance costs and other noncash interest expense		2		2
Inventory impairment		3		—
Foreign exchange losses		6		1
Deferred income tax (benefit)		—		(24)
Other		4		2
Changes in operating assets and liabilities:
Trade and other receivables		6		(35)
Accrued compensation and benefits		1		(26)
Trade and other payables		(11)		(47)
Accrued liabilities		(56)		22
Contract liabilities		(71)		(26)
Advances to suppliers		25		15
Deferred tax assets		(5)		(18)
Deferred tax liabilities		2		31
Other liabilities		4		(28)
Other		(8)		(7)
Cash used in operating activities		(58)		(13)
Investing activities:
Purchase of property, plant and equipment		(59)		(43)
Purchase or development of intangible assets		(14)		(17)
Disposal of subsidiary and short-term investments		—		5
Cash used in investing activities		(73)		(55)
Financing activities:
Net proceeds from revolving credit facility		150		90
Repayments of long-term debt		(6)		(5)
Settlement of securitization liability		(4)		(4)
Payment of dividends		(1)		(16)
Change in overdraft balance		—		2
Cash provided by financing activities		139		67
Increase (decrease) in cash, cash equivalents, and restricted cash		8		(1)
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	$	52	$	41
Reconciliation of cash flow information:
Cash and cash equivalents		45		25
Restricted cash included in prepaid and other current assets		6		7
Restricted cash included in other assets		1		9
Total cash, cash equivalents, and restricted cash	$	52	$	41

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NON-GAAP FINANCIAL MEASURES

In addition to results reported in accordance with U.S. GAAP, we use certain non-GAAP financial measures as supplemental indicators of our financial and operating performance. These non-GAAP financial measures include EBITDA, AdjustedEBITDA and Adjusted EBITDA margin.

We define EBITDA as earnings before interest, taxes, depreciation and amortization, and Adjusted EBITDA as EBITDA adjusted for certain items affecting comparability as specified in the calculation. Adjusted EBITDA margin is defined as Adjusted EBITDA as a percentage of revenues. Management believes that exclusion of items in Adjusted EBITDA assists in providing a more complete understanding of our underlying results and trends, and management uses these measures along with the corresponding U.S. GAAP financial measures to manage our business, evaluate our performance compared to prior periods and the marketplace, and to establish operational goals. Adjusted EBITDA is a measure being used as a key element of our incentive compensation plan. The Syndicated Credit Facility also uses Adjusted EBITDA in the determination of our debt leverage covenant ratio. The definition of Adjusted EBITDA in the Syndicated Credit Facility includes a more comprehensive set of adjustments.

We believe that these non-GAAP measures, when read in conjunction with our U.S. GAAP results, provide useful information to investors by facilitating the comparability of our ongoing operating results over the periods presented, the ability to identify trends in our underlying business, and the comparison of our operating results against analyst financial models and operating results of other public companies.

EBITDA and Adjusted EBITDA are not recognized terms under U.S. GAAP and may not be defined similarly by other companies. EBITDA and Adjusted EBITDA should not be considered alternatives to net income (loss) as indications of financial performance or as alternate to cash flows from operations as measures of liquidity. EBITDA, Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools and should not be considered in isolation or as a substitute for our results reported under U.S. GAAP. The table below reconciles our net (loss) income before taxes to Adjusted EBITDA for the three months ended March 31, 2019 and 2018.

	Three months ended March 31,
	2019		2018
($ millions)
Net (loss) income	$	(59)	$	15
Income tax benefit		(1)		(32)
Interest expense, net		49		53
Depreciation and amortization		98		111
EBITDA	$	87	$	147
Acquisition and integration related expense		4		4
Restructuring		20		—
Inventory impairment		3		—
CEO severance		3		—
Adjusted EBITDA	$	117	$	151
Adjusted EBITDA:
Space Systems		10		28
Imagery		121		134
Services		7		4
Intersegment eliminations		(3)		(2)
Corporate and other unallocated expenses		(18)		(13)
Adjusted EBITDA	$	117	$	151

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Cautionary Note Regarding Forward-Looking Statements

Certain statements and other information included in this release constitute "forward-looking information" or "forward-looking statements" (collectively, "forward-looking statements") under applicable securities laws. Statements including words such as "may", "will", "could", "should", "would", "plan", "potential", "intend", "anticipate", "believe", "estimate" or "expect" and other words, terms and phrases of similar meaning are often intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties, as well as other statements referring to or including forward-looking information included in this presentation.

Forward-looking statements are subject to various risks and uncertainties which could cause actual results to differ materially from the anticipated results or expectations expressed in this presentation. As a result, although management of the Company believes that the expectations and assumptions on which such forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. The risks that could cause actual results to differ materially from current expectations include, but are not limited to, the risk factors and other disclosures about the Company and its business included inthe Company's continuous disclosure materials filed from time to time with U.S. securities and Canadian regulatory authorities, which are available online under the Company's EDGAR profile at www.sec.gov, under the Company's SEDAR profile at www.sedar.com or on the Company's website at www.maxar.com.

The forward-looking statements contained in this release are expressly qualified in their entirety by the foregoing cautionary statements. All such forward-looking statements are based upon data available as of the date of this presentation or other specified date and speak only as of such date. The Company disclaims any intention or obligation to update or revise any forward-looking statements in this presentation as a result of new information or future events, except as may be required under applicable securities legislation.

*****

Unless stated otherwise or the context otherwise requires, references to the terms “Company,” “Maxar,” “we,” “us,” and “our” to refer collectively to Maxar Technologies Inc. and its consolidated subsidiaries. Financial information and results of operations presented in this Annual Report on Form 10-K for the periods prior to January 1, 2019 relate to Maxar Technologies Inc., our predecessor issuer, and relate to Maxar Technologies Inc. after January 1, 2019.

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Investor/Analyst Conference Call

Maxar President and Chief Executive Officer, Daniel Jablonsky, and Executive Vice President and Chief Financial Officer, Biggs Porter, will host an earnings conference call the same day, reviewing the first quarter results, followed by a question and answer session. The call is scheduled to begin promptly at 3:30 p.m. MT (5:30 p.m. ET).To participate, dial:

Toll free North America: 1-866-211-3067

Toronto: 1-647-689-6610

The Conference Call will also be Webcast live and then archived at:

https://event.on24.com/wcc/r/1983809/3460E7909E09A4D6F6D105596068098E

Telephone replay will be available from Thursday May 9, 2019 at 6:30 p.m. (8:30 p.m. ET) to Thursday May 23, 2019 at 9:59 p.m. MT (11:59 p.m. ET) at the following numbers:

Toll free North America: 1-800-585-8367

Toronto: 1-416-621-4642

Passcode: 4188454#

About Maxar

As a global leader of advanced space technology solutions, Maxar is at the nexus of the new space economy, developing and sustaining the infrastructure and delivering the information, services and systems that unlock the promise of space for commercial and government markets. The operations of DigitalGlobe, SSL and Radiant Solutions were unified under the Maxar brand in February; MDA continues to operate as an independent business unit within the Maxar organization. As a trusted partner with 5,900 employees in over 30 global locations, Maxar provides vertically integrated capabilities and expertise including satellites, Earth imagery, robotics, geospatial data and analytics to help customers anticipate and address their most complex mission-critical challenges with confidence. Every day, billions of people rely on Maxar to communicate, share information and data, and deliver insights that Build a Better World. Maxar trades on the New York Stock Exchange and Toronto Stock Exchange as MAXR. For more information, visit www.maxar.com.

CONTACT:

Jason Gursky | Maxar VP Investor Relations | 1-303-684-2207 | jason.gursky@maxar.com

Turner Brinton | Maxar Media Relations | 1-303-684-4545 | turner.brinton@maxar.com

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