While exactEarth’s chief executive remains coy about how the “strategic alternative” search is going, he says the Earth observation company picked its timing carefully to look at a possible sale, merger or other activity to maximize shareholder value.
CEO Peter Mabson pointed to exactEarth’s near real-time ship tracking and identification service, which will be ready later next year, as one of the factors in choosing the alternative search now.
“We’re ramping up a significant new capability that we see good long-term capability with,” Mabson said in an interview with SpaceQ. But he added his ability to speak to the search is limited. The board unanimously agreed to a search for alternatives, which was disclosed publicly earlier this year. exactEarth has repeatedly said in statements it is not giving a timeline for the process, or promising that the company’s structure will significantly change.
Meanwhile, exactEarth is about one-third of the way in deploying its multi-satellite exactView RT service. That service aims to provide information on vessels to customers within minutes of those ships broadcasting their information. Riding on the Iridium NEXT constellation satellites, the RT payload collects and analyzes information from the Automatic Identification System (AIS) signals ships broadcast.
AIS reveals information about the ships’ origin port, their destination, and the like. Once RT has 30 operational payloads, it will have enough assets in space to track ships in near real-time. exactEarth now has 27 payloads in operation, and expects to reach at least 30 by the second or third quarter of 2018.
But the new capability comes with a cost, as exactEarth ramped up sales and marketing to woo customers to the service. There also are fixed expenses associated with operating the network, Mabson said. These were some contributors to the $1.6 million loss (loss of seven cents a share) the company posted in its first-quarter fiscal 2018 results, announced late last week.[stockdio-historical-chart stockExchange=”TSX” width=”100%” symbol=”XCT” displayPrices=”Lines” performance=”false” days=”30″ allowPeriodChange=”true” height=”350px” culture=”English-Canada”]
exactEarth, however, did see an improvement in its bottom line following restructuring in 2016; its Q1 2017 results had a net loss of $2 million (nine cents a share). In February 2017, shortly before those results were disclosed, exactEarth told shareholders that the Government of Canada did not renew an AIS contract it had with exactEarth to monitor Canadian and global maritime traffic. At the time, exactEarth received $10,000 a month from the contract.
“It definitely had an impact on revenues, and when that happened, it also [impacted] the share price of the company. It was unfortunate timing,” Mabson said. He added that exactEarth remains the provider of AIS capability on the RADARSAT Constellation Mission, which will monitor Canadian land and sea areas from space. With the new AIS constellation growing, Mabson said exactEarth is keeping the government informed about its capabilities, and that he is hopeful revenues will increase from the government shortly.
exactEarth is also still active with its first generation of AIS satellites. Just last month, exactEarth added to its radar capabilities; it deployed an AIS payload on board a Spanish radar satellite, Paz, which is operated by Hisdesat.
“The basic idea is radar satellites will show you all the ships in a given area. Even if it’s dark or there are clouds, it doesn’t matter – the radar will detect it anyway. “But it doesn’t tell us who they are,” Mabson said.
So exactEarth blends information from radar and its network of AIS payloads to see which ships are broadcasting signals. From those, “dark targets” – ships that aren’t sending out the expected signals – are ferried out. It saves time in identifying which ships could be a threat, Mabson said. The military can then investigate those targets more closely, using drones or another ship.
exactEarth is the commercial result of a COM DEV International project to track AIS signals from space, dating back to the mid-2000s. At the time, Mabson said, there were roughly 150,000 transponders on commercial vessels that broadcast their coordinates automatically. COM DEV was among the first to realize they could be tracked from space. COM DEV tested this capability in 2008 using a nanosatellite, CanX-6 (EV0). The satellite was jointly developed by COM DEV and the UTIAS Space Flight Laboratory.
exactEarth started commercial operations in 2009 and in its early years, operated with COM DEV and Hisdesat holding equity interests. exactEarth then began trading on the Toronto Stock Exchange in 2016, after Honeywell acquired COM DEV.