With investor confidence waning, Maxar CEO Howard Lance has resigned and has been replaced by Daniel Jablonsky effective immediately.
It seems that after the loss of the WorldView-4 satellite and with the subsequent investment community seemingly losing faith in Maxar, some type of change had to happen.
Maxar’s initial problem started with orders for new GEO communication satellites spiralling downward but which Maxar thought would eventually pick up. That did not happen.
With this realization, Maxar began planning to sell assets at its SSL business unit which was were much of the GEO problems were happening. A reorganization ensued.
Then came the unexpected loss of its flagship satellite last week, WorldView-4.
Just two years old, the satellite control moment gyros failed “preventing the satellite from collecting imagery due to the loss of an axis of stability.”
With the loss of WorldView-4 and with the first of six WorldView-Legion satellites not expected to launch until 2020-2021, Maxar is expected to see a dip in revenue. At the same time Maxar’s Debt-to-Capital* ratio is 60.1%, which is considered high. The company had planned on reducing its Debt-to-Capital ratio in the next two years, but that will be harder to accomplish now.
The resignation by Howard was seemingly out of the blue. In fact, insider trading records show that Lance had been increasing his holdings in the company throughout 2018, including a public market buy of 57,600 shares as recently as November 7. As of December 21, 2018 Lance had 131,898 common shares. It seems Howard fell on his sword for the greater good of the company.
Recently appointed Chairman of the Maxar Board General Howell M. Estes III said in press release on Lance leaving, “on behalf of the Board, I want to thank Howard for his service over the last three years. One of Howard’s most important accomplishments was the U.S. Domestication and development of a strong and highly-experienced management team, and the Board is confident that this team, under Dan’s leadership, will continue serving customers and enhance value for shareholders.”
Maxar’s stock was up 4.65% by mid-morning on the news. Revenue for the first three quarters of 2018 was $1.645B.
The new CEO
In selecting Daniel Jablonsky they are picking someone from in-house who has a lot of experience.
Jablonsky had been President of DigitalGlobe, a company he has worked since 2012 and before the merger with MDA.
His short resumes read as follows; Daniel Jablonsky has served as President of DigitalGlobe, the global leader in commercial high-resolution satellite imagery, since October 2017 when it was acquired by Maxar Technologies. Under his leadership, DigitalGlobe’s IDI and Commercial business increased revenue by more than 10% in 2018. Mr. Jablonsky previously served as General Manager of the U.S. and International Defense and Intelligence businesses at DigitalGlobe, while also serving as Senior Vice President and General Counsel. Since 2015, Mr. Jablonsky has also served on the Board of Vricon, DigitalGlobe’s joint venture with SAAB, which creates innovative 3D solutions. Prior to joining DigitalGlobe in 2012, Mr. Jablonsky was a partner at Brownstein, Hyatt, Farber, Schreck, and before that, served as Corporate Counsel at Flextronics International LTD, a global multibillion-dollar technology supply chain company. He also worked as an attorney in the Division of Enforcement at the SEC and at the law firm of O’Melveny and Myers. Mr. Jablonsky holds a Bachelor of Science in Mechanical Engineering from the U.S. Naval Academy and a Juris Doctor from the University of Washington School of Law. Mr. Jablonsky began his professional career as a Surface Warfare Officer and Nuclear Engineer in the U.S. Navy.
On taking up his new role as President and CEO Jablonsky said, “I am honored that the Board has appointed me to lead Maxar at this important time. Our top priority is to serve our government and commercial partners and strengthen our operational and financial performance, including delivering sustainable revenue and cash flows, determining a definitive resolution for the GEO communications satellite line of business, and clarifying longer-term growth prospects, required investments and the optimal capital structure. Maxar has a strong foundation and delivers compelling solutions to serve as a mission-critical partner to our customers. Along with our management team and dedicated team members, I am committed to the future of Maxar and meeting the needs and expectations of all of our stakeholders. We are already working on action plans and will address these plans in the near future.”
General Estes III said of the decision “Dan has been a key member of the management team since his arrival to DigitalGlobe in 2012 and has taken on increased responsibilities following the closing of the Company’s merger. Dan’s experience as President of DigitalGlobe, after previously serving as both General Counsel and General Manager of the U.S. and International Defense and Intelligence businesses, and participation in Maxar’s executive leadership, provides him with a deep understanding of Maxar’s businesses, operations and strategy. He has worked closely with many of our largest customers, including the U.S. Government, and has a unique appreciation for the value of our mission-critical services as a former Surface Warfare Officer and Nuclear Engineer in the U.S. Navy. Dan is the right leader for Maxar and now is the right time for this transition as we work to unlock the value of our operations for all stakeholders and maximize returns for our shareholders.
* Debt-to-Capital: Total Debt / Total Capital
Updated at 1:30 p.m. EST.