COVID-19 has created additional challenges, has impacted MDA programs, and the company did need to its revise year-to-year growth accordingly. However, that growth is still expected to increase “50 to 60%” in 2022.
One of MDA’s flagship programs has run into supply chain issues. Telesat’s Lightspeed low Earth orbit (LEO) constellation prime contractor Thales Alenia Space is seeing delays in getting some components. That delay will effect the timing of the signing of the Thales Alenia Space contract and the expected Canadian and French export-credit agreements.
In part because of this delay MDA’s CFO Vito Culmone said “… we have narrowed our 2022 revenue target, and we now expect it to be in the $750 to $800 million range, representing robust year over year growth of approximately 50 to 60%.”
That new target is still positive growth and CEO Mike Greenley optimistically said he expects delays “as measurable in months or quarters, definitely not in years.”
MDA Q3 2021 business highlights
- Backlog grows to $829 million, up 30% from Q2.
- Q3 revenue up 13% YoY to $111.3 million.
- Strong Q3 financial performance with 35% gross profit.
- Adjusted EBITDA solid at 20% (excluding CEWS).
MDA flagship programs update
- On Canadarm3, MDA was awarded a $35.3 million contract from the Canadian Space Agency (CSA) for the design of the Gateway External Robotics Interfaces (GERI), a key component of the Canadarm3 which will be installed on the international Lunar Gateway. The new contract is the third awarded to MDA in conjunction with its Canadarm3 program.
- On Telesat Lightspeed, a series of significant funding announcements including a $1.44 billion investment from the Government of Canada and $109 million partnership from the Province of Ontario substantially advanced the program. MDA continued to advance risk reduction activities under our existing Telesat Lightspeed contract.
- On CSC (Canadian Surface Combatant project), work on the requirements analysis phase of the program continued to advance and the team is finalizing a number of the Electronic Warfare suite sensor contracts. The program represents over $1.5 billion of potential revenue for the Company over the life of the contract.
During the earnings call CEO Mike Greenley discussed the following highlights.
“In Q3, our satellite systems team completed a major production milestone with the build of serial number 500 of the OneWeb gateway LEO constellation program and serial number 1000 of the KU cluster antennas. This is a significant production achievement for MDA surpassing our internal previous records of 486 Iridium Next KA band antennas set in 2017.”
He then went on to say that “we are on track to complete production on OneWeb in March 2022, with total deliveries of around 650 Gateway antennas and 1300 ku clusters.”
With respect to the workforce Greenley said “since the beginning of the year, we have hired more than 600 new employees.” in 2020 the company hired 350 people. MDA now has 2200 employees. In 2022 the company continues to hire “but it’ll be in pockets based on specific program needs as we round out specific talent areas inside the larger programs as they progress through their next phases.”
He also provided an update on COVID-19 and the company’s updated office policy. “With respect to COVID-19. In September, we started to return to the office and volume in a hybrid model. Throughout the pandemic MDA has kept pace with public health policy and guidance, adjusting and aligning our work related health and safety policies when needed … federal regulations in Canada now require government suppliers and contractors to confirm vaccination status for their employees working in government facilities. To stay ahead of the curve and ensure responsible and safe working environment for all our employees wherever they work. In October, we introduced a mandatory vaccination policy that requires all MDA employees to be fully vaccinated against COVID-19. By November 30.”
Wth respect to company office vaccine mandate, Greenley said “we don’t expect any major disruptions there at all.”
Of note, of the three business streams, Geointelligence remains flat year-to-year while Satellite Systems and Robotics and Space Operations showed growth, as expected. MDA’s SARnext program is expected to help it grow its Geointelligence revenue when it comes online.