BRAMPTON, ON, Feb. 28, 2024 /PRNewswire/ - MDA Ltd. (TSX: MDA), a trusted space mission partner to the rapidly expanding global space industry, today announced financial results for the fourth quarter and year ended December 31, 2023.
"In 2023, the MDA team delivered another year of strong growth and execution with revenues up 26% and adjusted EBITDA up 24% on a year over year basis, further solidifying our position as a trusted mission partner and leader in the expanding space industry," said Mike Greenley, Chief Executive Officer of MDA. "We secured a number of strategic contracts including the Telesat Lightspeed LEO constellation award, valued at $2.1 billion and a $180 million authorization to proceed contract to initiate work on a new Non-Geostationary Orbit satellite constellation, with the full contract expected to be awarded this year. With these awards MDA has now secured three constellation contracts in the past two years, highlighting the strong momentum we are seeing in our Satellite Systems business driven by customer demand for communication satellite constellations." 
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"Our teams also continued to advance work on the Canadarm3 program with the first elements of the external robotic interfaces going into production in 2023, a major milestone for the program. On CHORUS, our next generation Earth observation constellation, the team made significant development progress and has started sub-system building and assembly as we prepare for the mission launch in late 2025.  These accomplishments reflect tangible progress against our strategic growth plan and position us well for the coming years."    
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"I am also pleased with our fourth quarter performance which demonstrated solid revenue growth and profitability as our teams remain focused on execution and delivering on our customer commitments. With a strong book of business and robust opportunity funnel, MDA is well positioned to meet growing customer demand across our end markets."  
FULL YEAR 2023 HIGHLIGHTS
FOURTH QUARTER 2023 HIGHLIGHTS   
2024 FINANCIAL OUTLOOK
As a trusted mission partner and leading global space technology provider, we are leveraging our capabilities and expertise to execute on targeted growth strategies across our end markets and business areas. Our strategic initiatives, which span across our three businesses, include investing in next generation space technology and services, expanding our presence in high growth markets and geographies, and scaling and expanding skills, talent and operations to meet current and future market demand. We continue to make good progress against our long term strategic plan
We continue to make good progress against our long term strategic plan
MDA is well positioned to capitalize on strong customer demand and robust market activity given our diverse and proven technology offerings. Our growth pipeline is significant and underpinned by existing and new programs and our book of business is healthy. We see activities ramping up in line with our expectations, and are encouraged by the team's solid execution.
For fiscal 2024, we expect full year revenues to be $950 – $1,050 million, representing robust growth of approximately 25% at the mid-point of guidance compared to 2023 levels. We expect revenue growth to accelerate in the second half of 2024 as we ramp up work volume on a number of programs. We expect full year adjusted EBITDA to be $190 – $210 million, representing approximately 19% – 20% adjusted EBITDA margin. We expect capital expenditures to be $210 – $230 million in 2024, comprising primarily of growth investments to support CHORUS and the previously outlined growth initiatives across our business areas
We expect capital expenditures to be $210 – $230 million in 2024, comprising primarily of growth investments to support CHORUS and the previously outlined growth initiatives across our business areas
For Q1 2024, we expect revenues to be $205 – $215 million as we continue to execute on our backlog.  
FINANCIAL OVERVIEW
KEY INDICATORS SUMMARY
REVENUES BY BUSINESS AREA
Revenues
Consolidated revenues for the fourth quarter of 2023 were $205.0 million, representing an increase of $18.9 million (or 10.2%) from the fourth quarter of 2022. The year over year increase in revenues was primarily driven by strong contributions from our Robotics and Space Operations and Satellite Systems businesses.
By business area, revenues in Geointelligence for the fourth quarter of 2023 were $49.9 million, which represents a decrease of $4.0 million (or 7.4%) from the same period in 2022 due to timing of programs. Revenues in Robotics & Space Operations for the fourth quarter of 2023 were $64.9 million, which represents an increase of $17.0 million (or 35.5%) from the same period in 2022. This year over year increase is primarily driven by the higher volume of work performed on the Canadarm3 program. Revenues in Satellite Systems for the fourth quarter of 2023 were $90.2 million, which represents an increase of $5.9 million (or 7.0%) from the same period in 2022 driven by slightly higher work volume on the Globalstar program and the initial ramp of the Lightspeed program which was awarded in Q3 2023
0%) from the same period in 2022 driven by slightly higher work volume on the Globalstar program and the initial ramp of the Lightspeed program which was awarded in Q3 2023
Consolidated revenues for the year ended December 31, 2023 were $807.6 million, which were $166.4 million (or 26.0%) higher than the same period in 2022. The year over year increase in revenues was primarily driven by strong contributions from our Satellite Systems and Robotics & Space Operations businesses.
By business area, revenues in Geointelligence for the year ended December 31, 2023 were $197.5 million, which represents an increase of $2.2 million (or 1.1%) from the same period in 2022 reflecting relatively steady volume of work. Revenues in Robotics & Space Operations for the year ended December 31, 2023 were $248.4 million, which represents an increase of $54.7 million (or 28.2%) from the same period in 2022. The year over year revenue increase is primarily driven by the higher volume of work performed on the Canadarm3 program. Revenues in Satellite Systems for the year ended December 31, 2023 were $361.7 million, which represents an increase of $109.5 million (or 43.4%) from the same period in 2022 driven by higher volumes related to satellite constellation work including the Globalstar program which commenced in Q1 2022 and additional awards to support US Department of Defense constellations
4%) from the same period in 2022 driven by higher volumes related to satellite constellation work including the Globalstar program which commenced in Q1 2022 and additional awards to support US Department of Defense constellations
Gross Profit and Gross Margin
Gross profit reflects our revenues less cost of revenues. Q4 2023 gross profit of $57.8 million represents a $1.1 million (or 1.9%) decrease over Q4 2022 driven by program mix and higher depreciation expense as new assets come into service, offset by higher work volumes. Gross margin in Q4 2023 was 28.2%, which is in line with our expectations and compares to a gross margin of 31.6% in Q4 2022.  
For the year ended December 31, 2023, gross profit of $244.0 million represents a $15.6 million (or 6.8%) increase over 2022 driven by higher volume of work performed year over year, partially offset by $16.8 million of higher ITCs recorded in Q1 2022 related to the resolution of historical claims. Gross margin for the year ended December 31, 2023 was 30.2%, which is in line with our expectations driven by an evolving program mix and higher depreciation expense. Comparatively, gross margin in 2022 was 33.0% excluding the aforementioned impact of the historical ITC claims recognized in Q1 2022
0% excluding the aforementioned impact of the historical ITC claims recognized in Q1 2022
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA for the fourth quarter of 2023 was $42.1 million compared with $39.9 million for the fourth quarter of 2022, representing an increase of $2.2 million (or 5.5%) year over year driven by higher work volume as we continue to execute on our backlog. Adjusted EBITDA margin was 20.5% for the fourth quarter of 2023, in line with the 21.4% adjusted EBITDA margin reported for the fourth quarter of 2022.
Adjusted EBITDA for the year ended December 31, 2023 was $174.2 million compared with $157.9 million for the same period in 2022, representing an increase of $16.3 million (or 10.3%) year over year. Adjusted EBITDA for the year ended December 31, 2022 included $16.8 million of income from the aforementioned resolution of historical ITC claims. When excluding the impact of the $16.8 million related to historical ITC claims, Adjusted EBITDA increased $33.1 million (or 23.5%) year over year. The improvement was driven by higher volumes of work performed year over year. Adjusted EBITDA margin was 21.6% for the year ended December 31, 2023 compared with 22.0% in 2022, excluding the previously noted historical ITC claims resolution
0% in 2022, excluding the previously noted historical ITC claims resolution
Adjusted EBITDA, excluding historical ITCs claims resolution, is summarized below.
Adjusted Net Income
Adjusted net income for the fourth quarter of 2023 was $27.8 million compared with $22.3 million for the fourth quarter of 2022, representing an increase of $5.5 million (or 24.7%) year over year driven by lower income tax expense and finance costs in Q4 2023. Adjusted net income for the year ended December 31, 2023 was $97.9 million compared with $78.9 million for the year ended December 31, 2022, representing an increase of $19.0 million (or 24.1%) year over year. The increase for the full year period is driven by higher operating income and lower finance costs
The increase for the full year period is driven by higher operating income and lower finance costs
Backlog
Backlog as at December 31, 2023 was $3,097.0 million, an increase of $1,718.8 million compared with the backlog at December 31, 2022 driven by new order bookings including the Telesat Lightspeed LEO constellation awarded in Q3 2023, partially offset by continued conversion of our backlog into revenue. The following table shows the build up of backlog for Q4 and the year ended December 31, 2023 as compared with the same periods in 2022.
CONFERENCE CALL AND WEBCAST
MDA will host a conference call and webcast to discuss these financial results on Wednesday, February 28 at 8:30 am ET. Interested parties can join the call by dialing 416-764-8609 (Toronto area) or 1-888-390-0605 (toll-free North America) or 080-0652-2435 (toll-free international) and entering the conference ID 26825361. A live webcast of the conference call and an accompanying slide presentation will be available at https://mda-en.investorroom.com/events-presentations.
A replay of the conference will be archived on the MDA website following the call. Parties may also access a recording of the call which will be available until March 6, 2024, by dialing 1-888-390-0541 and entering the passcode 825361#.
NON-IFRS FINANCIAL MEASURES
This press release refers to certain non-IFRS measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective. Accordingly, the measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We use non-IFRS measures, including EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Earnings per Share, Order Bookings and Net Debt, to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We define EBITDA as net income (loss) before: i) depreciation and amortization expenses, ii) provision for (recovery of) income taxes, and iii) finance costs. Adjusted EBITDA is calculated by adding to and deducting from EBITDA, as applicable, certain expenses, costs, charges or benefits incurred in such period which in management's view are either not indicative of underlying business performance or impact the ability to assess the operating performance of our business, including i) unrealized foreign exchange gain or loss ii) unrealized gain or loss on financial instruments and iii) share-based compensation expenses, and iv) other items that may arise from time to time. Adjusted EBITDA margin represents Adjusted EBITDA divided by revenue. Order Bookings is the dollar sum of contract values of firm customer contracts. Adjusted Net Income is calculated by adding to and deducting from net income, as applicable, certain expenses, costs, charges or benefits incurred in such period which in management's view are either not indicative of underlying business performance or impact the ability to assess the operating performance of our business, including i) amortization of intangible assets related to business combinations, ii) unrealized foreign exchange gain or loss, iii) unrealized gain or loss on financial instruments, and iv) share-based compensation expenses, and iv) other items that may arise from time to time. Adjusted Earnings per Share represents Adjusted Net Income divided by the weighted average number of shares outstanding. Order Bookings is indicative of firm future revenues; however, it does not provide a guarantee of future net income and provides no information about the timing of future revenue. Net Debt is the total carrying amount of long-term debt including current portions, as presented in the 2023 Audited Financial Statements, less cash (or plus bank indebtedness) and excluding any lease liabilities. Net Debt is a liquidity metric used to determine how well the Company can pay all of its debts if they were due immediately
Net Debt is a liquidity metric used to determine how well the Company can pay all of its debts if they were due immediately
FORWARD-LOOKING STATEMENTS
This press release may contain forward‐looking information within the meaning of applicable securities legislation, which reflects the Company's current expectations regarding future events. Forward‐looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Company's control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward‐looking information. Such risks and uncertainties include, but are not limited to the factors discussed under "Risk Factors" in the Company's Annual Information Form (AIF) dated February 28, 2024 and available on SEDAR+ at www.sedarplus.com. MDA does not undertake any obligation to update such forward‐looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law
MDA does not undertake any obligation to update such forward‐looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law
ABOUT MDA
Serving the world from its Canadian home and global offices, MDA (TSX: MDA) is an international space mission partner and a robotics, satellite systems and geointelligence pioneer with a 50-year story of firsts on and above the Earth. With over 3,000 staff across Canada, the US and the UK, MDA is a leading partner in the pursuit of viable Moon colonies, enhanced Earth observation, communication in a hyper-connected world, and more. MDA has a track record of making space ambitions come true, and enables highly skilled people to continually push boundaries, tackle big challenges, and imagine solutions that inspire and endure to change the world for the better, on the ground and in the stars. For more information about the Company, please visit www.mda.space
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MDA Ltd.   Consolidated Statement of Comprehensive IncomeFor the years ended December 31, 2023 and 2022(in millions of Canadian dollars except per share figures)
MDA Ltd. Consolidated Statement of Financial PositionDecember 31, 2023 and 2022(in millions of Canadian dollars)
MDA Ltd.Consolidated Statement of Cash FlowsFor the years ended December 31, 2023 and 2022(in millions of Canadian dollars)
RECONCILIATION OF NON-IFRS MEASURES 
The following tables provide a reconciliation of net income to EBITDA, adjusted EBITDA, and adjusted net income: 
SOURCE MDA Ltd.
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