Magellan Aerospace earns $3.31-million in 2020 Magellan Aerospace Corp. has released its financial results for the fourth quarter of 2020. All amounts are expressed in Canadian dollars unless otherwise indicated. The results are summarized as follows.
Three month period ended December 31 Twelve month period ended December 31
Expressed in thousands of Canadian dollars, except per share amounts
2020 2019 2020 2019
Revenues 180,057 246,678 744,414 1,016,219
Gross Profit 11,634 33,973 96,491 156,958
Net Income (22,875) 9,409 3,313 67,381
Net Income per Shar (0.40) 0.16 0.06 1.16
Adjusted EBITDA 11,544 27,928 100,436 145,221
Adjusted EBITDA per sh 0.20 0.48 1.73 2.49
1. Overview
A summary of Magellan's business and significant updates
Magellan is a diversified supplier of components to the aerospace industry. Through its wholly owned subsidiaries and controlled entity, Magellan engineers, and manufactures aeroengine and aerostructure components for aerospace markets, advanced products for defence and space markets, and complementary specialty products. The Corporation also supports the aftermarket through the supply of spare parts as well as performing repair and overhaul services.
Magellan operates substantially all of its activities in one reportable segment, Aerospace, which is viewed as one segment by the chief operating decision-makers for the purpose of resource allocations, assessing performance and strategic planning. The Aerospace segment includes the design, development, manufacture, repair and overhaul, and sale of systems and components for defence and civil aviation.
Business Update
On December 10, 2020, Magellan announced the delivery of the 200th set of F-35 Lightning II horizontal stabilizer assemblies under an agreement with BAE Systems. Magellan and BAE Systems have been working together to produce horizontal stabilizers for the global F-35 program since 2009. Both companies have since made significant investment in facilities, technologies and training to ensure the successful delivery of these flight-critical assemblies to the F-35 prime contractor Lockheed Martin. The horizontal stabilizers produced at Magellan are major assemblies on the Conventional Takeoff and Landing (CTOL) variant of the F-35. Magellan is targeting to produce more than 1,000 ship sets of horizontal tail assemblies over the life of the F-35 program along with various other metallic and composite components.
On January 14, 2021, the Corporation announced that Raytheon Missiles & Defense ("Raytheon") awarded the Corporation a contract for the supply of complex missile fin components. These heat-tolerant surface control assemblies will be manufactured at Magellan's facility in Middletown, Ohio, with deliveries starting in 2021 and continuing through 2024. The value of this agreement is approximately $61.4 million. Magellan has participated in the Standard Missile ("SM") program for more than 20 years, supplying dorsal fins for various configurations, including the SM-3 and SM-6. These defensive missiles provide area defence to the U.S. Military against theater ballistic missiles, aircraft and cruise missiles.
On February 8, 2021, Magellan announced the signing of a Memorandum of Understanding ("MOU") with General Electric Aviation Canada ("GE Canada") for the purpose of exploring an arrangement whereby GE Canada would support Magellan in establishing and delivering a Canadian-based sustainment solution for the GE F414-GE-400 engine, which powers Boeing's F/A-18 Block III Super Hornet fighter jet. This initiative is in support of Boeing's proposal to provide the Block III Super Hornet as a solution for Canada's Future Fighter Capability Project ("FFCP"). Under the MOU, with the selection of the Super Hornet for the FFCP, GE Canada and Magellan would develop an appropriate and competitive sustainment solution for Canada which would provide all aircraft engine sustainment services for the Royal Canadian Air Force on their F414 engine fleet. The in-country depot level sustainment support for the engines includes onsite maintenance, repair and overhaul support services, technical services, and engineering support and would be performed in Magellan's facility in Mississauga, Ontario for the life of the program.
On March 5, 2021, the Honourable William G. Davis, P.C., C.C., Q.C., former premier of Ontario, resigned as a member of the Board of Directors of the Corporation due to personal reasons. Mr. Davis served as a member of the Board since 1989 and has made tremendous contribution to Magellan over the years. His vast experience in regulatory and governmental affairs and in community and industry relations was a great asset to the Board.