TSX:MDA - Post Discussion
Post by
retiredcf on May 11, 2022 8:49am
RBC
Outperform
TSX: MDA; CAD 8.24
Price Target CAD 15.00
All values in CAD unless otherwise noted.
Priced as of prior trading day's market close, EST (unless otherwise noted).
1Q22 results ahead of expectations, backlog to $1.5B, 2022 guidance unchanged sentiment: positive
Our view: MDA reported 1Q22 revenues of $128M, up 4% over 1Q21. The revenue growth was led by Robotics and Space Operations, at $42M. Gross margins were strong (tax credit benefit) and adjusted EBITDA margins were 21.6% (excluding one-time items) but with higher R&D spending offsetting the ~$6M improvement in gross margins. The backlog increased to $1.5B, up from $685M in 4Q21, and the LTM book-to-bill is running at 2.7x. The company has maintained its 2022 revenue guidance of $750M-$800M. We beleive the quarter was strong and should support confidence in the full- year 2022 outlook.
First impression:
MDA reported a strong 1Q22, led by healthy bookings. Revenues increased to $128M, ahead of consensus and our estimates, and adjusted EBITDA margins of 21.6%. While the EBITDA was largely in line with estimates, the company demonstrated solid cost management. The highlight in the quarter was the backlog growth as the company booked the Globalstar LEO contract ($415M) and the Canadarm3 Phase B contract ($269M).
The company has also redeemed its $150M second lien notes, which should provide a savings on interest. The company is currently at just .6x leverage. FCF was a use of $22M in the quarter, with operating cash flow of $15M and capex of $37M. Management is hosting a conference call this morning at 8:30am ET.
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