Good evening, everyone, thank you for joining us today at our session with MDA. I'm Kristine Liwag, the senior aerospace defense analyst here at Morgan Stanley. Before we begin, just our standard disclosure. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. With that, I'm happy to have us be joined by Mike Greenley, CEO of MDA, and also Vito Culmone, CFO of MDA, who can be on screen if anybody has any questions. As a reminder to the audience, this is meant to be an interactive session. If you have any questions, please feel free to type it in your portal, and I'll be happy to ask Mike and Vito these questions. With that, Vito and Mike, welcome. Thank you. We're glad to be here. Well, great. Maybe I could start off with the first question, Mike. Can you provide us an update on your three big flagship programs or the three big rocks, as you've called them, Canadian Surface Combatant, Canadarm3, and Telesat LEO? Where are we with these programs, and what are key milestones we should be looking for? Sure. I can address that. All three programs are underway. As we mentioned earlier we've been selected for these programs and are currently conducting work on each of them. We take them one at a time, Canadian Surface Combatant is in what's called a requirements reconciliation phase. In this phase of the project, we're under contract to provide engineering and project management support in the area of the ship project that we work on, and be able to, what it says, finalize all the requirements for the program. That work continues. In parallel, the project team has started to contract for the first four ship sets, so the first four ships in this new ship fleet. You would've seen from us in Q1 that we would've picked up an order for what's called the laser warning countermeasure sensor for its first four ship set. The teams are working very diligently in the background throughout the year on the other sensor elements of the suite to be able to get those first four ship set orders organized. As we go through the second half of the year and the start of 2022, you should expect to see a string of orders come through related to those first four ship sets being conducted. In the case of Telesat Lightspeed and satellite systems, again, we're under a contract there. We're under preliminary funding to be able to do early risk reduction on that program. We're working away on that while the teams continue to support Telesat as they get all of their financing organized towards a future official full program start. That work continues, and we continue to provide that support. As we watch that program, it continues to progress as we would expect. We're looking forward to being able to get everybody under full contract for that and have the official full start to that program as we go through the next couple of quarters. In terms of Canadarm3, we announced last year that we had the Phase A contract, which is for the high-level requirements for the system. That's been progressing as we've gone through 2021 and continues through the year. In parallel, as part of that work, we have to get all of the proposals finalized and organized with the Canadian Space Agency for the next phase, Phase B of the program. That work, again, is progressing on schedule. Everyone's working extremely hard over that during the summer. The exact same pattern, so that as we can go through the next couple of quarters and get under contract for the next phase of work. We previously announced that we were the sole source selected to party to deliver the artificial intelligence robotics for Lunar Gateway through the Canadarm3 program. It's not a matter of if we're doing it or when or anything, it's just doing the work to be able to get the contracts set up so that we maintain project continuity moving forward. Thanks, Mike. I guess following up on Telesat LEO, right? They announced a CAD 1.15 billion investment in the Lightspeed project from the Canadian government. With this program announcement, how should we look at this? Is this something that supports that the program is on track? Is this an incremental growth driver? How meaningful is this for MDA? Yeah. For us, it's a key element of getting the base project financing organized. As we've gone through the last year, we would've seen a number of different sort of announcements. First of all, Telesat has its own money on its balance sheet that it'll talk about. There was announcements of support from the province of Quebec. There was announcement of support from the province of Ontario as we came through the summer. This announcement of support from the federal government, which is actually the second of two different announcements from the federal government over the last two years. All of that assembles the necessary finances, to be able to work on this with Telesat continuing with its business to do its IPO in addition to working on some debt financing. As it's pulling together everything, then to us, it's all just according to plan. Telesat is progressing according to plan to pull together all of the resources that it has intended to do to deliver the program. For these financing portions, are we waiting on other provincial governments or other indications from the federal government left over to make sure that the program is progressing as expected? Which ones are we waiting for? Is there anything else to wait for at this point? Yeah. I think we are waiting for Telesat to complete its financing and announce that it has done so. I think that's what we should watch for. From what we can see, they're making great progress on that. We just have to wait for that to be completed and then pull the start pistol. Thanks, Mike. Thinking about your hiring, right? I mean, you guys have been on a hiring spree. Yeah. When we looked at how many employees you onboarded, I think you brought on over 400 employees as of the middle of this year. You hired about 350 last year. Considering your employee base is only about 2,000 employees prior to all these hires, that's a fairly meaningful jump. I guess, first, how's onboarding and training, and transitioning to make sure that they're able to get on these programs smoothly? Also, second, how many more open positions do you have to fill? It's definitely really busy. Also very successful. In the recruiting process itself, the recruiting process is going really well. It's hard work, for sure. There's a great competition for talent out there in the world, but we're competing well. Fortunately, in the case of things like Canadarm3 or Telesat Lightspeed, these are super interesting projects. As an engineering challenge or a technical or business challenge, people are very interested in the topic, so that's really good and definitely helps with recruiting. The onboarding process is going well. Especially all the technical people, the engineers coming into our engineering matrices and then getting loaded into the big projects that need growth. Those projects are organized to receive this level of staff, so that's just all working basically. That's good. I think that's it. That's just going well. It'll continue. We will continue to have hiring as we go through the next couple of years. There'd be probably another 200, 300 that we need to pick up over the next couple of years as we keep going. I think right now, in this year, you used the number 400, which was probably our Q2 number. We're probably hitting the 500 number, if not this week, then next, for the year this year so far. Then have 200 more as we go through 2022 fully, to be able to get fully staffed up on these programs. That's kind of what the profile looks like. It's going well. We're getting good people. They're coming in. We're organized for it. We're doing some special activities and initiatives around transfer of knowledge and technology. We want to make sure that we have a very experienced workforce, a lot of experienced technical people that have a lot of experience on our types of programs. Making sure that our engineering managers are grouping those people accordingly on the projects and make sure we're passing knowledge on from one generation to the next, as we bring in this next generation, is an important focus for us as we're using all these new hires to build out our project teams. Thanks, Mike. In the past, we've talked about how MDA is well-positioned to benefit from mega constellations in low Earth orbit. At the same time, we're seeing a lot of new emerging players enter the space. Can you help us paint a picture in terms of how you see that industry developing, where these new space guys are in that landscape versus where MDA is? Help us understand where you live in that spectrum. Sure. In the LEO constellations, we've been there for a while in the LEO constellation space. We had activity on O3b, on Iridium NEXT. We're still on OneWeb, we're still delivering on OneWeb. OneWeb was really important for us because it took us into advanced manufacturing, robotics-based satellite subsystem assembly with additive manufacturing, 3D printing. Really high volume, high-quality production on the OneWeb program. That was really key for us. Telesat Lightspeed comes along as the next constellation, which further lifts our capacity and capabilities in those areas. That's really good. Up to and including, we're looking at full satellite manufacturing as part of that program. We have a very strong pipeline of people that are talking to us about LEO constellations, for sure. Certainly, the market has a number of different sort of types of players. You end up with some players that want to be vertically integrated and do it themselves. They want to have a LEO constellation like a SpaceX, let's say. They want to put up a capability, and they have high volumes in their business plan, and therefore, they're going to be vertically integrated and do everything themselves or as much as they can themselves. There's a couple of players like that. You get folks that are raising money for their constellations, and you're looking at, are they able to raise their money and pull it together? There's sort of two types in that category. Those that would like to do it themselves as a cost advantage. They want to be able to pull together the capability and do a bunch of things themselves. Others that just want a good operational constellation, and they want to go ahead and procure the satellites for their capability. We get involved in those conversations. Those that are seeking financing, we're constantly assessing their maturity, the level of financing that they're getting, who their anchor customers might be. Being selective about which programs are the steady ones that we can really advance with and develop an opportunity. The last category that's going to emerge in our view in the market is just kind of like the large corporation, like a big telco or a big tech company that just wants to have its own private network for whatever its business is. They're going to be well-financed because they're a large corporation, and they're going to want to have a network as part of their operations. Often, they don't want to get into the business of building satellite technology, so they're going to go out and try to acquire those. Which also creates some really interesting opportunities in the marketplace. For us, we get exposed to that full range. We have two modes of behaving there. One is in our traditional subsystem provider mode, where we can deliver antennas, electronics, and payloads into a satellite capability for someone. We're increasingly getting engaged in conversations about the full satellite because we're able to deal with that, and we have dealt with that in the past. We'll be in a position to show up as a subsystem supplier on some constellations and potentially as a full satellite provider on other constellations. That's all very high demand activity right now. There's a lot of activity there. As you said, there's a lot of entrants. We're in a position to be able to assess the opportunities and pick the ones that have really solid, high probability for us, and then focus on those. As we said in the IPO, we've got sort of over CAD 6 billion of opportunities in that LEO constellation category, and we're working them. We're talking to people, and we're working them. We would expect to see some action there over the next sort of 24-30 months. Thanks, Mike. Moving on to your strategic investment. Recently, you've announced a strategic investment in a space-focused VC fund, which offers you a window into the emerging space concepts and technologies. What trends are you seeing right now in young space companies looking for access to capital? Are there one or two areas that seem to be attracting outsized growth or outsized attention? Yeah. We're involved in a number of activities around that. I think in all three of our business areas, in geointelligence, in satellite systems, and robotics and space operations, there's legitimate startup and new business growth in each of these areas around the various technologies in those areas. Both the primary missions and downstream potential activities, especially in Earth observation and communications. We see that across the board. I can't think of one or two that are attracting specifically more in terms of the actual growth potential. For us, it's all about being tied into the conversation, being involved, and seeing what's coming. Being able to identify people that we can work with, that we can use in our supply chains, that we could partner with, that we could do further investments in, consider future acquisitions. It's just a great place to be. The example that you're raising was our investment in the Seraphim Space Investment Trust out of the U.K. It provides great insight for us to be able to do that. It creates opportunities for us, like I say, to include people in our business in the future and/or look at downstream M&A-type activity. Great. Do you anticipate to do more investments like that, Mike? Do you have some sort of number earmarked for investments like that should your Seraphim investment result in that access that you're looking for? Right now, when we think about it, just at a very small scale, that was a low single-digit CAD million thing. It's at that level. There's a lot of things that we can get involved in and stay interested in by just participating at that level. We don't have to turn that into a big-scaled activity. It's nice to stay crisp and current and sharp by participating in those types of activities. There'll probably be one or two of those that we're a part of, but just at a small scale. Thanks, Mike. Last quarter, you were awarded a new contract by L3Harris and Lockheed to provide LEO antennas for the Space Development Agency's wide field of view tracking Tranche 0. Sorry, that's quite a mouthful. Yeah. Late last month, we saw SDA issue an RFP for 144 satellites as part of Tranche 1. How do you think about this opportunity as SDA, so the Space Development Agency, build out its proliferated constellation in LEO? How big of an opportunity is this for you? Is that factored in in terms of your growth pipeline, and how are you positioned? Some element of that would definitely be in our base business plan, especially in satellite systems, for us to be able to deliver high-quality subsystems to people's satellites. That's where we're playing in that sector. We found that as we came out again as a standalone independent company, a number of the U.S. primes really started reaching out to us, looking for potential content, antennas, electronics, payloads on satellite programs. We're absolutely exercising that pipeline of opportunity. We like those conversations. We've been picked up by a whole new group of U.S.-based primes that like to talk to us. We've been able to quote them, been selected by them, and we get to now find our way into their supply chain. We plan to continue doing that. Those opportunities are in our pipeline and in our forecast for the future. Certainly, with success and as volumes increase, yeah, there can be upside, but our current view and our factored view of success of that current view is in the forecast that we've been talking about through the IPO. Yeah, we're a strong performer there. We always have been, and it's nice to be able to now bring that into that SDA arena. Thanks. Also, as a reminder to the audience, this is an interactive session. Type in your question in the web portal, then I'll read them out and ask Mike. Maybe next one for me, Mike. Let's go to the Moon. You've been recently awarded your fourth lunar sensor award. Can you speak to the opportunity set for MDA as the number of planned Moon missions grow? Also, there seems to be a renewed interest in terms of Cislunar operations. How should we think about this opportunity set for your company? Yeah, I think we've got a great sort of kit bag of product offerings that can fit into that whole conversation. Right now, people are planning missions and they're planning lunar landings, and therefore they're looking for lunar landing sensors, and we've got a great product there. A number of people have picked us up, which is excellent. You also saw us announce an altimeter this week with the folks over in Japan as they go to Phobos, one of the moons of Mars. We've got another sensor sale there. I like the commercial sensors because it gives us a great access point into these spacecraft missions. We have sensors, we have robotics, we have really good spacecraft communication systems as well. We're delivering spacecraft communications to some spacecraft projects, that comes into the mix. Our ability to have conversations with this, like you said, this growing number of spacecraft missions to the moon, allows us to be part of that and have a number of product lines that we can put on the table, which is excellent and which we would expect to grow. As the lunar program continues, there will always be a need for sensors. There will be a need for robotics, different types of devices and robotic-based devices, which plays into our robotics business, and communication systems and networks. We have a concept contract right now in partnership in Europe and through the European Space Agency to study the communication networks on the moon. Not just what the technical solution would look like, but also the business model in terms of can we get into public-private partnerships operating communication networks on the moon as a service. People are asking us to explore these types of things. We would fully expect to be involved as an advanced technology provider and potentially a service provider, as part of the whole Cislunar activity. Great. Mike, going back to the three flagship programs. To support that growth, you've also got a substantial CapEx plan. Can you give us an update in terms of where you are in your CapEx plan and any sort of progress update you could provide? Yeah. We put sort of a five-year CapEx plan on the table there during the IPO process. Absolutely, we continue on that path. Each of those initiatives as it relates to early phase investments related to Lightspeed and/or Surface Combatant. Our more significant investment in SAR next, our next generation radar-based Earth observation capability. Those projects are all continuing, and our investment plan continues within the plan that we've established. That's all good. There's nothing that's extraordinarily behind or ahead of schedule. It's just good, steady progress through the last several months of working on that continued activity. Kristine, maybe I'll add there. As we said in our IPO, we've earmarked sort of a growth CapEx budget of call it CAD 600 million. SAR next is the primary component of that, as Mike has alluded to. Also, we've got other initiatives supporting our flagships. The interesting part of us as an investment proposition, if you will, is we're projecting that our cash from operations will substantially fund all of that growth CapEx. That's an important component of, as investors who get to know us from an investment thesis perspective. Great. That's really helpful, guys. Maybe switching over to ESG. MDA satellites or your parts have been used for weather and environmental monitoring. Given significant investor interest in terms of looking at monitoring weather and looking at climate change, how do you see that demand increase? Do you think that there would be multiple providers of Earth observation platforms? Is this a significant growth sub-sector for you? Ultimately, how do you see ESG in your framework? Definitely, it's an active sector. Definitely, space plays a big role in climate and environmental monitoring. That whole sector, I think there's been studies that say there's about 50 different variables you can monitor in that area, and 26 of them you can only measure from space. The ability to use various environmental monitoring sensors is absolutely relevant to that conversation. As you've indicated from an ESG perspective, it's an increasing conversation. People care about it. We own and operate radar satellites, RADARSAT-2, for example, and our investments in SAR next. That is relevant. We've had recent stories, we've done some recent press releases on deforestation monitoring that we do. We do a lot of maritime monitoring. We do a lot of ice monitoring, which is all related to the climate change analysis picture, using our radar-based satellites. A lot of resource monitoring. All of that feeds into that, and we would expect that to grow as we go into the future. In addition, of course, there is other sensors. Hyperspectral sensors can play a role there. People are looking at different types of methane sensors in that regard. There are other sensor types that fit that whole environmental monitoring category that other folks have businesses in, and that we could certainly in the future consider as we look at, we are already dipping our toe in that environmental monitoring vertical with our radar. It would be a legitimate thing in terms of what other sensor feeds could we fuse with ours to create interesting information products in the environmental and climate monitoring space. Or maybe even someday you would look at with our other sensors that you want to operate as that continues to grow. We're in that space, we play in that space, and we would expect it to grow, and there's different ways we can do it, as I just described. Great. It looks like we've got a question from the web portal. Vito, it looks like the question is for you. Since the IPO, you've significantly changed capital structure of the business. How should we think about the very high cost of debt outstanding and, at some point, would those get refinanced at a much lower interest rate because your leverage is significantly lower now than pre-IPO? Yeah. Well, in fact, thank you for the question. One of the initiatives, substantially all the funds from the IPO went to a reduction in our leverage. When you look at our net debt position at the end of the quarter, we were in a net debt position of some CAD 30 million. Essentially a net debt position of zero. We do have CAD 150 million. I think that's what the question is referring to in second-term loans that we will address here as we move forward. The current provisions of that loan agreement do not make it a wise economic decision to act on that right away. Our costs of funding have come down substantially with the IPO proceeds, and it's a focus area for us moving forward, and we'll address it in the coming quarters. Well, great. I guess, Vito, like that CAD 150, right, is at 10% cost of capital. I would imagine, should it become economical to look at that term loan, it should be much more attractive cost of financing. Kristine, our liquidity profile right now is quite nice and the revolver we got in place is at substantially lower than the 10%. It's not a one-for-one swap. There's other provisions related to that CAD 150 that is not for public consumption, but we'll take care of that in due course. Great. Then it looks like we've got another question here in the queue. Mike, now that you guys are a public company and you've had a few months as a public entity, how has that changed your discussion with customers and suppliers, especially as the company's now at a better financial position on a cash basis? I think, Mike, we talked about this before. Since the separation from Maxar, you've gotten new businesses. At this point, as a public entity and have been a public entity for a few months, have those conversations increased in terms of increasing the relationship or having new business opportunities open doors for you? It's definitely opened doors for us. We have more conversations with a wider range of companies, for sure. That continues to grow. We're generally known as a pretty collaborative bunch, especially technically and from a business perspective. We like to work with other parties and work together on different missions and solutions for the market. I'd say now probably definitely more than before, our ability to talk about investing or co-investing or getting together in different types of business models would be we're a bit freer to do so now because we're in such a strong financial position and we are independent. I think that that adds. We've always been a strong technical collaborator. Now we're an increasingly business collaborator in terms of being able to work with others, and that adds to the conversation. Well, great. I think that's all the time that we have. Mike, Vito, thank you very much for joining us today at our virtual Laguna Conference. I really cannot wait for a real Laguna. Thank you so much. Absolutely. Thanks for having us. Take care. Bye. This ends our session with MDA this afternoon. Thank you.