Loral's low margin biz is the spacecraft manufacturing (SS/L); it's lucky to eke out 9% EBITDA, and a lot of that is on sales to Skynet, et al, so it's eliminated. Historically, and to this day, it is by far the biggest contributor Loral's top line however.
FSS business is much higher margin. I hesitate to speak for VMan, but I believe he's been disappointed that revenues and EBITDA have grown slower than mgmt forecasted. But most, maybe all, of that is explainable by delayed/failed launches over last 12-15 months. Now we finally have the assets in place, it looks like there's a very healthy backlog of business for them.
The Data business has also been disapointing, relative to old forecasts, but if you set those aside and just look at the current situation, maybe it's not so bad. Data recorded 22M$ in sales last Q, very nice sequential and y/y growth, and bookings of 33M$. It has a 178M$ backlog.
So yes, I believe that if G* disappeared, Loral would be earnings positive w/in the next 12-15 months, with good growth. Of course, the problem is, G* will not just disppear without a trace...if it doesn't succeed, it's likely to do damage to Loral's balance sheet and income statements for a long, long time. |
