Lockheed Martin Contracts Terran Orbital for 18 Satellite Buses

Lockheed Martin has contacted satellite manufacturer Terran Orbital for 18 busses that will be used for the production of 18 satellites under the Space Development Agency’s (SDA) Tranche 2 Tracking Layer contract.

The timing of this announcement is notable, coming on the eve of Terran Orbital's earnings report, likely aimed at assuring investors of the solidity of its alliance with Lockheed Martin, especially after the latter retracted its bid to acquire Terran Orbital.

Terran Orbital strategically chose to issue the press release after the stock market's closure on Monday, preceding its scheduled first-quarter earnings call on May 14.

Earlier, in January, Lockheed Martin had disclosed its intention to utilize Terran Orbital’s satellite buses following its triumph in securing an $890 million contract to manufacture 18 missile warning and missile tracking satellites for the SDA.

The SDA, a vital constituent of the U.S. Space Force, is engaged in constructing a constellation in low Earth orbit for the Defense Department.

“We’re proud to once again be selected as the trusted space vehicle provider for Lockheed Martin, especially for the SDA’s critical tracking mission,...This continued partnership signifies the confidence Lockheed Martin places in Terran Orbital’s capabilities,” - ” Marc Bell, Terran Orbital’s Chief Executive. 

This new contract catapults the total number of satellite buses under contract for Lockheed Martin to an impressive 106. As disclosed in regulatory filings, Lockheed Martin's SDA satellite orders constitute a substantial 81% of Terran Orbital’s backlog, underscoring the depth of their partnership.

This announcement follows a tumultuous phase for Terran Orbital. On May 2, Lockheed Martin rescinded a $500 million offer extended on March 1 to acquire the remaining shares of Terran Orbital at $1 per share. Consequently, Terran Orbital’s stock witnessed a sharp decline in value. While Lockheed Martin did not publicly elucidate the rationale behind the withdrawal, industry analysts have speculated about potential concerns regarding Terran Orbital’s engagement with its Rivada Space Networks contract.

Terran Orbital’s association with Rivada Space Networks, though substantial, has yet to witness significant progress, leaving uncertainties about the receipt of the anticipated $180 million by the end of 2023, which constitutes a down payment on the $2.4 billion project.

As of May 13, Terran Orbital’s stock price hovered around $1.05. While this figure still ensures compliance with the New York Stock Exchange's minimum listing requirement of $1, the company remains vigilant about sustaining investor confidence amidst evolving market dynamics.

With Lockheed Martin’s renewed commitment and a burgeoning portfolio of contracts, Terran Orbital appears poised to navigate through the challenges, reaffirming its position as a key player in the ever-expanding realm of satellite manufacturing and space technology.