Terran Orbital Reports Record 2023 Financial Results
-
Record 2023 revenue of
$135.9 million up 44% year-over-year -
Record 2023 gross profit of
$8.6 million improved$25.8 million over prior year -
Manufacturing 78 satellites for Lockheed Martin for
Space Development Agency programs -
Signed over
$2.7 billion in new awards in 2023 representing more than 360 satellites - Introduced seven new standard bus designs, spanning multiple size classes of satellites
- Launched new Responsive Space Initiative to deliver standard buses in 30 days, with integrated payloads in 60 days
- Commissioned new 50 Tech facility and broke ground on Goodyear expansion facility
-
$71.7 million cash balance as ofDecember 31, 2023
Full Year 2023 Financial Highlights
-
Generated record revenue of
$135.9 million up 44% year-over-year -
Gross profit of
$8.6 million compared to$17.3 million loss in 2022 -
Adjusted gross profit(1) of
$19.4 million compared to$2.2 million loss in 2022 -
Net loss of
$151.8 million improved from a net loss of$164.0 million in prior year
Results for the Fourth Quarter and Full Year 2023
Revenue for the fourth quarter of 2023 was
Cost of sales for the quarter was
Gross (loss) profit was
Selling, general, and administrative expenses were
Net loss was
Adjusted EBITDA(1) was
Capital expenditures totaled
Balance Sheet and Liquidity
As of
Backlog
Backlog represents the estimated dollar value of executed contracts, including both funded (firm orders for which funding is authorized and appropriated) and unfunded portions of such contracts, for which work has not been performed. The unfunded portion of enforceable contracts is accounted for as variable consideration and is reported at our estimate of the most likely amount to which the Company is expected to be entitled. Although backlog reflects business associated with contracts that are considered to be firm, terminations, amendments or contract cancellations may occur, which could result in a reduction in our total backlog.
Our backlog totaled
(1) Non-GAAP financial measure. Definitions of the non-GAAP financial measures used in this press release and reconciliations of such measures to their nearest GAAP measures are included below.
2023 Milestones
Launched 12 satellites into space, including:
-
Runner-1 for ImageSat International - Tantrum for Lockheed Martin
- 10 satellites for Space Development Agency’s Tranche 0 Transport Layer
Awarded
- 300 satellites for Rivada Space Networks
- 36 satellites for Lockheed Martin for the SDA Tranche 2 Transport Layer Beta
- 16 satellite constellation from new customer
-
Contract with Axient to supply satellites for the
Air Force Research Laboratory -
European Space Agency award for proximity operations and in-orbit servicing
Executing on expansion plans:
- Completed 50 Tech’s 60,000 sf addition to our existing manufacturing facility
- Increased clean room space ten-fold
- Completed our new printed circuit board assembly (PCBA) facility
- Completed our new module testing facility, over 2,500 modules built
- Expanded internal harness capability, delivered over 2,200 harnesses to programs
- Installed new large shaker table, TVAC chamber and shock testing facility
- Increased robotic assembly from module to panel (vehicle sub-assembly) level
- Broke ground on new 94,000 sf satellite assembly facility, anticipated to take possession in second quarter of 2024
Winning industry accolades
- Time Magazine’s TIME 100 Most Influential Companies 2023
- Fast Company’s Most Innovative Companies of 2023
- Business Intelligence Group’s BIG Award for Business, Small Business of the Year 2023
- Octane High Tech Awards, Best Large Disruptor / Innovator 2023
-
Office of the Secretary of Defense's Patriotic Employer Award 2023
Conference Call Information
In light of the Company’s ongoing strategic review, management has decided to cancel its previously scheduled fourth quarter and full-year 2023 earnings call.
About
Forward-Looking Statements
This press release contains, and the Company’s officers and representatives may from time to time make other public written and verbal announcements that contain, “forward-looking statements” for purposes of the federal securities laws. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. All statements, other than statements of present or historical facts, contained in this press release, regarding our expected future financial results, including for the fiscal year ending
These forward-looking statements are based on management’s current expectations, plans, forecasts, assumptions, and beliefs concerning future developments and their potential effects. There can be no assurance that the future developments affecting us will be those that we have anticipated, and we may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. New risk factors and uncertainties may emerge from time to time, and it is not possible to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. You should read this press release with the understanding that our actual future results may be materially different from the expectations disclosed in the forward-looking statements we make. All forward-looking statements we make are qualified in their entirety by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release, and we do not assume any obligation to, and we do not intend to, update any forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as required by law.
Condensed Consolidated Balance Sheets (Unaudited) (In thousands) |
||||||||
|
|
|
|
|||||
|
|
2023 |
|
|
2022 |
|
||
Assets: |
|
|
|
|
|
|||
Cash and cash equivalents |
|
$ |
71,663 |
|
|
$ |
93,561 |
|
Accounts receivable, net |
|
|
14,735 |
|
|
|
4,754 |
|
Contract assets, net |
|
|
21,390 |
|
|
|
6,763 |
|
Inventory |
|
|
33,348 |
|
|
|
24,133 |
|
Prepaid expenses and other current assets |
|
|
14,843 |
|
|
|
9,710 |
|
Total current assets |
|
|
155,979 |
|
|
|
138,921 |
|
Property, plant, and equipment, net |
|
|
46,449 |
|
|
|
24,743 |
|
Other assets |
|
|
17,885 |
|
|
|
18,990 |
|
Total assets |
|
$ |
220,313 |
|
|
$ |
182,654 |
|
Liabilities and shareholders' deficit: |
|
|
|
|
|
|||
Current portion of long-term debt |
|
$ |
11,740 |
|
|
$ |
7,739 |
|
Accounts payable |
|
|
22,850 |
|
|
|
21,188 |
|
Contract liabilities |
|
|
103,924 |
|
|
|
27,228 |
|
Reserve for anticipated losses on contracts |
|
|
977 |
|
|
|
2,860 |
|
Accrued expenses and other current liabilities |
|
|
14,408 |
|
|
|
11,721 |
|
Total current liabilities |
|
|
153,899 |
|
|
|
70,736 |
|
Long-term debt |
|
|
171,033 |
|
|
|
142,620 |
|
Warrant and derivative liabilities |
|
|
34,462 |
|
|
|
39,950 |
|
Other liabilities |
|
|
18,555 |
|
|
|
20,769 |
|
Total liabilities |
|
|
377,949 |
|
|
|
274,075 |
|
Shareholders' deficit: |
|
|
|
|
|
|||
Preferred stock |
|
|
- |
|
|
|
- |
|
Common stock |
|
|
20 |
|
|
|
14 |
|
Additional paid-in capital |
|
|
355,144 |
|
|
|
269,574 |
|
Accumulated deficit |
|
|
(513,011 |
) |
|
(361,168 |
) |
|
Accumulated other comprehensive income |
|
|
211 |
|
|
|
159 |
|
Total shareholders' deficit |
|
|
(157,636 |
) |
|
(91,421 |
) |
|
Total liabilities and shareholders' deficit |
|
$ |
220,313 |
|
|
$ |
182,654 |
|
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (In thousands, except share and per share amounts) |
||||||||||||||||
|
|
Three Months Ended
|
|
|
Year Ended
|
|
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Revenue |
|
$ |
31,600 |
|
|
$ |
31,923 |
|
|
$ |
135,915 |
|
|
$ |
94,237 |
|
Cost of sales |
|
|
32,134 |
|
|
|
42,710 |
|
|
|
127,355 |
|
|
|
111,494 |
|
Gross (loss) profit |
|
|
(534 |
) |
|
|
(10,787 |
) |
|
|
8,560 |
|
|
|
(17,257 |
) |
Selling, general, and administrative expenses |
|
|
27,193 |
|
|
|
27,587 |
|
|
|
117,458 |
|
|
|
111,870 |
|
Loss on impairment |
|
|
- |
|
|
|
23,694 |
|
|
|
- |
|
|
|
23,694 |
|
Loss from operations |
|
|
(27,727 |
) |
|
|
(62,068 |
) |
|
|
(108,898 |
) |
|
|
(152,821 |
) |
Interest expense, net |
|
|
13,182 |
|
|
|
9,637 |
|
|
|
48,502 |
|
|
|
26,644 |
|
Loss on extinguishment of debt |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
23,141 |
|
Change in fair value of warrant and derivative liabilities |
|
|
2,046 |
|
|
|
(40,975 |
) |
|
|
(5,488 |
) |
|
|
(43,300 |
) |
Other (income) expense |
|
|
(127 |
) |
|
|
2,147 |
|
|
|
(103 |
) |
|
|
4,514 |
|
Loss before income taxes |
|
|
(42,828 |
) |
|
|
(32,877 |
) |
|
|
(151,809 |
) |
|
|
(163,820 |
) |
Provision for income taxes |
|
|
11 |
|
|
|
102 |
|
|
|
34 |
|
|
|
160 |
|
Net loss |
|
|
(42,839 |
) |
|
|
(32,979 |
) |
|
|
(151,843 |
) |
|
|
(163,980 |
) |
Other comprehensive income (loss), net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency translation adjustments |
|
|
38 |
|
|
|
(132 |
) |
|
|
52 |
|
|
|
195 |
|
Total comprehensive loss |
|
$ |
(42,801 |
) |
|
$ |
(33,111 |
) |
|
$ |
(151,791 |
) |
|
$ |
(163,785 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
200,403,671 |
|
|
|
142,930,585 |
|
|
|
170,076,500 |
|
|
|
128,261,443 |
|
Diluted |
|
|
200,403,671 |
|
|
|
166,185,003 |
|
|
|
170,076,500 |
|
|
|
134,122,831 |
|
Net loss per share |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
(0.21 |
) |
|
$ |
(0.23 |
) |
|
$ |
(0.89 |
) |
|
$ |
(1.28 |
) |
Diluted |
|
$ |
(0.21 |
) |
|
$ |
(0.34 |
) |
|
$ |
(0.89 |
) |
|
$ |
(1.40 |
) |
Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) |
||||||||
|
|
Years Ended |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
(151,843 |
) |
|
$ |
(163,980 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
7,843 |
|
|
|
4,008 |
|
Non-cash interest expense |
|
|
32,034 |
|
|
|
14,309 |
|
Share-based compensation expense |
|
|
21,467 |
|
|
|
51,082 |
|
Provision for losses on receivables and inventory |
|
|
1,034 |
|
|
|
3,598 |
|
Loss on impairment |
|
|
- |
|
|
|
23,694 |
|
Loss on extinguishment of debt |
|
|
- |
|
|
|
23,141 |
|
Change in fair value of warrant and derivative liabilities |
|
|
(5,488 |
) |
|
|
(43,300 |
) |
Amortization of operating right-of-use assets |
|
|
1,224 |
|
|
|
994 |
|
Other non-cash, net |
|
|
737 |
|
|
|
1,000 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable, net |
|
|
(5,395 |
) |
|
|
376 |
|
Contract assets |
|
|
(14,571 |
) |
|
|
(4,054 |
) |
Inventory |
|
|
(9,482 |
) |
|
|
(14,564 |
) |
Accounts payable |
|
|
(3,205 |
) |
|
|
12,981 |
|
Contract liabilities |
|
|
76,470 |
|
|
|
10,012 |
|
Reserve for anticipated losses on contracts |
|
|
(1,883 |
) |
|
|
1,975 |
|
Accrued interest |
|
|
9 |
|
|
|
(1,835 |
) |
Other, net |
|
|
(4,671 |
) |
|
|
(1,241 |
) |
Net cash used in operating activities |
|
|
(55,720 |
) |
|
|
(81,804 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchases of property, plant, and equipment |
|
|
(23,147 |
) |
|
|
(22,469 |
) |
Net cash used in investing activities |
|
|
(23,147 |
) |
|
|
(22,469 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from long-term debt |
|
|
1,720 |
|
|
|
77,369 |
|
Proceeds from warrants and derivatives |
|
|
47,445 |
|
|
|
101,734 |
|
Proceeds from Tailwind Two Merger and |
|
|
- |
|
|
|
58,424 |
|
Proceeds from issuance of common stock |
|
|
22,172 |
|
|
|
14,791 |
|
Proceeds from issuance of common stock under the Committed Equity Facility |
|
|
- |
|
|
|
1,795 |
|
Repayment of long-term debt |
|
|
(8,818 |
) |
|
|
(32,890 |
) |
Payment of issuance costs |
|
|
(6,176 |
) |
|
|
(49,515 |
) |
Proceeds from exercise of stock options |
|
|
463 |
|
|
|
356 |
|
Exercise of equity-classified warrants |
|
|
2 |
|
|
|
- |
|
Payment of withholding taxes on net share settlements |
|
|
- |
|
|
|
(1,515 |
) |
Net cash provided by financing activities |
|
|
56,808 |
|
|
|
170,549 |
|
|
|
|
|
|
|
|
||
Effect of exchange rate fluctuations on cash and cash equivalents |
|
|
161 |
|
|
|
(40 |
) |
|
|
|
|
|
|
|
||
Net (decrease) increase in cash and cash equivalents |
|
|
(21,898 |
) |
|
|
66,236 |
|
Cash and cash equivalents at beginning of period |
|
|
93,561 |
|
|
|
27,325 |
|
Cash and cash equivalents at end of period |
|
$ |
71,663 |
|
|
$ |
93,561 |
|
Non-GAAP Measures
To provide investors with additional information in connection with our results as determined in accordance with GAAP, we disclose the non-GAAP financial measures Adjusted Gross Profit and Adjusted EBITDA. These non-GAAP measures may be different from non-GAAP measures made by other companies. These measures may exclude items that are significant in understanding and assessing our financial results. Therefore, these measures should not be considered in isolation or as an alternative to net income or other measures of financial performance or liquidity under GAAP.
Reconciliations of GAAP to Non-GAAP Measures (Unaudited)
(In thousands)
Adjusted Gross Profit
We define Adjusted Gross Profit as gross profit or loss adjusted for (i) share-based compensation expense included in cost of sales and (ii) depreciation and amortization included in cost of sales.
We believe that the presentation of Adjusted Gross Profit is appropriate to provide additional information to investors about our gross profit adjusted for certain non-cash items. Further, we believe Adjusted Gross Profit provides a meaningful measure of operating profitability because we use it for evaluating our business performance, making budgeting decisions, and comparing our performance against that of other peer companies using similar measures.
There are material limitations to using Adjusted Gross Profit. Adjusted Gross Profit does not take into account all items which directly affect our gross profit or loss. These limitations are best addressed by considering the economic effects of the excluded items independently and by considering Adjusted Gross Profit in conjunction with gross profit or loss as calculated in accordance with GAAP.
|
|
Three Months Ended
|
|
|
Years Ended
|
|
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Gross (loss) profit |
|
$ |
(534 |
) |
|
$ |
(10,787 |
) |
|
$ |
8,560 |
|
|
$ |
(17,257 |
) |
Share-based compensation expense |
|
|
908 |
|
|
|
2,595 |
|
|
|
5,850 |
|
|
|
12,652 |
|
Depreciation and amortization |
|
|
1,815 |
|
|
|
886 |
|
|
|
4,946 |
|
|
|
2,415 |
|
Adjusted gross profit (loss) |
|
$ |
2,189 |
|
|
$ |
(7,306 |
) |
|
$ |
19,356 |
|
|
$ |
(2,190 |
) |
Reconciliations of GAAP to Non-GAAP Measures (Unaudited)
(In thousands)
Adjusted EBITDA
We define Adjusted EBITDA as net income or loss adjusted for (i) interest, (ii) taxes, (iii) depreciation and amortization, (iv) share-based compensation expense, (v) loss on extinguishment of debt, (vi) change in fair value of warrant and derivative liabilities, and (vii) other non-recurring and/or non-cash items.
We believe that the presentation of Adjusted EBITDA is appropriate to provide additional information to investors about our operating profitability adjusted for certain non-cash items, non-routine items that we do not expect to continue at the same level in the future, as well as other items that are not core to our operations. Further, we believe Adjusted EBITDA provides a meaningful measure of operating profitability because we use it for evaluating our business performance, making budgeting decisions, and comparing our performance against that of other peer companies using similar measures.
There are material limitations to using Adjusted EBITDA. Adjusted EBITDA does not take into account certain significant items, including depreciation and amortization, interest, taxes, and other adjustments which directly affect our net income or loss. These limitations are best addressed by considering the economic effects of the excluded items independently and by considering Adjusted EBITDA in conjunction with net income or loss as calculated in accordance with GAAP.
|
|
Three Months Ended
|
|
|
Years Ended
|
|
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
Net loss |
|
$ |
(42,839 |
) |
|
$ |
(32,979 |
) |
|
$ |
(151,843 |
) |
|
$ |
(163,980 |
) |
Interest expense, net |
|
|
13,182 |
|
|
|
9,637 |
|
|
|
48,502 |
|
|
|
26,644 |
|
Provision for income taxes |
|
|
11 |
|
|
|
102 |
|
|
|
34 |
|
|
|
160 |
|
Depreciation and amortization |
|
|
2,812 |
|
|
|
1,396 |
|
|
|
7,843 |
|
|
|
4,008 |
|
Share-based compensation expense |
|
|
3,938 |
|
|
|
10,728 |
|
|
|
21,467 |
|
|
|
51,082 |
|
Loss on extinguishment of debt |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
23,141 |
|
Change in fair value of warrant and derivative liabilities |
|
|
2,046 |
|
|
|
(40,975 |
) |
|
|
(5,488 |
) |
|
|
(43,300 |
) |
Loss on impairment |
|
|
- |
|
|
|
23,694 |
|
|
|
- |
|
|
|
23,694 |
|
Other, net(a) |
|
|
289 |
|
|
|
2,320 |
|
|
|
2,036 |
|
|
|
9,075 |
|
Adjusted EBITDA |
|
$ |
(20,561 |
) |
|
$ |
(26,077 |
) |
|
$ |
(77,449 |
) |
|
$ |
(69,476 |
) |
(a) - Represents other expense and other charges and items. Non-recurring legal and accounting fees related to our transition to a public company and financing transactions are included herein.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240401480783/en/
ir@terranorbital.com
949-202-8476
Source: