Terran Orbital Reports First Quarter 2022 Financial Results
Terran Orbital Corporation (NYSE: LLAP) reported a 25% increase in revenues to $13.1 million for Q1 2022 compared to Q1 2021. The company signed record contracts worth $162 million and reported a backlog of $222 million, a 200% increase since December 2021. Despite these gains, Terran Orbital incurred a net loss of $71.4 million and faced challenges with cost of sales rising to $16 million due to supply chain pressures. Adjusted EBITDA was a loss of $14.7 million. The company ended with $76.7 million in cash and aims to expand manufacturing capacity throughout 2022.
- 25% increase in revenue to $13.1 million.
- Record contracts signed totaling $162 million.
- Backlog of $222 million, up 200% from last quarter.
- Net loss of $71.4 million, slightly improved from $77.5 million last year.
- Cost of sales increased to $16 million due to supply chain issues.
- Adjusted EBITDA loss of $14.7 million, worsening from $3.6 million the previous year.
First Quarter 2022 Highlights
-
Generated
$13.1 million 25% increase from first quarter of 2021 -
Signed record
$162 million -
Record backlog of
$222 million March 31, 2022 , up200% sinceDecember 31, 2021 - Awarded 42 satellites for US Space Development Agency’s (“SDA”) Tranche 1 Transport Layer
- Increased manufacturing and office space to over 250,000 sf and headcount to more than 330
-
Built pipeline to 140 opportunities representing over
$12 billion March 31, 2022 -
Completed merger with
Tailwind Two Acquisition Corp. (the “Tailwind Two Merger”) and related private equity and debt transactions; began trading on NYSE: LLAP -
Net loss of
$71.4 million $0.85 -
Adjusted EBITDA(1) loss of
$14.7 million -
Ended quarter with
$76.7 million
Results for the First Quarter of 2022
Total revenue for the first quarter of 2022 was
Cost of sales for the quarter was
Gross profit was
Selling, general and administrative expenses were
Our net loss for the quarter was
Adjusted EBITDA was
Backlog
The Company views growth in backlog as a key measure of its business growth. 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.
As of
Balance Sheet and Liquidity
As of
2022 Outlook
The Company’s near-term focus is on the successful execution of its existing contracts and obligations as well as winning new contracts to continue to expand our backlog. Accordingly, the Company plans to contribute significant resources to continue to expand its manufacturing capacity, vertically integrate, and continue to expand our ever-growing exceptional pool of talent. Capital expenditures for fiscal year 2022 are currently expected to be approximately
(1) This is a 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 equivalents are included below.
Conference Call Information
As previously announced, Terran Orbital’s first quarter 2022 conference call is scheduled for
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 future financial performance as well as statements regarding our business strategy, future operations, future financial position, estimated revenues and losses, projected costs, earnings outlooks, prospects, expectations, plans and objectives of management, including without limitation our 2022 outlook, are forward-looking statements. Forward-looking statements are typically identified by such words as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook, “estimate,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “will,” “should,” “would” and “could” and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements involve a number of risks, uncertainties (many of which are beyond our control), or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by the forward-looking statements contained in this press release, including, but not limited to: expectations regarding our strategies and future financial performance, including our future business plans or objectives, anticipated cost, timing and level of deployment of satellites, prospective performance and commercial opportunities and competitors, the timing of obtaining regulatory approvals, the ability to finance our operations, research and development activities and capital expenditures, reliance on government contracts and a strategic cooperation agreement with a significant customer, retention and expansion of our customer base, product and service offerings, pricing, marketing plans, operating expenses, market trends, revenues, margins, liquidity, cash flows and uses of cash, capital expenditures, and our ability to invest in growth initiatives; the ability to implement business plans, forecasts, and other expectations, and to identify and realize additional opportunities; anticipated timing, cost and performance of our Earth Observation Solutions’ planned satellite constellation and our ability to successfully finance, deploy and commercialize its business; anticipated timing, cost, financing and development of our satellite manufacturing capabilities, including our proposed new campus of approximately 660,000 square foot satellite manufacturing facility (the “Space Florida Facility”); prospective performance and commercial opportunities and competitors; our ability to finance our operations, research and development activities and capital expenditures; our success in retaining or recruiting, or changes required in, our officers, key employees or directors; our expansion plans and opportunities; our ability to comply with domestic and foreign regulatory regimes and the timing of obtaining regulatory approvals; our ability to finance and invest in growth initiatives; our ability to deal appropriately with conflicts of interest in the ordinary course of our business; the outcome of any legal proceedings that may be instituted against us; the ability to maintain the listing of our common stock and the public warrants on the NYSE and the possibility of limited liquidity and trading of such securities; geopolitical risk and changes in applicable laws or regulations; the possibility that we may be adversely affected by other economic, business, and/or competitive factors; that we have identified material weaknesses in our internal control over financial reporting which, if not corrected, could affect the reliability of our consolidated financial statements; the possibility that the COVID-19 pandemic, or another major disease, disrupts our business; supply chain disruptions, including delays, increased costs and supplier quality control challenges; the ability to attract and retain qualified labor and professionals and our reliance on a highly skilled workforce, including technicians, engineers and other professionals; we do not expect to become profitable in the near future and may never achieve our profitability expectations, plus we expect to generate negative cash flow from operations and investments for the foreseeable future; our leverage and our ability to service cash debt payments and comply with debt maintenance covenants, including meeting minimum liquidity and operating profit covenants; limited access to equity and debt capital markets and other funding sources that will be needed to fund operations and make investments, including investments in our NextGen Earth Observation constellation and the Space Florida Facility; delays and costs associated with developing our NextGen Earth Observation constellation, Space Florida Facility and other initiatives whether due to changes in demand, lack of funding, design changes or other conditions or circumstances; litigation and regulatory enforcement risks, including the diversion of management time and attention and the additional costs and demands on our resources; and the other risk factors disclosed in our filings with the
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 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) |
||||||||
| Assets: | ||||||||
| Cash and cash equivalents | $ |
76,654 |
|
$ |
27,325 |
|
||
| Accounts receivable, net |
|
18,626 |
|
|
3,723 |
|
||
| Contract assets, net |
|
3,609 |
|
|
2,757 |
|
||
| Inventory |
|
9,191 |
|
|
7,783 |
|
||
| Prepaid expenses and other current assets |
|
6,258 |
|
|
57,639 |
|
||
| Total current assets |
|
114,338 |
|
|
99,227 |
|
||
| Property, plant and equipment, net |
|
38,334 |
|
|
35,530 |
|
||
| Other assets |
|
17,316 |
|
|
639 |
|
||
| Total assets | $ |
169,988 |
|
$ |
135,396 |
|
||
| Liabilities, mezzanine equity and shareholders' deficit: | ||||||||
| Current portion of long-term debt | $ |
7,515 |
|
$ |
14 |
|
||
| Accounts payable |
|
10,833 |
|
|
9,366 |
|
||
| Contract liabilities |
|
24,204 |
|
|
17,558 |
|
||
| Reserve for anticipated losses on contracts |
|
965 |
|
|
886 |
|
||
| Accrued expenses and other current liabilities |
|
13,082 |
|
|
76,136 |
|
||
| Total current liabilities |
|
56,599 |
|
|
103,960 |
|
||
| Long-term debt |
|
94,929 |
|
|
115,134 |
|
||
| Warrant liabilities |
|
35,616 |
|
|
5,631 |
|
||
| Other liabilities |
|
16,995 |
|
|
2,028 |
|
||
| Total liabilities |
|
204,139 |
|
|
226,753 |
|
||
| Commitments and contingencies | ||||||||
| Mezzanine equity: | ||||||||
| Redeemable convertible preferred stock |
|
- |
|
|
8,000 |
|
||
| Shareholders' deficit: | ||||||||
| Preferred stock |
|
- |
|
|
- |
|
||
| Common stock |
|
14 |
|
|
8 |
|
||
| Additional paid-in capital |
|
234,384 |
|
|
97,737 |
|
||
| Accumulated deficit |
|
(268,560 |
) |
|
(197,066 |
) |
||
| Accumulated other comprehensive income (loss) |
|
11 |
|
|
(36 |
) |
||
| Total shareholders' deficit |
|
(34,151 |
) |
|
(99,357 |
) |
||
| Total liabilities, mezzanine equity and shareholders' deficit | $ |
169,988 |
|
$ |
135,396 |
|
||
|
||||||||
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) |
||||||||
(In thousands, except share and per share amounts) |
||||||||
| Three Months Ended |
||||||||
|
2022 |
|
|
2021 |
|
|||
| Revenue | $ |
13,120 |
|
$ |
10,494 |
|
||
| Cost of sales |
|
15,953 |
|
|
9,734 |
|
||
| Gross (loss) profit |
|
(2,833 |
) |
|
760 |
|
||
| Selling, general, and administrative expenses |
|
30,217 |
|
|
6,673 |
|
||
| Loss from operations |
|
(33,050 |
) |
|
(5,913 |
) |
||
| Interest expense, net |
|
2,923 |
|
|
907 |
|
||
| Loss on extinguishment of debt |
|
23,141 |
|
|
70,667 |
|
||
| Change in fair value of warrant and derivative liabilities |
|
11,853 |
|
|
(34 |
) |
||
| Other expense |
|
403 |
|
|
15 |
|
||
| Loss before income taxes |
|
(71,370 |
) |
|
(77,468 |
) |
||
| Provision for income taxes |
|
2 |
|
|
28 |
|
||
| Net loss |
|
(71,372 |
) |
|
(77,496 |
) |
||
| Other comprehensive income (loss), net of tax: | ||||||||
| Foreign currency translation adjustments |
|
47 |
|
|
(58 |
) |
||
| Total comprehensive loss | $ |
(71,325 |
) |
$ |
(77,554 |
) |
||
| Weighted-average shares outstanding - basic and diluted |
|
83,643,940 |
|
|
71,431,259 |
|
||
| Net loss per share - basic and diluted | $ |
(0.85 |
) |
$ |
(1.08 |
) |
||
|
||||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) |
||||||||
(In thousands) |
||||||||
| Three Months Ended |
||||||||
|
2022 |
|
|
2021 |
|
|||
| Cash flows from operating activities: | ||||||||
| Net loss | $ |
(71,372 |
) |
$ |
(77,496 |
) |
||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization |
|
846 |
|
|
671 |
|
||
| Non-cash interest expense |
|
1,215 |
|
|
889 |
|
||
| Share-based compensation expense |
|
17,335 |
|
|
168 |
|
||
| Provision for losses on receivables and inventory |
|
169 |
|
|
444 |
|
||
| Loss on extinguishment of debt |
|
23,141 |
|
|
70,667 |
|
||
| Change in fair value of warrant and derivative liabilities |
|
11,853 |
|
|
(34 |
) |
||
| Amortization of operating right-of-use assets |
|
305 |
|
|
— |
|
||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net |
|
(15,002 |
) |
|
(226 |
) |
||
| Contract assets |
|
(928 |
) |
|
(785 |
) |
||
| Inventory |
|
(1,550 |
) |
|
998 |
|
||
| Prepaid expenses and other current assets |
|
(1,384 |
) |
|
216 |
|
||
| Accounts payable |
|
2,134 |
|
|
2,202 |
|
||
| Contract liabilities |
|
6,708 |
|
|
728 |
|
||
| Reserve for anticipated losses on contracts |
|
79 |
|
|
(52 |
) |
||
| Accrued expenses and other current liabilities |
|
4,032 |
|
|
1,047 |
|
||
| Accrued interest |
|
(4,803 |
) |
|
- |
|
||
| Other, net |
|
(2,078 |
) |
|
15 |
|
||
| Net cash used in operating activities |
|
(29,300 |
) |
|
(548 |
) |
||
| Cash flows from investing activities: | ||||||||
| Purchases of property, plant and equipment |
|
(4,030 |
) |
|
(2,422 |
) |
||
| Net cash used in investing activities |
|
(4,030 |
) |
|
(2,422 |
) |
||
| Cash flows from financing activities: | ||||||||
| Proceeds from long-term debt |
|
35,942 |
|
|
47,481 |
|
||
| Proceeds from warrants and derivatives |
|
42,247 |
|
|
2,519 |
|
||
| Proceeds from Tailwind Two Merger |
|
29,779 |
|
|
- |
|
||
| Proceeds from |
|
28,645 |
|
|
- |
|
||
| Proceeds from issuance of common stock |
|
14,791 |
|
|
- |
|
||
| Repayment of long-term debt |
|
(27,171 |
) |
|
(4 |
) |
||
| Payment of issuance costs |
|
(41,681 |
) |
|
(5,667 |
) |
||
| Proceeds from exercise of stock options |
|
135 |
|
|
19 |
|
||
| Net cash provided by financing activities |
|
82,687 |
|
|
44,348 |
|
||
| Effect of exchange rate fluctuations on cash and cash equivalents |
|
(28 |
) |
|
(66 |
) |
||
| Net increase in cash and cash equivalents |
|
49,329 |
|
|
41,312 |
|
||
| Cash and cash equivalents at beginning of period |
|
27,325 |
|
|
12,336 |
|
||
| Cash and cash equivalents at end of period | $ |
76,654 |
|
$ |
53,648 |
|
||
Non-GAAP Measures
To provide investors with additional information in connection with our results as determined in accordance with GAAP, we disclose non-GAAP financial measures, such as Adjusted Gross Profit and Adjusted EBITDA, that have not been prepared in accordance with GAAP. 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 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.
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.
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 |
||||||
|
2022 |
|
|
2021 |
||
| Gross (loss) profit | $ |
(2,833 |
) |
$ |
760 |
|
| Share-based compensation expense |
|
2,113 |
|
|
14 |
|
| Depreciation and amortization |
|
513 |
|
|
453 |
|
| Adjusted gross (loss) profit | $ |
(207 |
) |
$ |
1,227 |
|
Adjusted EBITDA
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.
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.
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 |
|||||||
|
2022 |
|
|
2021 |
|
||
| Net loss | $ |
(71,372 |
) |
$ |
(77,496 |
) |
|
| Interest expense, net |
|
2,923 |
|
|
907 |
|
|
| Provisions for income taxes |
|
2 |
|
|
28 |
|
|
| Depreciation and amortization |
|
846 |
|
|
671 |
|
|
| Share-based compensation expense |
|
17,335 |
|
|
168 |
|
|
| Loss on extinguishment of debt |
|
23,141 |
|
|
70,667 |
|
|
| Change in fair value of warrant and derivative liabilities |
|
11,853 |
|
|
(34 |
) |
|
| Other, net(a) |
|
555 |
|
|
1,452 |
|
|
| Adjusted EBITDA | $ |
(14,717 |
) |
$ |
(3,637 |
) |
|
(a) - Represents other expense and other charges and items. Non-recurring legal and accounting fees related to our transition to a public company are included herein.
View source version on businesswire.com: https://www.businesswire.com/news/home/20220513005190/en/
pr@terranorbital.com
949-508-6404
Source:
FAQ
What were Terran Orbital's Q1 2022 financial results?
What is the contract backlog for Terran Orbital as of March 31, 2022?
What new contracts did Terran Orbital sign in Q1 2022?
What is Terran Orbital's cash position as of Q1 2022?
How did supply chain issues affect Terran Orbital's Q1 performance?
