Terran Orbital Reports Full Year 2022 Financial Results and Another Year of Record Revenues
Terran Orbital reported record revenues of $94.2 million for 2022, a 130% increase year-over-year, driven by significant contracts including a major $2.4 billion deal with Rivada Space Networks for 300 satellites. Despite the revenue growth, the company experienced a net loss of $164 million, up from $139 million in the previous year, largely due to increased costs and operational expenses. The backlog grew by 131% to $170.8 million, excluding the Rivada contract. Looking ahead, the company is expanding its manufacturing capacity and is set to deliver 42 Transport Layer satellites in 2023.
- Revenue increased by 130% year-over-year to $94.2 million.
- Backlog grew by 131% to $170.8 million, excluding the $2.4 billion Rivada contract.
- Awarded $2.4 billion contract from Rivada Space Networks for 300 satellites.
- Net loss widened to $164 million, compared to $139 million in 2021.
- Cost of sales increased significantly, leading to a gross loss of $17.3 million for the year.
- Abandoned plans for a company-owned constellation, resulting in a $22.4 million impairment.
-
Record 2022 revenues of
, an increase of$94.2 million 130% -
Recently awarded record 300 satellite,
constellation from Rivada Space Networks$2.4 billion -
Commissioning
Irvine expansion in 2023 to bring capacity up to 250 satellites per year -
Announcing additional
Irvine expansion to be online as soon as 2024
Full Year 2022 Financial and Operational Highlights
-
Generated a record
of revenue in 2022, an increase of$94.2 million 130% year-over-year -
Delivered a record 19 satellites, including 10 satellites for the Transport Layer of the
Space Development Agency (SDA) -
Received
investment in$100 million October 2022 from Lockheed Martin and extended Strategic Cooperation Agreement to 2035 -
Backlog of
at year end, an increase of$170.8 million 131% year-over-year, not including the Rivada order$2.4 billion -
Full year 2022 net loss of
compared to net loss of$164.0 million in 2021$139.0 million
2023 Business Highlights to Date
- On pace to begin delivery of 42 Transport Layer Tranche 1 satellites to the SDA during 2023
-
Awarded
contract from Rivada Space Networks for 300 LEO satellites and related services in$2.4 billion February 2023 -
Commissioning previously announced
Irvine, CA expansion in 2023 to bring manufacturing capacity up to 250 satellites per year -
Announcing additional
Irvine expansion to be online as soon as 2024
Results for the Fourth Quarter and Full Year of 2022
Total revenue for the fourth quarter of 2022 was
Cost of sales for the quarter was
Gross (loss) profit was
Selling, general, and administrative expenses were
During the fourth quarter of 2022, the Company abandoned plans to invest in a company-owned constellation of Earth observation satellites. As a result, we recorded a loss on impairment of
Our net loss for the fourth quarter of 2022 was
Adjusted EBITDA(1) was
Capital expenditures totaled
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.
As of
Balance Sheet and Liquidity
As of
In order to proceed with our strategic business plan, we will likely need to raise additional funds in the future through the issuance of additional debt, equity (including additional equity through our
Subsequent Events
On
Outlook
The Company continues to focus on the successful execution of existing contracts and delivery of satellites on schedule, while also continuing to expand capacity, develop new solutions, and win new contracts to expand its backlog. The Company expects to begin delivery of 42 satellite buses for the Space Development Agency’s Tranche 1 Transport Layer and anticipates that it will commence development work for the Rivada Space Networks constellation in 2023.
(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 measures are included below.
Conference Call Information
As previously announced, Terran Orbital’s 2022 earnings 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 business strategy, future operations, our ability to execute, the industry in which we operate, expectations regarding key customer contracts, and expectations, plans and objectives of management 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: Rivada’s ability to obtain funding to continue to finance its operations and fund our manufacturing contract; the status of Rivada’s regulatory approvals for its constellation and business operations and continuing ability to receive and maintain required regulatory approvals to conduct its business; Rivada’s right to terminate our contract for convenience or default; our ability to scale-up our manufacturing processes and facilities in order to meet the demands of this program; design and engineering flaws that may exist in our products and the failure of our components and satellites to operate as intended; our ability to finance our operations, research and development activities and capital expenditures; 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, 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, financing and development of our satellite manufacturing capabilities; 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; 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; the possibility that the COVID-19 pandemic, or another major disease, natural disaster, or threat to the physical security of our facilities or employees 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; our ability to achieve profitability and meet expectations regarding cash flow from operations and investments; our leverage and our ability to service cash debt payments and comply with debt maintenance covenants, including meeting minimum liquidity and operating profit covenants; our ability to access invested cash or cash equivalents upon failure of any financial institutions we bank with; limited access, or access on unfavorable terms, to equity and debt capital markets and other funding sources that will be needed to fund operations and make investments; litigation and regulatory enforcement, including the diversion of management time and attention and the additional costs and demands on our resources; and the other risks 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, 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.
Consolidated Balance Sheets (Unaudited) (In thousands) |
||||||||
|
|
|
|
|||||
|
|
2022 |
|
|
2021 |
|
||
Assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
93,561 |
|
|
$ |
27,325 |
|
Accounts receivable, net |
|
|
4,754 |
|
|
|
3,723 |
|
Contract assets, net |
|
|
6,763 |
|
|
|
2,757 |
|
Inventory |
|
|
24,133 |
|
|
|
7,783 |
|
Prepaid expenses and other current assets |
|
|
9,710 |
|
|
|
57,639 |
|
Total current assets |
|
|
138,921 |
|
|
|
99,227 |
|
Property, plant, and equipment, net |
|
|
24,743 |
|
|
|
35,530 |
|
Other assets |
|
|
18,990 |
|
|
|
639 |
|
Total assets |
|
$ |
182,654 |
|
|
$ |
135,396 |
|
Liabilities, mezzanine equity and shareholders' deficit: |
|
|
|
|
|
|
||
Current portion of long-term debt |
|
$ |
7,739 |
|
|
$ |
14 |
|
Accounts payable |
|
|
21,188 |
|
|
|
9,366 |
|
Contract liabilities |
|
|
27,228 |
|
|
|
17,558 |
|
Reserve for anticipated losses on contracts |
|
|
2,860 |
|
|
|
886 |
|
Accrued expenses and other current liabilities |
|
|
11,721 |
|
|
|
76,136 |
|
Total current liabilities |
|
|
70,736 |
|
|
|
103,960 |
|
Long-term debt |
|
|
142,620 |
|
|
|
115,134 |
|
Warrant and derivative liabilities |
|
|
39,950 |
|
|
|
5,631 |
|
Other liabilities |
|
|
20,769 |
|
|
|
2,028 |
|
Total liabilities |
|
|
274,075 |
|
|
|
226,753 |
|
|
|
|
|
|
|
|
||
Mezzanine equity: |
|
|
|
|
|
|
||
Redeemable convertible preferred stock |
|
|
- |
|
|
|
8,000 |
|
Shareholders' deficit: |
|
|
|
|
|
|
||
Preferred stock |
|
|
- |
|
|
|
- |
|
Common stock |
|
|
14 |
|
|
|
8 |
|
Additional paid-in capital |
|
|
269,574 |
|
|
|
97,737 |
|
Accumulated deficit |
|
|
(361,168 |
) |
|
|
(197,066 |
) |
Accumulated other comprehensive income (loss) |
|
|
159 |
|
|
|
(36 |
) |
Total shareholders' deficit |
|
|
(91,421 |
) |
|
|
(99,357 |
) |
Total liabilities, mezzanine equity and shareholders' deficit |
|
$ |
182,654 |
$ |
135,396 |
Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (In thousands, except share and per share amounts) |
||||||||||||||||
|
|
Three Months Ended |
|
|
Years Ended |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Revenue |
|
$ |
31,923 |
|
|
$ |
10,748 |
|
|
$ |
94,237 |
|
|
$ |
40,906 |
|
Cost of sales |
|
|
42,710 |
|
|
|
10,007 |
|
|
|
111,494 |
|
|
|
33,912 |
|
Gross (loss) profit |
|
|
(10,787 |
) |
|
|
741 |
|
|
|
(17,257 |
) |
|
|
6,994 |
|
Selling, general, and administrative expenses |
|
|
27,587 |
|
|
|
13,123 |
|
|
|
111,870 |
|
|
|
43,703 |
|
Loss on impairment |
|
|
23,694 |
|
|
|
- |
|
|
|
23,694 |
|
|
|
- |
|
Loss from operations |
|
|
(62,068 |
) |
|
|
(12,382 |
) |
|
|
(152,821 |
) |
|
|
(36,709 |
) |
Interest expense, net |
|
|
9,637 |
|
|
|
1,791 |
|
|
|
26,644 |
|
|
|
7,965 |
|
Loss on extinguishment of debt |
|
|
- |
|
|
|
27,922 |
|
|
|
23,141 |
|
|
|
96,024 |
|
Change in fair value of warrant and derivative liabilities |
|
|
(40,975 |
) |
|
|
(1,792 |
) |
|
|
(43,300 |
) |
|
|
(1,716 |
) |
Other expense (income) |
|
|
2,147 |
|
|
|
(66 |
) |
|
|
4,514 |
|
|
|
(38 |
) |
Loss before income taxes |
|
|
(32,877 |
) |
|
|
(40,237 |
) |
|
|
(163,820 |
) |
|
|
(138,944 |
) |
Provision for income taxes |
|
|
102 |
|
|
|
16 |
|
|
|
160 |
|
|
|
38 |
|
Net loss |
|
|
(32,979 |
) |
|
|
(40,253 |
) |
|
|
(163,980 |
) |
|
|
(138,982 |
) |
Other comprehensive (loss) income, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency translation adjustments |
|
|
(132 |
) |
|
|
6 |
|
|
|
195 |
|
|
|
168 |
|
Total comprehensive loss |
|
$ |
(33,111 |
) |
|
$ |
(40,247 |
) |
|
$ |
(163,785 |
) |
|
$ |
(138,814 |
) |
Weighted-average shares outstanding - basic and diluted |
|
|
142,930,585 |
|
|
|
78,535,842 |
|
|
|
128,261,443 |
|
|
|
76,713,895 |
|
Net loss per share - basic and diluted |
$ |
(0.23 |
) |
$ |
(0.51 |
) |
$ |
(1.28 |
) | $ |
(1.81 |
) |
Consolidated Statements of Cash Flows (Unaudited) (In thousands) |
||||||||
|
|
Years Ended |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
(163,980 |
) |
|
$ |
(138,982 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
4,008 |
|
|
|
3,053 |
|
Non-cash interest expense |
|
|
14,309 |
|
|
|
7,908 |
|
Share-based compensation expense |
|
|
51,082 |
|
|
|
678 |
|
Provision for losses on receivables and inventory |
|
|
3,598 |
|
|
|
877 |
|
Loss on impairment |
|
|
23,694 |
|
|
|
- |
|
Loss on extinguishment of debt |
|
|
23,141 |
|
|
|
96,024 |
|
Change in fair value of warrant and derivative liabilities |
|
|
(43,300 |
) |
|
|
(1,716 |
) |
Amortization of operating right-of-use assets |
|
|
994 |
|
|
|
- |
|
Other non-cash, net |
|
|
1,000 |
|
|
|
(567 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
- |
|
|
Accounts receivable, net |
|
|
376 |
|
|
|
(1,687 |
) |
Contract assets |
|
|
(4,054 |
) |
|
|
(901 |
) |
Inventory |
|
|
(14,564 |
) |
|
|
(5,393 |
) |
Prepaid expenses and other current assets |
|
|
105 |
|
|
|
596 |
|
Accounts payable |
|
|
12,981 |
|
|
|
2,161 |
|
Contract liabilities |
|
|
10,012 |
|
|
|
(229 |
) |
Reserve for anticipated losses on contracts |
|
|
1,975 |
|
|
|
(1,322 |
) |
Accrued expenses and other current liabilities |
|
|
(2,685 |
) |
|
|
4,634 |
|
Accrued interest |
|
|
(1,835 |
) |
|
|
- |
|
Other, net |
|
|
1,339 |
|
|
|
(21 |
) |
Net cash used in operating activities |
|
|
(81,804 |
) |
|
|
(34,887 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchases of property, plant, and equipment |
|
|
(22,469 |
) |
|
|
(16,352 |
) |
Net cash used in investing activities |
|
|
(22,469 |
) |
|
|
(16,352 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from long-term debt |
|
|
77,369 |
|
|
|
58,241 |
|
Proceeds from warrants and derivatives |
|
|
101,734 |
|
|
|
16,759 |
|
Proceeds from Tailwind Two Merger and |
|
|
58,424 |
|
|
|
- |
|
Proceeds from issuance of common stock |
|
|
14,791 |
|
|
|
- |
|
Proceeds from issuance of common stock under the Committed Equity Facility |
|
|
1,795 |
|
|
|
- |
|
Repayment of long-term debt |
|
|
(32,890 |
) |
|
|
(10 |
) |
Payment of issuance costs |
|
|
(49,515 |
) |
|
|
(8,880 |
) |
Proceeds from exercise of stock options |
|
|
356 |
|
|
|
242 |
|
Payment of withholding taxes on net share settlements |
|
|
(1,515 |
) |
|
|
- |
|
Net cash provided by financing activities |
|
|
170,549 |
|
|
|
66,352 |
|
|
|
|
|
|
|
|
||
Effect of exchange rate fluctuations on cash and cash equivalents |
|
|
(40 |
) |
|
|
(124 |
) |
|
|
|
|
|
|
|
||
Net increase in cash and cash equivalents |
|
|
66,236 |
|
|
|
14,989 |
|
Cash and cash equivalents at beginning of period |
|
|
27,325 |
|
|
|
12,336 |
|
Cash and cash equivalents at end of period |
$ |
93,561 |
|
|
$ |
27,325 |
|
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 |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Gross (loss) profit |
|
$ |
(10,787 |
) |
|
$ |
741 |
|
|
$ |
(17,257 |
) |
|
$ |
6,994 |
|
Share-based compensation expense |
|
|
2,595 |
|
|
|
23 |
|
|
|
12,652 |
|
|
|
125 |
|
Depreciation and amortization |
|
|
886 |
|
|
|
935 |
|
|
|
2,415 |
|
|
|
2,350 |
|
Adjusted gross (loss) profit |
|
$ |
(7,306 |
) |
|
$ |
1,699 |
|
|
$ |
(2,190 |
) |
|
$ |
9,469 |
|
Reconciliations of GAAP to Non-GAAP Measures (Unaudited)
(In thousands)
Adjusted EBITD
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 |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Net loss |
|
$ |
(32,979 |
) |
|
$ |
(40,253 |
) |
|
$ |
(163,980 |
) |
|
$ |
(138,982 |
) |
Interest expense, net |
|
|
9,637 |
|
|
|
1,791 |
|
|
|
26,644 |
|
|
|
7,965 |
|
Provision for income taxes |
|
|
102 |
|
|
|
16 |
|
|
|
160 |
|
|
|
38 |
|
Depreciation and amortization |
|
|
1,396 |
|
|
|
836 |
|
|
|
4,008 |
|
|
|
3,053 |
|
Share-based compensation expense |
|
|
10,728 |
|
|
|
147 |
|
|
|
51,082 |
|
|
|
678 |
|
Loss on extinguishment of debt |
|
|
- |
|
|
|
27,922 |
|
|
|
23,141 |
|
|
|
96,024 |
|
Change in fair value of warrant and derivative liabilities |
|
|
(40,975 |
) |
|
|
(1,792 |
) |
|
|
(43,300 |
) |
|
|
(1,716 |
) |
Loss on impairment |
|
|
23,694 |
|
|
|
- |
|
|
|
23,694 |
|
|
|
- |
|
Other, net(a) |
|
|
2,320 |
|
|
|
42 |
|
|
|
9,075 |
|
|
|
6,796 |
|
Adjusted EBITDA |
|
$ |
(26,077 |
) |
|
$ |
(11,291 |
) |
|
$ |
(69,476 |
) |
|
$ |
(26,144 |
) |
(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/20230321005545/en/
investors@terranorbital.com
949-202-8476
Source:
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