0001819974false00018199742024-08-072024-08-07

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM 8-K
___________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 7, 2024
___________________________
SkyWater Technology, Inc.
(Exact name of registrant as specified in its charter)
___________________________
Delaware001-4034537-1839853
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
2401 East 86th Street
Bloomington, Minnesota
55425
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (952) 851-5200
___________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered under Section 12(b) of the Exchange Act:
Title of Each Class
Trading
Symbol
Name of Each Exchange
on Which Registered
Common stock, par value $0.01 per shareSKYTThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth companyx
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o


Item 2.02    Results of Operations and Financial Condition
On August 7, 2024, SkyWater Technology, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2024. The press release is furnished herewith as Exhibit 99.1.
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in that filing.
Item 9.01    Financial Statements and Exhibits.
(d) Exhibits
The following documents are filed as exhibits to this report:
Exhibit Number
Description of Exhibit
99.1
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SkyWater Technology, Inc.
Date: August 7, 2024
/s/ Thomas J. Sonderman
Name:Thomas J. Sonderman
Title:Chief Executive Officer


Exhibit 99.1

image_0a.jpg
SkyWater Technology Reports Second Quarter 2024 Results
Eighth Straight Quarter of Record Revenue and 34% Growth Year-Over-Year
BLOOMINGTON, Minn., – August 7, 2024 – SkyWater Technology, Inc. (NASDAQ: SKYT), the trusted technology realization partner, today announced financial results for the second quarter 2024 ended June 30, 2024.
Financial Highlights for Q2 2024:
•Revenue increased 34% year-over-year to a record $93.3 million.
•Gross margin decreased to 18.3% on a GAAP basis, compared to 23.9% in Q2 2023, and decreased to 18.9% on a non-GAAP basis, compared to 25.3% in Q2 2023.
•Net loss to shareholders of $1.9 million, or $0.04 per share on a GAAP basis, and net income to shareholders of $0.8 million, or $0.02 per share on a non-GAAP basis, compared to net loss to shareholders of $8.6 million, or $0.19 per share on a GAAP basis, and net loss to shareholders of $2.0 million, or $0.04 per share on a non-GAAP basis in Q2 2023.
•Adjusted EBITDA of $8.1 million, or 8.7% of revenue, compared to $10.3 million, or 14.7% of revenue in Q2 2023.
“We are pleased to report continued strong results for our unique and differentiated Advanced Technology Services business, which – coupled with record levels of customer-funded CapEx – drove another record revenue quarter and positive non-GAAP EPS,” commented Thomas Sonderman, SkyWater Chief Executive Officer. “With continued progress in efficiency gains, our second quarter results are indicative of the new revenue baseline required to support future profitability and positive cash flow from operations as we move into next year and beyond. With our revenue outlook for the underlying business remaining relatively consistent as we have progressed through 2024, our customers’ commitments to fund the technical capabilities and capacity that will support future growth have continued to expand further. We believe these unprecedented levels of customer co-investment make SkyWater a uniquely CapEx-light semiconductor manufacturing partner, with an expanding gross margin profile and significant earnings growth potential in the years to come.”
Recent Business Highlights:
•Advanced Technology Service (ATS) development revenue exceeded expectations to reach a new record in Q2, reflecting strong operational execution and improved cycle times in response to accelerated demand on multiple aerospace and defense programs.
•Record revenue results, along with significant progress achieved in our ongoing cost-control efforts, enabled positive non-GAAP EPS along with strong operating cash flow generation in Q2.
•In next-generation medical applications, through our recent ATS collaboration with Quantum-Si, we are now transitioning their baseline technology to Wafer Services, a key milestone as they progress commercialization efforts for their state-of-the-art proteome sequencing technology.
•The recent installation of Multibeam’s high-productivity, direct-write patterning system is a key development supporting strong customer demand for our Technology as a Service (“TaaS”) business model. The first-of-its-kind Multicolumn E-Beam Lithography (MEBL) system enables advanced lithography capability from early-concept prototyping through the production ramp.
•The recent delivery of the first fan-out wafer-level packaging tool to SkyWater Florida is a significant milestone as we accelerate the tooling and facilitation of our operations in preparation for an expected 2025 ramp of our advanced packaging service offering.
1

Q2 2024 Summary:
GAAP
In millions, except per share data
Q2 2024Q2 2023Y/YQ1 2024Q/Q
ATS development revenue (1)
$61.7$52.118%$61.21%
Tools revenue (2)
$25.9$0.9NM$8.5206%
Wafer Services revenue$5.8$16.8(66)%$10.0(42)%
Total revenue
$93.3$69.834%$79.617%
Gross profit$17.1$16.73%$13.032%
Gross margin18.3%23.9%(560) bps16.3%200 bps
Net loss to shareholders$(1.9)$(8.6)78%$(5.7)67%
Basic loss per share$(0.04)$(0.19)79%$(0.12)67%
Net loss margin to shareholders
(2.0)%(12.3)%1,030 bps(7.2)%520 bps
__________________
NM - Not meaningful
(1)ATS development revenue represents GAAP revenue primarily derived from process development services, tool installation and qualification services, facility and tool access, and security services.
(2)Tools revenue and cost of tools revenue represents GAAP revenue and cost primarily derived from the procurement and subsequent sale of equipment to our customers. While this equipment is owned by our customers, the equipment is retained in one of SkyWater’s fabs and is used to complete ATS customer programs.
Non-GAAP
In millions, except per share data
Q2 2024Q2 2023Y/YQ1 2024Q/Q
Non-GAAP gross profit$17.6$17.7—%$13.431%
Non-GAAP gross margin18.9%25.3%(640) bps16.9%200 bps
Non-GAAP net income (loss) to shareholders
$0.8$(2.0)NM$(3.7)NM
Non-GAAP basic income (loss) per share
$0.02$(0.04)NM$(0.08)NM
Adjusted EBITDA$8.1$10.3(21)%$4.965%
Adjusted EBITDA margin8.7%14.7%(600) bps6.2%250 bps
__________________
NM - Not meaningful
Q2 2024 Results:
•Revenue: Revenue of $93.3 million increased 34% year-over-year. ATS development revenue of $61.7 million increased 18% year-over-year. Tools revenue was $25.9 million in the second quarter of 2024 compared to $0.9 million in the second quarter of 2023. Wafer Services revenue of $5.8 million decreased 66% compared to the second quarter of 2023.
•Gross Profit: GAAP gross profit was $17.1 million, or 18.3% of total revenue, compared to gross profit of $16.7 million, or 23.9% of total revenue, in the second quarter of 2023. Non-GAAP gross profit was $17.6 million, or 18.9% of total revenue, compared to non-GAAP gross profit of $17.7 million, or 25.3% of total revenue, in the second quarter of 2023.
•Operating Expenses: GAAP operating expenses were $15.7 million, compared to $20.2 million in the second quarter of 2023.
•Net Loss: GAAP net loss to shareholders was $1.9 million, or $0.04 per share, compared to a net loss to shareholders of $8.6 million, or $0.19 per share, in the second quarter of 2023. Non-GAAP net income to shareholders was $0.8 million, or $0.02 per share, compared to a non-GAAP net loss to shareholders of $2.0 million, or $0.04 per share, in the second quarter of 2023.
•Adjusted EBITDA: Adjusted EBITDA was $8.1 million, or 8.7% of total revenue, compared to $10.3 million, or 14.7% of total revenue, in the second quarter of 2023.
A reconciliation between historical GAAP and non-GAAP information is contained in the tables below in the section titled “Non-GAAP Financial Measures.”
2

Investor Webcast
SkyWater will host a conference call on Wednesday, August 7, 2024, at 3:30 p.m. CT to discuss its second quarter 2024 financial results. A live webcast of the call will be available online at IR.SkyWaterTechnology.com.
About SkyWater Technology
SkyWater (NASDAQ: SKYT) is a U.S.-based semiconductor manufacturer and a DMEA-accredited Category 1A Trusted Supplier. SkyWater’s Technology as a Service model streamlines the path to production for customers with development services, volume production and heterogeneous integration solutions in its U.S. facilities. This pioneering model enables innovators to co-create the next wave of technology within diverse categories including mixed-signal CMOS, ROICs, rad-hard ICs, MEMS, superconducting ICs, photonics and advanced packaging. SkyWater serves the growing markets of aerospace & defense, automotive, biomedical, industrial and quantum computing. For more information, visit: www.skywatertechnology.com.
Cautionary Statement Regarding Preliminary Results
The Company’s results for the second quarter ended June 30, 2024 are preliminary, unaudited and subject to the finalization of the Company’s second quarter review and full-year audit and should not be viewed as a substitute for full financial statements prepared in accordance with GAAP. The Company cautions that actual results may differ materially from those described in this press release.
SkyWater Technology Forward-Looking Statements
This press release contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements that are based on the Company’s current expectations or forecasts of future events, rather than past events and outcomes, and such statements are not guarantees of future performance. Forward-looking statements include all statements other than statements of historical fact contained in this presentation, including information or predictions concerning the Company’s future business, results of operations, financial performance, plans and objectives, competitive position, market trends, and potential growth and market opportunities. In some cases, you can identify forward-looking statements by words such as “intends,” “estimates,” “predicts,” “potential,” “continues,” “anticipates,” “plans,” “expects,” “believes,” “should,” “could,” “may,” “will,” “targets,” “projects,” “seeks” or the negative of these terms or other comparable terminology.
Forward-looking statements are subject to risks, uncertainties and assumptions, which may cause the Company’s actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Key factors that could cause the Company’s actual results to be different than expected or anticipated include, but are not limited to: our goals and strategies; our future business development, financial condition and results of operations; our ability to continue operating our fabrication facilities at full capacity; our ability to appropriately respond to changing technologies on a timely and cost-effective basis; our customer relationships and our ability to retain and expand our customer relationships; our ability to accurately predict our future revenues for the purpose of appropriately budgeting and adjusting our expenses; our expectations regarding dependence on our largest customers; our ability to diversify our customer base and develop relationships in new markets; the performance and reliability of our third-party suppliers and manufacturers; our ability to procure tools, materials, and chemicals; our ability to control costs, including our operating and capital expenses; the size and growth potential of the markets for our solutions, and our ability to serve and expand our presence in those markets; the level of demand in our customers’ end markets; our ability to attract, train and retain key qualified personnel in a competitive labor market; adverse litigation judgments, settlements or other litigation-related costs; changes in trade policies, including the imposition of tariffs; our ability to raise additional capital or financing; our ability to accurately forecast demand; the level and timing of U.S. government program funding; our ability to maintain compliance with certain U.S. government contracting requirements; regulatory developments in the United States and foreign countries; our ability to protect our intellectual property rights; our ability to meet our long-term growth targets; and other factors discussed in the “Risk Factors” section of the annual report on Form 10-K the Company filed with the SEC on March 15, 2024 and in other documents that the Company files with the SEC, which are available at http://www.sec.gov. The Company assumes no obligation to update any forward-looking statements, which speak only as of the date of this press release.
Source String: SkyWater Technology (SKYT-IR)
SkyWater Investor Contact: Claire McAdams | claire@headgatepartners.com
SkyWater Media Contact: Lauri Julian | Media@SkyWaterTechnology.com
3



SKYWATER TECHNOLOGY, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
June 30, 2024December 31, 2023
(in thousands, except share data)
Assets
Current assets
Cash and cash equivalents$18,362 $18,382 
Accounts receivable (net of allowance for credit losses of $433 and $180, respectively)
52,237 65,961 
Contract assets (net of allowance for credit losses of $49 and $99, respectively)
18,467 29,666 
Inventory14,614 15,341 
Prepaid expenses and other current assets16,732 16,853 
Income tax receivable255 172 
Total current assets120,667 146,375 
Property and equipment, net156,926 159,367 
Intangible assets, net6,798 5,672 
Other assets6,024 5,342 
Total assets$290,415 $316,756 
Liabilities and shareholders’ equity
Current liabilities
Current portion of long-term debt$4,984 $3,976 
Accounts payable18,976 19,614 
Accrued expenses32,998 48,291 
Short-term financing, net of unamortized debt issuance costs23,879 22,765 
Contract liabilities53,087 49,551 
Total current liabilities133,924 144,197 
Long-term liabilities
Long-term debt, less current portion and net of unamortized debt issuance costs37,410 36,098 
Long-term contract liabilities52,790 65,754 
Deferred income tax liability, net565 679 
Other long-term liabilities8,906 9,327 
Total long-term liabilities99,671 111,858 
Total liabilities233,595 256,055 
Shareholders’ equity
Preferred stock, $0.01 par value per share (80,000,000 shares authorized, zero shares issued and outstanding as of June 30, 2024 and December 31, 2023)
— — 
Common stock, $0.01 par value per share (200,000,000 shares authorized; 47,468,475 and 47,028,159 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively)
474 470 
Additional paid-in capital183,817 178,473 
Accumulated deficit(132,829)(125,203)
Total shareholders’ equity, SkyWater Technology, Inc.
51,462 53,740 
Noncontrolling interests5,358 6,961 
Total shareholders’ equity
56,820 60,701 
Total liabilities and shareholders’ equity
$290,415 $316,756 
4



SKYWATER TECHNOLOGY, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
Three-Month Period EndedSix-Month Period Ended
June 30, 2024March 31, 2024July 2, 2023June 30, 2024July 2, 2023
(in thousands, except share data)
Revenue$93,329 $79,636 $69,811 $172,965 $135,905 
Cost of revenue76,215 66,656 53,144 142,871 102,770 
Gross profit17,114 12,980 16,667 30,094 33,135 
Research and development expense
3,382 4,012 2,396 7,394 5,063 
Selling, general, and administrative expense
12,332 11,169 17,820 23,502 32,716 
Operating income (loss)1,400 (2,201)(3,549)(802)(4,644)
Interest expense(2,482)(2,390)(2,950)(4,871)(5,421)
Loss before income taxes(1,082)(4,591)(6,499)(5,673)(10,065)
Income tax (benefit) expense(127)41 25 (86)25 
Net loss(955)(4,632)(6,524)(5,587)(10,090)
Less: net income attributable to noncontrolling interests942 1,097 2,066 2,039 2,773 
Net loss attributable to SkyWater Technology, Inc.$(1,897)$(5,729)$(8,590)$(7,626)$(12,863)
Net loss per share attributable to common shareholders, basic and diluted$(0.04)$(0.12)$(0.19)$(0.16)$(0.29)
Weighted average shares used in computing net loss per common share, basic and diluted47,394,969 47,098,519 44,743,269 47,246,744 44,280,343 
5



SKYWATER TECHNOLOGY, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Six-Month Period Ended
June 30, 2024July 2, 2023
(in thousands)
Cash flows from operating activities
Net loss$(5,587)$(10,090)
Adjustments to reconcile net loss to net cash flows provided by (used in) operating activities
Depreciation and amortization9,129 14,559 
Gain on sale of property and equipment(78)— 
Amortization of debt issuance costs included in interest expense880 876 
Long-term incentive and equity-based compensation4,088 3,820 
Deferred income taxes(115)(37)
Provision for credit losses203 3,602 
Changes in operating assets and liabilities
Accounts receivable and contract assets24,775 (17,425)
Inventories727 (2,627)
Prepaid expenses and other assets(560)(606)
Accounts payable and accrued expenses(18,529)(1,771)
Contract liabilities, current and long-term(9,427)(8,371)
Income tax receivable and payable(83)62 
Net cash provided by (used in) operating activities5,423 (18,008)
Cash flows from investing activities
Purchase of software and technology licenses(1,155)(612)
Proceeds from sale of property and equipment23 — 
Purchases of property and equipment(2,086)(2,608)
Net cash used in investing activities(3,218)(3,220)
Cash flows from financing activities
Draws on revolving line of credit168,500 121,350 
Paydowns of revolving line of credit(163,900)(123,810)
Proceeds from tool financings920 496 
Repayment of tool financings(920)— 
Principal payments on long-term debt
(2,047)(791)
Cash paid for principal on finance leases
(396)(456)
Proceeds from the issuance of common stock pursuant to equity compensation plans1,260 1,276 
Proceeds from the issuance of common stock under the ATM— 12,144 
Cash paid on licensed technology obligations(2,000)(2,350)
Contributions from noncontrolling interest
323 — 
Distributions to noncontrolling interest
(3,965)(478)
Net cash (used in) provided by financing activities(2,225)7,381 
Net decrease in cash and cash equivalents(20)(13,847)
Cash and cash equivalents - beginning of period18,382 30,025 
Cash and cash equivalents - end of period$18,362 $16,178 
6



Supplemental Financial Information by Quarter

Q2 2024
Q1 2024
Q4 2023
Q3 2023
Q2 2023
Q1 2023
(in thousands)
ATS development revenue (1)
$61,669 $61,185 $57,170 $53,891 $52,073 $47,770 
Tools revenue (2)
25,880 8,459 9,936 3,243 936 536 
Wafer Services revenue5,780 9,992 12,048 14,490 16,802 17,788 
Total revenue$93,329 $79,636 $79,154 $71,624 $69,811 $66,094 
Tools revenue (2)
$25,880 $8,459 $9,936 $3,243 $936 $536 
Cost of tools revenue (2)
24,869 8,260 9,125 2,861 290 484 
Tools gross profit
$1,011 $199 $811 $382 $646 $52 
Revenue impact of modified customer contracts
$— $— $— $— $3,601 $— 
Cost of revenue impact of modified customer contracts
— — — — — — 
Gross profit (loss) impact of modified customer contracts
$— $— $— $— $3,601 $— 
__________________
(1)ATS development revenue represents GAAP revenue primarily derived from process development services, tool installation and qualification services, facility and tool access, and security services.
(2)Tools revenue and cost of tools revenue represents GAAP revenue and cost primarily derived from the procurement and subsequent sale of equipment to our customers. While this equipment is owned by our customers, the equipment is retained in one of SkyWater’s fabs and is used to complete ATS customer programs.
7



Non-GAAP Financial Measures
We provide supplemental, non-GAAP financial information that our management regularly evaluates to provide additional insight to investors as supplemental information to our results reported using U.S. generally accepted accounting principles (GAAP). We provide non-GAAP cost of revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP research and development expense, non-GAAP selling, general and administrative expense, non-GAAP net loss to shareholders, and non-GAAP net loss to shareholders per share. Our management uses these non-GAAP financial measures to make informed operating decisions, complete strategic planning, prepare annual budgets, and evaluate Company and management performance. We believe these non-GAAP financial measures are useful performance measures to our investors because they provide a baseline for analyzing trends in our business and exclude certain items that may not be indicative of our core operating results. The non-GAAP financial measures disclosed in this earnings press release should not be viewed as an alternative to, or more meaningful than, the reported results prepared in accordance with GAAP. In addition, because these non-GAAP financial measures are not determined in accordance with GAAP, other companies, including our peers, may calculate their non-GAAP financial measures differently than we do. As a result, the non-GAAP financial measures presented in this earnings press release may not be directly comparable to similarly titled measures presented by other companies.
We also provide adjusted earnings before interest, income taxes, depreciation and amortization (EBITDA) and adjusted EBITDA margin as supplemental non-GAAP measures. We define adjusted EBITDA as net (loss) income before interest expense, income tax (benefit) expense, depreciation and amortization, equity-based compensation and certain other items that we do not view as indicative of our ongoing performance, including net income attributable to noncontrolling interests, business transformation costs, management transition expense, and CHIPS Act specialist fees. Our management uses adjusted EBITDA and adjusted EBITDA margin to make informed operating decisions, complete strategic planning, prepare annual budgets, and evaluate Company and management performance. We believe adjusted EBITDA is a useful performance measure to our investors because it allows for an effective evaluation of our operating performance when compared to other companies, including our peers, without regard to financing methods or capital structures. We exclude the items listed above from net income or loss in arriving at adjusted EBITDA because the amounts of these items can vary substantially within our industry depending on the accounting methods and policies used, book values of assets, capital structures, and the methods by which assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net (loss) income determined in accordance with GAAP. Certain items excluded from adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic cost bases of depreciable assets, none of which are reflected in adjusted EBITDA. Our presentation of adjusted EBITDA should not be construed as an indication that our results will be unaffected by the items excluded from adjusted EBITDA. In future fiscal periods, we may exclude such items and may incur income and expenses similar to these excluded items. Accordingly, the exclusion of these items and other similar items in our non-GAAP financial measures should not be interpreted as implying that these items are non-recurring, infrequent or unusual, unless otherwise expressly indicated.
The following tables present a reconciliation of the most directly comparable financial measures, calculated and presented in accordance with GAAP, to our non-GAAP financial measures.
8



SKYWATER TECHNOLOGY, INC.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
Three-Month Period EndedSix-Month Period Ended
June 30, 2024March 31, 2024July 2, 2023June 30, 2024July 2, 2023
(in thousands)
GAAP revenue
$93,329 $79,636 $69,811 $172,965 $135,905 
GAAP cost of revenue$76,215 $66,656 $53,144 $142,871 $102,770 
Equity-based compensation (1)
(504)(455)(291)(959)(804)
Management transition expense (2)
— — (705)— (705)
Non-GAAP cost of revenue$75,711 $66,201 $52,148 $141,912 $101,261 
GAAP gross profit$17,114 $12,980 $16,667 $30,094 $33,135 
GAAP gross margin18.3 %16.3 %23.9 %17.4 %24.4 %
Equity-based compensation (1)
$504 $455 $291 $959 $804 
Management transition expense (2)
— — 705 — 705 
Non-GAAP gross profit$17,618 $13,435 $17,663 $31,053 $34,644 
Non-GAAP gross margin18.9 %16.9 %25.3 %18.0 %25.5 %
GAAP research and development expense
$3,382 $4,012 $2,396 $7,394 $5,063 
Equity-based compensation (1)
(90)(107)(217)(197)(379)
Non-GAAP research and development expense
$3,292 $3,905 $2,179 $7,197 $4,684 
GAAP selling, general, and administrative expense
$12,332 $11,169 $17,820 $23,502 $32,716 
Equity-based compensation (1)
(1,422)(1,510)(1,459)(2,932)(2,637)
Management transition expense (2)
(664)— (130)(664)(130)
Business transformation costs (3)
— — (2,500)— (2,500)
CHIPS Act specialist fees (4)
— — (1,320)— (1,320)
Non-GAAP selling, general, and administrative expense
$10,246 $9,659 $12,411 $19,906 $26,129 
GAAP net loss to shareholders$(1,897)$(5,729)$(8,590)$(7,626)$(12,863)
Equity-based compensation (1)2,016 2,072 1,967 4,088 3,820 
Management transition expense (2)
664 — 835 664 835 
Business transformation costs (3)
— — 2,500 — 2,500 
CHIPS Act specialist fees (4)
— — 1,320 — 1,320 
Non-GAAP net income (loss) to shareholders
$783 $(3,657)$(1,968)$(2,874)$(4,388)
9




Three-Month Period EndedSix-Month Period Ended
June 30, 2024March 31, 2024July 2, 2023June 30, 2024July 2, 2023
(in thousands)
Equity-based compensation allocation in the consolidated statements of operations (1):
Cost of revenue$504 $455 $291 $959 $804 
Research and development expense
90 107 217 197 379 
Selling, general, and administrative expense
1,422 1,510 1,459 2,932 2,637 
$2,016 $2,072 $1,967 $4,088 $3,820 
Management transition expense allocation in the consolidated statements of operations (2):
Cost of revenue$— $— $705 $— $705 
Selling, general, and administrative expense
664 — 130 664 130 
$664 $— $835 $664 $835 
10



Three-Month Period Ended
June 30, 2024
Six-Month Period Ended
June 30, 2024
GAAPNon-GAAPGAAPNon-GAAP
Computation of net income (loss) per common share, basic and diluted:(in thousands, except per share data)
Numerator:
Net income (loss) attributable to SkyWater Technology, Inc.$(1,897)$783 $(7,626)$(2,874)
Denominator:
Weighted-average common shares outstanding, basic
47,395 47,395 47,247 47,247 
Net income (loss) per common share, basic$(0.04)$0.02 $(0.16)$(0.06)
Weighted-average common shares outstanding, diluted
47,395 47,521 47,247 47,247 
Net income (loss) per common share, diluted$(0.04)$0.02 $(0.16)$(0.06)
Three-Month Period Ended
March 31, 2024
GAAPNon-GAAP
Computation of net loss per common share, basic and diluted:(in thousands, except per share data)
Numerator:
Net loss attributable to SkyWater Technology, Inc.$(5,729)$(3,657)
Denominator:
Weighted-average common shares outstanding, basic and diluted47,099 47,099 
Net loss per common share, basic and diluted$(0.12)$(0.08)
Three-Month Period Ended
July 2, 2023
Six-Month Period Ended
July 2, 2023
GAAPNon-GAAPGAAPNon-GAAP
Computation of net loss per common share, basic and diluted:
(in thousands, except per share data)
Numerator:
Net loss attributable to SkyWater Technology, Inc.$(8,590)$(1,968)$(12,863)$(4,388)
Denominator:
Weighted-average common shares outstanding, basic and diluted44,743 44,743 44,280 44,280 
Net loss per common share, basic and diluted$(0.19)$(0.04)$(0.29)$(0.10)
11



Three-Month Period EndedSix-Month Period Ended
June 30, 2024March 31, 2024July 2, 2023June 30, 2024July 2, 2023
(in thousands)
Net loss to shareholders (GAAP)$(1,897)$(5,729)$(8,590)$(7,626)$(12,863)
Net loss margin to shareholders(2.0)%(7.2)%(12.3)%(4.4)%(9.5)%
Interest expense
$2,482 $2,390 $2,950 $4,871 $5,421 
Income tax (benefit) expense
(127)41 25 (86)25 
Depreciation and amortization4,064 5,065 7,207 9,129 14,559 
EBITDA4,522 1,767 1,592 6,288 7,142 
Equity-based compensation (1)
2,016 2,072 1,967 4,088 3,820 
Management transition expense (2)
664 — 835 664 835 
Business transformation costs (3)
— — 2,500 — 2,500 
CHIPS Act specialist fees (4)
— — 1,320 — 1,320 
Net income attributable to noncontrolling interests (5)
942 1,097 2,066 2,039 2,773 
Adjusted EBITDA$8,144 $4,936 $10,280 $13,079 $18,390 
Adjusted EBITDA margin
8.7 %6.2 %14.7 %7.6 %13.5 %
__________________
(1)Represents non-cash equity-based compensation expense.
(2)Represents severance, separation, and other costs related to the reorganization of the manufacturing, sales, marketing, and operations leadership team.
(3)Represents expenses related to long-term transformation activities focused on improvement in automation and operational efficiency and includes project-based management consulting fees.
(4)Represents project-based specialist fees related to our CHIPS Act application process.
(5)Represents net income attributable to our VIE, which was formed for the purpose of purchasing the land and building of our primary operating facility in Bloomington, Minnesota. Since interest expense is added back to net loss to shareholders in our adjusted EBITDA financial measure, we also add back the net income attributable to the VIE as its net income is derived from interest the VIE charges SkyWater.
12
v3.24.2.u1
Cover
Aug. 07, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Aug. 07, 2024
Entity Registrant Name SkyWater Technology, Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-40345
Entity Tax Identification Number 37-1839853
Entity Address, Address Line One 2401 East 86th Street
Entity Address, City or Town Bloomington
Entity Address, State or Province MN
Entity Address, Postal Zip Code 55425
City Area Code 952
Local Phone Number 851-5200
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common stock, par value $0.01 per share
Trading Symbol SKYT
Security Exchange Name NASDAQ
Entity Emerging Growth Company true
Entity Ex Transition Period false
Entity Central Index Key 0001819974
Amendment Flag false
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