- 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 of December 31, 2023
Terran Orbital Corporation (NYSE: LLAP) ("Terran Orbital" or the
"Company"), a leading manufacturer of satellite products primarily
serving the aerospace and defense industries, today announced
financial results and operational highlights for the three and
twelve months ended December 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
Marc Bell, Co-Founder, Chairman, and Chief Executive Officer of
Terran Orbital said, “I am pleased to report our company’s strong
results for 2023. Our revenue growth and gross margin improvement
affirm the strength of our strategy and execution. The future of
space is responsive, and Terran Orbital is well-positioned to
capitalize on this growing market segment. We're focused on
sustainable growth, achieving profitability, and delivering
solutions that meet evolving customer needs. Terran Orbital isn't
just keeping pace with disruption, we're at the forefront, shaping
the future of the space economy through responsive space.”
Results for the Fourth Quarter and Full Year 2023
Revenue for the fourth quarter of 2023 was $31.6 million,
compared to $31.9 million for the same quarter in 2022, and $135.9
million for the full year, up 44% over the prior year. The increase
in annual revenue was primarily due to the continued and increased
level of progress made in satisfying our customer contracts and
reflects the ongoing favorable impact from significant contract
wins and modifications in recent periods. Revenue for 2023 was
negatively impacted by an estimated $6.1 million of EAC adjustments
on certain firm fixed price programs. EAC represents the total
estimated cost-at-completion and is comprised of direct material,
direct labor and manufacturing overhead applicable to a performance
obligation.
Cost of sales for the quarter was $32.1 million compared to
$42.7 million in the same period in the prior year, and $127.4
million for the full year, compared to $111.5 million for the prior
year. The increase in cost of sales for the full year was primarily
due to an increase of $25.8 million in direct and indirect program
costs and $2.5 million in depreciation and amortization, partially
offset by a decrease of $6.8 million in share-based compensation
expense, $3.9 million loss reserve, and $2.1 million in scrap and
obsolete materials and services. Cost of sales for the full year
included an estimated negative impact of $2.1 million due to EAC
adjustments on certain programs and non-recurring changes in
estimates related to inventory.
Gross (loss) profit was $(0.5) million for the quarter, compared
to $(10.8) million in the same period in the prior year, and $8.6
million for the full year, compared to $(17.3) million for the
prior year. Excluding share-based compensation and depreciation and
amortization included in cost of sales, Adjusted Gross (Loss)
Profit(1) was $2.2 million for the quarter, compared to $(7.3)
million for the same period in the prior year, and $19.4 million
for the full year, compared to $(2.2) million in the prior year.
EAC adjustments negatively impacted gross profit and Adjusted Gross
Profit by an estimated $4.0 million during 2023.
Selling, general, and administrative expenses were $27.2 million
for the quarter, compared to $27.6 million for the same period in
the prior year, and $117.5 million for the full year, compared to
$111.9 million for prior year. The increase for the full year was
primarily driven by increases in salaries and wages, research and
development expenses, business development expenses, depreciation
and amortization, and other operating costs, partially offset by a
decrease in share-based compensation expense and accounting, legal,
and other professional fees.
Net loss was $42.8 million in the quarter, compared to a net
loss of $33.0 million for the same period in the prior year, and
$151.8 million for the full year, compared to $164.0 million for
the prior year. The improvement in annual net loss was driven by
the net positive impact of the items noted above as well as the
absence of debt extinguishment in 2023, partially offset by the
change in the fair values of warrant and derivative liabilities and
higher interest expense in 2023.
Adjusted EBITDA(1) was $(20.6) million for the quarter 2023,
compared to $(26.1) million in the same period in the prior year,
and $(77.4) million for the full year, compared to $(69.5) million
for the prior year. The decrease in Adjusted EBITDA for the full
year was primarily due to an increase in selling, general, and
administrative expenses as a result of our growth initiatives,
partially offset by an increase in Adjusted Gross Profit.
Capital expenditures totaled $23.1 million in 2023, up from
$22.5 million in 2022.
Balance Sheet and Liquidity
As of December 31, 2023, Terran Orbital had $71.7 million of
cash on hand and approximately $313.8 million in gross debt
obligations. The Company’s debt included $16.9 million in
connection with an obligation under one of its PIPE investment
subscription agreements, which is payable in cash or equity at the
Company’s option, subject to certain limitations.
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 $2.7 billion as of December 31, 2023, of
which $2.4 billion is related to Rivada Space Networks, compared to
backlog of $170.8 million as of December 31, 2022.
(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 $2.7 billion in new contracts, including:
- 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 Terran Orbital
Terran Orbital Corporation is a leading manufacturer of
satellite products primarily serving the aerospace and defense
industries. Terran Orbital provides end-to-end satellite solutions
by combining satellite design, production, launch planning, mission
operations, and on-orbit support to meet the needs of the most
demanding military, civil, and commercial customers. Learn more at
www.terranorbital.com.
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 December 31, 2024,
our business strategy, future operations, results of operations and
its impact on our shareholders, our ability to execute,
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
additional funding to continue to finance its operations and fund
future installments of 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 the Rivada program and other programs; our
ability to maintain compliance with the listing standards of the
New York Stock Exchange; our ability to operate as a going concern;
our ability to execute on programs and collect from customers in a
timely manner; our ability to finance our operations, 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; 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; and the other risks disclosed in our Annual Report on
Form 10-K filed with the SEC on April 1, 2024 and the prospectus
supplement dated September 18, 2023 related to our Registration
Statement on Form S-3, as amended (File No. 333-271093), which was
declared effective by the SEC on April 18, 2023.
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.
TERRAN ORBITAL
CORPORATION
Condensed Consolidated Balance
Sheets (Unaudited)
(In thousands)
December 31,
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
TERRAN ORBITAL
CORPORATION
Condensed Consolidated
Statements of Operations and Comprehensive Loss (Unaudited)
(In thousands, except share
and per share amounts)
Three Months Ended December
31,
Year Ended December
31,
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
)
TERRAN ORBITAL
CORPORATION
Condensed Consolidated
Statements of Cash Flows (Unaudited)
(In thousands)
Years Ended December
31,
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 PIPE
Investment
-
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
TERRAN ORBITAL CORPORATION 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.
TERRAN ORBITAL CORPORATION
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 December
31,
Years Ended December
31,
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
)
TERRAN ORBITAL CORPORATION
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 December
31,
Years Ended December
31,
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
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