- Revenue: Revenue of $65.1 million increased 69% year-over-year. Advanced Technology Services revenue of $47.9 million increased 97% year-over-year reflecting the momentum we are gaining with several key customers, as well as a non-recurring, non-cash revenue recognition of $4.7 million for the early completion of a fixed-fee program. Advanced Technology Services revenue contained $0.03 million of tool revenue in fourth quarter 2022 and $1.1 million in fourth quarter 2021. Wafer Services revenue of $17.2 million increased 21% compared to the fourth quarter of 2021 driven by more favorable pricing and increased volumes.
- Gross Profit (Loss): GAAP gross profit was $16.6 million, or 25.4% of revenue, compared to gross loss of $16.6 million, or (43.1)% of revenue, in the fourth quarter of 2021. GAAP gross loss for the fourth quarter of 2021 included a $13.4 million inventory write-down charge for temperature differential sensing wafers. Cost of revenues in the fourth quarter of 2022 contained $2.7 million for heterogeneous integration and $1.4 million in depreciation for the radiation hardened facility. Non-GAAP gross profit was $17.0 million, or 26.2% of revenue, compared to gross loss of $2.3 million, or (6.1)% of revenue, in the fourth quarter of 2021.
- Net Loss: GAAP net loss to shareholders of $3.0 million, or $(0.07) per share, compared to a net loss to shareholders of $27.0 million, or $(0.69) per share, in the fourth quarter of 2021. Non-GAAP net loss to shareholders of $1.5 million, or $(0.03) per share, compared to a net loss to shareholders of $11.2 million, or $(0.28) per share, in the fourth quarter of 2021.
- Adjusted EBITDA: Adjusted EBITDA was $10.3 million, or 15.9% of revenue, compared to $(4.7) million or (12.3)% of revenue in the fourth quarter of 2021.
- Balance Sheet: Cash and cash equivalents of $30.0 million compared to $12.9 million from January 2, 2022.
A reconciliation between historical GAAP and non-GAAP information is contained in the tables below in the section titled, “Non-GAAP Financial Measures.”
Investor Webcast
SkyWater will host a conference call on Monday, February 13, 2023, at 3:30 p.m. CT to discuss its fourth quarter and full year 2022 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. investor-owned semiconductor manufacturer and a DMEA-accredited Category 1A Trusted Foundry. 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 world-class U.S. facilities. This pioneering model enables innovators to co-create the next wave of technology with diverse categories including mixed-signal CMOS, ROICs, rad-hard ICs, power management, MEMS, superconducting ICs, photonics, carbon nanotubes and interposers. SkyWater serves growing markets including aerospace & defense, automotive, biomedical, cloud & computing, consumer, industrial and IoT. For more information, visit: www.skywatertechnology.com.
Cautionary Statement Regarding Preliminary Results
The Company’s results for the fiscal quarter and year ended January 1, 2023 are preliminary, unaudited and subject to the finalization of the Company’s fourth 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 you 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 sole semiconductor foundry 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 amid industry-wide supply chain shortages; 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 impact of the COVID-19 pandemic on our business, results of operations and financial condition and our customers, suppliers and workforce; the impact of the COVID-19 pandemic on the global economy; 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 10, 2022 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.
SKYWATER TECHNOLOGY, INC. Consolidated Balance Sheets (Unaudited) |
|||||||
|
January 1, 2023 |
|
January 2, 2022 |
||||
|
(in thousands, except share data) |
||||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
30,025 |
|
|
$ |
12,917 |
|
| Accounts receivable, net |
|
62,670 |
|
|
|
39,381 |
|
| Inventories |
|
13,397 |
|
|
|
17,500 |
|
| Prepaid expenses and other current assets |
|
10,290 |
|
|
|
3,854 |
|
| Income tax receivable |
|
169 |
|
|
|
745 |
|
| Total current assets |
|
116,551 |
|
|
|
74,397 |
|
| Property and equipment, net |
|
179,915 |
|
|
|
180,475 |
|
| Intangible assets, net |
|
5,608 |
|
|
|
3,891 |
|
| Other assets |
|
3,690 |
|
|
|
4,835 |
|
| Total assets |
$ |
305,764 |
|
|
$ |
263,598 |
|
| Liabilities and Shareholders' Equity |
|
|
|
||||
| Current liabilities: |
|
|
|
||||
| Current portion of long-term debt |
$ |
1,855 |
|
|
$ |
1,021 |
|
| Accounts payable |
|
21,102 |
|
|
|
7,637 |
|
| Accrued expenses |
|
25,212 |
|
|
|
17,483 |
|
| Short-term financing, net of unamortized debt issuance costs (11) |
|
55,817 |
|
|
|
— |
|
| Current portion of contingent consideration |
|
— |
|
|
|
816 |
|
| Deferred revenue - current |
|
28,186 |
|
|
|
20,808 |
|
| Total current liabilities |
|
132,172 |
|
|
|
47,765 |
|
| Long-term liabilities: |
|
|
|
||||
| Long-term debt, less current portion and net of unamortized debt issuance costs |
|
35,181 |
|
|
|
58,428 |
|
| Long-term incentive plan |
|
1,643 |
|
|
|
4,039 |
|
| Deferred revenue - long-term |
|
67,967 |
|
|
|
88,094 |
|
| Deferred income tax liability, net |
|
1,239 |
|
|
|
995 |
|
| Other long-term liabilities |
|
13,585 |
|
|
|
4,350 |
|
| Total long-term liabilities |
|
119,615 |
|
|
|
155,906 |
|
| Total liabilities |
|
251,787 |
|
|
|
203,671 |
|
| Commitments and contingencies |
|
|
|
||||
| Shareholders’ equity: |
|
|
|
||||
| Preferred stock, $0.01 par value per share (80,000,000 and zero shares authorized, none issued and outstanding) |
|
— |
|
|
|
— |
|
| Common stock, $0.01 par value per share (200,000,000 shares authorized; 43,704,876 and 39,836,038 shares issued and outstanding) |
|
437 |
|
|
|
398 |
|
| Additional paid-in capital |
|
147,304 |
|
|
|
115,208 |
|
| Accumulated deficit |
|
(94,072 |
) |
|
|
(54,479 |
) |
| Total shareholders’ equity, SkyWater Technology, Inc. |
|
53,669 |
|
|
|
61,127 |
|
| Non-controlling interests |
|
308 |
|
|
|
(1,200 |
) |
| Total shareholders’ equity |
|
53,977 |
|
|
|
59,927 |
|
| Total liabilities and shareholders’ equity |
$ |
305,764 |
|
|
$ |
263,598 |
|
| SKYWATER TECHNOLOGY, INC. Consolidated Statements of Operations (Unaudited) |
|||||||||||||||
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
January 1,
|
|
January 2,
|
|
January 1,
|
|
January 2,
|
||||||||
|
|
(in thousands, except share data) |
||||||||||||||
| Revenue |
$ |
65,087 |
|
|
$ |
38,533 |
|
|
$ |
212,941 |
|
|
$ |
162,848 |
|
| Cost of revenue: |
|
|
|
|
|
|
|
||||||||
| Cost of revenue, before inventory write-down |
|
48,536 |
|
|
|
41,714 |
|
|
|
186,974 |
|
|
|
156,878 |
|
| Inventory write-down (1) |
|
— |
|
|
|
13,442 |
|
|
|
— |
|
|
|
13,442 |
|
| Total cost of revenue |
|
48,536 |
|
|
|
55,156 |
|
|
|
186,974 |
|
|
|
170,320 |
|
| Gross profit (loss) |
|
16,551 |
|
|
|
(16,623 |
) |
|
|
25,967 |
|
|
|
(7,472 |
) |
| Research and development |
|
2,208 |
|
|
|
1,228 |
|
|
|
9,431 |
|
|
|
8,747 |
|
| Selling, general and administrative expenses |
|
13,040 |
|
|
|
9,951 |
|
|
|
46,303 |
|
|
|
43,595 |
|
| Change in fair value of contingent consideration |
|
— |
|
|
|
(154 |
) |
|
|
— |
|
|
|
(2,710 |
) |
| Operating income (loss) |
|
1,303 |
|
|
|
(27,648 |
) |
|
|
(29,767 |
) |
|
|
(57,104 |
) |
| Other income (expense): |
|
|
|
|
|
|
|
||||||||
| Paycheck Protection Program loan forgiveness |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6,453 |
|
| Loss on debt extinguishment |
|
(1,101 |
) |
|
|
— |
|
|
|
(1,101 |
) |
|
|
— |
|
| Interest expense |
|
(1,794 |
) |
|
|
(839 |
) |
|
|
(5,194 |
) |
|
|
(3,542 |
) |
| Total other income (expense) |
|
(2,895 |
) |
|
|
(839 |
) |
|
|
(6,295 |
) |
|
|
2,911 |
|
| Loss before income taxes |
|
(1,592 |
) |
|
|
(28,487 |
) |
|
|
(36,062 |
) |
|
|
(54,193 |
) |
| Income tax expense (benefit) |
|
852 |
|
|
|
(2,322 |
) |
|
|
809 |
|
|
|
(6,790 |
) |
| Net loss |
|
(2,444 |
) |
|
|
(26,165 |
) |
|
|
(36,871 |
) |
|
|
(47,403 |
) |
| Less: net income attributable to non-controlling interests |
|
597 |
|
|
|
871 |
|
|
|
2,722 |
|
|
|
3,293 |
|
| Net loss attributable to SkyWater Technology, Inc. |
$ |
(3,041 |
) |
|
$ |
(27,036 |
) |
|
$ |
(39,593 |
) |
|
$ |
(50,696 |
) |
| Net loss per share attributable to common shareholders, basic and diluted: |
$ |
(0.07 |
) |
|
$ |
(0.69 |
) |
|
$ |
(0.97 |
) |
|
$ |
(1.76 |
) |
| Weighted average shares used in computing net loss per common share, basic and diluted: |
|
42,612,763 |
|
|
|
39,324,851 |
|
|
|
40,835,186 |
|
|
|
29,038,174 |
|
| SKYWATER TECHNOLOGY, INC. Consolidated Statements of Cash Flows (Unaudited) |
|||||||
|
|
Twelve Months Ended |
||||||
|
|
January 1, 2023 |
|
January 2, 2022 |
||||
|
|
(in thousands) |
||||||
| Cash flows from operating activities: |
|
|
|
||||
| Net loss |
$ |
(36,871 |
) |
|
$ |
(47,403 |
) |
| Adjustments to reconcile net loss to net cash flows provided by (used in) operating activities: |
|
|
|
||||
| Depreciation and amortization |
|
28,192 |
|
|
|
27,368 |
|
| Inventory write-down (1) |
|
— |
|
|
|
13,442 |
|
| Gain on Paycheck Protection Program loan forgiveness |
|
— |
|
|
|
(6,453 |
) |
| Gain on sale of property and equipment |
|
(3 |
) |
|
|
(2,012 |
) |
| Amortization of debt issuance costs included in interest expense |
|
1,430 |
|
|
|
621 |
|
| Long-term incentive and stock-based compensation |
|
8,610 |
|
|
|
12,533 |
|
| Change in fair value of contingent consideration |
|
— |
|
|
|
(2,710 |
) |
| Cash paid for contingent consideration in excess of initial valuation |
|
(816 |
) |
|
|
(7,374 |
) |
| Deferred income taxes |
|
244 |
|
|
|
(7,063 |
) |
| Loss on debt extinguishment |
|
1,101 |
|
|
|
— |
|
| Non-cash revenue related to customer equipment |
|
— |
|
|
|
(2,481 |
) |
| Changes in operating assets and liabilities: |
|
|
|
||||
| Accounts receivable |
|
(12,846 |
) |
|
|
(9,387 |
) |
| Inventories |
|
(5,894 |
) |
|
|
(3,773 |
) |
| Prepaid expenses and other assets |
|
(5,288 |
) |
|
|
5,098 |
|
| Accounts payable |
|
18,458 |
|
|
|
(6,481 |
) |
| Deferred revenue |
|
(12,749 |
) |
|
|
(17,150 |
) |
| Income tax receivable and payable |
|
576 |
|
|
|
(2,455 |
) |
| Net cash used in operating activities |
|
(15,856 |
) |
|
|
(55,680 |
) |
| Cash flows from investing activities: |
|
|
|
||||
| Purchase of software and licenses |
|
(400 |
) |
|
|
(1,220 |
) |
| Proceeds from sale of property and equipment |
|
— |
|
|
|
2,159 |
|
| Purchases of property and equipment |
|
(14,981 |
) |
|
|
(30,762 |
) |
| Net cash used in investing activities |
|
(15,381 |
) |
|
|
(29,823 |
) |
| Cash flows from financing activities: |
|
|
|
||||
| Net (repayment) proceeds on Revolver |
|
(22,328 |
) |
|
|
(6,081 |
) |
| Proceeds from Financing |
|
58,838 |
|
|
|
— |
|
| Repayment of Financing |
|
(1,469 |
) |
|
|
(990 |
) |
| Cash paid for debt issuance costs |
|
(4,168 |
) |
|
|
(250 |
) |
| Proceeds from issuance of common stock pursuant to the initial public offering, net of underwriting discounts and commissions |
|
— |
|
|
|
104,212 |
|
| Proceeds from the issuance of common stock pursuant to the employee stock purchase plan |
|
1,800 |
|
|
|
— |
|
| Proceeds from the issuance of common stock, net of underwriting discounts and commissions |
|
16,168 |
|
|
|
— |
|
| Cash paid for offering costs |
|
(5 |
) |
|
|
(1,867 |
) |
| Cash paid for capital leases |
|
(1,603 |
) |
|
|
(1,115 |
) |
| Proceeds from the ATM program, net of commissions |
|
3,476 |
|
|
|
— |
|
| Cash paid on license technology obligations |
|
(1,150 |
) |
|
|
— |
|
| Distributions to VIE member |
|
(1,214 |
) |
|
|
(2,925 |
) |
| Net cash provided by financing activities |
|
48,345 |
|
|
|
90,984 |
|
| Net change in cash and cash equivalents |
|
17,108 |
|
|
|
5,481 |
|
| Cash and cash equivalents - beginning of period |
|
12,917 |
|
|
|
7,436 |
|
| Cash and cash equivalents - end of period |
$ |
30,025 |
|
|
$ |
12,917 |
|
