SkyWater Technology Reports Fourth Quarter and Full Year 2021 Results

Q4 2021 Results:

  • Revenue: Revenue of $38.5 million decreased 3% year-over-year. Advanced Technology Services revenue of $24.4 million decreased 7% year-over-year due to less non-recurring tool revenue. Advanced Technology Services revenue contains $1.1 million of tool revenue in fourth quarter 2021 and $4.9 million in fourth quarter 2020. Wafer Services revenue of $14.2 million increased 5% compared to the fourth quarter of 2020 driven by increased revenue from a large customer contract.
  • Gross Profit (Loss): GAAP gross loss was $16.6 million, or (43.1)% of revenue, compared to gross profit of $3.5 million, or 8.9% of revenue, in the fourth quarter of 2020. GAAP gross loss for the fourth quarter of 2021 includes a $13.4 million inventory write-down charge for temperature differential sensing wafers. Cost of revenues in fourth quarter of 2021 contained $2.7 million for heterogeneous integration and $1.7 million in depreciation for the radiation hardened facility. Non-GAAP gross loss was $1.9 million, or (4.8)% of revenue, compared to gross profit of $4.8 million, or 12.2% of revenue, in the fourth quarter of 2020.
  • Net Loss: GAAP net loss to shareholders of $27.0 million, or $(0.69) per share, compared to a net loss to shareholders of $12.3 million, or $(0.68) per share, in the fourth quarter of 2020. Non-GAAP net loss to shareholders of $11.2 million, or $(0.28) per share, compared to a net loss to shareholders of $11.4 million, or $(0.63) per share, in the fourth quarter of 2020.
  • Adjusted EBITDA: Adjusted EBITDA was $(4.9) million, or (12.6)% of revenue, compared to $1.3 million or 3.2% of revenue in the fourth quarter of 2020.
  • Balance Sheet: Cash and cash equivalents of $12.9 million compared to $7.4 million from January 3, 2021.

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 Wednesday, February 23, 2022, at 9:00 a.m. CT to discuss its fourth quarter and full year 2021 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 DOD-accredited Trusted supplier. SkyWater’s Technology as a ServiceSM 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, read-out ICs, rad-hard, power discretes, 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 2, 2022 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; and other factors discussed in the “Risk Factors” section of the prospectus the Company filed with the SEC on April 22, 2021 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.

SKYT-IR

SKYWATER TECHNOLOGY, INC.

Consolidated Balance Sheets

(Unaudited)

 

January 2, 2022

 

January 3, 2021

 

(in thousands, except share and
unit data)

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

12,917

 

 

$

7,436

 

Accounts receivable, net

 

39,381

 

 

 

29,995

 

Inventories

 

17,500

 

 

 

27,169

 

Prepaid expenses and other current assets

 

3,854

 

 

 

11,972

 

Income tax receivable

 

745

 

 

 

 

Total current assets

 

74,397

 

 

 

76,572

 

Property and equipment, net

 

180,475

 

 

 

178,078

 

Intangible assets, net

 

3,891

 

 

 

4,561

 

Other assets

 

4,835

 

 

 

3,998

 

Total assets

$

263,598

 

 

$

263,209

 

Liabilities and Shareholders’ Equity (Deficit)

 

 

 

Current liabilities:

 

 

 

Current portion of long-term debt

$

1,021

 

 

$

2,772

 

Accounts payable

 

7,637

 

 

 

16,792

 

Accrued expenses

 

17,483

 

 

 

25,496

 

Income taxes payable

 

 

 

 

1,710

 

Current portion of contingent consideration

 

816

 

 

 

8,904

 

Deferred revenue - current

 

20,808

 

 

 

30,653

 

Total current liabilities

 

47,765

 

 

 

86,327

 

Long-term liabilities:

 

 

 

Long-term debt, less current portion and unamortized debt issuance costs

 

58,428

 

 

 

69,828

 

Contingent consideration, less current portion

 

 

 

 

1,996

 

Long-term incentive plan

 

4,039

 

 

 

3,185

 

Deferred revenue - long-term

 

88,094

 

 

 

95,399

 

Deferred income tax liability, net

 

995

 

 

 

8,058

 

Other long-term liabilities

 

4,350

 

 

 

 

Total long-term liabilities

 

155,906

 

 

 

178,466

 

Total liabilities

 

203,671

 

 

 

264,793

 

Commitments and contingencies

 

 

 

Shareholders’ equity (deficit):

 

 

 

Preferred stock, $0.01 par value per share (80,000,000 and zero shares authorized; zero issued and outstanding)

 

 

 

 

 

Common stock, $0.01 par value per share (200,000,000 and zero shares authorized, 39,836,038 and zero shares issued and outstanding)

 

398

 

 

 

 

Additional paid-in capital

 

115,208

 

 

 

 

Class A preferred units (zero and 2,000,000 units authorized; zero issued and outstanding)

 

 

 

 

 

Class B preferred units (zero and 18,000,000 units authorized; zero and 18,000,000 units issued and outstanding)

 

 

 

 

 

Common units (zero and 5,000,000 units authorized; zero and 3,057,344 units issued; zero and 2,107,452 outstanding)

 

 

 

 

3,767

 

Accumulated deficit

 

(54,479

)

 

 

(3,783

)

Total shareholders’ equity (deficit), SkyWater Technology, Inc.

 

61,127

 

 

 

(16

)

Non-controlling interests

 

(1,200

)

 

 

(1,568

)

Total shareholders’ equity (deficit)

 

59,927

 

 

 

(1,584

)

Total liabilities and shareholders’ equity

$

263,598

 

 

$

263,209

 

The accompanying notes are an integral part of these consolidated financial statements.

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