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SkyWater Technology Reports Second Quarter 2022 Results

Strong Progress Toward 2022 Revenue Growth Objectives; Continued Gross Margin Expansion

BLOOMINGTON, Minn. — (BUSINESS WIRE) — August 15, 2022 — SkyWater Technology (NASDAQ: SKYT), the trusted technology realization partner, today announced financial results for the second quarter of 2022, ended July 3, 2022.

“We are pleased to report second-quarter 2022 revenues of over $47 million and increasing momentum toward our margin expansion and profitability objectives,” said Thomas Sonderman, SkyWater president and chief executive officer. “Our year-over-year revenue growth demonstrates both the recent successes in winning new ATS customers as well as the more favorable contract terms reflected in our wafer services business. Excluding tool sales, ATS revenues grew 20% year-over-year and wafer services revenue grew 23%, and with the continued growth of ATS along with better pricing and predictability in our wafer services business, we achieved very strong levels of flow-through and reported positive gross margins in the quarter. We also achieved sequential quarterly revenue growth with nearly every key ATS customer, offsetting the expected quarterly decline from wafer services, which came as a result of the accounting treatment pull-in of $8 million of WIP into our first-quarter wafer services revenues. Finally, since last quarter we have announced new awards and partnerships that provide meaningful revenue opportunities in support of our long-term growth and profitability targets. For 2022, our performance year to date and expected second-half revenue ramp in multiple ATS programs provides increasing confidence that we will achieve growth this year approaching our long-term annual target of 25%.”

Recent Business Updates:

Q2 2022 Summary:

GAAP

 

 

 

 

 

 

 

 

 

In USD millions, except per share data

Q2 22

 

Q2 21

 

Y/Y

 

Q1 22

 

Q/Q

Advanced Technology Services revenue

$29.8

 

$26.9

 

11%

 

$26.6

 

12%

Wafer Services revenue

$17.6

 

$14.3

 

23%

 

$21.5

 

(18)%

Revenue

$47.4

 

$41.2

 

15%

 

$48.1

 

(1)%

Gross profit (loss)

$2.1

 

$1.8

 

17%

 

$(0.9)

 

333%

Gross margin

4.4%

 

4.4%

 

 

(2.0)%

 

640 bps

Net loss to shareholders

$(13.0)

 

$(7.0)

 

(86)%

 

$(16.6)

 

22%

Basic loss per share

$(0.32)

 

$(0.20)

 

(60)%

 

$(0.42)

 

24%

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

 

 

 

 

In USD millions, except per share data

Q2 22

 

Q2 21

 

Y/Y

 

Q1 22

 

Q/Q

Non-GAAP gross profit (loss)

$2.6

 

$1.8

 

44%

 

$0.5

 

420%

Non-GAAP gross margin

5.6%

 

4.7%

 

90 bps

 

1.1%

 

450 bps

Non-GAAP net loss to shareholders

$(10.7)

 

$(5.1)

 

(110)%

 

$(13.0)

 

18%

Non-GAAP basic loss per share

$(0.27)

 

$(0.15)

 

(80)%

 

$(0.33)

 

18%

Adjusted EBITDA

$(1.6)

 

$(0.8)

 

(100)%

 

$(4.8)

 

67%

Adjusted EBITDA margin

(3.4%)

 

(2.0%)

 

(140) bps

 

(10.0%)

 

660 bps

Q2 2022 Results:

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 today, Monday, August 15, 2022, at 3:30 p.m. CT to discuss its second quarter 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 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, 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.

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 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)

 

 

July 3, 2022

 

January 2, 2022

 

(in thousands, except share data)

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

10,974

 

 

$

12,917

 

Accounts receivable, net

 

49,906

 

 

 

39,381

 

Inventories

 

11,866

 

 

 

17,500

 

Prepaid expenses and other current assets

 

6,077

 

 

 

3,854

 

Income tax receivable

 

744

 

 

 

745

 

Total current assets

 

79,567

 

 

 

74,397

 

Property and equipment, net

 

187,141

 

 

 

180,475

 

Intangible assets, net

 

6,576

 

 

 

3,891

 

Other assets

 

3,363

 

 

 

4,835

 

Total assets

$

276,647

 

 

$

263,598

 

Liabilities and Shareholders’ Equity

 

 

 

Current liabilities:

 

 

 

Current portion of long-term debt

$

1,042

 

 

$

1,021

 

Accounts payable

 

13,848

 

 

 

7,637

 

Accrued expenses

 

25,094

 

 

 

17,483

 

Current portion of contingent consideration

 

441

 

 

 

816

 

Deferred revenue - current

 

24,339

 

 

 

20,808

 

Total current liabilities

 

64,764

 

 

 

47,765

 

Long-term liabilities:

 

 

 

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

 

77,190

 

 

 

58,428

 

Long-term incentive plan

 

3,636

 

 

 

4,039

 

Deferred revenue - long-term

 

79,392

 

 

 

88,094

 

Deferred income tax liability, net

 

858

 

 

 

995

 

Other long-term liabilities

 

13,178

 

 

 

4,350

 

Total long-term liabilities

 

174,254

 

 

 

155,906

 

Total liabilities

 

239,018

 

 

 

203,671

 

Commitments and contingencies

 

 

 

Shareholders’ equity:

 

 

 

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

 

 

 

 

 

Common stock, $0.01 par value per share (200,000,000 shares authorized; 40,449,776 and 39,836,038 shares issued and outstanding)

 

404

 

 

 

398

 

Additional paid-in capital

 

121,697

 

 

 

115,208

 

Accumulated deficit

 

(84,090

)

 

 

(54,479

)

Total shareholders’ equity, SkyWater Technology, Inc.

 

38,011

 

 

 

61,127

 

Non-controlling interests

 

(382

)

 

 

(1,200

)

Total shareholders’ equity

 

37,629

 

 

 

59,927

 

Total liabilities and shareholders’ equity

$

276,647

 

 

$

263,598

 

SKYWATER TECHNOLOGY, INC.

Consolidated Statements of Operations

(Unaudited)

 

 

Three Months Ended

 

Six Months Ended

 

July 3, 2022

 

July 4, 2021

 

July 3, 2022

 

July 4, 2021

 

(in thousands, except share and per share data)

Revenue

$

47,407

 

 

$

41,189

 

 

$

95,528

 

 

$

89,290

 

Cost of revenue

 

45,327

 

 

 

39,377

 

 

 

94,388

 

 

 

78,312

 

Gross profit

 

2,080

 

 

 

1,812

 

 

 

1,140

 

 

 

10,978

 

Research and development

 

2,361

 

 

 

3,339

 

 

 

4,643

 

 

 

5,266

 

Selling, general and administrative expenses

 

10,795

 

 

 

15,415

 

 

 

22,485

 

 

 

24,018

 

Change in fair value of contingent consideration

 

 

 

 

(942

)

 

 

 

 

 

(886

)

Operating loss

 

(11,076

)

 

 

(16,000

)

 

 

(25,988

)

 

 

(17,420

)

Other (expense) income:

 

 

 

 

 

 

 

Paycheck Protection Program loan forgiveness

 

 

 

 

6,453

 

 

 

 

 

 

6,453

 

Interest expense

 

(1,040

)

 

 

(912

)

 

 

(2,069

)

 

 

(1,970

)

Total other (expense) income

 

(1,040

)

 

 

5,541

 

 

 

(2,069

)

 

 

4,483

 

Loss before income taxes

 

(12,116

)

 

 

(10,459

)

 

 

(28,057

)

 

 

(12,937

)

Income tax expense (benefit)

 

63

 

 

 

(4,237

)

 

 

(131

)

 

 

(4,662

)

Net loss

 

(12,179

)

 

 

(6,222

)

 

 

(27,926

)

 

 

(8,275

)

Less: net income attributable to non-controlling interests

 

826

 

 

 

757

 

 

 

1,685

 

 

 

1,515

 

Net loss attributable to SkyWater Technology, Inc.

$

(13,005

)

 

$

(6,979

)

 

$

(29,611

)

 

$

(9,790

)

Net loss per share attributable to common shareholders, basic and diluted:

$

(0.32

)

 

$

(0.20

)

 

$

(0.74

)

 

$

(0.54

)

Weighted average shares used in computing net loss per common share, basic and diluted:

 

40,203,050

 

 

 

34,707,758

 

 

 

40,031,615

 

 

 

18,884,051

 

SKYWATER TECHNOLOGY, INC.

Consolidated Statements of Cash Flows

(Unaudited)

 

 

Six Months Ended

 

July 3, 2022

 

July 4, 2021

 

 

 

 

 

(in thousands)

Cash flows from operating activities:

 

 

 

Net loss

$

(27,926

)

 

$

(8,275

)

Adjustments to reconcile net loss to net cash flows (used in) provided by operating activities:

 

 

 

Depreciation and amortization

 

13,657

 

 

 

13,336

 

Gain on Paycheck Protection Program loan forgiveness

 

 

 

 

(6,453

)

Amortization of debt issuance costs included in interest expense

 

348

 

 

 

320

 

Long-term incentive and stock-based compensation

 

5,334

 

 

 

7,008

 

Change in fair value of contingent consideration

 

 

 

 

(886

)

Cash paid for contingent consideration in excess of initial valuation

 

(375

)

 

 

(6,114

)

Deferred income taxes

 

(137

)

 

 

(5,191

)

Non-cash revenue related to customer equipment

 

 

 

 

(2,481

)

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

(1,024

)

 

 

(3,401

)

Inventories

 

(3,865

)

 

 

(1,998

)

Prepaid expenses and other assets

 

(751

)

 

 

5,672

 

Accounts payable and accrued expenses

 

6,047

 

 

 

(4,482

)

Deferred revenue

 

(5,170

)

 

 

(16,695

)

Income tax payable and receivable

 

 

 

 

(1,171

)

Net cash used in operating activities

 

(13,862

)

 

 

(30,811

)

Cash flows from investing activities:

 

 

 

Purchase of software and licenses

 

(400

)

 

 

(357

)

Purchases of property and equipment

 

(5,463

)

 

 

(12,898

)

Net cash used in investing activities

 

(5,863

)

 

 

(13,255

)

Cash flows from financing activities:

 

 

 

Proceeds from issuance of common stock pursuant to the initial public offering, net of underwriting discounts and commissions

 

 

 

 

104,212

 

Net proceeds on Revolver

 

18,946

 

 

 

382

 

Proceeds from the issuance of common stock pursuant to the employee stock purchase plan and a long term incentive plan

 

1,128

 

 

 

 

Cash paid for offering costs

 

 

 

 

(1,205

)

Cash paid for capital leases

 

(416

)

 

 

(288

)

Distributions to VIE member

 

(867

)

 

 

(1,373

)

Cash paid on license technology obligations

 

(500

)

 

 

 

Repayment of Financing

 

(509

)

 

 

(495

)

Net cash provided by financing activities

 

17,782

 

 

 

101,233

 

Net change in cash and cash equivalents

 

(1,943

)

 

 

57,167

 

Cash and cash equivalents - beginning of period

 

12,917

 

 

 

7,436

 

Cash and cash equivalents - end of period

$

10,974

 

 

$

64,603

 

Supplemental Revenue and Cost of Revenue Information by Quarter

 

 

 

Q1 2021

 

Q2 2021

 

Q3 2021

 

Q4 2021

 

Q1 2022

 

Q2 2022

 

(in thousands)

Wafer Services revenue

 

$

10,019

 

$

14,312

 

$

12,652

 

$

14,174

 

$

21,546

 

$

17,584

Advanced Technology Services revenue

 

 

38,082

 

 

26,877

 

 

22,373

 

 

24,359

 

 

26,575

 

 

29,823

Revenue

 

$

48,101

 

$

41,189

 

$

35,025

 

$

38,533

 

$

48,121

 

$

47,407

 

 

 

 

 

 

 

 

 

 

 

 

 

Tool revenue (included in ATS revenue)

 

$

15,405

 

$

2,346

 

$

281

 

$

1,127

 

$

984

 

$

313

Tool cost of revenue

 

$

9,873

 

$

1,223

 

$

281

 

$

701

 

$

984

 

$

200

Revenue impact of new contract with significant customer

 

 

 

 

 

 

 

 

 

 

8,230

 

$

Cost of revenue impact of new contract with significant customer

 

 

 

 

 

 

 

 

 

 

10,887

 

$

Non-GAAP Financial Measures

We provide supplemental non-GAAP financial information that our management utilizes to evaluate our ongoing financial performance and provide additional insight to investors as supplemental information to our U.S. GAAP results. We provide non-GAAP gross profit, non-GAAP gross margin, non-GAAP net loss to shareholders, and non-GAAP net loss per share. We provide these non-GAAP financial measures because we believe this non-GAAP presentation provides a baseline for analyzing trends in our business and to 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 our non-GAAP measures are not determined in accordance with U.S. GAAP, these measures are susceptible to differing calculations, and not all comparable or peer companies may calculate their non-GAAP measures in the same manner. 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 EBITDA and adjusted EBITDA margin as supplemental non-GAAP measurements. We define adjusted EBITDA as net income (loss) before interest expense, income tax provision (benefit), depreciation and amortization, equity-based compensation and certain other items that we do not view as indicative of our ongoing performance, including fair value changes in contingent considerations, management fees, inventory write-down, corporate conversion and IPO related costs, Paycheck Protection Program loan forgiveness, SkyWater Florida start-up costs, net income attributable to non-controlling interests, and management transition expense. We believe adjusted EBITDA is a useful performance measure because it allows for an effective evaluation of our operating performance when compared to our peers, without regard to our financing methods or capital structure. We exclude the items listed above from net income or loss in arriving at adjusted EBITDA because these amounts can vary substantially within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income determined in accordance with U.S. 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 costs 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 presentation 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 U.S. GAAP, to our non-GAAP financial measures.

SKYWATER TECHNOLOGY, INC.

Reconciliation of GAAP to Non-GAAP Financial Measures

(Unaudited)

 

 

Three Months Ended

 

July 3, 2022

 

July 4, 2021

 

April 3, 2022

 

(in thousands)

GAAP revenue

$

47,407

 

 

$

41,189

 

 

$

48,121

 

Tool revenue (1)

 

(313

)

 

 

(2,346

)

 

 

(984

)

Non-GAAP revenue

$

47,094

 

 

$

38,843

 

 

$

47,137

 

 

 

 

 

 

 

GAAP cost of revenue

$

45,327

 

 

$

39,377

 

 

$

49,061

 

Equity-based compensation (2)

 

(546

)

 

 

(827

)

 

 

(1,125

)

SkyWater Florida start-up costs (3)

 

(113

)

 

 

(318

)

 

 

(341

)

Cost of tool revenue (1)

 

(200

)

 

 

(1,223

)

 

 

(984

)

Non-GAAP cost of revenue

$

44,468

 

 

$

37,009

 

 

$

46,611

 

 

 

 

 

 

 

GAAP gross profit

$

2,080

 

 

$

1,812

 

 

$

(940

)

GAAP gross margin

 

4.4

%

 

 

4.4

%

 

 

(2.0

)%

Equity-based compensation (2)

 

546

 

 

 

827

 

 

 

1,125

 

SkyWater Florida start-up costs (3)

 

113

 

 

 

318

 

 

 

341

 

Tool revenue (1)

 

(313

)

 

 

(2,346

)

 

 

(984

)

Cost of tool revenue (1)

 

200

 

 

 

1,223

 

 

 

984

 

Non-GAAP gross profit

$

2,626

 

 

$

1,834

 

 

$

526

 

Non-GAAP gross margin

 

5.6

%

 

 

4.7

%

 

 

1.1

%

 

 

 

 

 

 

GAAP research and development

$

2,361

 

 

$

3,339

 

 

$

2,282

 

Equity-based compensation (2)

 

(128

)

 

 

(1,487

)

 

 

(225

)

Non-GAAP research and development

$

2,233

 

 

$

1,852

 

 

$

2,057

 

 

 

 

 

 

 

GAAP selling, general and administrative expenses

$

10,795

 

 

$

15,415

 

 

$

11,690

 

SkyWater Florida start-up costs (3)

 

(45

)

 

 

(186

)

 

 

(61

)

Management transition expense (4)

 

 

 

 

(435

)

 

 

 

Equity-based compensation (2)

 

(1,444

)

 

 

(4,454

)

 

 

(1,866

)

Management fees (6)

 

 

 

 

(56

)

 

 

 

Non-GAAP selling, general and administrative expenses

$

9,306

 

 

$

10,284

 

 

$

9,763

 

 

Three Months Ended

 

July 3, 2022

 

July 4, 2021

 

April 3, 2022

 

(in thousands)

GAAP net loss to SkyWater Technology, Inc.

$

(13,005

)

 

$

(6,979

)

 

$

(16,606

)

Paycheck Protection Program loan forgiveness

 

 

 

 

(6,453

)

 

 

 

Corporate conversion and initial public offering related costs (5)

 

 

 

 

1,521

 

 

 

 

SkyWater Florida start-up costs (3)

 

158

 

 

 

504

 

 

 

402

 

Management transition expense (4)

 

 

 

 

435

 

 

 

 

Fair value changes in contingent consideration (5)

 

 

 

 

(942

)

 

 

 

Equity-based compensation (2)

 

2,118

 

 

 

6,768

 

 

 

3,216

 

Management fees (6)

 

 

 

 

56

 

 

 

 

Non-GAAP net loss to shareholders

$

(10,729

)

 

$

(5,090

)

 

$

(12,988

)

 

 

 

 

 

 

Equity-based compensation allocation in the consolidated statements of operations:

 

 

 

 

 

Cost of revenue

$

546

 

 

$

827

 

 

$

1,125

 

Research and development

 

128

 

 

 

1,487

 

 

 

225

 

Selling, general and administrative expenses

 

1,444

 

 

 

4,454

 

 

 

1,866

 

 

$

2,118

 

 

$

6,768

 

 

$

3,216

 

 

 

 

 

 

 

SkyWater Florida start-up costs allocation in the consolidated statements of operations:

 

 

 

 

 

Cost of revenue

$

113

 

 

$

318

 

 

$

341

 

Selling, general and administrative expenses

 

45

 

 

 

186

 

 

 

61

 

 

$

158

 

 

$

504

 

 

$

402

 

 

Three Months Ended
July 3, 2022

 

GAAP

 

Non-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.

$

(13,005

)

 

$

(10,729

)

Denominator:

 

 

 

Weighted-average common shares outstanding, basic and diluted

 

40,203

 

 

 

40,203

 

Net loss per common share, basic and diluted

$

(0.32

)

 

$

(0.27

)

 

 

 

 

 

Three Months Ended
July 4, 2021

 

GAAP

 

Non-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.

$

(6,979

)

 

$

(5,090

)

Denominator:

 

 

 

Weighted-average Class B preferred units outstanding, basic and diluted

 

34,708

 

 

 

34,708

 

Net loss per Class B preferred unit, basic and diluted

$

(0.20

)

 

$

(0.15

)

 

 

 

 

 

Three Months Ended
April 3, 2022

 

GAAP

 

Non-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.

$

(16,606

)

 

$

(12,988

)

Denominator:

 

 

 

Weighted-average common shares outstanding, basic and diluted

 

39,862

 

 

 

39,862

 

Net loss per common share, basic and diluted

$

(0.42

)

 

$

(0.33

)

 

Three Months Ended

 

Six Months Ended

 

July 3, 2022

 

July 4, 2021

 

April 3,
2022

 

July 3, 2022

 

July 4, 2021

 

(in thousands)

Net loss to shareholders

$

(13,005

)

 

$

(6,979

)

 

$

(16,606

)

 

$

(29,611

)

 

$

(9,790

)

Interest expense

 

1,040

 

 

 

912

 

 

 

1,029

 

 

 

2,069

 

 

 

1,970

 

Income tax expense (benefit)

 

63

 

 

 

(4,237

)

 

 

(194

)

 

 

(131

)

 

 

(4,662

)

Depreciation and amortization

 

7,198

 

 

 

6,854

 

 

 

6,458

 

 

 

13,657

 

 

 

13,336

 

EBITDA

 

(4,704

)

 

 

(3,450

)

 

 

(9,313

)

 

 

(14,016

)

 

 

854

 

Paycheck Protection Program loan forgiveness

 

 

 

 

(6,453

)

 

 

 

 

 

 

 

 

(6,453

)

Corporate conversion and initial public offering related costs

 

 

 

 

1,521

 

 

 

 

 

 

 

 

 

1,521

 

SkyWater Florida start-up costs (3)

 

158

 

 

 

504

 

 

 

402

 

 

 

560

 

 

 

504

 

Management transition expense (4)

 

 

 

 

435

 

 

 

 

 

 

 

 

 

435

 

Fair value changes in contingent consideration (5)

 

 

 

 

(942

)

 

 

 

 

 

 

 

 

(886

)

Equity-based compensation (2)

 

2,118

 

 

 

6,768

 

 

 

3,216

 

 

 

5,334

 

 

 

7,003

 

Management fees (6)

 

 

 

 

56

 

 

 

 

 

 

 

 

 

332

 

Net income attributable to non-controlling interests (7)

 

826

 

 

 

757

 

 

 

859

 

 

 

1,685

 

 

 

1,515

 

Adjusted EBITDA

$

(1,602

)

 

$

(804

)

 

$

(4,836

)

 

$

(6,437

)

 

$

4,825

 

__________________
(1)

Tool revenue and cost of tool revenue represent the revenue and external costs related to the services we provide to qualify customer funded tool technologies as our customers invest in our capabilities to expand our technology platforms.

(2)

Represents non-cash equity-based compensation expense.

(3)

Represents start-up costs associated with our 200 mm heterogeneous integration facility in Kissimmee, Florida, which includes legal fees, recruiting expenses, retention awards and facility start-up expenses. These expenses are not indicative of our ongoing costs and will be discontinued following the start-up of SkyWater Florida.

(4)

Represents expenses directly associated with the corporate conversion and IPO, such as professional, consulting, legal and accounting services. This also includes bonus awards granted to employees upon the completion of the IPO. These expenses are not indicative of our ongoing costs and were discontinued following the completion of our initial public offering.

(5)

Represents non-cash valuation adjustment of contingent consideration to fair market value during the period.

(6)

Represents a related party transaction with Oxbow Industries, our principal stockholder. As these fees are not part of the core business, did not continue after our IPO and are excluded from management’s assessment of the business, we believe it is useful to investors to view our results excluding these fees.

(7)

Represents net income attributable to our VIE, which was formed for the purpose of purchasing our land, building with the proceeds of a bank loan. Since depreciation and interest expense are excluded from net loss in our adjusted EBITDA financial measure, we also exclude the net income attributable to the VIE.

 



Contact:

SkyWater Investor Contact: Claire McAdams | claire@headgatepartners.com

SkyWater Media Contact: Lauri Julian | Media@SkyWaterTechnology.com