Rocket Lab Announces First Quarter 2023 Financial Results, Issues Guidance For Continued Growth In Second Quarter 2023

Notes to Editor: All dollar amounts in this press release are expressed in U.S. dollars, unless otherwise stated.

+ USE OF NON-GAAP FINANCIAL MEASURES

We supplement the reporting of our financial information determined under Generally Accepted Accounting Principles in the United States of America (“GAAP”) with certain non-GAAP financial information. The non-GAAP financial information presented excludes certain significant items that may not be indicative of, or are unrelated to, results from our ongoing business operations. We believe that these non-GAAP measures provide investors with additional insight into the company's ongoing business performance. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. Reconciliation of the non-GAAP financial information to the corresponding GAAP measures for the historical periods disclosed are included at the end of the tables in this press release. We have not provided a reconciliation for forward-looking non-GAAP financial measures because, without unreasonable efforts, we are unable to predict with reasonable certainty the amount and timing of adjustments that are used to calculate these non-GAAP financial measures, particularly related to stock-based compensation and its related tax effects. The following definitions are provided:

+ ADJUSTED EDITDA

EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA further excludes items of income or loss that we characterize as unrepresentative of our ongoing operations. Such items are excluded from net income or loss to determine Adjusted EBITDA. Management believes this measure provides investors meaningful insight into results from ongoing operations.

+ OTHER NON-GAAP FINANCIAL MEASURES

Non-GAAP gross profit, research and development, net, selling, general and administrative, operating expenses, operating loss and total other income (expense), net, further excludes items of income or loss that we characterize as unrepresentative of our ongoing operations. Such items are excluded from the applicable GAAP financial measure. Management believes these non-GAAP measures provide investors meaningful insight into results from ongoing operations.

ROCKET LAB U.S.A., INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

(unaudited; in thousands, except share and per share data)

 

 

 

Three Months Ended March 31,

 

 

2023

 

2022

Revenues

 

$

54,895

 

 

$

40,703

 

Cost of revenues

 

 

48,538

 

 

 

36,968

 

Gross profit

 

 

6,357

 

 

 

3,735

 

Operating expenses:

 

 

 

 

Research and development, net

 

 

23,905

 

 

 

13,477

 

Selling, general and administrative

 

 

28,469

 

 

 

23,078

 

Total operating expenses

 

 

52,374

 

 

 

36,555

 

Operating loss

 

 

(46,017

)

 

 

(32,820

)

Other income (expense):

 

 

 

 

Interest expense, net

 

 

(685

)

 

 

(2,989

)

Gain (loss) on foreign exchange

 

 

134

 

 

 

(20

)

Change in fair value of liability classified warrants

 

 

 

 

 

13,482

 

Other income, net

 

 

1,477

 

 

 

26

 

Total other income, net

 

 

926

 

 

 

10,499

 

Loss before income taxes

 

 

(45,091

)

 

 

(22,321

)

Provision for income taxes

 

 

(526

)

 

 

(4,388

)

Net loss

 

$

(45,617

)

 

$

(26,709

)

Net loss per share attributable to Rocket Lab USA, Inc.:

 

 

 

 

Basic and diluted

 

$

(0.10

)

 

$

(0.06

)

Weighted-average common shares outstanding:

 

 

 

 

Basic and diluted

476,199,710

456,495,288

ROCKET LAB U.S.A., INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2023 AND DECEMBER 31, 2022

(unaudited; in thousands, except share and per share values)

 

 

March 31, 2023

 

 

 

 

(unaudited)

 

December 31, 2022

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

208,365

 

 

$

242,515

 

Marketable securities, current

 

 

190,357

 

 

 

229,276

 

Accounts receivable, net

 

 

50,690

 

 

 

36,572

 

Contract assets

 

 

12,558

 

 

 

9,451

 

Inventories

 

 

98,453

 

 

 

92,279

 

Prepaids and other current assets

 

 

63,203

 

 

 

52,201

 

Assets held for sale

 

 

11,630

 

 

 

 

Total current assets

 

 

635,256

 

 

 

662,294

 

Non-current assets:

 

 

 

 

Property, plant and equipment, net

 

 

95,981

 

 

 

101,514

 

Intangible assets, net

 

 

76,495

 

 

 

79,692

 

Goodwill

 

 

71,020

 

 

 

71,020

 

Right-of-use assets - operating leases

 

 

34,839

 

 

 

35,239

 

Right-of-use assets - finance leases

 

 

15,458

 

 

 

15,614

 

Marketable securities, non-current

 

 

47,920

 

 

 

9,193

 

Restricted cash

 

 

3,337

 

 

 

3,356

 

Deferred income tax assets, net

 

 

3,500

 

 

 

3,898

 

Other non-current assets

 

 

7,102

 

 

 

7,303

 

Total assets

 

$

990,908

 

 

$

989,123

 

Liabilities and Stockholders’ Equity

 

 

 

 

Current liabilities:

 

 

 

 

Trade payables

 

$

22,852

 

 

$

12,084

 

Accrued expenses

 

 

8,678

 

 

 

8,723

 

Employee benefits payable

 

 

12,333

 

 

 

8,634

 

Contract liabilities

 

 

125,635

 

 

 

108,344

 

Current installments of long-term borrowings

 

 

2,934

 

 

 

2,906

 

Other current liabilities

 

 

24,863

 

 

 

22,249

 

Total current liabilities

 

 

197,295

 

 

 

162,940

 

Non-current liabilities:

 

 

 

 

Long-term borrowings, excluding current installments

 

 

100,724

 

 

 

100,043

 

Non-current operating lease liabilities

 

 

33,870

 

 

 

34,266

 

Non-current finance lease liabilities

 

 

15,478

 

 

 

15,568

 

Deferred tax liabilities

 

 

170

 

 

 

95

 

Other non-current liabilities

 

 

3,353

 

 

 

3,005

 

Total liabilities

 

 

350,890

 

 

 

315,917

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

Stockholders’ equity:

 

 

 

 

Common stock, $0.0001 par value; authorized shares: 2,500,000,000; issued and outstanding shares: 478,153,075 and 475,356,517 at March 31, 2023 and December 31, 2022, respectively

 

 

48

 

 

 

48

 

Additional paid-in capital

 

 

1,125,976

 

 

 

1,112,977

 

Accumulated deficit

 

 

(486,572

)

 

 

(440,955

)

Accumulated other comprehensive income

 

 

566

 

 

 

1,136

 

Total stockholders’ equity

 

 

640,018

 

 

 

673,206

 

Total liabilities and stockholders’ equity

$

990,908

$

989,123

ROCKET LAB U.S.A., INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

(unaudited; in thousands)

 

 

 

For the Three Months Ended March 31,

 

 

2023

 

2022

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

Net loss

 

$

(45,617

)

 

$

(26,709

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

Depreciation and amortization

 

 

7,033

 

 

 

6,088

 

Stock-based compensation expense

 

 

14,036

 

 

 

11,958

 

Loss on disposal of assets

 

 

5

 

 

 

5

 

Amortization of debt issuance costs and discount

 

 

709

 

 

 

690

 

Noncash lease expense

 

 

988

 

 

 

731

 

Noncash income associated with liability-classified warrants

 

 

 

 

 

(13,482

)

Change in the fair value of contingent consideration

 

 

300

 

 

 

2,500

 

Accretion of marketable securities purchased at a discount

 

 

(1,147

)

 

 

 

Deferred income taxes

 

 

420

 

 

 

(1,558

)

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable, net

 

 

(14,116

)

 

 

(5,644

)

Contract assets

 

 

(3,109

)

 

 

(3,668

)

Inventories

 

 

(6,712

)

 

 

(9,132

)

Prepaids and other current assets

 

 

(10,035

)

 

 

(1,071

)

Other non-current assets

 

 

103

 

 

 

772

 

Trade payables

 

 

11,305

 

 

 

805

 

Accrued expenses

 

 

403

 

 

 

(3,245

)

Employee benefits payables

 

 

1,294

 

 

 

475

 

Contract liabilities

 

 

17,292

 

 

 

10,652

 

Other current liabilities

 

 

2,305

 

 

 

4,266

 

Non-current lease liabilities

 

 

(891

)

 

 

(783

)

Other non-current liabilities

 

 

49

 

 

 

11

 

Net cash used in operating activities

 

 

(25,385

)

 

 

(26,339

)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

Purchases of property, equipment and software

 

 

(12,674

)

 

 

(6,242

)

Cash paid for acquisitions, net of acquired cash and restricted cash

 

 

 

 

 

(65,588

)

Purchases of marketable securities

 

 

(76,394

)

 

 

 

Maturities of marketable securities

 

 

78,099

 

 

 

 

Net cash used in investing activities

 

 

(10,969

)

 

 

(71,830

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

Proceeds from the exercise of stock options and public warrants

 

 

771

 

 

 

1,379

 

Proceeds from Employee Stock Purchase Plan

 

 

1,202

 

 

 

1,025

 

Proceeds from sale of employees restricted stock units to cover taxes

 

 

3,078

 

 

 

20,841

 

Minimum tax withholding paid on behalf of employees for restricted stock units

 

 

(1,915

)

 

 

(8,756

)

Payment of contingent consideration

 

 

(1,000

)

 

 

 

Finance lease principal payments

 

 

(78

)

 

 

(45

)

Net cash provided by financing activities

 

 

2,058

 

 

 

14,444

 

Effect of exchange rate changes on cash and cash equivalents

 

 

127

 

 

 

(574

)

Net decrease in cash and cash equivalents and restricted cash

 

 

(34,169

)

 

 

(84,299

)

Cash and cash equivalents, and restricted cash, beginning of period

 

 

245,871

 

 

 

692,075

 

Cash and cash equivalents, and restricted cash, end of period

 

$

211,702

 

 

$

607,776

 

ROCKET LAB U.S.A., INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

(unaudited; in thousands)

 

The tables provided below reconcile the non-GAAP financial measures Adjusted EBITDA, Non-GAAP gross profit, Non-GAAP research and development, net, Non-GAAP selling, general and administrative, Non-GAAP operating expenses, Non-GAAP operating loss and Non-GAAP total other income (expense), net with the most directly comparable GAAP financial measures. See above for additional information on the use of these non-GAAP financial measures.

 

 

 

Three Months Ended March 31,

 

 

2023

 

2022

NET LOSS

 

$

(45,617

)

 

$

(26,709

)

Depreciation

 

 

3,713

 

 

 

3,193

 

Amortization

 

 

3,320

 

 

 

2,895

 

Stock-based compensation expense

 

 

14,036

 

 

 

11,958

 

Transaction costs

 

 

165

 

 

 

375

 

Interest expense, net

 

 

685

 

 

 

2,989

 

Change in fair value of liability classified warrants

 

 

 

 

 

(13,482

)

Change in fair value of contingent consideration

 

 

300

 

 

 

2,500

 

Performance reserve escrow

 

 

1,838

 

 

 

1,895

 

Amortization of inventory step-up

 

 

 

 

 

2,002

 

Provision for income taxes

 

 

526

 

 

 

4,388

 

(Gain) loss on foreign exchange

 

 

(134

)

 

 

20

 

Accretion of marketable securities purchased at a discount

 

 

(1,165

)

 

 

 

Loss on disposal of assets

 

 

5

 

 

 

5

 

Employee retention credit

 

 

(3,841

)

 

 

 

ADJUSTED EBITDA

 

$

(26,169

)

 

$

(7,971

)

 

 

Three Months Ended March 31,

 

 

2023

 

2022

GAAP Gross profit

 

$

6,357

 

 

$

3,735

 

Stock-based compensation

 

 

3,813

 

 

 

3,335

 

Amortization of purchased intangibles

 

 

1,710

 

 

 

565

 

Amortization of inventory step-up

 

 

 

 

 

2,002

 

Performance reserve escrow

 

 

57

 

 

 

114

 

Employee retention credit

 

 

(2,130

)

 

 

 

Non-GAAP Gross profit

 

$

9,807

 

 

$

9,751

 

Non-GAAP Gross margin

 

 

17.9

%

 

 

24.0

%

 

 

 

 

 

GAAP Research and development, net

 

$

23,905

 

 

$

13,477

 

Stock-based compensation

 

 

(5,022

)

 

 

(5,026

)

Amortization of purchased intangibles

 

 

(9

)

 

 

(1,632

)

Employee retention credit

 

 

631

 

 

 

 

Non-GAAP Research and development, net

 

$

19,505

 

 

$

6,819

 

 

 

 

 

 

GAAP Selling, general and administrative

 

$

28,469

 

 

$

23,078

 

Stock-based compensation

 

 

(5,201

)

 

 

(3,597

)

Amortization of purchased intangibles

 

 

(1,434

)

 

 

(598

)

Transaction costs

 

 

(165

)

 

 

(375

)

Performance reserve escrow

 

 

(1,781

)

 

 

(1,781

)

Change in fair value of contingent consideration

 

 

(300

)

 

 

(2,500

)

Employee retention credit

 

 

1,080

 

 

 

 

Non-GAAP Selling, general and administrative

 

$

20,668

 

 

$

14,227

 

 

 

 

 

 

GAAP Operating expenses

 

$

52,374

 

 

$

36,555

 

Stock-based compensation

 

 

(10,223

)

 

 

(8,623

)

Amortization of purchased intangibles

 

 

(1,443

)

 

 

(2,230

)

Transaction costs

 

 

(165

)

 

 

(375

)

Performance reserve escrow

 

 

(1,781

)

 

 

(1,781

)

Change in fair value of contingent consideration

 

 

(300

)

 

 

(2,500

)

Employee retention credit

 

 

1,711

 

 

 

 

Non-GAAP Operating expenses

 

$

40,173

 

 

$

21,046

 

 

 

 

 

 

GAAP Operating loss

 

$

(46,017

)

 

$

(32,820

)

Total non-GAAP adjustments

 

 

15,651

 

 

 

21,525

 

Non-GAAP Operating loss

 

$

(30,366

)

 

$

(11,295

)

 

 

 

 

 

GAAP Total other income (expense), net

 

$

926

 

 

$

10,499

 

Change in fair value of liability classified warrants

 

 

 

 

 

(13,482

)

(Gain) loss on foreign exchange

 

 

(134

)

 

 

20

 

Non-GAAP Total other income (expense), net

 

$

792

 

 

$

(2,963

)





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