SkyWater Technology Reports Fourth Quarter and Full Year 2021 Results|||


2021 Tape Revenue of $162.8 Million

BLOOMINGTON, Minn.–(Business organization WIRE)–SkyWater Engineering (NASDAQ: SKYT), the trusted technology realization partner, today announced financial results for the fourth quarter and total year 2021, concluded Jan two, 2022.

  • Record almanac revenue increased 16% year-over-year to $162.8 1000000. Quarterly revenue decreased three% year-over-twelvemonth to $38.5 million.
  • Almanac internet loss to shareholders of $50.seven one thousand thousand, or (31)% of revenue. Quarterly net loss to shareholders of $27.0 million, or (70)% of revenue, includes a $xiii.4 meg one-time inventory write-downwards.
  • Almanac adjusted EBITDA of $(two.6) 1000000, or (1.six)% of revenue. Quarterly adapted EBITDA of $(iv.nine) million, or (12.six)% of acquirement.

“SkyWater fabricated great progress this year toward our vision of accelerating the path from ideation to commercialization in the semiconductor industry,” said SkyWater President and CEO Thomas Sonderman. “SkyWater continued to brand important advancements on our long-term strategic platforms. Our radiation hardened technology recently achieved a critical qualification milestone and we made significant progress in ability management with the introduction of our highly differentiated high-speed switching power MOSFET technology. Nosotros remain convinced that SkyWater’south unique model for timely and efficient technology realization is ideally positioned to drive increased shareholder value equally our nation commits to enhancing domestic semiconductor manufacturing.”

Sonderman concluded, “Fourth quarter revenue grew 15% yr-over-yr, excluding the extra operating week in Q4 2020 and tool revenue. Labor market inflation and supply chain challenges persisted throughout the quarter, and we look to keep to navigate these constraints, while investing strategically for growth. In 2022, we expect acquirement growth near our long-term growth target of 25% and gross margin expansion. This is supported by our 2021 pipeline growth, new and expected programme wins, and the expected motility of our radiation hardened technology to the productization phase.”

Recent Business Updates:

  • Won nine new Advanced Technology Services programs in the quaternary quarter of 2021.
  • Achieved a critical radiation hardened (rad-hard) applied science qualification milestone.
  • Established presence in Indiana at WestGate@Crane Technology Park, side by side to the Naval Surface Warfare Center, Crane Segmentation (NSWC Crane) every bit part of the company’s rad-hard engineering science roadmap.
  • Introduced a breakthrough silicon power MOSFET device with Applied Novel Devices, Inc. (AND) enabling improved energy efficiency for power conversion applications.
  • Continued to make potent progress at the company’s heterogeneous integration fab in Florida including the fabrication of the company’s first full flow interposer inside the showtime year subsequently taking over operations.
  • Increased activities, a common mensurate of productivity, in the Minnesota facility past 12% year-over-year led by potent Advanced Engineering science Services execution.
  • Continued to amplify the company’s unique capabilities within all levels of government to back up our nation’s commitment to invest strategically in domestic semiconductor manufacturing.
  • Announced technology development to speedily enable the product ramp of nanoscale sensors with NanoDx to enhance and expand accurate, rapid testing for several indications, including COVID-19, traumatic brain injury, sepsis and stroke.
  • Lauded the U.Southward. Business firm of Representatives in the passage of the America COMPETES Act, which includes funding of $52 billion for the Chips for America Act.
  • Connected to navigate a dynamic supply concatenation for substrates, chemicals, and gases as well as inflationary pressures pervasive in the markets.
  • Achieved AS9100 certification, the standardized quality management system for organizations that pattern, develop, or provide aviation, infinite and defence products and services, at Minnesota facility.
  • Expanded Board of Directors with appointments of independent directors Nancy Fares, Amy Leong and Greg Graves.

Q4 2021 Summary:

GAAP

In USD millions, except per share data

Q4 21

Q4 twenty

Y/Y

Q3 21

Q/Q

Advanced Engineering Services revenue

$24.4

$26.3

(7)%

$22.iv

9%

Wafer Services revenue

$xiv.2

$xiii.4

5%

$12.7

12%

Revenue

$38.5

$39.eight

(3)%

$35.0

ten%

Gross profit (loss)

$(16.6)

$three.5

(571)%

$(1.viii)

810%

Gross margin

(43.1)%

eight.9%

(5,200) bps

(5.two)%

(3,790) bps

Net loss to shareholders

$(27.0)

$(12.3)

(120)%

$(13.9)

(95)%

Basic loss per share

$(0.69)

$(0.68)

(1)%

$(0.36)

(92)%

Not-GAAP

In USD millions, except per share data

Q4 21

Q4 20

Y/Y

Q3 21

Q/Q

Not-GAAP gross profit (loss)

$(one.9)

$4.8

(139)%

$(0.five)

284%

Non-GAAP gross margin

(iv.8)%

12.ii%

(one,700) bps

(i.4)%

(340) bps

Non-GAAP cyberspace loss to shareholders

$(11.2)

$(eleven.4)

2%

$(11.5)

3%

Not-GAAP bones loss per share

$(0.28)

$(0.63)

56%

$(0.29)

3%

Adapted EBITDA

$(four.9)

$i.three

(478)%

$(2.7)

(80)%

Adjusted EBITDA margin

(12.vi%)

3.2%

(1,580) bps

(7.7%)

(490) bps

2021 Summary:

GAAP

In USD millions, except per share information

FY21

FY20

Y/Y

Avant-garde Technology Services revenue

$111.7

$94.0

19%

Wafer Services revenue

$51.2

$46.4

10%

Revenue

$162.8

$140.4

xvi%

Gross turn a profit (loss)

$(7.5)

$22.seven

(133)%

Gross margin

(4.six)%

16.two%

(2,080) bps

Net loss to shareholders

$(50.seven)

$(twenty.6)

(146)%

Basic loss per share

$(1.76)

$(ane.15)

(54)%

Non-GAAP

In USD millions, except per share data

FY21

FY20

Y/Y

Not-GAAP gross profit (loss)

$ix.9

$24.3

(59)%

Non-GAAP gross margin

half-dozen.1%

17.3%

(i,120) bps

Non-GAAP net loss to shareholders

$(30.0)

$(15.eight)

(90)%

Non-GAAP basic loss per share

$(1.05)

$(0.88)

(19)%

Adjusted EBITDA

$(2.six)

$14.four

(118)%

Adjusted EBITDA margin

(i.6%)

10.3%

(i,190) bps

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Q4 2021 Results:

  • Revenue:
    Revenue of $38.five million decreased 3% year-over-year. Advanced Applied science Services revenue of $24.4 million decreased 7% year-over-year due to less non-recurring tool revenue. Avant-garde Technology Services revenue contains $1.i million of tool revenue in fourth quarter 2021 and $4.9 meg in fourth quarter 2020. Wafer Services revenue of $14.two million increased 5% compared to the fourth quarter of 2020 driven past increased revenue from a large customer contract.
  • Gross Turn a profit (Loss):
    GAAP gross loss was $16.6 one thousand thousand, or (43.ane)% of revenue, compared to gross turn a profit of $3.5 meg, or 8.9% of revenue, in the fourth quarter of 2020. GAAP gross loss for the fourth quarter of 2021 includes a $13.four million inventory write-downwardly charge for temperature differential sensing wafers. Cost of revenues in fourth quarter of 2021 independent $two.7 one thousand thousand for heterogeneous integration and $i.7 million in depreciation for the radiations hardened facility. Non-GAAP gross loss was $ane.9 million, or (4.8)% of revenue, compared to gross turn a 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 1000000, or $(0.69) per share, compared to a cyberspace loss to shareholders of $12.iii million, or $(0.68) per share, in the 4th quarter of 2020. Not-GAAP net loss to shareholders of $11.2 1000000, or $(0.28) per share, compared to a net loss to shareholders of $11.4 million, or $(0.63) per share, in the 4th quarter of 2020.
  • Adjusted EBITDA: Adjusted EBITDA was $(4.ix) million, or (12.6)% of revenue, compared to $ane.iii 1000000 or 3.2% of revenue in the fourth quarter of 2020.
  • Balance Sheet:
    Cash and greenbacks equivalents of $12.ix one thousand thousand compared to $7.4 million from Jan 3, 2021.

A reconciliation between historical GAAP and not-GAAP information is contained in the tables below in the section titled, “Non-GAAP Financial Measures.”

Investor Webcast

SkyWater will host a briefing call on Wednesday, February 23, 2022, at 9:00 a.m. CT to hash out its fourth quarter and full year 2021 fiscal results. A alive webcast of the telephone call will exist available online at IR.SkyWaterTechnology.com.

About SkyWater Technology

SkyWater (NASDAQ: SKYT) is a U.S. investor-endemic semiconductor manufacturer and a DOD-accredited Trusted supplier. SkyWater’s Applied science as a ServiceSM
model streamlines the path to product for customers with evolution services, volume product and heterogeneous integration solutions in its earth-class U.S. facilities. This pioneering model enables innovators to co-create the adjacent moving ridge of technology with various 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 & defence, automotive, biomedical, cloud & computing, consumer, industrial and IoT. For more data, visit: world wide web.skywatertechnology.com.

Cautionary Statement Regarding Preliminary Results

The Visitor’s results for the fiscal quarter and year concluded January 2, 2022 are preliminary, unaudited and subject to the finalization of the Company’s fourth quarter review and full-yr audit and should not exist viewed as a substitute for total financial statements prepared in accordance with GAAP. The Visitor cautions you that actual results may differ materially from those described in this press release.

SkyWater Applied science Frontward-Looking Statements

This press release contains “forrard-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements that are based on the Company’s electric current expectations or forecasts of future events, rather than by, events and outcomes, and such statements are not guarantees of future performance. Forward-looking statements include all statements other than statements of historical fact independent in this presentation, including information or predictions apropos the Company’s hereafter business organisation, results of operations, financial performance, plans and objectives, competitive position, market place trends, and potential growth and marketplace 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.

Forrad-looking statements are subject to risks, uncertainties and assumptions, which may cause the Company’southward actual results, performance or achievements to exist materially different from those expressed or implied by such forward-looking statements. Key factors that could cause the Company’southward actual results to exist dissimilar than expected or anticipated include, only are not limited to: our goals and strategies; our future business concern development, financial condition and results of operations; our power to continue operating our sole semiconductor foundry at total capacity; our ability to appropriately respond to irresolute technologies on a timely and cost-effective basis; our client relationships and our power to retain and expand our customer relationships; our ability to accurately predict our time to come 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 of operations and develop relationships in new markets; the performance and reliability of our third-party suppliers and manufacturers; our power to procure tools, materials, and chemicals amid industry-broad supply chain shortages; our ability to command costs, including our operating and capital expenses; the size and growth potential of the markets for our solutions, and our ability to serve and aggrandize our presence in those markets; the level of need in our customers’ cease markets; our ability to concenter, train and retain key qualified personnel in a competitive labor marketplace; adverse litigation judgments, settlements or other litigation-related costs; changes in trade policies, including the imposition of tariffs; our ability to heighten additional capital or financing; our power to accurately forecast demand; the bear upon of the COVID-19 pandemic on our business organisation, 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 power to maintain compliance with sure U.S. government contracting requirements; regulatory developments in the U.s. and strange 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 Visitor files with the SEC, which are bachelor at
http://world wide web.sec.gov. The Company assumes no obligation to update whatsoever forward-looking statements, which speak simply as of the date of this printing release.

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SKYT-IR

SKYWATER Engineering, INC.

Consolidated Rest Sheets

(Unaudited)

Jan ii, 2022

January 3, 2021

(in thousands, except share and

unit data)

Assets

Current avails:

Greenbacks and greenbacks equivalents

$

12,917

$

seven,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 electric current assets

74,397

76,572

Property and equipment, internet

180,475

178,078

Intangible assets, net

three,891

4,561

Other assets

4,835

3,998

Full assets

$

263,598

$

263,209

Liabilities and Shareholders’ Equity (Deficit)

Current liabilities:

Current portion of long-term debt

$

1,021

$

ii,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

xx,808

xxx,653

Full current liabilities

47,765

86,327

Long-term liabilities:

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

58,428

69,828

Contingent consideration, less current portion

1,996

Long-term incentive plan

four,039

3,185

Deferred acquirement – long-term

88,094

95,399

Deferred income revenue enhancement liability, internet

995

8,058

Other long-term liabilities

4,350

Full 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 (eighty,000,000 and nil shares authorized; nil issued and outstanding)

Mutual 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 (cipher and 2,000,000 units authorized; nada issued and outstanding)

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

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

three,767

Accumulated deficit

(54,479

)

(3,783

)

Total shareholders’ equity (deficit), SkyWater Applied science, Inc.

61,127

(16

)

Non-controlling interests

(1,200

)

(1,568

)

Full shareholders’ equity (deficit)

59,927

(1,584

)

Total liabilities and shareholders’ disinterestedness

$

263,598

$

263,209

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

SKYWATER TECHNOLOGY, INC.

Consolidated Statements of Operations

(Unaudited)

Three Months Concluded

Twelve Months Ended

January two,

2022

January iii,

2021

Jan 2,

2022

January 3,

2021

(in thousands, except share, unit and per share and unit of measurement information)

Revenue

$

38,533

$

39,772

$

162,848

$

140,438

Cost of revenue:

Cost of revenue, earlier inventory write-downwardly

41,714

36,244

156,878

117,746

Inventory write-down (ane)

13,442

13,442

Total toll of acquirement

55,156

36,244

170,320

117,746

Gross profit (loss)

(xvi,623

)

3,528

(seven,472

)

22,692

Research and evolution

one,228

i,672

8,747

4,208

Selling, general and administrative expenses

9,951

6,713

43,595

25,032

Modify in off-white value of contingent consideration

(154

)

741

(ii,710

)

2,094

Operating loss

(27,648

)

(5,598

)

(57,104

)

(8,642

)

Other income (expense):

Paycheck Protection Programme loan forgiveness

6,453

Change in fair value of warrant liability

1,680

780

Loss on debt extinguishment

(1,434

)

(1,434

)

Interest expense

(839

)

(1,412

)

(3,542

)

(5,499

)

Full other expense

(839

)

(ane,166

)

2,911

(vi,153

)

Loss earlier income taxes

(28,487

)

(six,764

)

(54,193

)

(14,795

)

Income tax expense (benefit)

(2,322

)

4,631

(vi,790

)

4,919

Cyberspace loss

(26,165

)

(eleven,395

)

(47,403

)

(19,714

)

Less: net income attributable to non-decision-making interests

871

903

3,293

903

Net loss owing to SkyWater Engineering, Inc.

$

(27,036

)

$

(12,298

)

$

(50,696

)

$

(20,617

)

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

$

(0.69

)

$

(1.76

)

Net loss per unit attributable to Form B preferred unitholders, basic and diluted:

$

(0.68

)

$

(ane.fifteen

)

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

39,324,851

29,038,174

Weighted average units used in calculating net loss per Class B preferred unit, basic and diluted:

18,000,000

18,000,000

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

SKYWATER Engineering science, INC.

Consolidated Statements of Cash Flows

(Unaudited)

Twelve Months Ended

January 2, 2022

January 3, 2021

(in thousands)

Cash flows from operating activities:

Cyberspace loss

$

(47,403

)

$

(19,714

)

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

Depreciation and amortization

27,368

18,866

Inventory write-downwards (i)

xiii,442

Gain on Paycheck Protection Program loan forgiveness

(6,453

)

Foundry services obligation

(iii,732

)

Gain on sale of holding and equipment

(2,012

)

(1,124

)

Amortization of debt issuance costs included in interest expense

621

1,661

Long-term incentive and stock-based compensation

12,533

2,640

Change in fair value of warrant liability

(780

)

Change in fair value of contingent consideration

(2,710

)

two,094

Cash paid for contingent consideration in excess of initial valuation

(7,374

)

(7,296

)

Deferred income taxes

(7,063

)

2,387

Non-greenbacks revenue related to customer equipment

(2,481

)

Loss on debt extinguishment

1,434

Changes in operating avails and liabilities:

Accounts receivable

(9,387

)

31,452

Inventories

(3,773

)

(11,175

)

Prepaid expenses and other avails

5,098

(9,411

)

Accounts payable

(1,198

)

483

Accrued expenses

(569

)

xi,601

Deferred revenue

(17,150

)

74,578

Income revenue enhancement payable and receivable

(2,455

)

ii,231

Net cash (used in) provided past operating activities

(50,966

)

96,195

Cash flows from investing activities:

Purchase of software and licenses

(1,220

)

(4,085

)

Gain from sale of property and equipment

two,159

1,676

Purchases of property and equipment

(35,476

)

(85,768

)

Net greenbacks used in investing activities

(34,537

)

(88,177

)

Cash flows from financing activities:

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

104,212

Greenbacks paid for offering costs

(1,867

)

(2,183

)

Proceeds from Paycheck Protection Programme loan

six,453

Repayment of term loan

(38,270

)

Cash paid for term loan extinguishment

(405

)

Net repayment on line of credit

(12,380

)

Net repayment on Revolver

(six,081

)

32,303

Proceeds from Financing

39,000

Repayment of Financing

(990

)

Cash paid for capital letter leases

(ane,115

)

Greenbacks paid for debt issuance costs

(250

)

(5,182

)

Repurchase of warrants

(14,000

)

Repurchase of common units

(4,085

)

Cash paid for contingent consideration

(3,998

)

Gain from exercise of common unit options

31

Distributions to VIE member

(2,925

)

(2,471

)

Net cash provided by (used in) financing activities

ninety,984

(5,187

)

Internet change in greenbacks and cash equivalents

5,481

2,831

Cash and cash equivalents – beginning of period

7,436

four,605

Cash and greenbacks equivalents – end of period

$

12,917

$

7,436

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

Supplemental Revenue Information past Quarter

Q1 2020

Q2 2020

Q3 2020

Q4 2020

2020

Q1 2021

Q2 2021

Q3 2021

Q4 2021

2021

(in thousands)

Wafer Services revenue

$

13,318

$

10,896

$

8,762

$

13,442

$

46,418

$

x,019

$

14,312

$

12,652

$

14,174

$

51,157

Avant-garde Technology Services revenue

23,586

nineteen,863

24,241

26,330

94,020

38,082

26,877

22,373

24,359

111,691

Acquirement

$

36,904

$

30,759

$

33,003

$

39,772

$

140,438

$

48,101

$

41,189

$

35,025

$

38,533

$

162,848

Tool revenue (included in ATS revenue)

$

3,173

$

$

360

$

4,895

$

8,428

$

xv,405

$

two,346

$

281

$

one,127

$

19,159

Not-GAAP Financial Measures

We provide supplemental non-GAAP financial information that our management utilizes to evaluate our ongoing financial functioning and provide additional insight to investors as supplemental information to our U.S. GAAP results. Nosotros provide non-GAAP gross turn a profit, non-GAAP gross margin, not-GAAP net loss to shareholders, and not-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 not-GAAP financial measures disclosed in this earnings printing release should not be viewed equally an culling to, or more meaningful than, the reported results prepared in accord with GAAP. In addition, considering our non-GAAP measures are not determined in accordance with U.Southward. GAAP, these measures are susceptible to differing calculations, and non all comparable or peer companies may summate their not-GAAP measures in the same manner. Equally a outcome, the non-GAAP fiscal measures presented in this earnings press release may not be straight comparable to similarly titled measures presented by other companies.

Nosotros also provide adjusted EBITDA and adjusted EBITDA margin as supplemental non-GAAP measurements. We define adapted 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 every bit indicative of our ongoing performance, including fair value changes in contingent considerations, fair value changes in warrants and management fees, inventory write-down, corporate conversion and IPO related costs, Paycheck Protection Program loan forgiveness, SkyWater Florida offset-up costs, cyberspace income attributable to non-controlling interests, and management transition expense. We believe adapted EBITDA is a useful operation mensurate because information technology allows for an effective evaluation of our operating performance when compared to our peers, without regard to our financing methods or capital construction.

Contacts

SkyWater Investor Contact:
Heather Davis | Investor@SkyWaterTechnology.com
SkyWater Media Contact:
Lauri Julian
| Media@SkyWaterTechnology.com

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Source: https://www.dailyhostnews.com/skywater-technology-reports-fourth-quarter-and-full-year-2021-results

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