SkyWater Technology Reports Third Quarter 2021 Results

Year-over-Year Revenue Growth of 6%

SkyWater Technology (NASDAQ: SKYT), the trusted technology realization partner today announced financial results for the third quarter of 2021, ended October 3, 2021.

  • Revenue grew 6% year-over-year to $35.0 million
  • Net loss to shareholders of $13.9 million, or (40)% of revenue
  • Adjusted EBITDA of $(2.7) million, or (7.7)% of revenue

“We made important progress on our Radiation Hardened and Power Management platform qualifications while adding eight new Advanced Technology Services customers in the quarter, for a total of 25 in the past twelve months,” said SkyWater president and CEO Thomas Sonderman. “Supply chain challenges and hiring constraints plus continued delays in the funding of existing United States Government programs had a magnified near-term effect on the company. This resulted in delayed revenue for certain Advanced Technology Services and Wafer Services programs in the amount of approximately $15 million for the third and fourth quarter of 2021. Despite these headwinds, the company continued to aggressively ramp our Advanced Technology Services and Wafer Services businesses and sustainably grew our overall sales pipeline. All of these factors give us a strong conviction in our long-term growth model of 25% annual top line growth.”

Q3 2021 Summary:

GAAP

 

 

 

 

 

 

 

 

 

In USD millions, except per share data

Q3 21

 

Q3 20

 

Y/Y

 

Q2 21

 

Q/Q

Advanced Technology Services revenue

$22.4

 

$24.2

 

(8)%

 

$26.9

 

(17)%

Wafer Services revenue

$12.7

 

$8.8

 

44%

 

$14.3

 

(12)%

Revenue

$35.0

 

$33.0

 

6%

 

$41.2

 

(15)%

Gross profit (loss)

$(1.8)

 

$7.3

 

(125)%

 

$1.8

 

(201)%

Gross margin

(5.2)%

 

22.1%

 

(2,730) bps

 

4.4%

 

(960) bps

Net loss to shareholders

$(13.9)

 

$(1.7)

 

(739)%

 

$(7.0)

 

(99)%

Basic loss per share

$(0.36)

 

$(0.09)

 

(300)%

 

$(0.20)

 

(80)%

Non-GAAP

 

 

 

 

 

 

 

 

 

In USD millions, except per share data

Q3 21

 

Q3 20

 

Y/Y

 

Q2 21

 

Q/Q

Non-GAAP gross profit (loss)

$(0.5)

 

$7.4

 

(107)%

 

$3.0

 

(116)%

Non-GAAP gross margin

(1.4)%

 

22.4%

 

(2,380) bps

 

7.2%

 

(860) bps

Non-GAAP net loss to shareholders

$(11.5)

 

$(0.8)

 

(1356)%

 

$(5.1)

 

(126)%

Non-GAAP basic loss per share

$(0.29)

 

$(0.04)

 

(625)%

 

$(0.15)

 

(93)%

Adjusted EBITDA

$(2.7)

 

$5.3

 

(151)%

 

$(0.8)

 

(237)%

Adjusted EBITDA margin

(7.7%)

 

16.1%

 

(2,380) bps

 

(2.0%)

 

(570) bps

Q3 2021 Results:

  • Revenue: Revenue of $35.0 million increased 6% year-over-year. Advanced Technology Services revenue of $22.4 million decreased 8% year-over-year due to delayed revenue. Wafer Services revenue of $12.7 million increased 44% compared to the third quarter of 2020 driven by increased wafer output.
  • Gross Profit (Loss): GAAP gross loss was $1.8 million, or (5.2)% of revenue, compared to gross profit of $7.3 million, or 22.1% of revenue, in the third quarter of 2020. Non-GAAP gross loss was $0.5 million, or (1.4)% of revenue, compared to gross profit of $7.4 million, or 22.4% of revenue, in the third quarter of 2020.
  • Net Loss: GAAP net loss to shareholders of $13.9 million, or $(0.36) per share, compared to a net loss to shareholders of $1.7 million, or $(0.09), in the third quarter of 2020. Non-GAAP net loss to shareholders of $11.5 million, or $(0.29) per share, compared to a net loss to shareholders of $0.8 million, or $(0.04), in the third quarter of 2020.
  • Adjusted EBITDA: Adjusted EBITDA was $(2.7) million, or (7.7)% of revenue, compared to $5.3 million or 16.1% of revenue in the third quarter of 2020.
  • Balance Sheet: Cash and cash equivalents of $8.5 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.”

Recent Business Updates:

  • Wafer Services output increased nearly 60% in the third quarter of 2021, compared to third quarter 2020.
  • Completed the transition of two customers from Advanced Technology Services to Wafer Services with an additional five transitions currently underway.
  • Won eight new Advanced Technology Services programs in the third quarter of 2021.
  • Produced the first test wafers with copper back-end processing for the company’s radiation hardened (RH90) platform.
  • Signed agreement with Carillon to produce solid-state Holographic Optical Beam Steering (HOBS) chips for satellite and other free-space optical communications (FSOC) applications.
  • Initiated process transfers and license agreement for Weebit Nano’s innovative Resistive RAM (ReRAM) technology for volume production with SkyWater’s customers’ designs.
  • Signed agreement for Deca’s second generation M-Series™ fan-out wafer-level packaging (FOWLP) with Adaptive Pattering® for SkyWater’s advanced packaging facility in Florida.
  • Revised schedule for a significant complex multi-year Advanced Technology Services program originally estimated to be completed in 2021 to early 2022, causing revenue to be pushed similarly from 2021 to 2022.
  • Adapted hiring strategies and pay scales to address the challenges of a highly competitive market for technology and operations resources, an important ingredient to enable revenue recognition for the company.
  • Implemented contingency strategies to adapt to the ongoing supply chain disruptions the company is experiencing for substrates, chemicals and spare parts while adapting to similar constraints being seen by our customers in an attempt to minimize the effect on revenue output in the second half of 2021.

Investor Webcast

SkyWater will host a conference call on Wednesday, November 3, 2021, at 9:00 a.m. CT to discuss its third quarter 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.-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 advanced packaging 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.

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 ability to diversify our customer base and develop relationships in new markets; our expectations regarding dependence on our largest customer; 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; the impact of the COVID-19 pandemic on the global economy; our ability to maintain compliance with certain U.S. Government contracting requirements; vaccine mandates may have an impact on our business and results of operations; 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)

 

 

October 3, 2021

 

January 3, 2021

 

(in thousands, except share and unit data)

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

8,458

 

 

$

7,436

 

Accounts receivable, net

35,086

 

 

29,995

 

Inventories

30,906

 

 

27,169

 

Prepaid expenses and other current assets

3,875

 

 

11,972

 

Total current assets

78,325

 

 

76,572

 

Property and equipment, net

184,142

 

 

178,078

 

Intangible assets, net

4,018

 

 

4,561

 

Other assets

5,200

 

 

3,998

 

Total assets

$

271,685

 

 

$

263,209

 

Liabilities and Shareholders’ Equity (Deficit)

 

 

 

Current liabilities:

 

 

 

Current portion of long-term debt

$

1,012

 

 

$

2,772

 

Accounts payable

12,213

 

 

16,792

 

Accrued expenses

15,109

 

 

25,496

 

Income taxes payable

382

 

 

1,710

 

Current portion of contingent consideration

1,700

 

 

8,904

 

Deferred revenue - current

24,772

 

 

30,653

 

Total current liabilities

55,188

 

 

86,327

 

Long-term liabilities:

 

 

 

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

34,589

 

 

69,828

 

Contingent consideration, less current portion

 

 

1,996

 

Long-term incentive plan

3,902

 

 

3,185

 

Deferred revenue - long-term

85,449

 

 

95,399

 

Deferred income tax liability, net

3,216

 

 

8,058

 

Other long-term liabilities

4,284

 

 

 

Total long-term liabilities

131,440

 

 

178,466

 

Total liabilities

186,628

 

 

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; 39,059,743 and zero shares issued and outstanding)

391

 

 

 

Additional paid-in capital

113,223

 

 

 

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

(27,443

)

 

(3,783

)

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

86,171

 

 

(16

)

Non-controlling interests

(1,114

)

 

(1,568

)

Total shareholders’ equity (deficit)

85,057

 

 

(1,584

)

Total liabilities and shareholders’ equity

$

271,685

 

 

$

263,209

 

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

 

SKYWATER TECHNOLOGY, INC.

Consolidated Statements of Operations

(Unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

October 3,

2021

 

September 27,

2020

 

October 3,

2021

 

September 27,

2020

 

(in thousands, except share, unit and per share and unit data)

Revenue

$

35,025

 

 

$

33,003

 

 

$

124,315

 

 

$

100,666

 

Cost of revenue

36,852

 

 

25,725

 

 

115,164

 

 

81,502

 

Gross profit (loss)

(1,827

)

 

7,278

 

 

9,151

 

 

19,164

 

Research and development

2,253

 

 

1,088

 

 

7,519

 

 

2,536

 

Selling, general and administrative expenses

9,626

 

 

5,765

 

 

33,644

 

 

18,319

 

Change in fair value of contingent consideration

(1,670

)

 

(200

)

 

(2,556

)

 

1,353

 

Operating income (loss)

(12,036

)

 

625

 

 

(29,456

)

 

(3,044

)

Other income (expense):

 

 

 

 

 

 

 

Paycheck Protection Program loan forgiveness

 

 

 

 

6,453

 

 

 

Change in fair value of warrant liability

 

 

(660

)

 

 

 

(900

)

Interest expense

(733

)

 

(1,303

)

 

(2,703

)

 

(4,087

)

Total other expense

(733

)

 

(1,963

)

 

3,750

 

 

(4,987

)

Loss before income taxes

(12,769

)

 

(1,338

)

 

(25,706

)

 

(8,031

)

Income tax expense (benefit)

194

 

 

316

 

 

(4,468

)

 

288

 

Net loss

(12,963

)

 

(1,654

)

 

(21,238

)

 

(8,319

)

Less: net income attributable to non-controlling interests

907

 

 

 

 

2,422

 

 

 

Net loss attributable to SkyWater Technology, Inc.

$

(13,870

)

 

$

(1,654

)

 

$

(23,660

)

 

$

(8,319

)

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

$

(0.36

)

 

 

 

$

(0.94

)

 

 

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

 

 

$

(0.09

)

 

 

 

$

(0.46

)

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

39,059,743

 

 

 

 

25,609,281

 

 

 

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

 

 

18,000,000

 

 

 

 

18,000,000

 

 

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

SKYWATER TECHNOLOGY, INC.

Consolidated Statements of Cash Flows

(Unaudited)

 

 

Nine Months Ended

 

October 3, 2021

 

September 27, 2020

 

(in thousands)

Cash flows from operating activities:

 

 

 

Net loss

$

(21,238

)

 

$

(8,319

)

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

 

 

 

Depreciation and amortization

20,300

 

 

13,113

 

Gain on Paycheck Protection Program loan forgiveness

(6,453

)

 

 

Foundry services obligation

 

 

(3,732

)

Gain on sale of property and equipment

(74

)

 

(1,124

)

Amortization of debt issuance costs included in interest expense

530

 

 

1,126

 

Long-term incentive and stock-based compensation

10,403

 

 

1,051

 

Change in fair value of warrant liability

 

 

900

 

Change in fair value of contingent consideration

(2,556

)

 

1,353

 

Cash paid for contingent consideration in excess of initial valuation

(6,644

)

 

(1,255

)

Deferred income taxes

(4,841

)

 

(567

)

Non-cash revenue related to customer equipment

(2,481

)

 

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

(5,091

)

 

17,545

 

Inventories

(3,737

)

 

(7,939

)

Prepaid expenses and other assets

4,713

 

 

(11,353

)

Accounts payable

178

 

 

2,102

 

Accrued expenses

(3,091

)

 

14,005

 

Deferred revenue

(15,831

)

 

76,984

 

Income tax payable and receivable

(1,328

)

 

(2,221

)

Net cash (used in) provided by operating activities

(37,241

)

 

91,669

 

Cash flows from investing activities:

 

 

 

Purchase of software and licenses

(819

)

 

(1,879

)

Proceeds from sale of property and equipment

149

 

 

1,676

 

Purchases of property and equipment

(29,777

)

 

(65,513

)

Net cash used in investing activities

(30,447

)

 

(65,716

)

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

 

 

 

Cash paid for offering costs

(1,867

)

 

(1,443

)

Proceeds from Paycheck Protection Program loan

 

 

6,453

 

Repayment of term loan

 

 

(3,361

)

Net repayment on line of credit

 

 

(9,702

)

Net repayment on Revolver

(30,289

)

 

 

Repayment of Financing

(787

)

 

 

Cash paid for capital leases

(591

)

 

 

Cash paid for debt issuance costs

 

 

(100

)

Cash paid for contingent consideration

 

 

(3,998

)

Distributions to VIE member

(1,968

)

 

 

Net cash provided by (used in) financing activities

68,710

 

 

(12,151

)

Net change in cash and cash equivalents

1,022

 

 

13,802

 

Cash and cash equivalents - beginning of period

7,436

 

 

4,605

 

Cash and cash equivalents - end of period

$

8,458

 

 

$

18,407

 

 

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

Supplemental Revenue Information by Quarter

 

 

Q1 2020

 

Q2 2020

 

Q3 2020

 

Q4 2020

 

Q1 2021

 

Q2 2021

 

Q3 2021

 

(in thousands)

Wafer Services revenue

$

13,318

 

 

$

10,896

 

 

$

8,762

 

 

$

13,442

 

 

$

10,019

 

 

$

14,312

 

 

$

12,652

 

Advanced Technology Services revenue

23,586

 

 

19,863

 

 

24,241

 

 

26,330

 

 

38,082

 

 

26,877

 

 

22,373

 

Revenue

$

36,904

 

 

$

30,759

 

 

$

33,003

 

 

$

39,772

 

 

$

48,101

 

 

$

41,189

 

 

$

35,025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tool revenue (included in ATS sales)

$

3,173

 

 

$

 

 

$

360

 

 

$

4,895

 

 

$

15,405

 

 

$

2,346

 

 

$

281

 

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 and for the other reasons described in the footnotes to the tables below. 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 to peer companies that may calculate their non-GAAP measures in the same manner.

We also provide adjusted EBITDA and adjusted EBITDA margin as supplemental non-GAAP measurements. We define adjusted EBITDA as net income or 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 Paycheck Protection Program loan forgiveness, corporate conversion and initial public offering costs, SkyWater Florida start-up costs, management transition expense, fair value changes in contingent consideration, fair value changes in warrants and management fees. 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

 

October 3, 2021

 

September 27,

2020

 

July 4, 2021

 

(in thousands)

GAAP gross profit (loss)

$

(1,827

)

 

$

7,278

 

 

$

1,812

 

GAAP gross margin

(5.2

)%

 

22.1

%

 

4.4

%

Equity-based compensation (1)

967

 

 

112

 

 

827

 

SkyWater Florida start-up costs (2)

374

 

 

 

 

318

 

Non-GAAP gross profit (loss)

$

(486

)

 

$

7,390

 

 

$

2,957

 

Non-GAAP gross margin

(1.4

)%

 

22.4

%

 

7.2

%

 

 

 

 

 

 

GAAP net loss to shareholders

$

(13,870

)

 

$

(1,654

)

 

$

(6,979

)

Paycheck Protection Program loan forgiveness

 

 

 

 

(6,453

)

Corporate conversion and initial public offering related costs (3)

208

 

 

 

 

1,521

 

SkyWater Florida start-up costs (2)

434

 

 

 

 

504

 

Management transition expense (4)

 

 

 

 

435

 

Fair value changes in contingent consideration (5)

(1,670

)

 

(200

)

 

(942

)

Equity-based compensation (1)

3,394

 

 

188

 

 

6,768

 

Fair value changes in warrants (6)

 

 

660

 

 

 

Management fees (7)

 

 

216

 

 

56

 

Non-GAAP net loss to shareholders

$

(11,504

)

 

$

(790

)

 

$

(5,090

)

 

 

 

 

 

 

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

 

 

 

 

 

Cost of revenue

$

967

 

 

$

112

 

 

$

827

 

Research and development

341

 

 

6

 

 

1,487

 

Selling, general and administrative expenses

2,086

 

 

70

 

 

4,454

 

 

$

3,394

 

 

$

188

 

 

$

6,768

 

 

 

 

 

 

 

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

 

 

 

 

 

Cost of revenue

$

374

 

 

$

 

 

$

318

 

Selling, general and administrative expenses

60

 

 

 

 

186

 

 

$

434

 

 

$

 

 

$

504

 

__________________

(1)

Represents non-cash equity-based compensation expense.

(2)

Represents start-up costs associated with our 200 mm advanced packaging 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.

(3)

Represents expenses directly associated with the corporate conversion and initial public offering, 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.

(4)

Represents expense for the departure of our former Chief Administrative Officer, which includes primarily severance benefits.

(5)

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

(6)

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

(7)

Represents a related party transaction with Oxbow Industries, our principal financial investor. As these fees are not part of the core business, will 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.

 

Three Months Ended October 3, 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.

$

(13,870

)

 

$

(11,504

)

Undistributed preferred return to Class B preferred unitholders

 

 

 

Net loss attributable to common shareholders

$

(13,870

)

 

$

(11,504

)

Denominator:

 

 

 

Weighted-average common shares outstanding, basic and diluted

39,060

 

 

39,060

 

Net loss per common share, basic and diluted

$

(0.36

)

 

$

(0.29

)

 

 

 

 

 

Three Months Ended September 27, 2020

 

GAAP

 

Non-GAAP

Computation of net loss per Class B preferred unit, basic and diluted:

(in thousands, except per unit data)

Numerator:

 

 

 

Net loss attributable to SkyWater Technology, Inc.

$

(1,654

)

 

$

(790

)

Denominator:

 

 

 

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

18,000

 

 

18,000

 

Net loss per Class B preferred unit, basic and diluted

$

(0.09

)

 

$

(0.04

)

 

 

 

 

 

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

)

Undistributed preferred return to Class B preferred unitholders

(39

)

 

(39

)

Net loss attributable to common shareholders

$

(7,018

)

 

$

(5,129

)

Denominator:

 

 

 

Weighted-average common shares outstanding, basic and diluted

34,708

 

 

34,708

 

Net loss per common share, basic and diluted

$

(0.20

)

 

$

(0.15

)

 

Three Months Ended

Nine Months Ended Quarter Ended

 

October 3,

2021

 

September 27,

2020

 

October 3,

2021

 

September 27,

2020

 

(in thousands)

Net loss to shareholders

$

(13,870

)

 

$

(1,654

)

 

$

(23,660

)

 

$

(8,319

)

Interest expense

733

 

 

1,303

 

 

2,703

 

 

4,087

 

Income tax expense (benefit)

194

 

 

316

 

 

(4,468

)

 

288

 

Depreciation and amortization

6,964

 

 

4,477

 

 

20,300

 

 

13,113

 

EBITDA

(5,979

)

 

4,442

 

 

(5,125

)

 

9,169

 

Paycheck Protection Program loan forgiveness

 

 

 

 

(6,453

)

 

 

Corporate conversion and initial public offering related costs (3)

208

 

 

 

 

1,729

 

 

 

SkyWater Florida start-up costs (2)

434

 

 

 

 

938

 

 

 

Management transition expense (4)

 

 

 

 

435

 

 

 

Fair value changes in contingent consideration (5)

(1,670

)

 

(200

)

 

(2,556

)

 

1,353

 

Equity-based compensation (1)

3,394

 

 

188

 

 

10,397

 

 

1,051

 

Fair value changes in warrants (6)

 

 

660

 

 

 

 

900

 

Management fees (7)

 

 

216

 

 

332

 

 

644

 

Net income attributable to non-controlling interests (8)

907

 

 

 

 

2,422

 

 

 

Adjusted EBITDA

$

(2,706

)

 

$

5,306

 

 

$

2,119

 

 

$

13,117

 

__________________

(8)

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.

 

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