Rocket Lab Announces Third Quarter 2022 Results and Guidance for Fourth Quarter 2022

Rocket Lab founder and CEO, Peter Beck, said: “This quarter recorded historic achievements for Rocket Lab. We continued our small launch industry-leading cadence of a successful mission every month in Q3, and following another successful launch early in Q4 we have now conducted nine orbital missions in 2022, beating our previous annual launch record. The development of our large Neutron rocket was accelerated this quarter with the selection of the NASA Stennis Space Center as the site for Archimedes engine testing and development, eliminating the need to build a site from scratch and speeding up our development time to first launch. Neutron hardware was also produced for the first time this quarter, including full-scale prototypes of the rocket’s Archimedes engine and seven-metre diameter tank section.

“Our space systems business growth is continuing, highlighted by our single largest satellite separation systems order in company history totalling $14 million. Since July 1, our space solar power business has also executed more than 50 contracts or modifications to existing contracts, and early in the fourth quarter we’ve booked more than $13 million in new business, with the majority of those bookings generated by space systems.”

Third Quarter 2022 Business Highlights:

Since October 1, 2022 Rocket Lab also:

Fourth Quarter 2022 Guidance

For the fourth quarter of 2022, Rocket Lab expects:

See “Use of Non-GAAP Financial Measures” below for an explanation of our use of Non-GAAPfinancial measures, and the reconciliation of Non-GAAP measures to the comparable GAAPmeasures in the tables attached to this press release.

Conference Call Information & Shareholder Q&A Platform

Rocket Lab will host a conference call for investors at 1:30 p.m. PT (4:30 p.m. ET) today to discuss these business highlights and financial results for our third quarter, to provide our outlook for the rest of the year, and other updates.

As part of the event, Rocket Lab has opened up a public Q&A platform where verified retail and institutional shareholders will be able to submit and upvote questions. A selection of these questions will be answered by Rocket Lab management during the earnings call. To submit questions, please visit https://app.saytechnologies.com/rocket-lab-2022-q3

The live webcast and a replay of the webcast will be available on Rocket Lab’s Investor Relations website: https://investors.rocketlabusa.com/events-and-presentations/events

About Rocket Lab

Founded in 2006, Rocket Lab is an end-to-end space company with an established track record of mission success. We deliver reliable launch services, satellite manufacture, spacecraft components, and on-orbit management solutions that make it faster, easier and more affordable to access space. Headquartered in Long Beach, California, Rocket Lab designs and manufactures the Electron small orbital launch vehicle and the Photon satellite platform and is developing the Neutron launch vehicle for large spacecraft and constellation deployment. Since its first orbital launch in January 2018, Rocket Lab’s Electron launch vehicle has become the second most frequently launched U.S. rocket annually and has delivered 152 satellites to orbit for private and public sector organizations, enabling operations in national security, scientific research, space debris mitigation, Earth observation, climate monitoring, and communications. Rocket Lab’s Photon spacecraft platform has been selected to support NASA missions to the Moon and Mars, as well as the first private commercial mission to Venus. Rocket Lab has three launch pads at two launch sites, including two launch pads at a private orbital launch site located in New Zealand and a second launch site in Virginia, USA which is expected to become operational in 2022. To learn more, visit www.rocketlabusa.com.

Forward Looking Statements

This press release may contain certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, contained in this press release, including statements regarding our strategy, future operations, future financial position, projected costs, prospects, plans and objectives of management, including without limitation Q4 2022 guidance, are forward-looking statements. Words such as, but not limited to, “anticipate,” “aim,” “believe,” “contemplate,” “continue,” “could,” “design,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “suggest,” “strategy,” “target,” “will,” “would,” and similar expressions or phrases, or the negative of those expressions or phrases, are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are based on Rocket Lab’s current expectations and beliefs concerning future developments and their potential effects. These forward-looking statements involve a number of risks, uncertainties (many of which are beyond Rocket Lab’s control), or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including risks related to the global COVID-19 pandemic; risks related to government restrictions and lock-downs in New Zealand and other countries in which we operate that could delay or suspend our operations; delays and disruptions in expansion efforts; our dependence on a limited number of customers; the harsh and unpredictable environment of space in which our products operate which could adversely affect our launch vehicle and spacecraft; increased congestion from the proliferation of low Earth orbit constellations which could materially increase the risk of potential collision with space debris or another spacecraft and limit or impair our launch flexibility and/or access to our own orbital slots; increased competition in our industry due in part to rapid technological development and decreasing costs; technological change in our industry which we may not be able to keep up with or which may render our services uncompetitive; average selling price trends; failure of our launch vehicles, spacecraft and components to operate as intended either due to our error in design in production or through no fault of our own; launch schedule disruptions; supply chain disruptions, product delays or failures; design and engineering flaws; launch failures; natural disasters and epidemics or pandemics; changes in governmental regulations including with respect to trade and export restrictions, or in the status of our regulatory approvals or applications; or other events that force us to cancel or reschedule launches, including customer contractual rescheduling and termination rights; risks that acquisitions may not be completed on the anticipated time frame or at all or do not achieve the anticipated benefits and results; and the other risks detailed from time to time in Rocket Lab’s filings with the Securities and Exchange Commission (the “SEC”), including under the heading “Risk Factors” in Rocket Lab’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which was filed with the SEC on March 24, 2022, and elsewhere (including that the impact of the COVID-19 pandemic may also exacerbate the risks discussed therein). There can be no assurance that the future developments affecting Rocket Lab will be those that we have anticipated. You should read this press release with the understanding that our actual results may be materially different from the plans, intentions and expectations disclosed in the forward looking statements we make. All forward looking statements are qualified in their entirety by this cautionary statement. Except as required by law, Rocket Lab is not undertaking any obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

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. GAAP measures for the historical periods disclosed are included in this presentation. 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 EBITDA

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 to determine adjusted income. 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.

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

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

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

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

Three Months Ended September 30,

Nine Months Ended September 30,

2022

2021

2022

2021

Revenues

$

63,057

$

5,287

$

159,234

$

34,759

Cost of revenues

54,590

17,738

142,074

43,337

Gross profit (loss)

8,467

(12,451

)

17,160

(8,578

)

Operating expenses:

Research and development, net

17,508

14,189

50,150

29,797

Selling, general and administrative

22,961

25,655

64,991

39,347

Total operating expenses

40,469

39,844

115,141

69,144

Operating loss

(32,002

)

(52,295

)

(97,981

)

(77,722

)

Other income (expense):

Interest expense, net

(1,486

)

(2,977

)

(6,907

)

(3,377

)

Gain (loss) on foreign exchange

(51

)

16

(3,947

)

(389

)

Change in fair value of liability classified warrants

—

(33,947

)

13,482

(39,424

)

Other income (expense), net

622

(450

)

625

(583

)

Total other income (expense), net

(915

)

(37,358

)

3,253

(43,773

)

Loss before income taxes

(32,917

)

(89,653

)

(94,728

)

(121,495

)

Benefit (provision) for income taxes

(1,693

)

1,684

(4,008

)

979

Net loss

$

(34,610

)

$

(87,969

)

$

(98,736

)

$

(120,516

)

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

Basic and diluted

$

(0.07

)

$

(0.39

)

$

(0.21

)

$

(0.93

)

Weighted-average common shares outstanding:

Basic and diluted

469,768,797

228,266,647

463,709,955

129,232,016

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

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2022 AND DECEMBER 31, 2021

(in thousands, except share and per share data) 

September 30, 2022

(unaudited)

December 31, 2021

Assets

Current assets:

Cash and cash equivalents

$

333,279

$

690,959

Marketable securities, current

169,428

—

Accounts receivable, net

57,732

13,957

Contract assets

9,063

2,490

Inventories

86,138

47,904

Prepaids and other current assets

43,810

19,454

Total current assets

699,450

774,764

Non-current assets:

Property, plant and equipment, net

93,547

65,339

Intangible assets, net

82,980

57,487

Goodwill

59,929

43,308

Right-of-use assets - operating leases

32,214

28,424

Right-of-use assets - finance leases

15,768

—

Marketable securities, non-current

9,751

—

Restricted cash

3,008

1,116

Deferred income tax assets, net

3,243

5,859

Other non-current assets

1,472

4,550

Total assets

$

1,001,362

$

980,847

Liabilities and Stockholders’ Equity

Current liabilities:

Trade payables

$

13,266

$

3,489

Accrued expenses

9,586

10,977

Employee benefits payable

8,560

8,266

Contract liabilities

112,649

59,749

Current installments of long-term borrowings

2,886

2,827

Other current liabilities

14,393

10,999

Total current liabilities

161,340

96,307

Non-current liabilities:

Long-term borrowings, excluding current installments

99,344

97,297

Non-current operating lease liabilities

31,588

28,302

Non-current finance lease liabilities

15,656

—

Deferred tax liabilities

22

466

Public and private warrant liabilities

—

58,227

Other non-current liabilities

2,576

1,800

Total liabilities

310,526

282,399

COMMITMENTS AND CONTINGENCIES

Stockholders’ equity:

Common stock, $0.0001 par value; authorized shares: 2,500,000,000; issued and outstanding shares: 472,746,850 and 450,180,479 at September 30, 2022 and December 31, 2021, respectively

47

45

Additional paid-in capital

1,098,892

1,002,106

Accumulated deficit

(403,747

)

(305,011

)

Accumulated other comprehensive income (loss)

(4,356

)

1,308

Total stockholders’ equity

690,836

698,448

Total liabilities and stockholders’ equity

$

1,001,362

$

980,847

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

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

(unaudited; in thousands) 

Nine Months Ended September 30,

2022

2021

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss

$

(98,736

)

$

(120,516

)

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

Depreciation and amortization

21,590

7,410

Stock-based compensation expense

43,312

24,173

Loss on disposal of assets

32

63

Loss on extinguishment of long-term debt

—

496

Amortization of debt issuance costs and discount

2,107

846

Noncash lease expense

2,312

1,479

Noncash (income) expense associated with liability-classified warrants

(13,482

)

39,424

Change in the fair value of contingent consideration

200

—

Accretion of marketable securities purchased at a discount

(421

)

—

Deferred income taxes

1,167

(3,707

)

Changes in operating assets and liabilities:

Accounts receivable

(30,752

)

(10,601

)

Contract assets

(6,960

)

1,969

Inventories

(17,635

)

(12,226

)

Prepaids and other current assets

(17,173

)

(1,871

)

Other non-current assets

3,281

—

Trade payables

(1,625

)

(4,497

)

Accrued expenses

(3,530

)

2,769

Employee benefits payables

2,519

1,234

Contract liabilities

26,404

25,031

Other current liabilities

2,310

(92

)

Non-current lease liabilities

(2,551

)

(1,258

)

Other non-current liabilities

39

(3

)

Net cash used in operating activities

(87,592

)

(49,877

)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property, equipment and software

(27,419

)

(11,447

)

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

(65,824

)

—

Purchases of marketable securities

(179,853

)

—

Repayments of marketable securities

240

—

Net cash used in investing activities

(272,856

)

(11,447

)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from the exercise of stock options and public warrants

4,278

2,790

Proceeds from Employee Stock Purchase Plan

3,149

—

Proceeds from sale of employees restricted stock units to cover taxes

28,587

—

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

(28,308

)

—

Tax payment for net settled option shares

(444

)

—

Payment of contingent consideration

(5,500

)

—

Finance lease principal payments

(193

)

—

Proceeds from long-term revolving line of credit

—

15,000

Proceeds from long-term secured term loan

—

98,895

Repayments on long-term revolving line of credit

—

(15,000

)

Proceeds from Business Combination and PIPE Investment, net of transaction costs

—

730,452

Repurchase of shares and options from management, net of amount recognized as compensation cost

—

(30,358

)

Net cash provided by financing activities

1,569

801,779

Effect of exchange rate changes on cash and cash equivalents

3,091

(599

)

Net increase (decrease) in cash and cash equivalents and restricted cash

(355,788

)

739,856

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

692,075

53,933

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

$

336,287

$

793,789

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

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

(unaudited; in thousands)

The tables provided below reconcile the non-GAAP financial measures adjusted EBITDA, gross profit, research and development, net, selling, general and administrative, operating expenses, operating loss and 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
September 30,

Nine Months Ended
September 30,

2022

2021

2022

2021

NET LOSS

$

(34,610

)

$

(87,969

)

$

(98,736

)

$

(120,516

)

Depreciation

4,400

1,945

11,911

5,500

Amortization

3,453

618

9,679

1,910

Stock-based compensation expense

14,485

21,793

43,312

24,173

Management redemption compensation expense

—

9,724

—

9,724

Transaction costs

34

659

505

659

Loss on extinguishment of debt

—

—

—

795

Interest expense, net

1,486

2,977

6,907

3,377

Change in fair value of liability classified warrants

—

33,947

(13,482

)

39,424

Change in fair value of contingent consideration

200

—

200

—

Performance reserve escrow

1,894

—

5,684

—

Amortization of inventory step-up

—

—

2,618

—

(Benefit) provision for income taxes

1,693

(1,684

)

4,008

(979

)

(Gain) loss on foreign exchange

51

(16

)

3,947

389

ADJUSTED EBITDA

$

(6,914

)

$

(18,006

)

$

(23,447

)

$

(35,544

)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2022

2021

2022

2021

GAAP Gross profit (loss)

$

8,467

$

(12,451

)

$

17,160

$

(8,578

)

Stock-based compensation

4,964

7,937

14,091

8,541

Amortization of purchased intangibles

1,756

56

3,072

168

Amortization of inventory step-up

—

—

2,618

—

Performance reserve escrow

114

—

342

—

Non-GAAP Gross profit (loss)

$

15,301

$

(4,458

)

$

37,283

$

131

Non-GAAP Gross margin

24.3

%

-84.3

%

23.4

%

0.4

%

GAAP Research and development, net

$

17,508

$

14,189

$

50,150

$

29,797

Stock-based compensation

(5,309

)

(5,967

)

(16,685

)

(6,934

)

Amortization of purchased intangibles

(9

)

(366

)

(3,333

)

(1,105

)

Non-GAAP Research and development, net

$

12,190

$

7,856

$

30,132

$

21,758

GAAP Selling, general and administrative

$

22,961

$

25,655

$

64,991

$

39,347

Stock-based compensation

(4,212

)

(7,889

)

(12,536

)

(8,698

)

Management redemption compensation expense

—

(9,724

)

—

(9,724

)

Amortization of purchased intangibles

(1,529

)

(24

)

(2,907

)

(72

)

Transaction costs

(34

)

(659

)

(505

)

(659

)

Performance reserve escrow

(1,781

)

—

(5,343

)

—

Change in fair value of contingent consideration

(200

)

—

(200

)

—

Non-GAAP Selling, general and administrative

$

15,205

$

7,359

$

43,500

$

20,194

GAAP Operating expenses

$

40,469

$

39,844

$

115,141

$

69,144

Stock-based compensation

(9,521

)

(13,856

)

(29,221

)

(15,632

)

Management redemption compensation expense

—

(9,724

)

—

(9,724

)

Amortization of purchased intangibles

(1,538

)

(390

)

(6,240

)

(1,177

)

Transaction costs

(34

)

(659

)

(505

)

(659

)

Performance reserve escrow

(1,781

)

—

(5,343

)

—

Change in fair value of contingent consideration

(200

)

—

(200

)

—

Non-GAAP Operating expenses

$

27,395

$

15,215

$

73,632

$

41,952

GAAP Operating loss

$

(32,002

)

$

(52,295

)

$

(97,981

)

$

(77,722

)

Total non-GAAP adjustments

19,908

32,622

61,632

35,901

Non-GAAP Operating loss

$

(12,094

)

$

(19,673

)

$

(36,349

)

$

(41,821

)

GAAP Total other income (expense), net

$

(915

)

$

(37,358

)

$

3,253

$

(43,773

)

Change in fair value of liability classified warrants

—

33,947

(13,482

)

39,424

(Gain) loss on foreign exchange

51

(16

)

3,947

389

Non-GAAP Total other income (expense), net

$

(864

)

$

(3,427

)

$

(6,282

)

$

(3,960

)

View source version on businesswire.com:https://www.businesswire.com/news/home/20221109005991/en/

    CONTACT: + Rocket Lab Investor Relations Contact

Adam Spice

investors@rocketlabusa.com+ Rocket Lab Media Contact

Murielle Baker

             media@rocketlabusa.com

KEYWORD: CALIFORNIA UNITED STATES NORTH AMERICA
 

INDUSTRY KEYWORD: TECHNOLOGY CONTRACTS AIR TRANSPORT SATELLITE AEROSPACE MANUFACTURING HARDWARE DEFENSE
 

SOURCE: Rocket Lab USA, Inc.

Copyright Business Wire 2022.

PUB: 11/09/2022 04:15 PM/DISC: 11/09/2022 04:17 PM

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