Cover Page
Cover Page - shares | 3 Months Ended | |
Apr. 03, 2022 | May 13, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Apr. 3, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-40345 | |
Entity Registrant Name | SkyWater Technology, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 37-1839853 | |
Entity Address, Address Line One | 2401 East 86th Street | |
Entity Address, City or Town | Bloomington | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55425 | |
City Area Code | 952 | |
Local Phone Number | 851-5200 | |
Title of 12(b) Security | Common stock, par value $0.01 per share | |
Trading Symbol | SKYT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 40,310,292 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001819974 | |
Current Fiscal Year End Date | --01-01 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Apr. 03, 2022 | Jan. 02, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 6,435 | $ 12,917 |
Accounts receivable, net | 47,698 | 39,381 |
Inventories | 13,113 | 17,500 |
Prepaid expenses and other current assets | 6,417 | 3,854 |
Income tax receivable | 744 | 745 |
Total current assets | 74,407 | 74,397 |
Property and equipment, net | 187,364 | 180,475 |
Intangible assets, net | 5,494 | 3,891 |
Other assets | 4,411 | 4,835 |
Total assets | 271,676 | 263,598 |
Current liabilities: | ||
Current portion of long-term debt | 1,030 | 1,021 |
Accounts payable | 6,014 | 7,637 |
Accrued expenses | 24,082 | 17,483 |
Current portion of contingent consideration | 816 | 816 |
Deferred revenue - current | 23,273 | 20,808 |
Total current liabilities | 55,215 | 47,765 |
Long-term liabilities: | ||
Long-term debt, less current portion and unamortized debt issuance costs | 67,727 | 58,428 |
Long-term incentive plan | 4,249 | 4,039 |
Deferred revenue - long-term | 82,944 | 88,094 |
Deferred income tax liability, net | 798 | 995 |
Other long-term liabilities | 13,234 | 4,350 |
Total long-term liabilities | 168,952 | 155,906 |
Total liabilities | 224,167 | 203,671 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Preferred stock, $0.01 par value per share (80,000,000 shares authorized; zero issued and outstanding) | 0 | 0 |
Common stock, $0.01 par value per share (200,000,000 shares authorized; 39,904,690 and 39,836,038 shares issued and outstanding) | 399 | 398 |
Additional paid-in capital | 118,873 | 115,208 |
Accumulated deficit | (71,085) | (54,479) |
Total shareholders’ equity, SkyWater Technology, Inc. | 48,187 | 61,127 |
Non-controlling interests | (678) | (1,200) |
Total shareholders’ equity | 47,509 | 59,927 |
Total liabilities and shareholders’ equity | $ 271,676 | $ 263,598 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Apr. 03, 2022 | Jan. 02, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value per share (in USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 80,000,000 | 80,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value per share (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 39,904,690 | 39,836,038 |
Common stock, shares outstanding (in shares) | 39,904,690 | 39,836,038 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 48,121 | $ 48,101 |
Cost of revenue | 49,061 | 38,935 |
Gross profit (loss) | (940) | 9,166 |
Research and development | 2,282 | 1,927 |
Selling, general and administrative expenses | 11,690 | 8,603 |
Change in fair value of contingent consideration | 0 | 56 |
Operating loss | (14,912) | (1,420) |
Other income (expense): | ||
Interest expense | (1,029) | (1,058) |
Total other expense | (1,029) | (1,058) |
Loss before income taxes | (15,941) | (2,478) |
Income tax expense (benefit) | (194) | (425) |
Net loss | (15,747) | (2,053) |
Less: net income attributable to non-controlling interests | 859 | 758 |
Net loss attributable to SkyWater Technology, Inc. | $ (16,606) | $ (2,811) |
Net loss per share attributable to common shareholders, basic (in USD per share) | $ (0.42) | $ (1.04) |
Net loss per share attributable to common shareholders, diluted (in USD per share) | $ (0.42) | $ (1.04) |
Weighted average units used in computing net loss per unit, basic (in shares) | 39,861,688 | 3,060,343 |
Weighted average units used in computing net loss per unit, diluted (in shares) | 39,861,688 | 3,060,343 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity (Deficit) - USD ($) shares in Thousands, $ in Thousands | Total | Capital UnitsClass A Units | Capital UnitsClass B Units | Capital UnitsCommon Units | Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Total Shareholders’ Equity (Deficit), SkyWater Technology, Inc. | Non-controlling Interests |
Beginning balance (in shares) at Jan. 03, 2021 | 0 | 18,000 | 2,108 | 0 | 0 | |||||
Beginning balance at Jan. 03, 2021 | $ (1,584) | $ 0 | $ 0 | $ 3,767 | $ 0 | $ 0 | $ 0 | $ (3,783) | $ (16) | $ (1,568) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Unit-based compensation | 5 | $ 5 | 5 | |||||||
Other (in shares) | (2) | |||||||||
Distribution to VIE member | (981) | (981) | ||||||||
Net income (loss) | (2,053) | (2,811) | (2,811) | 758 | ||||||
Ending balance (in shares) at Apr. 04, 2021 | 0 | 18,000 | 2,106 | 0 | 0 | |||||
Ending balance at Apr. 04, 2021 | (4,613) | $ 0 | $ 0 | $ 3,772 | $ 0 | $ 0 | 0 | (6,594) | (2,822) | (1,791) |
Beginning balance (in shares) at Jan. 02, 2022 | 0 | 0 | 0 | 0 | 39,836 | |||||
Beginning balance at Jan. 02, 2022 | 59,927 | $ 0 | $ 0 | $ 0 | $ 0 | $ 398 | 115,208 | (54,479) | 61,127 | (1,200) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Issuance of common stock pursuant to equity compensation plans (in shares) | 69 | |||||||||
Issuance of common stock pursuant to equity compensation plans | 659 | $ 1 | 658 | 659 | ||||||
Stock-based compensation | 3,007 | 3,007 | 3,007 | |||||||
Distribution to VIE member | (337) | (337) | ||||||||
Net income (loss) | (15,747) | (16,606) | (16,606) | 859 | ||||||
Ending balance (in shares) at Apr. 03, 2022 | 0 | 0 | 0 | 0 | 39,905 | |||||
Ending balance at Apr. 03, 2022 | $ 47,509 | $ 0 | $ 0 | $ 0 | $ 0 | $ 399 | $ 118,873 | $ (71,085) | $ 48,187 | $ (678) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (15,747) | $ (2,053) |
Adjustments to reconcile net loss to net cash flows (used in) provided by operating activities: | ||
Depreciation and amortization | 6,458 | 6,482 |
Amortization of debt issuance costs included in interest expense | 172 | 160 |
Long-term incentive and stock-based compensation | 3,216 | 235 |
Change in fair value of contingent consideration | 0 | 56 |
Cash paid for contingent consideration in excess of initial valuation | 0 | (3,356) |
Deferred income taxes | (197) | (1,697) |
Non-cash revenue related to customer equipment | 0 | (2,481) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (86) | 3,265 |
Inventories | (3,843) | (4,061) |
Prepaid expenses and other assets | (2,139) | 4,546 |
Accounts payable and accrued expenses | 4,057 | 2,187 |
Deferred revenue | (2,684) | (14,514) |
Income tax payable and receivable | 1 | 2,807 |
Net cash used in operating activities | (10,792) | (8,424) |
Cash flows from investing activities: | ||
Purchase of software and licenses | (400) | (219) |
Purchases of property and equipment | (4,414) | (5,178) |
Net cash used in investing activities | (4,814) | (5,397) |
Cash flows from financing activities: | ||
Net proceeds on Revolver | 9,392 | 13,030 |
Proceeds from employee stock purchase plan | 659 | 0 |
Cash paid for offering costs | 0 | (1,199) |
Cash paid for capital leases | (334) | 0 |
Distributions to VIE member | (337) | (981) |
Repayment of Financing | (256) | (249) |
Net cash provided by financing activities | 9,124 | 10,601 |
Net change in cash and cash equivalents | (6,482) | (3,220) |
Cash and cash equivalents - beginning of period | 12,917 | 7,436 |
Cash and cash equivalents - end of period | 6,435 | 4,216 |
Supplemental disclosure of cash flow information: | ||
Interest | 882 | 1,009 |
Income taxes | 2 | (1,534) |
Noncash investing and financing activity: | ||
Capital expenditures incurred, not yet paid | 1,537 | 6,622 |
Equipment acquired through capital lease obligations | 9,035 | 2,470 |
Intangible assets acquired, not yet paid | $ 1,628 | $ 0 |
Nature of Business
Nature of Business | 3 Months Ended |
Apr. 03, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | Nature of Business SkyWater Technology, Inc., together with its consolidated subsidiaries (collectively, “we”, “us”, “our”, or “SkyWater”), is a U.S. investor-owned, independent, pure-play technology foundry that offers advanced semiconductor development and manufacturing services from our fabrication facility, or fab, in Minnesota and advanced packaging services from our Florida facility. In our technology as a service model, we leverage a strong foundation of proprietary technology to co-develop process technology intellectual property with our customers that enables disruptive concepts through our Advanced Technology Services for diverse microelectronics (integrated circuits, or ICs) and related micro- and nanotechnology applications. In addition to these differentiated technology development services, we support customers with volume production of ICs for high-growth markets through our Wafer Services. Emerging Growth Company Status We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012. Corporate Conversion and Initial Public Offering Effective April 14, 2021, we converted into a Delaware corporation pursuant to a statutory conversion and changed our name to SkyWater Technology, Inc. Previously, we operated as a Delaware limited liability company under the name CMI Acquisition, LLC. As a result of the corporate conversion, the holders of the different series of units of CMI Acquisition, LLC, became holders of common stock and options to purchase common stock of SkyWater Technology, Inc. The number of shares of common stock that holders of Class B preferred units and common units were entitled to receive in the corporate conversion was determined in accordance with a plan of conversion, which was based upon the terms of the CMI Acquisition, LLC operating agreement, and varied depending on which class of Units a holder owned. See Note 8 – Shareholders’ Equity . |
Basis of Presentation and Princ
Basis of Presentation and Principles of Consolidation | 3 Months Ended |
Apr. 03, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The condensed consolidated financial statements as of April 3, 2022, and for the three months ended April 3, 2022 and April 4, 2021, are presented in thousands of U.S. dollars (except share and per share information), are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all financial information and disclosures required by U.S. GAAP for complete financial statements. These unaudited interim condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the related notes thereto as of January 2, 2022. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which include normal recurring adjustments, necessary for the fair presentation of our financial position as of April 3, 2022, our results of operations, shareholders' equity (deficit) and cash flows for the three months ended April 3, 2022 and April 4, 2021. The results of operations for the three months ended April 3, 2022 are not necessarily indicative of the results of operations to be expected for the year ending January 1, 2023, or for any other interim period, or for any other future year. Principles of Consolidation Our condensed consolidated financial statements include our assets, liabilities, revenues, and expenses, as well as the assets, liabilities, revenues, and expenses of subsidiaries in which we have a controlling financial interest, SkyWater Technology Foundry, Inc. (“SkyWater Technology Foundry”), SkyWater Federal, LLC (“SkyWater Federal”), and SkyWater Florida, Inc. (“SkyWater Florida”), and variable interest entities (“VIE”) for which we are the primary beneficiary. All intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated statements of operations, shareholders’ equity (deficit) and cash flows are for the three months ended April 3, 2022 and April 4, 2021, each of which consisted of 13 weeks. Liquidity and Cash Requirements Our ability to execute our operating strategy is dependent on our ability to continue to access capital through our Revolver (as defined in Note 6 – Debt ) and other sources of financing. Our current business plans indicate that we will require additional liquidity to continue our operations for the next 12 months from the issuance of the consolidated financial statements. In response to this, we are in the process of implementing a plan to reduce operating costs to improve cash flow, which includes a reduction in spending and a delayed increase in personnel, and may require us to decrease our level of investment in new products and technologies, discontinue further expansion of our business, or scale back our existing operations. Management believes that its cash and cash equivalents on hand, available borrowings on our Revolver, and these cost reduction measures, as needed, will provide sufficient liquidity to fund its operations for the next 12 months from the issuance of the consolidated financial statements. The Company has based this estimate on assumptions that may prove to be wrong, and its operating plan may change as a result of many factors currently unknown to it. To the extent that our current resources and plans to reduce expenses are insufficient to satisfy our cash requirements, we may need to seek additional equity or debt financing. Our ability to do so depends on prevailing economic conditions and other factors, many of which are beyond our control. Use of Estimates The preparation of our condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Management evaluates these estimates and judgments on an ongoing basis and bases its estimates on experience, current and expected future conditions, third-party evaluations and various other assumptions that management believes are reasonable under the circumstances. Actual results could differ from those estimates. COVID-19 In March 2020, the World Health Organization declared the novel coronavirus 2019 (“COVID-19”) outbreak a global pandemic. The COVID-19 pandemic has spread throughout the United States and the world, with the continued potential for significant impact. Our business has been adversely affected by the effects of the COVID-19 pandemic. We implemented modifications to employee travel and employee work locations, as required in some cases by federal, state and local authorities, which has had a negative impact on employee productivity. Because we have manufacturing operations, we may be vulnerable to an outbreak of a new coronavirus or other contagious diseases. Although we have not experienced a shutdown of our manufacturing facilities, the effects of such an outbreak could include the temporary shutdown of our operations or the operations of our customers, disruptions or restrictions on the ability to ship our products to our customers as well as disruptions that may affect our suppliers. Any disruption of our ability to manufacture or distribute our products, the ability of our suppliers to deliver key components on a timely basis, or our customers’ ability to order and take delivery of our products could have a material adverse effect on our revenue and operating results. The future broader implications of the pandemic remain uncertain and will depend on certain future developments, including the duration, scope and severity of the pandemic, the effectiveness of vaccines and the impact of our workforce of vaccine mandates. Net Loss Per Share We calculate basic and diluted net loss per common share in conformity with the two-class method required for companies with participating securities. Our previously outstanding Class B preferred units met the criteria of a participating security as they contained the rights to an 8% “preferred return” on the deemed original equity value of each such Class B preferred unit (accrued daily since the date of issuance of each such Class B preferred unit). Under the two-class method, income or losses are allocated between the common shareholders and the Class B preferred unitholders. The two-class method includes an allocation formula that determines income or loss per unit for each class according to preferred dividends and undistributed earnings or losses for the period. Our reported net loss for the three months ended April 4, 2021 is increased by the amount allocated to the Class B preferred units to arrive at the loss allocated to common shareholders for purposes of calculating net loss per share. As a result of our April 2021 corporate conversion and IPO, the number of common shares used to compute net loss per common share for the three months ended April 4, 2021 was retrospectively adjusted to reflect the conversion akin to a split-like situation. Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of shares and potentially dilutive securities outstanding for the period determined using the treasury-stock method. Because we reported a net loss for the three months ended April 3, 2022 and April 4, 2021, the number of shares used to calculate diluted net loss per common share is the same as the number of shares used to calculate basic net loss per common share because the potentially dilutive shares would have been anti-dilutive if included in the calculation. At April 3, 2022 and April 4, 2021, there were restricted stock units and stock options totaling 3,414,000 and 2,329,000, respectively, excluded from the computation of diluted weighted-average shares outstanding because their inclusion would have been anti-dilutive. The following table sets forth the computation of basic and diluted net loss per common share for the three months ended April 3, 2022 and April 4, 2021: Three Months Ended April 3, 2022 April 4, 2021 (in thousands, except per share data) Numerator: Net loss attributable to SkyWater Technology, Inc. $ (16,606) $ (2,811) Undistributed preferred return to Class B preferred unitholders — (359) Net loss attributable to common shareholders $ (16,606) $ (3,170) Denominator: Weighted-average common shares outstanding, basic and diluted (1) 39,862 3,060 Net loss per common share, basic and diluted $ (0.42) $ (1.04) __________________ (1) The weighted-average common shares outstanding for the three months ended April 4, 2021 reflects the retrospective adjustment for the April 14, 2021 corporate conversion of 2,105,936 common units into 3,060,343 shares of common stock. Operating Segment Information Operating segments are identified as components of an enterprise about which separate financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. We view our operations and manage our business as one operating segment. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Apr. 03, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Our audited consolidated financial statements include an additional discussion of the significant accounting policies and estimates used in the preparation of our condensed consolidated financial statements. There were no material changes to our significant accounting policies and estimates during the three months ended April 3, 2022, except with respect to the adoption of Financial Accounting Standards Board (“FASB”) Accounting Standards Update ("ASU") 2016-2, Leases (“Topic 842”). Recently Issued Accounting Standards In February 2016, the FASB issued Topic 842. The guidance in this ASU supersedes the leasing guidance in Topic 840, Leases. Under the new guidance, lessees are required to recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statement of operations. The standard is effective for public business entities for fiscal years beginning after December 15, 2018. As an emerging growth company, we adopted the new standard on January 3, 2022 for our year ending January 1, 2023. The adoption of Topic 842 did not have a material impact on our condensed consolidated financial statements as disclosed in Note 15 – Leases . In June 2016, the FASB issued a new credit loss accounting standard, ASU 2016-13, Current Expected Credit Losses (“Topic 326”). This guidance replaces the current allowance for loan and lease loss accounting standard and focuses on estimation of expected losses over the life of the loans instead of relying on incurred losses. The standard is effective for certain public business entities for fiscal years beginning after December 15, 2019. As an emerging growth company, we intend to adopt the new standard on January 2, 2023 for our year ending December 31, 2023. However if we lose our emerging growth |
Revenue
Revenue | 3 Months Ended |
Apr. 03, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Wafer Services Contract In March 2022, we signed a new contract with a significant wafer services customer. Under the contract, orders are non-cancellable and we have an enforceable right to complete the orders and to payment for any finished or in-process wafers plus a reasonable margin. The wafers produced for that customer are highly customized and have no alternative use to us. Control of these wafers is deemed to transfer to the customer over time during the fabrication process, using the same measure of progress toward satisfying the promise to deliver the units to the customer. Consequently, the transaction price is recognized as revenue over time based on actual costs incurred in the fabrication process to date relative to total expected costs to produce all wafers beginning in March 2022. The contract terms and pricing is applicable to all in-process and future wafers. We recorded revenue of $8,230 in the first quarter of 2022 to account for recognition of wafer services activities in process at the date the contract was signed. Disaggregated Revenue The following table discloses revenue by product type and the timing of recognition of revenue for transfer of goods and services to customers: Three Months Ended April 3, 2022 Topic 606 Revenue Point-in-Time Over Time Lease Revenue Total Revenue Wafer Services $ 13,205 $ 8,341 $ — $ 21,546 Advanced Technology Services T&M — 18,908 — 18,908 Fixed Price — 6,500 — 6,500 Other — — 1,167 1,167 Total Advanced Technology Services — 25,408 1,167 26,575 Total revenue $ 13,205 $ 33,749 $ 1,167 $ 48,121 Three Months Ended April 4, 2021 Topic 606 Revenue Point-in-Time Over Time Lease Revenue Total Revenue Wafer Services $ 10,019 $ — $ — $ 10,019 Advanced Technology Services T&M — 10,792 — 10,792 Fixed Price — 26,123 — 26,123 Other — — 1,167 1,167 Total Advanced Technology Services — 36,915 1,167 38,082 Total revenue $ 10,019 $ 36,915 $ 1,167 $ 48,101 The following table discloses revenue by country as determined based on customer address: Three Months Ended April 3, 2022 April 4, 2021 United States $ 42,359 $ 43,621 United Kingdom 1,781 2,086 Canada 1,670 1,609 All others 2,311 785 $ 48,121 $ 48,101 Deferred Contract Costs We recognized amortization of deferred contract costs in our condensed consolidated statements of operations totaling $195 and $551 for the three months ended April 3, 2022 and April 4, 2021, respectively. Contract Assets Contract assets are $26,207 and $16,303 at April 3, 2022 and January 2, 2022, respectively, and are included in accounts receivable, net in our condensed consolidated balance sheets. The contract assets balance at April 3, 2022 includes the impact from the new wafer services contract described above, in which we recorded revenue and contract assets of $8,230 for in-process wafers. Contract Liabilities The contract liabilities and other significant components of deferred revenue are as follows: April 3, 2022 January 2, 2022 Contract Deferred Total Contract Deferred Total Current $ 18,606 $ 4,667 $ 23,273 $ 16,141 $ 4,667 $ 20,808 Long-term 72,833 10,111 82,944 76,816 11,278 88,094 Total $ 91,439 $ 14,778 $ 106,217 $ 92,957 $ 15,945 $ 108,902 The decrease in contract liabilities from January 2, 2022 to April 3, 2022 was primarily the result of completion of specific performance obligations for our customers. Approximately 3% of our total contract liabilities at January 2, 2022 were recognized in revenue in the first three months of 2022. Approximately 15% of our total contract liabilities at January 3, 2021 were recognized in revenue in the first three months of 2021. Remaining Performance Obligations As of April 3, 2022, we had approximately $89,903 of transaction price allocated to remaining performance obligations that are unsatisfied (or partially satisfied) on contracts with an original expected duration of one year or more, which are primarily related to Advanced Technology Services contracts. We expect to recognize those remaining performance obligations as follows: Within one year $ 17,070 From one to two years 17,992 From two to three years 10,968 After three years 43,873 Total $ 89,903 We do not disclose the value of remaining performance obligations for contracts with an original expected duration of one year or less. Further, we do not adjust the promised amount of consideration for the effects of a significant financing component if we expect, at contract inception, that the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service will be one year or less. |
Balance Sheet Information
Balance Sheet Information | 3 Months Ended |
Apr. 03, 2022 | |
Balance Sheet Information [Abstract] | |
Balance Sheet Information | Balance Sheet Information Certain significant amounts included in our condensed consolidated balance sheets consist of the following: April 3, 2022 January 2, 2022 Accounts receivable, net: Trade accounts receivable $ 21,491 $ 23,022 Unbilled revenue (contract assets) 26,207 16,303 Other receivables — 56 Total accounts receivable, net $ 47,698 $ 39,381 April 3, 2022 January 2, 2022 Inventories: Raw materials $ 3,865 $ 3,340 Work-in-process 1,390 7,339 Supplies and spare parts 7,858 6,821 Total inventories—current 13,113 17,500 Supplies and spare parts classified as other assets 2,252 2,388 Total inventories $ 15,365 $ 19,888 April 3, 2022 January 2, 2022 Prepaid expenses and other current assets: Prepaid expenses $ 3,116 $ 1,759 Deferred contract costs 2,785 1,579 Prepaid inventory 516 516 Total prepaid assets and other current assets $ 6,417 $ 3,854 April 3, 2022 January 2, 2022 Property and equipment, net: Land $ 5,396 $ 5,396 Buildings and improvements 87,396 87,156 Machinery and equipment 173,924 143,105 Fixed assets not yet in service 11,059 29,229 Total property and equipment, at cost 277,775 264,886 Less: Accumulated depreciation (90,411) (84,411) Total property and equipment, net $ 187,364 $ 180,475 Depreciation expense was $6,031 and $6,047 for the three months ended April 3, 2022 and April 4, 2021, respectively. In December 2021, we completed an assessment of the useful lives of our machinery and equipment and adjusted the estimated useful life from seven years to ten years to better reflect the estimated periods during which the assets will remain in service. This change in accounting estimate was effective beginning in December of 2021 on a prospective basis for all machinery and equipment acquired after March 1, 2017, the date in which we became an independent company as part of a divestiture from Cypress. The effect of this change in estimate resulted in a $445 decrease in depreciation expense for the three months ended April 3, 2022. Intangible assets consist of purchased software and license costs from our acquisition of the business in 2017. Additionally, we have entered into license agreements for third-party software and licensed technology, which also comprise intangible assets. During the three months ended April 3, 2022, we acquired third-party software and licensed technology of $2,028, which will be amortized over a weighted average estimated life of 8.8 years. Intangible assets are summarized as follows: April 3, 2022 January 2, 2022 Intangible assets, net: Software and licensed technology $ 8,653 $ 6,625 Customer list — 1,500 Total intangible assets, at cost 8,653 8,125 Less: Accumulated amortization (3,159) (4,234) Total intangible assets, net $ 5,494 $ 3,891 For the three months ended April 3, 2022 and April 4, 2021, amortization of the customer list intangible asset charged to operations was $0 and $88, respectively, and amortization of software and licensed technology was $425 and $347, respectively. Remaining estimated aggregate annual amortization expense is as follows for the years ending: Amortization Remainder of 2022 $ 1,403 2023 1,429 2024 754 2025 601 2026 433 Thereafter 874 Total $ 5,494 April 3, 2022 January 2, 2022 Other assets: Supplies and spare parts $ 2,252 $ 2,388 Deferred contract costs 862 1,760 Other assets 1,297 687 Total other assets $ 4,411 $ 4,835 April 3, 2022 January 2, 2022 Accrued expenses: Accrued compensation $ 5,596 $ 4,557 Patents and licensed technology obligations 2,000 — Accrued commissions 241 189 Accrued fixed asset expenditures 1,252 861 Accrued royalties 2,586 1,854 Capital lease obligations 1,597 1,192 Other accrued expenses 10,810 8,830 Total accrued expenses $ 24,082 $ 17,483 |
Debt
Debt | 3 Months Ended |
Apr. 03, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt The components of debt outstanding are as follows: April 3, 2022 January 2, 2022 Revolver $ 35,615 $ 26,223 Financing (by VIE) 37,593 37,850 Unamortized debt issuance costs (1) (4,451) (4,624) Total long-term debt, including current maturities 68,757 59,449 Less: Current portion of long-term debt (1,030) (1,021) Long-term debt, excluding current portion and unamortized debt issuance costs $ 67,727 $ 58,428 __________________ (1) Unamortized debt issuance costs as of April 3, 2022 included $1,379 for the Revolver (as defined below) and $3,072 for the Financing (as defined below). Unamortized debt issuance costs as of January 2, 2022 included $1,471 for the Revolver and $3,153 for the Financing (by VIE). Revolver The outstanding balance of our amended and restated revolving credit agreement with Wells Fargo Bank, National Association (the “Revolver”) was $35,615 as of April 3, 2022 at an interest rate of 2.9%. Our remaining availability under the Revolver was $29,101 as of April 3, 2022. However, we must maintain availability under the Revolver of at least $15,000 in order to not have to comply with the leverage ratio and fixed charge coverage ratio financial covenants contained in the Revolver with respect to the fiscal quarters ending on or prior to July 2, 2023. As of April 3, 2022, our unused remaining availability was $29,101 and we were in compliance with applicable financial covenants of the Revolver and expect to be in compliance with applicable financial covenants over the next twelve months. Maturities As of April 3, 2022, the Revolver is due in December 2025. The Financing is repayable in equal monthly installments of $194 over 10 years, with the balance payable at the maturity date of October 6, 2030. Future principal payments of our Revolver and consolidated VIE’s Financing, excluding unamortized debt issuance costs, are as follows: Remainder of 2022 $ 767 2023 1,060 2024 1,094 2025 36,749 2026 1,177 Thereafter 32,361 Total $ 73,208 |
Income Taxes
Income Taxes | 3 Months Ended |
Apr. 03, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rates for the three months ended April 3, 2022 and April 4, 2021 differ from the statutory tax rates due to state income taxes, permanent tax differences, and changes in our deferred tax asset valuation allowance. The tax rate in any quarter can be affected positively or negatively by adjustments that are required to be reported in the specific quarter of resolution. The effective income tax rate for the three months ended April 3, 2022 was 1.2%, compared to 17.2% for the three months ended April 4, 2021. The income tax benefit rate applied to our pre-tax loss was lower for the three months ended April 3, 2022 and April 4, 2021 than our statutory tax rate of 21% primarily due to a deferred tax asset valuation allowances. Management regularly evaluates the future realization of deferred tax assets and provides a valuation allowance, if considered necessary, based on such evaluation. As part of the evaluation, management has evaluated taxable income in carryback years, future reversals of taxable temporary differences, feasible tax planning strategies, and future expectations of income. Based upon this analysis, a valuation allowance of $12,918 was recorded as of April 3, 2022 to reduce our net deferred tax assets to the amount that is more likely than not to be realized. The valuation allowance at January 2, 2022 was $9,819. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Apr. 03, 2022 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Classes of Equity Units Until our corporate conversion on April 14, 2021, we had three classes of limited liability interests, designated as Class A preferred units, Class B preferred units, and common units (collectively, the “Unit” or “Units”). The Class A preferred units were authorized specifically for issuance upon exercise of warrants, of which none were issued and outstanding. Class A preferred units and common units were non-voting classes, and Class B preferred units are a voting class. Conversion On April 14, 2021, we completed a corporate conversion. Pursuant to the certificate of incorporation effected in connection with the corporate conversion, our authorized capital stock consists of 200,000,000 shares of voting common stock, par value $0.01 per share, and 80,000,000 shares of preferred stock, par value $0.01 per share. As of April 3, 2022, giving effect to the corporate conversion and our IPO, 39,904,690 shares of common stock were issued and outstanding. No shares of our preferred stock were outstanding. On April 21, 2021, our common stock began trading on the Nasdaq Stock Market under the symbol “SKYT”. Upon the corporate conversion, all Units were converted into an aggregate of 31,055,743 shares of our common stock. Each Class B preferred unit and common unit was converted into a number of shares of common stock determined by dividing (1) the amount that would have been distributed in respect of each such Unit in accordance with CMI Acquisition, LLC’s operating agreement if all assets of CMI Acquisition, LLC had been sold for a cash amount equal to the pre-offering value of CMI Acquisition, LLC, as such value is determined by CMI Acquisition, LLC’s board of managers based on the fair value of each share of common stock (net of any underwriting discounts, fees and expenses), by (2) such per share fair value. The amounts that would have been distributed for this purpose in respect of Class B preferred units and common units were determined by reference to the terms of CMI Acquisition, LLC’s operating agreement, with different values applicable to each series of Units. Before any distributions were made on common units, distributions were made on each Class B preferred unit in an amount equal to the sum of an 8% “preferred return” on the deemed original equity value of each such Class B preferred unit (accrued daily since the date of issuance of each such Class B preferred unit) plus the amount of such original equity value. Only after those distributions were made, the common units, together with the Class B preferred units, shared in the remainder of the distribution on a pro rata basis. For purposes of the corporate conversion, pre-offering “per share fair value” was determined taking into account an assumed initial public offering price of common stock. Accordingly, the outstanding Units were converted as follows: • holders of Class B preferred units received an aggregate of 27,995,400 shares of common stock; and • holders of common units received an aggregate of shares 3,060,343 of common stock. Initial Public Offering On April 23, 2021, we completed our initial public offering (“IPO”) and issued 8,004,000 shares of common stock, including the underwriter’s exercise of their right to purchase additional shares, at an initial offering price to the public of $14.00 per share. We received net proceeds from the IPO of approximately $100,162 after deducting underwriting discounts and commissions of $7,844 and offering costs of approximately $4,050. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Apr. 03, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation 2021 Equity Incentive Plan In connection with our IPO, we adopted the 2021 Equity Incentive Plan (the “2021 Equity Plan”). The 2021 Equity Plan became effective upon the consummation of the IPO. As of April 3, 2022, the 2021 Equity Plan provides for the issuance of up to 5,150,000 shares of common stock to eligible individuals in the form of options, stock appreciation rights, restricted stock, restricted stock units, deferred stock units, unrestricted stock, dividend equivalent rights, other equity-based awards and cash bonus awards. The share reserve of the 2021 Equity Plan will be increased effective the first business day of each calendar year by an amount equal to the lesser of: (i) 150,000 shares of common stock; (ii) three percent (3%) of the shares of common stock outstanding on the final day of the immediately preceding calendar year; and (iii) such smaller number of shares of common stock as determined by the compensation committee. Stock Options During the three months ended April 3, 2022, we granted 549,000 stock options, respectively, which vest ratably on each of the first, second, third, and fourth anniversaries of the grant date and expire 10 years from the grant date. No stock options were granted during the three months ended April 4, 2021. Share-based compensation expense related to stock option awards was $423 and $0 for the three months ended April 3, 2022 and April 4, 2021, respectively. Actual forfeitures are recognized as they occur. The fair value of each stock option is estimated on the date of grant using a Black-Scholes option-pricing model that uses assumptions noted in the following table. The risk-free interest rate used in the option valuation model was based on yields available on the grant dates for U.S. Treasury Strips with maturity consistent with the expected life assumption. The expected term of the option represents the period of time that options granted are expected to be outstanding and is based on the Securities and Exchange Commission ("SEC") Simplified Method (midpoint of average vesting time and contractual term). Expected volatility is based on an average of the historical, daily volatility of a peer group of similar companies over a period consistent with the expected life assumption ending on the grant date. We assumed no dividend yield in the valuation of the options granted as we have never declared or paid dividends on our common stock and currently intend to retain earnings for use in operations. Three Months Ended April 3, 2022 Expected volatility: 47.2% Expected term (in years): 6.25 Risk-free interest rate: 1.9% The following table summarizes our stock option activity during the three months ended April 3, 2022: Number of Stock Options Weighted Average Aggregate Intrinsic Value Weighted-Average Remaining Contractual Life Balance outstanding as of January 2, 2022 986 $ 14.29 Granted 549 $ 11.24 Exercised — $ — Forfeited or canceled (99) $ 13.25 Balance outstanding as of April 3, 2022 1,436 $ 13.20 $ — 7.4 years Balance vested and exercisable as of April 3, 2022 22 $ 14.00 $ — 0.2 years The weighted average grant-date fair value of options granted in the three months ended April 3, 2022 was $5.37. As of April 3, 2022, total unrecognized compensation cost related to stock options was $5,782 and is expected to be recognized over a weighted average period of approximately 3.5 years. Restricted Common Stock Units During the three months ended April 3, 2022, we granted 10,000 restricted common stock units to newly appointed directors which vest in full on May 31, 2022. During the three months ended April 3, 2022, we granted 263,000 restricted common stock units, which vest ratably on each of the first, second and third anniversaries of the grant date. The common stock relating to these restricted common stock units is issued upon vesting. The grantee has no rights as a common stockholder until the common stock related to the restricted common stock units have been issued. No restricted common stock units were granted during the three months ended April 4, 2021. Share-based compensation expense related to restricted common stock unit awards was $2,377 and $0 for the three months ended April 3, 2022 and April 4, 2021, respectively. Actual forfeitures are recognized as they occur. As of April 3, 2022, total unrecognized compensation cost related to restricted common stock units was $7,511 and is expected to be recognized over a weighted average period of approximately 1.8 years. The estimated fair value of restricted common stock units is based on the grant date closing price of our common stock for time-based vesting awards. No restricted stock units vested during the three months ended April 3, 2022 and April 4, 2021. The following table summarizes our restricted common stock unit activity during the three months ended April 3, 2022: Number of Restricted Common Stock Units Weighted Average Grant Date Fair Value Per Share Balance outstanding as of January 2, 2022 1,745 $ 8.34 Granted 273 $ 11.24 Vested — $ — Forfeited or canceled (40) $ 16.57 Balance outstanding as of April 3, 2022 1,978 $ 8.52 2021 Employee Stock Purchase Plan In connection with our IPO, we also adopted the 2021 Employee Stock Purchase Plan (the “2021 ESPP”). A maximum of 707,000 shares of our common stock has been reserved for issuance under the 2021 ESPP. Under the 2021 ESPP, eligible employees may purchase our common stock through payroll deductions at a discount not to exceed 15% of the lower of the fair market values of our common stock as of the beginning or end of each offering period, which may range from 6 to 27 months. Payroll deductions are limited to 15% of the employee’s eligible compensation and a maximum of 2,500 shares of our common stock may be purchased by an employee each offering period. The initial six-month offering period commenced on September 1, 2021 and 69,000 shares were purchased under the 2021 ESPP during the three months ended April 3, 2022. As of April 3, 2022 and January 2, 2022, $351 and $937, respectively, was withheld on behalf of employees for future purchases under the 2021 ESPP and recorded as accrued compensation. Share-based compensation expense related to the 2021 ESPP was $207 for the three months ended April 3, 2022. Actual forfeitures are recognized as they occur. As of April 3, 2022, total unrecognized compensation cost related to the 2021 ESPP was $381 and will be recognized on a straight-line basis over the six-month offering period. The fair value of the 2021 ESPP is estimated on the date of grant using a Black-Scholes option-pricing model that uses assumptions noted in the following table. The risk-free interest rate used in the option valuation model was based on yields available on the grant dates for U.S. Treasury Strips with maturity consistent with the expected life assumption. Expected volatility is based on an average of the historical, daily volatility of a peer group of similar companies over a period consistent with the expected life assumption ending on the grant date. We assumed no dividend yield in the valuation of the options granted as we have never declared or paid dividends on our common stock and currently intend to retain earnings for use in operations. Three Months Ended Expected volatility: 47.2% Expected term (in years): 0.50 Risk-free interest rate: 0.60% Weighted average grant-date fair value per share $3.20 Share-Based Compensation Expense Allocation Share-based compensation expense was allocated in the condensed consolidated statements of operations as follows: Three Months Ended April 3, 2022 April 4, 2021 Cost of revenue $ 1,040 $ — Research and development 207 — Selling, general and administrative expenses 1,760 5 $ 3,007 $ 5 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Apr. 03, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The FASB defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To determine fair value, we use a fair value hierarchy categorized into three levels based on inputs used. Generally, the three levels are as follows: • Level 1 – Quoted prices in active markets for identical assets or liabilities; • Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 inputs are used in the valuation of our contingent consideration obligation. The change in level 3 assets measured at fair value on a recurring basis is summarized as follows: Three Months Ended April 3, 2022 April 4, 2021 Beginning balance $ 816 $ 10,900 Payments — (3,356) Change in fair value — 56 Ending balance $ 816 $ 7,600 We expect to pay our contingent consideration liability in the second quarter of 2022 at the amount currently recorded on our condensed consolidated balance sheet. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The carrying values of accounts receivable, accounts payable, accrued liabilities, and other financial working capital items approximate fair values at April 3, 2022 and January 2, 2022 due to the short maturity of these items. The carrying values of our borrowings under our Revolver and Financing approximate their fair values due to the frequency of the floating interest rate resets on these borrowings. The fair value of the Revolver and Financing were determined based on inputs that are classified as Level 2 in the fair value hierarchy. Our non-financial assets such as property and equipment and intangible assets are recorded at fair value upon acquisition and are remeasured at fair value only if an impairment charge is recognized. As of April 3, 2022 and January 2, 2022, we did not have any assets or liabilities measured at fair value on a non-recurring basis. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Apr. 03, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation From time to time, we are involved in legal proceedings and subject to claims arising in the ordinary course of our business. Although the results of litigation and claims cannot be predicted with certainty, we currently believe that the resolution of these ordinary-course matters will not have a material adverse effect on our business, operating results, financial condition or cash flows. Even if any particular litigation is resolved in a manner that is favorable to our interests, such litigation can have a negative impact on us because of defense and settlement costs, diversion of management resources from our business and other factors. |
Major Customers and Concentrati
Major Customers and Concentration Risk | 3 Months Ended |
Apr. 03, 2022 | |
Risks and Uncertainties [Abstract] | |
Major Customers and Concentration Risk | Major Customers and Concentration Risk The following customers accounted for 10% or more of revenue for the three months ended April 3, 2022 and April 4, 2021: Three Months Ended April 3, 2022 April 4, 2021 Customer A 16 % 37 % Customer B 40 % 19 % Customer C * 10 % 56 % 66 % __________________ * Represents less than 10% of revenue. We had two major customers that accounted for 33% and 29% of outstanding trade accounts receivable as of April 3, 2022 and two major customers that accounted for 25% and 12% of outstanding trade accounts receivable as of January 2, 2022. The loss of a major customer could adversely affect our operating results and financial condition. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Apr. 03, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Professional Services Oxbow Industries, LLC (“Oxbow”), our principal stockholder, provided management and financial consulting services to us. We incurred management fees to Oxbow of $0 and $160 of during the three months ended April 3, 2022 and April 4, 2021, respectively, which have been expensed and included in general and administrative expenses in our condensed consolidated statements of operations. A member of our board of directors provided legal and professional services to us. We incurred fees of $0 and $116 for the three months ended April 3, 2022 and April 4, 2021, respectively, which have been expensed and included in general and administrative expenses in our condensed consolidated statements of operations. Sale-Leaseback Transaction On September 29, 2020, we entered into an agreement to sell the land and building representing our primary operating location in Bloomington, Minnesota to an entity (“Oxbow Realty”) controlled by our principal stockholder. We subsequently entered into an agreement to lease the land and building from Oxbow Realty for initial payments of $394 per month over 20 years. The monthly payments are subject to a 2% increase each year during the term of the lease. We are also required to make certain customary payments constituting "additional rent," including certain monthly reserve, insurance and tax payments, in accordance with the terms of the lease agreement. Future minimum lease commitments to Oxbow Realty as of April 3, 2022 were as follows (such amounts are eliminated from our condensed consolidated financial statements due to the consolidation of Oxbow Realty, see Note 14 – Variable Interest Entities ): Remainder of 2022 $ 3,631 2023 4,932 2024 5,031 2025 5,132 2026 5,234 Thereafter 84,116 Total lease payments 108,076 Less: imputed interest (80,660) Total $ 27,416 |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Apr. 03, 2022 | |
Condensed Financial Information Disclosure [Abstract] | |
Variable Interest Entities | Variable Interest Entities Oxbow Realty was established for the purpose of holding real estate and facilitating real estate transactions. This included facilitating the purchase of our land and building with proceeds from a bank loan and managing the leaseback of the land and building to us. We determined that Oxbow Realty meets the definition of a VIE under Topic 810, Consolidation , because it lacks sufficient equity to finance its activities. We concluded that we are the primary beneficiary of Oxbow Realty as we have the power to direct operation and maintenance decisions during the lease term, which would most significantly affect the VIE’s economic performance. As the primary beneficiary, we consolidate the assets, liabilities and results of operations of Oxbow Realty, eliminate any transactions between us and Oxbow Realty, and record a non-controlling interest for the economic interest in Oxbow Realty not owned by us because the owners of our common stock do not legally have rights or obligations to those profits or losses. In addition, the assets of Oxbow Realty can only be used to settle its liabilities, and the creditors of Oxbow Realty do not have recourse to the general credit of SkyWater. The following table shows the carrying amounts of assets and liabilities of Oxbow Realty that are consolidated by us as of April 3, 2022 and January 2, 2022. The assets and liabilities are presented prior to consolidation, and thus a portion of these assets and liabilities are eliminated in consolidation. April 3, 2022 January 2, Cash and cash equivalents $ 240 $ 475 Prepaid expenses 424 192 Finance receivable 37,492 37,437 Other assets 256 200 Total assets $38,412 $38,304 Accounts payable $ 855 $ 1,232 Accrued expenses 697 479 Debt 37,538 37,793 Total liabilities $39,090 $39,504 The following table shows the revenue and expenses of Oxbow Realty that are consolidated by us for the three months ended April 3, 2022 and April 4, 2021. We have included these amounts, net of eliminations, in the corresponding tables in the notes to our condensed consolidated financial statements. Three Months Ended April 3, 2022 April 4, 2021 Revenue $ 1,260 $ 1,345 General and administrative expenses 77 252 Interest expense 324 335 Total expenses 401 587 Net income $ 859 $ 758 |
Leases
Leases | 3 Months Ended |
Apr. 03, 2022 | |
Leases [Abstract] | |
Leases | Leases On January 3, 2022, we adopted ASU No. 2016-02, Leases , and all related amendments using the "Comparatives Under 840 Option" transition approach. Under this transition approach, comparative prior periods, including disclosures, were not restated. We elected the transition package of practical expedients which, among other things, allowed us to carry forward historical lease classification. We chose not to elect the hindsight practical expedient. The adoption of the standard did not have an impact on our condensed consolidated statements of operations and there was no adjustment to our retained earnings. We do not expect the adoption of the new standard to have a material impact on our operating results on an ongoing basis. The most significant impact of the new leases standard was the recognition of right-of-use assets and lease liabilities for operating leases, while our accounting for finance leases remained substantially unchanged. On January 3, 2022, the adoption of the new standard resulted in the recognition of a right-of-use asset of $184 and a lease liability of $184. We lease certain property and equipment, such as our headquarters in Minnesota, our office location in Florida and certain production equipment under finance leases. We also lease our manufacturing location in Florida and warehouse space in Minnesota under operating leases. We determine if an arrangement is a lease at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet. On April 1, 2022, we commenced a finance lease for a new nitrogen generator. The lease has a term of 15 years for total fixed payments of approximately $14,000. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets are recognized at commencement date based on the present value of lease payments over the lease term. For leases that do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Some of our leases include options to extend the term, which is only included in the lease liability and right-of-use assets calculation when it is reasonably certain we will exercise that option. As of April 3, 2022, the operating lease liability and operating right-of-use assets did not include any lease extension options. We have lease agreements with lease and non-lease components and have elected to account for these as a single lease component only for equipment leases. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. The components of lease expense are as follows: Three Months Ended Operating lease cost $ 13 Finance lease cost: Amortization of assets 347 Interest on lease liabilities 88 Variable lease cost — Total net lease cost $ 448 Short-term lease cost amounted to $70 for the three months ended April 3, 2022. Supplemental cash flow information related to leases are as follows: Three Months Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for operating leases $ 12 Operating cash flows used for finance leases 88 Financing cash flows used for finance leases 334 Right of use assets obtained in exchange for lease liabilities: Operating leases 184 Finance leases 9,035 The weighted average remaining lease term and weighted average discount rates related to leases are as follows: April 3, 2022 Weighted average remaining lease term: Operating leases 3.8 years Finance leases 13.2 years Weighted average discount rate: Operating leases 4.8% Finance leases 8.5% Supplemental balance sheet information related to leases is as follows: Leases Classification April 3, 2022 Assets Operating lease right-of-use assets Other assets $ 174 Finance lease right-of-use assets Property and equipment, net 11,135 Total lease right-of-use assets $ 11,309 Operating lease liabilities Current portion of operating lease liabilities Accrued expenses $ 42 Operating lease liabilities, excluding current portion Other long-term liabilities 132 Total operating lease liabilities 174 Finance lease liabilities Current portion of finance lease liabilities Accrued expenses 1,597 Finance lease liabilities, excluding current portion Other long-term liabilities 9,523 Total finance lease liabilities 11,120 Total lease liabilities 11,294 Future maturities of lease liabilities as of April 3, 2022 are as follows: Fiscal Year Operating Leases Finance Leases Total Remainder of 2022 $ 36 $ 1,915 $ 1,951 2023 50 1,436 1,486 2024 51 1,212 1,263 2025 54 1,133 1,187 2026 — 1,135 1,135 Thereafter — 11,968 11,968 Total lease payments 191 18,799 18,990 Less imputed interest (17) (7,679) (7,696) Total lease liabilities $ 174 $ 11,120 $ 11,294 With the exception of the future minimum lease commitments related to our lease of the land and building representing our primary operating location in Bloomington, Minnesota, which are eliminated in consolidation, we had no disclosures in the prior year period related to leases. SkyWater as the Lessor In March 2020, we executed a contract with a customer that includes the right to use of a portion of our existing facility to produce wafers using the customer’s equipment. The contractual amount that relates to revenue from an operating lease was $21,000, and is being recognized over the estimated lease term of 4.5 years. The total amount was prepaid by the customer and recorded as deferred revenue. See Note 4 – Revenue |
Leases | Leases On January 3, 2022, we adopted ASU No. 2016-02, Leases , and all related amendments using the "Comparatives Under 840 Option" transition approach. Under this transition approach, comparative prior periods, including disclosures, were not restated. We elected the transition package of practical expedients which, among other things, allowed us to carry forward historical lease classification. We chose not to elect the hindsight practical expedient. The adoption of the standard did not have an impact on our condensed consolidated statements of operations and there was no adjustment to our retained earnings. We do not expect the adoption of the new standard to have a material impact on our operating results on an ongoing basis. The most significant impact of the new leases standard was the recognition of right-of-use assets and lease liabilities for operating leases, while our accounting for finance leases remained substantially unchanged. On January 3, 2022, the adoption of the new standard resulted in the recognition of a right-of-use asset of $184 and a lease liability of $184. We lease certain property and equipment, such as our headquarters in Minnesota, our office location in Florida and certain production equipment under finance leases. We also lease our manufacturing location in Florida and warehouse space in Minnesota under operating leases. We determine if an arrangement is a lease at inception. Leases with an initial term of 12 months or less are not recorded on the balance sheet. On April 1, 2022, we commenced a finance lease for a new nitrogen generator. The lease has a term of 15 years for total fixed payments of approximately $14,000. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease right-of-use assets are recognized at commencement date based on the present value of lease payments over the lease term. For leases that do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Some of our leases include options to extend the term, which is only included in the lease liability and right-of-use assets calculation when it is reasonably certain we will exercise that option. As of April 3, 2022, the operating lease liability and operating right-of-use assets did not include any lease extension options. We have lease agreements with lease and non-lease components and have elected to account for these as a single lease component only for equipment leases. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. The components of lease expense are as follows: Three Months Ended Operating lease cost $ 13 Finance lease cost: Amortization of assets 347 Interest on lease liabilities 88 Variable lease cost — Total net lease cost $ 448 Short-term lease cost amounted to $70 for the three months ended April 3, 2022. Supplemental cash flow information related to leases are as follows: Three Months Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for operating leases $ 12 Operating cash flows used for finance leases 88 Financing cash flows used for finance leases 334 Right of use assets obtained in exchange for lease liabilities: Operating leases 184 Finance leases 9,035 The weighted average remaining lease term and weighted average discount rates related to leases are as follows: April 3, 2022 Weighted average remaining lease term: Operating leases 3.8 years Finance leases 13.2 years Weighted average discount rate: Operating leases 4.8% Finance leases 8.5% Supplemental balance sheet information related to leases is as follows: Leases Classification April 3, 2022 Assets Operating lease right-of-use assets Other assets $ 174 Finance lease right-of-use assets Property and equipment, net 11,135 Total lease right-of-use assets $ 11,309 Operating lease liabilities Current portion of operating lease liabilities Accrued expenses $ 42 Operating lease liabilities, excluding current portion Other long-term liabilities 132 Total operating lease liabilities 174 Finance lease liabilities Current portion of finance lease liabilities Accrued expenses 1,597 Finance lease liabilities, excluding current portion Other long-term liabilities 9,523 Total finance lease liabilities 11,120 Total lease liabilities 11,294 Future maturities of lease liabilities as of April 3, 2022 are as follows: Fiscal Year Operating Leases Finance Leases Total Remainder of 2022 $ 36 $ 1,915 $ 1,951 2023 50 1,436 1,486 2024 51 1,212 1,263 2025 54 1,133 1,187 2026 — 1,135 1,135 Thereafter — 11,968 11,968 Total lease payments 191 18,799 18,990 Less imputed interest (17) (7,679) (7,696) Total lease liabilities $ 174 $ 11,120 $ 11,294 With the exception of the future minimum lease commitments related to our lease of the land and building representing our primary operating location in Bloomington, Minnesota, which are eliminated in consolidation, we had no disclosures in the prior year period related to leases. SkyWater as the Lessor In March 2020, we executed a contract with a customer that includes the right to use of a portion of our existing facility to produce wafers using the customer’s equipment. The contractual amount that relates to revenue from an operating lease was $21,000, and is being recognized over the estimated lease term of 4.5 years. The total amount was prepaid by the customer and recorded as deferred revenue. See Note 4 – Revenue |
Basis of Presentation and Pri_2
Basis of Presentation and Principles of Consolidation (Policies) | 3 Months Ended |
Apr. 03, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation | Principles of Consolidation Our condensed consolidated financial statements include our assets, liabilities, revenues, and expenses, as well as the assets, liabilities, revenues, and expenses of subsidiaries in which we have a controlling financial interest, SkyWater Technology Foundry, Inc. (“SkyWater Technology Foundry”), SkyWater Federal, LLC (“SkyWater Federal”), and SkyWater Florida, Inc. (“SkyWater Florida”), and variable interest entities (“VIE”) for which we are the primary beneficiary. All intercompany accounts and transactions have been eliminated in consolidation. The condensed consolidated statements of operations, shareholders’ equity (deficit) and cash flows are for the three months ended April 3, 2022 and April 4, 2021, each of which consisted of 13 weeks. |
Liquidity and Cash Requirements | Liquidity and Cash Requirements Our ability to execute our operating strategy is dependent on our ability to continue to access capital through our Revolver (as defined in Note 6 – Debt ) and other sources of financing. Our current business plans indicate that we will require additional liquidity to continue our operations for the next 12 months from the issuance of the consolidated financial statements. In response to this, we are in the process of implementing a plan to reduce operating costs to improve cash flow, which includes a reduction in spending and a delayed increase in personnel, and may require us to decrease our level of investment in new products and technologies, discontinue further expansion of our business, or scale back our existing operations. Management believes that its cash and cash equivalents on hand, available borrowings on our Revolver, and these cost reduction measures, as needed, will provide sufficient liquidity to fund its operations for the next 12 months from the issuance of the consolidated financial statements. The Company has based this estimate on assumptions that may prove to be wrong, and its operating plan may change as a result of many factors currently unknown to it. To the extent that our current resources and plans to reduce expenses are insufficient to satisfy our cash requirements, we may need to seek additional equity or debt financing. Our ability to do so depends on prevailing economic conditions and other factors, many of which are beyond our control. |
Use of Estimates | Use of Estimates The preparation of our condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Management evaluates these estimates and judgments on an ongoing basis and bases its estimates on experience, current and expected future conditions, third-party evaluations and various other assumptions that management believes are reasonable under the circumstances. Actual results could differ from those estimates. |
COVID-19 | COVID-19 In March 2020, the World Health Organization declared the novel coronavirus 2019 (“COVID-19”) outbreak a global pandemic. The COVID-19 pandemic has spread throughout the United States and the world, with the continued potential for significant impact. Our business has been adversely affected by the effects of the COVID-19 pandemic. We implemented modifications to employee travel and employee work locations, as required in some cases by federal, state and local authorities, which has had a negative impact on employee productivity. Because we have manufacturing operations, we may be vulnerable to an outbreak of a new coronavirus or other contagious diseases. Although we have not experienced a shutdown of our manufacturing facilities, the effects of such an outbreak could include the temporary shutdown of our operations or the operations of our customers, disruptions or restrictions on the ability to ship our products to our customers as well as disruptions that may affect our suppliers. Any disruption of our ability to manufacture or distribute our products, the ability of our suppliers to deliver key components on a timely basis, or our customers’ ability to order and take delivery of our products could have a material adverse effect on our revenue and operating results. The future broader implications of the pandemic remain uncertain and will depend on certain future developments, including the duration, scope and severity of the pandemic, the effectiveness of vaccines and the impact of our workforce of vaccine mandates. |
Net Loss Per Share | Net Loss Per Share We calculate basic and diluted net loss per common share in conformity with the two-class method required for companies with participating securities. Our previously outstanding Class B preferred units met the criteria of a participating security as they contained the rights to an 8% “preferred return” on the deemed original equity value of each such Class B preferred unit (accrued daily since the date of issuance of each such Class B preferred unit). Under the two-class method, income or losses are allocated between the common shareholders and the Class B preferred unitholders. The two-class method includes an allocation formula that determines income or loss per unit for each class according to preferred dividends and undistributed earnings or losses for the period. Our reported net loss for the three months ended April 4, 2021 is increased by the amount allocated to the Class B preferred units to arrive at the loss allocated to common shareholders for purposes of calculating net loss per share. As a result of our April 2021 corporate conversion and IPO, the number of common shares used to compute net loss per common share for the three months ended April 4, 2021 was retrospectively adjusted to reflect the conversion akin to a split-like situation. Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing |
Operating Segment Information | Operating Segment Information Operating segments are identified as components of an enterprise about which separate financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. We view our operations and manage our business as one operating segment. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In February 2016, the FASB issued Topic 842. The guidance in this ASU supersedes the leasing guidance in Topic 840, Leases. Under the new guidance, lessees are required to recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statement of operations. The standard is effective for public business entities for fiscal years beginning after December 15, 2018. As an emerging growth company, we adopted the new standard on January 3, 2022 for our year ending January 1, 2023. The adoption of Topic 842 did not have a material impact on our condensed consolidated financial statements as disclosed in Note 15 – Leases . In June 2016, the FASB issued a new credit loss accounting standard, ASU 2016-13, Current Expected Credit Losses (“Topic 326”). This guidance replaces the current allowance for loan and lease loss accounting standard and focuses on estimation of expected losses over the life of the loans instead of relying on incurred losses. The standard is effective for certain public business entities for fiscal years beginning after December 15, 2019. As an emerging growth company, we intend to adopt the new standard on January 2, 2023 for our year ending December 31, 2023. However if we lose our emerging growth |
Basis of Presentation and Pri_3
Basis of Presentation and Principles of Consolidation (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Computation of Basic and Diluted Net Loss Per Common Share | The following table sets forth the computation of basic and diluted net loss per common share for the three months ended April 3, 2022 and April 4, 2021: Three Months Ended April 3, 2022 April 4, 2021 (in thousands, except per share data) Numerator: Net loss attributable to SkyWater Technology, Inc. $ (16,606) $ (2,811) Undistributed preferred return to Class B preferred unitholders — (359) Net loss attributable to common shareholders $ (16,606) $ (3,170) Denominator: Weighted-average common shares outstanding, basic and diluted (1) 39,862 3,060 Net loss per common share, basic and diluted $ (0.42) $ (1.04) __________________ |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregated Revenue | The following table discloses revenue by product type and the timing of recognition of revenue for transfer of goods and services to customers: Three Months Ended April 3, 2022 Topic 606 Revenue Point-in-Time Over Time Lease Revenue Total Revenue Wafer Services $ 13,205 $ 8,341 $ — $ 21,546 Advanced Technology Services T&M — 18,908 — 18,908 Fixed Price — 6,500 — 6,500 Other — — 1,167 1,167 Total Advanced Technology Services — 25,408 1,167 26,575 Total revenue $ 13,205 $ 33,749 $ 1,167 $ 48,121 Three Months Ended April 4, 2021 Topic 606 Revenue Point-in-Time Over Time Lease Revenue Total Revenue Wafer Services $ 10,019 $ — $ — $ 10,019 Advanced Technology Services T&M — 10,792 — 10,792 Fixed Price — 26,123 — 26,123 Other — — 1,167 1,167 Total Advanced Technology Services — 36,915 1,167 38,082 Total revenue $ 10,019 $ 36,915 $ 1,167 $ 48,101 |
Schedule of Revenue by Country | The following table discloses revenue by country as determined based on customer address: Three Months Ended April 3, 2022 April 4, 2021 United States $ 42,359 $ 43,621 United Kingdom 1,781 2,086 Canada 1,670 1,609 All others 2,311 785 $ 48,121 $ 48,101 |
Schedule of Contract Liabilities | The contract liabilities and other significant components of deferred revenue are as follows: April 3, 2022 January 2, 2022 Contract Deferred Total Contract Deferred Total Current $ 18,606 $ 4,667 $ 23,273 $ 16,141 $ 4,667 $ 20,808 Long-term 72,833 10,111 82,944 76,816 11,278 88,094 Total $ 91,439 $ 14,778 $ 106,217 $ 92,957 $ 15,945 $ 108,902 |
Schedule of Performance Obligations | We expect to recognize those remaining performance obligations as follows: Within one year $ 17,070 From one to two years 17,992 From two to three years 10,968 After three years 43,873 Total $ 89,903 |
Balance Sheet Information (Tabl
Balance Sheet Information (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
Balance Sheet Information [Abstract] | |
Schedule of Accounts Receivable, Net | Certain significant amounts included in our condensed consolidated balance sheets consist of the following: April 3, 2022 January 2, 2022 Accounts receivable, net: Trade accounts receivable $ 21,491 $ 23,022 Unbilled revenue (contract assets) 26,207 16,303 Other receivables — 56 Total accounts receivable, net $ 47,698 $ 39,381 |
Schedule of Inventories | April 3, 2022 January 2, 2022 Inventories: Raw materials $ 3,865 $ 3,340 Work-in-process 1,390 7,339 Supplies and spare parts 7,858 6,821 Total inventories—current 13,113 17,500 Supplies and spare parts classified as other assets 2,252 2,388 Total inventories $ 15,365 $ 19,888 |
Schedule of Prepaid Expenses and Other Current Assets | April 3, 2022 January 2, 2022 Prepaid expenses and other current assets: Prepaid expenses $ 3,116 $ 1,759 Deferred contract costs 2,785 1,579 Prepaid inventory 516 516 Total prepaid assets and other current assets $ 6,417 $ 3,854 |
Schedule of Property and Equipment, Net | April 3, 2022 January 2, 2022 Property and equipment, net: Land $ 5,396 $ 5,396 Buildings and improvements 87,396 87,156 Machinery and equipment 173,924 143,105 Fixed assets not yet in service 11,059 29,229 Total property and equipment, at cost 277,775 264,886 Less: Accumulated depreciation (90,411) (84,411) Total property and equipment, net $ 187,364 $ 180,475 |
Schedule of Intangible Assets | Intangible assets are summarized as follows: April 3, 2022 January 2, 2022 Intangible assets, net: Software and licensed technology $ 8,653 $ 6,625 Customer list — 1,500 Total intangible assets, at cost 8,653 8,125 Less: Accumulated amortization (3,159) (4,234) Total intangible assets, net $ 5,494 $ 3,891 |
Schedule of Remaining Estimated Aggregate Annual Amortization Expense | Remaining estimated aggregate annual amortization expense is as follows for the years ending: Amortization Remainder of 2022 $ 1,403 2023 1,429 2024 754 2025 601 2026 433 Thereafter 874 Total $ 5,494 |
Schedule of Other Assets | April 3, 2022 January 2, 2022 Other assets: Supplies and spare parts $ 2,252 $ 2,388 Deferred contract costs 862 1,760 Other assets 1,297 687 Total other assets $ 4,411 $ 4,835 |
Schedule of Accrued Expenses | April 3, 2022 January 2, 2022 Accrued expenses: Accrued compensation $ 5,596 $ 4,557 Patents and licensed technology obligations 2,000 — Accrued commissions 241 189 Accrued fixed asset expenditures 1,252 861 Accrued royalties 2,586 1,854 Capital lease obligations 1,597 1,192 Other accrued expenses 10,810 8,830 Total accrued expenses $ 24,082 $ 17,483 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Outstanding | The components of debt outstanding are as follows: April 3, 2022 January 2, 2022 Revolver $ 35,615 $ 26,223 Financing (by VIE) 37,593 37,850 Unamortized debt issuance costs (1) (4,451) (4,624) Total long-term debt, including current maturities 68,757 59,449 Less: Current portion of long-term debt (1,030) (1,021) Long-term debt, excluding current portion and unamortized debt issuance costs $ 67,727 $ 58,428 __________________ (1) Unamortized debt issuance costs as of April 3, 2022 included $1,379 for the Revolver (as defined below) and $3,072 for the Financing (as defined below). Unamortized debt issuance costs as of January 2, 2022 included $1,471 for the Revolver and $3,153 for the Financing (by VIE). |
Summary of Future Principal Payments | Future principal payments of our Revolver and consolidated VIE’s Financing, excluding unamortized debt issuance costs, are as follows: Remainder of 2022 $ 767 2023 1,060 2024 1,094 2025 36,749 2026 1,177 Thereafter 32,361 Total $ 73,208 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Black-Scholes Option Pricing Model Assumptions | Three Months Ended April 3, 2022 Expected volatility: 47.2% Expected term (in years): 6.25 Risk-free interest rate: 1.9% |
Schedule of Stock Option Activity | The following table summarizes our stock option activity during the three months ended April 3, 2022: Number of Stock Options Weighted Average Aggregate Intrinsic Value Weighted-Average Remaining Contractual Life Balance outstanding as of January 2, 2022 986 $ 14.29 Granted 549 $ 11.24 Exercised — $ — Forfeited or canceled (99) $ 13.25 Balance outstanding as of April 3, 2022 1,436 $ 13.20 $ — 7.4 years Balance vested and exercisable as of April 3, 2022 22 $ 14.00 $ — 0.2 years |
Schedule of Restricted Common Stock Unit Activity | The following table summarizes our restricted common stock unit activity during the three months ended April 3, 2022: Number of Restricted Common Stock Units Weighted Average Grant Date Fair Value Per Share Balance outstanding as of January 2, 2022 1,745 $ 8.34 Granted 273 $ 11.24 Vested — $ — Forfeited or canceled (40) $ 16.57 Balance outstanding as of April 3, 2022 1,978 $ 8.52 |
Schedule of Black-Scholes ESPP Pricing Model Assumptions | Three Months Ended Expected volatility: 47.2% Expected term (in years): 0.50 Risk-free interest rate: 0.60% Weighted average grant-date fair value per share $3.20 |
Schedule of Share-based Compensation Expense | Share-based compensation expense was allocated in the condensed consolidated statements of operations as follows: Three Months Ended April 3, 2022 April 4, 2021 Cost of revenue $ 1,040 $ — Research and development 207 — Selling, general and administrative expenses 1,760 5 $ 3,007 $ 5 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Change in Level 3 Assets Measured at Fair Value On a Recurring Basis | Level 3 inputs are used in the valuation of our contingent consideration obligation. The change in level 3 assets measured at fair value on a recurring basis is summarized as follows: Three Months Ended April 3, 2022 April 4, 2021 Beginning balance $ 816 $ 10,900 Payments — (3,356) Change in fair value — 56 Ending balance $ 816 $ 7,600 |
Major Customers and Concentra_2
Major Customers and Concentration Risk (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
Risks and Uncertainties [Abstract] | |
Summary of Concentration Risk Percentage of Customers | The following customers accounted for 10% or more of revenue for the three months ended April 3, 2022 and April 4, 2021: Three Months Ended April 3, 2022 April 4, 2021 Customer A 16 % 37 % Customer B 40 % 19 % Customer C * 10 % 56 % 66 % __________________ * Represents less than 10% of revenue. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
Related Party Transactions [Abstract] | |
Schedule of Future Minimum Lease Commitments | Future minimum lease commitments to Oxbow Realty as of April 3, 2022 were as follows (such amounts are eliminated from our condensed consolidated financial statements due to the consolidation of Oxbow Realty, see Note 14 – Variable Interest Entities ): Remainder of 2022 $ 3,631 2023 4,932 2024 5,031 2025 5,132 2026 5,234 Thereafter 84,116 Total lease payments 108,076 Less: imputed interest (80,660) Total $ 27,416 Future maturities of lease liabilities as of April 3, 2022 are as follows: Fiscal Year Operating Leases Finance Leases Total Remainder of 2022 $ 36 $ 1,915 $ 1,951 2023 50 1,436 1,486 2024 51 1,212 1,263 2025 54 1,133 1,187 2026 — 1,135 1,135 Thereafter — 11,968 11,968 Total lease payments 191 18,799 18,990 Less imputed interest (17) (7,679) (7,696) Total lease liabilities $ 174 $ 11,120 $ 11,294 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of VIE Condensed Balance Sheet Statements | The following table shows the carrying amounts of assets and liabilities of Oxbow Realty that are consolidated by us as of April 3, 2022 and January 2, 2022. The assets and liabilities are presented prior to consolidation, and thus a portion of these assets and liabilities are eliminated in consolidation. April 3, 2022 January 2, Cash and cash equivalents $ 240 $ 475 Prepaid expenses 424 192 Finance receivable 37,492 37,437 Other assets 256 200 Total assets $38,412 $38,304 Accounts payable $ 855 $ 1,232 Accrued expenses 697 479 Debt 37,538 37,793 Total liabilities $39,090 $39,504 |
Schedule of VIE Condensed Income Statements | The following table shows the revenue and expenses of Oxbow Realty that are consolidated by us for the three months ended April 3, 2022 and April 4, 2021. We have included these amounts, net of eliminations, in the corresponding tables in the notes to our condensed consolidated financial statements. Three Months Ended April 3, 2022 April 4, 2021 Revenue $ 1,260 $ 1,345 General and administrative expenses 77 252 Interest expense 324 335 Total expenses 401 587 Net income $ 859 $ 758 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Apr. 03, 2022 | |
Leases [Abstract] | |
Schedule of Lease Costs | The components of lease expense are as follows: Three Months Ended Operating lease cost $ 13 Finance lease cost: Amortization of assets 347 Interest on lease liabilities 88 Variable lease cost — Total net lease cost $ 448 Supplemental cash flow information related to leases are as follows: Three Months Ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used for operating leases $ 12 Operating cash flows used for finance leases 88 Financing cash flows used for finance leases 334 Right of use assets obtained in exchange for lease liabilities: Operating leases 184 Finance leases 9,035 The weighted average remaining lease term and weighted average discount rates related to leases are as follows: April 3, 2022 Weighted average remaining lease term: Operating leases 3.8 years Finance leases 13.2 years Weighted average discount rate: Operating leases 4.8% Finance leases 8.5% |
Schedule of Balance Sheet Lease Information | Supplemental balance sheet information related to leases is as follows: Leases Classification April 3, 2022 Assets Operating lease right-of-use assets Other assets $ 174 Finance lease right-of-use assets Property and equipment, net 11,135 Total lease right-of-use assets $ 11,309 Operating lease liabilities Current portion of operating lease liabilities Accrued expenses $ 42 Operating lease liabilities, excluding current portion Other long-term liabilities 132 Total operating lease liabilities 174 Finance lease liabilities Current portion of finance lease liabilities Accrued expenses 1,597 Finance lease liabilities, excluding current portion Other long-term liabilities 9,523 Total finance lease liabilities 11,120 Total lease liabilities 11,294 |
Schedule of Maturities of Operating Lease Liabilities | Future minimum lease commitments to Oxbow Realty as of April 3, 2022 were as follows (such amounts are eliminated from our condensed consolidated financial statements due to the consolidation of Oxbow Realty, see Note 14 – Variable Interest Entities ): Remainder of 2022 $ 3,631 2023 4,932 2024 5,031 2025 5,132 2026 5,234 Thereafter 84,116 Total lease payments 108,076 Less: imputed interest (80,660) Total $ 27,416 Future maturities of lease liabilities as of April 3, 2022 are as follows: Fiscal Year Operating Leases Finance Leases Total Remainder of 2022 $ 36 $ 1,915 $ 1,951 2023 50 1,436 1,486 2024 51 1,212 1,263 2025 54 1,133 1,187 2026 — 1,135 1,135 Thereafter — 11,968 11,968 Total lease payments 191 18,799 18,990 Less imputed interest (17) (7,679) (7,696) Total lease liabilities $ 174 $ 11,120 $ 11,294 |
Schedule of Maturities of Finance Lease Liabilities | Future maturities of lease liabilities as of April 3, 2022 are as follows: Fiscal Year Operating Leases Finance Leases Total Remainder of 2022 $ 36 $ 1,915 $ 1,951 2023 50 1,436 1,486 2024 51 1,212 1,263 2025 54 1,133 1,187 2026 — 1,135 1,135 Thereafter — 11,968 11,968 Total lease payments 191 18,799 18,990 Less imputed interest (17) (7,679) (7,696) Total lease liabilities $ 174 $ 11,120 $ 11,294 |
Nature of Business (Details)
Nature of Business (Details) | Apr. 23, 2021shares |
IPO | Common Stock | |
Organization, Consolidation And Presentation Of Financial Statements [Line Items] | |
Shares issued in public offering (in shares) | 8,004,000 |
Basis of Presentation and Pri_4
Basis of Presentation and Principles of Consolidation - Narrative (Details) | Apr. 03, 2022shares | Apr. 04, 2021shares | Apr. 03, 2022segment |
Organization, Consolidation And Presentation Of Financial Statements [Line Items] | |||
Number of operating segments | segment | 1 | ||
Restricted Stock Units And Stock Options | |||
Organization, Consolidation And Presentation Of Financial Statements [Line Items] | |||
Units excluded from computation (in shares) | shares | 3,414,000 | 2,329,000 | |
Class B Units | |||
Organization, Consolidation And Presentation Of Financial Statements [Line Items] | |||
Preferred units rate of return | 8.00% |
Basis of Presentation and Pri_5
Basis of Presentation and Principles of Consolidation - Schedule of Basic And Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 14, 2021 | Apr. 03, 2022 | Apr. 04, 2021 |
Numerator: | |||
Net loss attributable to SkyWater Technology, Inc. | $ (16,606) | $ (2,811) | |
Undistributed preferred return to Class B preferred unitholders, basic | 0 | (359) | |
Undistributed preferred return to Class B preferred unitholders, diluted | 0 | (359) | |
Net loss attributable to common shareholders, basic | (16,606) | (3,170) | |
Net loss attributable to common shareholders, diluted | $ (16,606) | $ (3,170) | |
Denominator: | |||
Weighted average shares outstanding, basic (in shares) | 39,861,688 | 3,060,343 | |
Weighted average shares outstanding, diluted (in shares) | 39,861,688 | 3,060,343 | |
Net loss per share, basic (in USD per share) | $ (0.42) | $ (1.04) | |
Net loss per share, diluted (in USD per share) | $ (0.42) | $ (1.04) | |
Common Units | |||
Denominator: | |||
Number of units converted (in shares) | 2,105,936 | ||
Common Stock | |||
Denominator: | |||
Conversion of units (in shares) | 31,055,743 | ||
Common Stock | Common Unit Holders | |||
Denominator: | |||
Conversion of units (in shares) | 3,060,343 | 3,060,343 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 03, 2022 | Apr. 04, 2021 | Jan. 02, 2022 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Amortization of deferred contract costs | $ 195 | $ 551 | |
Contract assets | $ 26,207 | $ 16,303 | |
Percentage of contract liabilities recognized in revenue | 3.00% | 15.00% | |
Revenue obligation amount | $ 89,903 | ||
Wafer Services | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Deferred revenue recognized | 8,230 | ||
Contract assets | $ 8,230 |
Revenue - Summary of Disaggrega
Revenue - Summary of Disaggregated Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Lease Revenue | $ 1,167 | $ 1,167 |
Total Revenue | 48,121 | 48,101 |
Point-in-Time | ||
Disaggregation of Revenue [Line Items] | ||
Topic 606 Revenue | 13,205 | 10,019 |
Over Time | ||
Disaggregation of Revenue [Line Items] | ||
Topic 606 Revenue | 33,749 | 36,915 |
Wafer Services | ||
Disaggregation of Revenue [Line Items] | ||
Lease Revenue | 0 | 0 |
Total Revenue | 21,546 | 10,019 |
Wafer Services | Point-in-Time | ||
Disaggregation of Revenue [Line Items] | ||
Topic 606 Revenue | 13,205 | 10,019 |
Wafer Services | Over Time | ||
Disaggregation of Revenue [Line Items] | ||
Topic 606 Revenue | 8,341 | 0 |
Total Advanced Technology Services | ||
Disaggregation of Revenue [Line Items] | ||
Lease Revenue | 1,167 | 1,167 |
Total Revenue | 26,575 | 38,082 |
Total Advanced Technology Services | Point-in-Time | ||
Disaggregation of Revenue [Line Items] | ||
Topic 606 Revenue | 0 | 0 |
Total Advanced Technology Services | Over Time | ||
Disaggregation of Revenue [Line Items] | ||
Topic 606 Revenue | 25,408 | 36,915 |
T&M | ||
Disaggregation of Revenue [Line Items] | ||
Lease Revenue | 0 | 0 |
Total Revenue | 18,908 | 10,792 |
T&M | Point-in-Time | ||
Disaggregation of Revenue [Line Items] | ||
Topic 606 Revenue | 0 | 0 |
T&M | Over Time | ||
Disaggregation of Revenue [Line Items] | ||
Topic 606 Revenue | 18,908 | 10,792 |
Fixed Price | ||
Disaggregation of Revenue [Line Items] | ||
Lease Revenue | 0 | 0 |
Total Revenue | 6,500 | 26,123 |
Fixed Price | Point-in-Time | ||
Disaggregation of Revenue [Line Items] | ||
Topic 606 Revenue | 0 | 0 |
Fixed Price | Over Time | ||
Disaggregation of Revenue [Line Items] | ||
Topic 606 Revenue | 6,500 | 26,123 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Lease Revenue | 1,167 | 1,167 |
Total Revenue | 1,167 | 1,167 |
Other | Point-in-Time | ||
Disaggregation of Revenue [Line Items] | ||
Topic 606 Revenue | 0 | 0 |
Other | Over Time | ||
Disaggregation of Revenue [Line Items] | ||
Topic 606 Revenue | $ 0 | $ 0 |
Revenue - Summary of Revenue by
Revenue - Summary of Revenue by Country (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 48,121 | $ 48,101 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 42,359 | 43,621 |
United Kingdom | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,781 | 2,086 |
Canada | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,670 | 1,609 |
All others | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 2,311 | $ 785 |
Revenue - Summary of Contract L
Revenue - Summary of Contract Liabilities (Details) - USD ($) $ in Thousands | Apr. 03, 2022 | Jan. 02, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Current contract liabilities | $ 18,606 | $ 16,141 |
Long-term contract liabilities | 72,833 | 76,816 |
Total contract liabilities | 91,439 | 92,957 |
Current deferred lease revenue | 4,667 | 4,667 |
Long-term deferred lease revenue | 10,111 | 11,278 |
Total deferred lease revenue | 14,778 | 15,945 |
Current deferred revenue | 23,273 | 20,808 |
Long-term deferred revenue | 82,944 | 88,094 |
Total deferred revenue | $ 106,217 | $ 108,902 |
Revenue - Summary of Performanc
Revenue - Summary of Performance Obligations (Details) $ in Thousands | Apr. 03, 2022USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue obligation amount | $ 89,903 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-04 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue obligation amount | $ 17,070 |
Revenue recognition period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-02 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue obligation amount | $ 17,992 |
Revenue recognition period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue obligation amount | $ 10,968 |
Revenue recognition period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-03-31 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue obligation amount | $ 43,873 |
Revenue recognition period | 12 months |
Balance Sheet Information - Sum
Balance Sheet Information - Summary of Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Apr. 03, 2022 | Jan. 02, 2022 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable, net | $ 47,698 | $ 39,381 |
Trade accounts receivable | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable, net | 21,491 | 23,022 |
Unbilled revenue (contract assets) | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable, net | 26,207 | 16,303 |
Other receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total accounts receivable, net | $ 0 | $ 56 |
Balance Sheet Information - S_2
Balance Sheet Information - Summary Of Inventories (Details) - USD ($) $ in Thousands | Apr. 03, 2022 | Jan. 02, 2022 |
Balance Sheet Information [Abstract] | ||
Raw materials | $ 3,865 | $ 3,340 |
Work-in-process | 1,390 | 7,339 |
Supplies and spare parts | 7,858 | 6,821 |
Total inventories—current | 13,113 | 17,500 |
Supplies and spare parts classified as other assets | 2,252 | 2,388 |
Total inventories | $ 15,365 | $ 19,888 |
Balance Sheet Information - S_3
Balance Sheet Information - Summary of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Apr. 03, 2022 | Jan. 02, 2022 |
Balance Sheet Information [Abstract] | ||
Prepaid expenses | $ 3,116 | $ 1,759 |
Deferred contract costs | 2,785 | 1,579 |
Prepaid inventory | 516 | 516 |
Total prepaid assets and other current assets | $ 6,417 | $ 3,854 |
Balance Sheet Information - S_4
Balance Sheet Information - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Apr. 03, 2022 | Jan. 02, 2022 |
Balance Sheet Information [Abstract] | ||
Land | $ 5,396 | $ 5,396 |
Buildings and improvements | 87,396 | 87,156 |
Machinery and equipment | 173,924 | 143,105 |
Fixed assets not yet in service | 11,059 | 29,229 |
Total property and equipment, at cost | 277,775 | 264,886 |
Less: Accumulated depreciation | (90,411) | (84,411) |
Total property and equipment, net | $ 187,364 | $ 180,475 |
Balance Sheet Information - Nar
Balance Sheet Information - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 11 Months Ended | |
Dec. 31, 2021 | Apr. 03, 2022 | Apr. 04, 2021 | Nov. 30, 2021 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation expense | $ 6,031 | $ 6,047 | ||
Cumulative Effect, Period of Adoption, Adjustment | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation expense | (445) | |||
Machinery And Equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful lives | 10 years | 7 years | ||
Software and licensed technology | ||||
Property, Plant and Equipment [Line Items] | ||||
Acquired third-party intangible assets | $ 2,028 | |||
Weighted average estimated life of acquired intangibles | 8 years 9 months 18 days | |||
Amortization of intangible assets | $ 425 | 347 | ||
Customer list | ||||
Property, Plant and Equipment [Line Items] | ||||
Amortization of intangible assets | $ 0 | $ 88 |
Balance Sheet Information - S_5
Balance Sheet Information - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | Apr. 03, 2022 | Jan. 02, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, at cost | $ 8,653 | $ 8,125 |
Less: Accumulated amortization | (3,159) | (4,234) |
Total intangible assets, net | 5,494 | 3,891 |
Software and licensed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, at cost | 8,653 | 6,625 |
Customer list | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, at cost | $ 0 | $ 1,500 |
Balance Sheet Information - S_6
Balance Sheet Information - Summary of Remaining Estimated Aggregate Annual Amortization Expense (Details) - USD ($) $ in Thousands | Apr. 03, 2022 | Jan. 02, 2022 |
Balance Sheet Information [Abstract] | ||
Remainder of 2022 | $ 1,403 | |
2023 | 1,429 | |
2024 | 754 | |
2025 | 601 | |
2026 | 433 | |
Thereafter | 874 | |
Total intangible assets, net | $ 5,494 | $ 3,891 |
Balance Sheet Information - S_7
Balance Sheet Information - Summary of Other Assets (Details) - USD ($) $ in Thousands | Apr. 03, 2022 | Jan. 02, 2022 |
Balance Sheet Information [Abstract] | ||
Supplies and spare parts | $ 2,252 | $ 2,388 |
Deferred contract costs | 862 | 1,760 |
Other assets | 1,297 | 687 |
Total other assets | $ 4,411 | $ 4,835 |
Balance Sheet Information - S_8
Balance Sheet Information - Summary of Accrued Expenses (Details) - USD ($) $ in Thousands | Apr. 03, 2022 | Jan. 02, 2022 |
Balance Sheet Information [Abstract] | ||
Accrued compensation | $ 5,596 | $ 4,557 |
Patents and licensed technology obligations | 2,000 | 0 |
Accrued commissions | 241 | 189 |
Accrued fixed asset expenditures | 1,252 | 861 |
Accrued royalties | 2,586 | 1,854 |
Capital lease obligations | 1,597 | 1,192 |
Other accrued expenses | 10,810 | 8,830 |
Total accrued expenses | $ 24,082 | $ 17,483 |
Debt - Summary of Debt Outstand
Debt - Summary of Debt Outstanding (Details) - USD ($) $ in Thousands | Apr. 03, 2022 | Jan. 02, 2022 |
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | $ (4,451) | $ (4,624) |
Total long-term debt, including current maturities | 68,757 | 59,449 |
Less: Current portion of long-term debt | (1,030) | (1,021) |
Long-term debt, excluding current portion and unamortized debt issuance costs | 67,727 | 58,428 |
Revolver | ||
Debt Instrument [Line Items] | ||
Long-term debt | 35,615 | 26,223 |
Unamortized debt issuance costs | 1,379 | 1,471 |
Financing (by VIE) | VIEs | ||
Debt Instrument [Line Items] | ||
Long-term debt | 37,593 | 37,850 |
Unamortized debt issuance costs | $ 3,072 | $ 3,153 |
Debt - Narrative (Details)
Debt - Narrative (Details) - Revolver - USD ($) | Apr. 03, 2022 | Apr. 03, 2022 | Jan. 02, 2022 |
Debt Instrument [Line Items] | |||
Outstanding balance of loan | $ 35,615,000 | $ 35,615,000 | $ 26,223,000 |
Debt instrument, periodic payment | $ 194,000 | ||
Debt instrument, term | 10 years | ||
Wells Fargo Bank | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 2.90% | 2.90% | |
Remaining balance of revolver | $ 29,101,000 | $ 29,101,000 | |
Minimum remaining availability required under revolver covenant | $ 15,000,000 | $ 15,000,000 |
Debt - Summary of Future Princi
Debt - Summary of Future Principal Payments (Details) - Line of Credit And Loans Payable $ in Thousands | Apr. 03, 2022USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
Remainder of 2022 | $ 767 |
2023 | 1,060 |
2024 | 1,094 |
2025 | 36,749 |
2026 | 1,177 |
Thereafter | 32,361 |
Total | $ 73,208 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | ||
Apr. 03, 2022 | Apr. 04, 2021 | Jan. 02, 2022 | |
Income Tax Disclosure [Abstract] | |||
Effective income tax rate | 1.20% | 17.20% | |
Federal statutory income tax rate | 21.00% | ||
Valuation allowance | $ 12,918,000 | $ 9,819,000 | |
Penalties and interest expense | $ 0 | $ 0 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 23, 2021 | Apr. 14, 2021 | Apr. 03, 2022 | Apr. 04, 2021 | Jan. 02, 2022 |
Class of Stock [Line Items] | |||||
Common shares authorized (in shares) | 200,000,000 | 200,000,000 | 200,000,000 | ||
Common shares, per share (in USD per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||
Preferred shares authorized (in shares) | 80,000,000 | 80,000,000 | 80,000,000 | ||
Preferred shares, per share (in USD per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||
Common shares, issued (in shares) | 39,904,690 | 39,836,038 | |||
Preferred shares outstanding (in shares) | 0 | 0 | |||
Stock offering costs | $ 0 | $ 1,199 | |||
IPO | |||||
Class of Stock [Line Items] | |||||
Underwriting discounts and commissions | $ 7,844 | ||||
Stock offering costs | $ 4,050 | ||||
Class A Units | |||||
Class of Stock [Line Items] | |||||
Preferred units issued (in shares) | 0 | ||||
Preferred units outstanding (in shares) | 0 | ||||
Common Stock | |||||
Class of Stock [Line Items] | |||||
Conversion of units (in shares) | 31,055,743 | ||||
Common Stock | IPO | |||||
Class of Stock [Line Items] | |||||
Shares issued in public offering (in shares) | 8,004,000 | ||||
Public offering price per share (in USD per share) | $ 14 | ||||
Proceeds from public offering | $ 100,162 | ||||
Common Stock | Class B Preferred Unitholders | |||||
Class of Stock [Line Items] | |||||
Conversion of units (in shares) | 27,995,400 | ||||
Common Stock | Common Unit Holders | |||||
Class of Stock [Line Items] | |||||
Conversion of units (in shares) | 3,060,343 | 3,060,343 | |||
Class B Units | |||||
Class of Stock [Line Items] | |||||
Preferred units rate of return | 8.00% |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 23, 2021 | Apr. 04, 2021 | Apr. 03, 2022 | Apr. 04, 2021 | Jan. 02, 2022 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares available for issuance (in shares) | 5,150,000 | ||||
Annual increase of number of shares reserved for issuance (in shares) | 150,000 | ||||
Annual percent increase of number of shares reserved for issuance | 3.00% | ||||
Number of stock options granted (in shares) | 549,000 | 0 | |||
Share-based compensation expense | $ 3,007 | $ 5 | |||
Weighted average grant-date fair value of options granted | $ 5.37 | ||||
Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expiration period of options granted | 10 years | ||||
Share-based compensation expense | $ 423 | 0 | |||
Unrecognized compensation cost | $ 5,782 | ||||
Weighted average period of recognition for unrecognized compensation cost | 3 years 6 months | ||||
Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ 2,377 | $ 0 | |||
Unrecognized compensation cost | $ 7,511 | ||||
Weighted average period of recognition for unrecognized compensation cost | 1 year 9 months 18 days | ||||
Units granted (in shares) | 263,000 | 0 | |||
RSUs vested (in shares) | 0 | 0 | |||
Restricted Stock Units (RSUs) | Newly Appointed Directors | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Units granted (in shares) | 10,000 | ||||
Employee Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ 207 | ||||
Unrecognized compensation cost | $ 381 | ||||
Common stock reserved for ESPP issuance (in shares) | 707,000 | ||||
Percentage of earnings applied to purchase of stock under ESPP | 15.00% | ||||
Shares available for purchase by an employee at each offering period (in shares) | 2,500 | ||||
Shares available for purchase by an employee at each offering period (in shares) | 69,000 | ||||
Amount withheld on behalf employees for future purchases | $ 351 | $ 937 | |||
Employee Stock | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage of fair value of shares at grant date to determine purchase price | 15.00% | ||||
Offering period | 27 months | ||||
Employee Stock | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Offering period | 6 months |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Option Pricing Model Assumption (Details) - Options | 3 Months Ended |
Apr. 03, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility: | 47.20% |
Expected term (in years): | 6 years 3 months |
Risk-free interest rate: | 1.90% |
Share-Based Compensation - Sc_2
Share-Based Compensation - Schedule of Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Number of Stock Options | ||
Number of stock options outstanding at beginning of period (in shares) | 986,000 | |
Number of stock options granted (in shares) | 549,000 | 0 |
Number of stock options exercised (in shares) | 0 | |
Number of stock options forfeited or canceled (in shares) | (99,000) | |
Number of stock options outstanding at end of period (in shares) | 1,436,000 | |
Number of stock options vested and exercisable (in shares) | 22,000 | |
Weighted Average Exercise Price Per Share | ||
Weighted average exercise of options outstanding at beginning of period (in USD per share) | $ 14.29 | |
Weighted average exercise of options granted (in USD per share) | 11.24 | |
Weighted average exercise of options exercised (in USD per share) | 0 | |
Weighted average exercise of options forfeited or canceled (in USD per share) | 13.25 | |
Weighted average exercise of options outstanding at end of period (in USD per share) | 13.20 | |
Weighted average exercise of options vested and exercisable (in USD per share) | $ 14 | |
Aggregate intrinsic value of shares outstanding | $ 0 | |
Aggregate intrinsic value of shares vested and exercisable | $ 0 | |
Weighted-average remaining contractual life of shares outstanding | 7 years 4 months 24 days | |
Weighted-average remaining contractual life of shares vested and exercisable | 2 months 12 days |
Share-Based Compensation - Sc_3
Share-Based Compensation - Schedule of RSU Activity (Details) - Restricted Stock Units (RSUs) - $ / shares | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Number of Restricted Common Stock Units | ||
RSUs outstanding at beginning of period (in shares) | 1,745,000 | |
RSUs granted (in shares) | 273,000 | |
RSUs vested (in shares) | 0 | 0 |
RSUs forfeited or canceled (in shares) | (40,000) | |
RSUs outstanding at end of period (in shares) | 1,978,000 | |
Weighted Average Grant Date Fair Value Per Share | ||
Weighted average grant date fair value of RSUs outstanding at beginning of period (in USD per share) | $ 8.34 | |
Weighted average grant date fair value of RSUs granted (in USD per share) | 11.24 | |
Weighted average grant date fair value of RSUs vested (in USD per share) | 0 | |
Weighted average grant date fair value of RSUs forfeited or canceled (in USD per share) | 16.57 | |
Weighted average grant date fair value of RSUs outstanding at end of period (in USD per share) | $ 8.52 |
Share-Based Compensation - Sc_4
Share-Based Compensation - Schedule of ESPP Pricing Model Assumption (Details) - Employee Stock | 3 Months Ended |
Apr. 03, 2022$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility: | 47.20% |
Expected term (in years): | 6 months |
Risk-free interest rate: | 0.60% |
Weighted average grant-date fair value per share | $ 3.20 |
Share-Based Compensation - Sc_5
Share-Based Compensation - Schedule of Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | $ 3,007 | $ 5 |
Cost of revenue | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | 1,040 | 0 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | 207 | 0 |
Selling, general and administrative expenses | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | $ 1,760 | $ 5 |
Fair Value Measurements (Detail
Fair Value Measurements (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Contingent consideration balance at beginning of period | $ 816 | $ 10,900 |
Payments | 0 | (3,356) |
Change in fair value | 0 | 56 |
Contingent consideration balance at end of period | $ 816 | $ 7,600 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Apr. 03, 2022USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual commitments outstanding | $ 10 |
Major Customers and Concentra_3
Major Customers and Concentration Risk (Details) - Customer Concentration Risk | 3 Months Ended | 12 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | Jan. 02, 2022 | |
Revenue Benchmark | Customer A | |||
Concentration Risk [Line Items] | |||
Customer percentage of revenue | 16.00% | 37.00% | |
Revenue Benchmark | Customer B | |||
Concentration Risk [Line Items] | |||
Customer percentage of revenue | 40.00% | 19.00% | |
Revenue Benchmark | Customer C | |||
Concentration Risk [Line Items] | |||
Customer percentage of revenue | 10.00% | ||
Revenue Benchmark | Major Customers | |||
Concentration Risk [Line Items] | |||
Customer percentage of revenue | 56.00% | 66.00% | |
Accounts Receivable | Customer One | |||
Concentration Risk [Line Items] | |||
Customer percentage of revenue | 33.00% | 25.00% | |
Accounts Receivable | Customer Two | |||
Concentration Risk [Line Items] | |||
Customer percentage of revenue | 29.00% | 12.00% |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) $ in Thousands | Sep. 29, 2020 | Apr. 03, 2022 | Apr. 04, 2021 |
Related Party Transaction [Line Items] | |||
Lease payment per month | $ 12 | ||
Oxbow Industries LLC | |||
Related Party Transaction [Line Items] | |||
Expenses from related party transaction | 0 | $ 160 | |
Board Of Directors | |||
Related Party Transaction [Line Items] | |||
Expenses from related party transaction | $ 0 | $ 116 | |
Oxbow Realty | |||
Related Party Transaction [Line Items] | |||
Lease payment per month | $ 394 | ||
Lease term | 20 years | ||
Annual percentage increase in monthly lease payments | 2.00% |
Related Party Transactions - Su
Related Party Transactions - Summary of Minimum Lease Payments Sale Lease back Transactions (Details) - USD ($) $ in Thousands | Apr. 03, 2022 | Jan. 03, 2022 |
Related Party Transaction [Line Items] | ||
Remainder of 2022 | $ 36 | |
2023 | 50 | |
2024 | 51 | |
2025 | 54 | |
2026 | 0 | |
Total lease payments | 191 | |
Less: imputed interest | (17) | |
Total | 174 | $ 184 |
Oxbow Realty | ||
Related Party Transaction [Line Items] | ||
Remainder of 2022 | 3,631 | |
2023 | 4,932 | |
2024 | 5,031 | |
2025 | 5,132 | |
2026 | 5,234 | |
Thereafter | 84,116 | |
Total lease payments | 108,076 | |
Less: imputed interest | (80,660) | |
Total | $ 27,416 |
Variable Interest Entities - Su
Variable Interest Entities - Summary of Condensed Balance Sheet Statements (Details) - USD ($) $ in Thousands | Apr. 03, 2022 | Jan. 02, 2022 |
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Cash and cash equivalents | $ 6,435 | $ 12,917 |
Total assets | 271,676 | 263,598 |
Total liabilities | 224,167 | 203,671 |
VIEs | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Cash and cash equivalents | 240 | 475 |
Prepaid expenses | 424 | 192 |
Finance receivable | 37,492 | 37,437 |
Other assets | 256 | 200 |
Total assets | 38,412 | 38,304 |
Accounts payable | 855 | 1,232 |
Accrued expenses | 697 | 479 |
Debt | 37,538 | 37,793 |
Total liabilities | $ 39,090 | $ 39,504 |
Variable Interest Entities - _2
Variable Interest Entities - Summary of Condensed Income Statements (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Condensed Income Statements, Captions [Line Items] | ||
Interest expense | $ 1,029 | $ 1,058 |
Net loss attributable to SkyWater Technology, Inc. | (16,606) | (2,811) |
VIEs | ||
Condensed Income Statements, Captions [Line Items] | ||
Revenue | 1,260 | 1,345 |
General and administrative expenses | 77 | 252 |
Interest expense | 324 | 335 |
Total expenses | 401 | 587 |
Net loss attributable to SkyWater Technology, Inc. | $ 859 | $ 758 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Apr. 03, 2022 | Apr. 01, 2022 | Jan. 03, 2022 | Jan. 02, 2022 | Mar. 31, 2020 | |
Leases [Abstract] | |||||
Operating lease right-of-use assets | $ 174 | $ 184 | |||
Total lease liabilities | 174 | $ 184 | |||
Finance lease term | 15 years | ||||
Finance lease | $ 14,000 | ||||
Short-term lease cost | 70 | ||||
Revenue from operating lease | $ 21,000 | ||||
Estimated lease term | 4 years 6 months | ||||
Carrying value, net of lease | 27,000 | ||||
Accumulated depreciation of carrying value of lease | $ 1,939 | $ 1,558 |
Leases - Lease Expense (Details
Leases - Lease Expense (Details) $ in Thousands | 3 Months Ended |
Apr. 03, 2022USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 13 |
Amortization of assets | 347 |
Interest on lease liabilities | 88 |
Variable lease cost | 0 |
Total net lease cost | $ 448 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 03, 2022 | Apr. 04, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows used for operating leases | $ 12 | |
Operating cash flows used for finance leases | 88 | |
Financing cash flows used for finance leases | 334 | $ 0 |
Right of use assets obtained in exchange for lease liabilities: | ||
Operating leases | 184 | |
Finance leases | $ 9,035 |
Leases - Weighted Average Lease
Leases - Weighted Average Lease Term and Discount Rates (Details) | Apr. 03, 2022 |
Weighted average remaining lease term: | |
Operating leases | 3 years 9 months 18 days |
Finance leases | 13 years 2 months 12 days |
Weighted average discount rate: | |
Operating leases | 4.80% |
Finance leases | 8.50% |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Apr. 03, 2022 | Jan. 03, 2022 | Jan. 02, 2022 |
Leases [Abstract] | |||
Operating lease right-of-use assets | $ 174 | $ 184 | |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other assets | ||
Finance lease right-of-use assets | $ 11,135 | ||
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property and equipment, net | ||
Total lease right-of-use assets | $ 11,309 | ||
Current portion of operating lease liabilities | $ 42 | ||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued expenses | ||
Operating lease liabilities, excluding current portion | $ 132 | ||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other long-term liabilities | ||
Total operating lease liabilities | $ 174 | $ 184 | |
Current portion of finance lease liabilities | $ 1,597 | $ 1,192 | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued expenses | ||
Finance lease liabilities, excluding current portion | $ 9,523 | ||
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other long-term liabilities | ||
Total finance lease liabilities | $ 11,120 | ||
Total lease liabilities | $ 11,294 |
Leases - Future Maturities of L
Leases - Future Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Apr. 03, 2022 | Jan. 03, 2022 |
Operating Leases | ||
Remainder of 2022 | $ 36 | |
2023 | 50 | |
2024 | 51 | |
2025 | 54 | |
2026 | 0 | |
Thereafter | 0 | |
Total lease payments | 191 | |
Less imputed interest | (17) | |
Total lease liabilities | 174 | $ 184 |
Finance Leases | ||
Remainder of 2022 | 1,915 | |
2023 | 1,436 | |
2024 | 1,212 | |
2025 | 1,133 | |
2026 | 1,135 | |
Thereafter | 11,968 | |
Total lease payments | 18,799 | |
Less imputed interest | (7,679) | |
Total lease liabilities | 11,120 | |
Total | ||
Remainder of 2022 | 1,951 | |
2023 | 1,486 | |
2024 | 1,263 | |
2025 | 1,187 | |
2026 | 1,135 | |
Thereafter | 11,968 | |
Total lease payments | 18,990 | |
Less imputed interest | (7,696) | |
Total lease liabilities | $ 11,294 |