Cover Page
Cover Page - shares | 3 Months Ended | |
Apr. 02, 2023 | May 10, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Apr. 02, 2023 | |
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 $0.01 per share | |
Trading Symbol | SKYT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 44,471,829 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001819974 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Apr. 02, 2023 | Jan. 01, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 13,840 | $ 30,025 |
Accounts receivable, net | 67,016 | 62,670 |
Inventories | 14,366 | 13,397 |
Prepaid expenses and other current assets | 12,457 | 10,290 |
Income tax receivable | 169 | 169 |
Total current assets | 107,848 | 116,551 |
Property and equipment, net | 175,368 | 179,915 |
Intangible assets, net | 5,324 | 5,608 |
Other assets | 4,286 | 3,690 |
Total assets | 292,826 | 305,764 |
Current liabilities: | ||
Current portion of long-term debt | 2,021 | 1,855 |
Accounts payable | 13,931 | 21,102 |
Accrued expenses | 26,264 | 25,212 |
Short-term financing, less unamortized debt issuance costs | 52,213 | 55,817 |
Deferred revenue - current | 28,168 | 28,186 |
Total current liabilities | 122,597 | 132,172 |
Long-term liabilities: | ||
Long-term debt, less current portion and net of unamortized debt issuance costs | 35,194 | 35,181 |
Long-term incentive plan | 0 | 1,643 |
Deferred revenue - long-term | 62,740 | 67,967 |
Deferred income tax liability, net | 1,239 | 1,239 |
Other long-term liabilities | 13,584 | 13,585 |
Total long-term liabilities | 112,757 | 119,615 |
Total liabilities | 235,354 | 251,787 |
Commitments and contingencies (Note 11) | ||
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; 44,280,198 and 43,704,876 shares issued and outstanding) | 443 | 437 |
Additional paid-in capital | 154,764 | 147,304 |
Accumulated deficit | (98,720) | (94,072) |
Total shareholders’ equity, SkyWater Technology, Inc. | 56,487 | 53,669 |
Non-controlling interests | 985 | 308 |
Total shareholders’ equity | 57,472 | 53,977 |
Total liabilities and shareholders’ equity | $ 292,826 | $ 305,764 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Apr. 02, 2023 | Jan. 01, 2023 |
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) | 44,280,198 | 43,704,876 |
Common stock, shares outstanding (in shares) | 44,280,198 | 43,704,876 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2023 | Apr. 03, 2022 | |
Income Statement [Abstract] | ||
Revenue | $ 66,094 | $ 48,121 |
Cost of revenue | 49,626 | 49,061 |
Gross profit (loss) | 16,468 | (940) |
Research and development | 2,668 | 2,282 |
Selling, general and administrative expenses | 14,895 | 11,690 |
Operating income (loss) | (1,095) | (14,912) |
Other income (expense): | ||
Interest expense | (2,471) | (1,029) |
Total other income (expense) | (2,471) | (1,029) |
Income (loss) before income taxes | (3,566) | (15,941) |
Income tax expense (benefit) | 0 | (194) |
Net income (loss) | (3,566) | (15,747) |
Less: net income attributable to non-controlling interests | 707 | 859 |
Net income (loss) attributable to SkyWater Technology, Inc. | $ (4,273) | $ (16,606) |
Net income (loss) per share attributable to common shareholders, basic (in USD per share) | $ (0.10) | $ (0.42) |
Net income (loss) per share attributable to common shareholders, diluted (in USD per share) | $ (0.10) | $ (0.42) |
Weighted average shares used in computing net income (loss) per common share, basic (in shares) | 43,817,417 | 39,861,688 |
Weighted average shares used in computing net income (loss) per common share, diluted (in shares) | 43,817,417 | 39,861,688 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Total Shareholders’ Equity, SkyWater Technology, Inc. | Total Shareholders’ Equity, SkyWater Technology, Inc. Cumulative Effect, Period of Adoption, Adjustment | Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Retained Earnings (Accumulated Deficit) Cumulative Effect, Period of Adoption, Adjustment | Non-controlling Interests |
Beginning balance of preferred stock (in shares) at Jan. 02, 2022 | 0 | |||||||||
Beginning balance of common stock (in shares) at Jan. 02, 2022 | 39,836,000 | |||||||||
Beginning balance at Jan. 02, 2022 | $ 59,927 | $ 61,127 | $ 0 | $ 398 | $ 115,208 | $ (54,479) | $ (1,200) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Issuance of common stock pursuant to equity compensation plans (in shares) | 69,000 | |||||||||
Issuance of common stock pursuant to equity compensation plans | 659 | 659 | $ 1 | 658 | ||||||
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 of preferred stock (in shares) at Apr. 03, 2022 | 0 | |||||||||
Ending balance of common stock (in shares) at Apr. 03, 2022 | 39,905,000 | |||||||||
Ending balance at Apr. 03, 2022 | $ 47,509 | 48,187 | $ 0 | $ 399 | 118,873 | (71,085) | (678) | |||
Beginning balance of preferred stock (in shares) at Jan. 01, 2023 | 0 | 0 | ||||||||
Beginning balance of common stock (in shares) at Jan. 01, 2023 | 43,704,876 | 43,705,000 | ||||||||
Beginning balance at Jan. 01, 2023 | $ 53,977 | $ (375) | 53,669 | $ (375) | $ 0 | $ 437 | 147,304 | (94,072) | $ (375) | 308 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Issuance of common stock (in shares) | 245,000 | |||||||||
Issuance of common stock | 2,696 | 2,696 | $ 3 | 2,693 | ||||||
Issuance of common stock pursuant to equity compensation plans (in shares) | 330,000 | |||||||||
Issuance of common stock pursuant to equity compensation plans | 2,917 | 2,917 | $ 3 | 2,914 | ||||||
Stock-based compensation | 1,853 | 1,853 | 1,853 | |||||||
Distribution to VIE member | (30) | (30) | ||||||||
Net income (loss) | $ (3,566) | (4,273) | (4,273) | 707 | ||||||
Ending balance of preferred stock (in shares) at Apr. 02, 2023 | 0 | 0 | ||||||||
Ending balance of common stock (in shares) at Apr. 02, 2023 | 44,280,198 | 44,280,000 | ||||||||
Ending balance at Apr. 02, 2023 | $ 57,472 | $ 56,487 | $ 0 | $ 443 | $ 154,764 | $ (98,720) | $ 985 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2023 | Apr. 03, 2022 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (3,566) | $ (15,747) |
Adjustments to reconcile net income (loss) to net cash flows used in operating activities: | ||
Depreciation and amortization | 7,352 | 6,458 |
Amortization of debt issuance costs included in interest expense | 357 | 172 |
Long-term incentive and stock-based compensation | 1,853 | 3,216 |
Deferred income taxes | 0 | (197) |
Cash paid for operating leases | (12) | (12) |
Cash paid for finance leases | (212) | (88) |
Provision for credit losses | 2,154 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (6,875) | (86) |
Inventories | (969) | (3,843) |
Prepaid expenses and other assets | (2,653) | (2,139) |
Accounts payable | (3,270) | 4,157 |
Deferred revenue | (5,245) | (2,684) |
Income tax receivable and payable | 0 | 1 |
Net cash used in operating activities | (11,086) | (10,792) |
Cash flows from investing activities: | ||
Purchase of software and licenses | (213) | (400) |
Purchases of property and equipment | (2,851) | (4,414) |
Net cash used in investing activities | (3,064) | (4,814) |
Cash flows from financing activities: | ||
Draws on revolving line of credit | 59,350 | 0 |
Paydowns of revolving line of credit | (63,310) | 0 |
Net (repayment) proceeds on Revolver | 0 | 9,392 |
Net proceeds from tool financing | 494 | 0 |
Repayment of VIE financing | (317) | (256) |
Cash paid for finance leases | (343) | (334) |
Proceeds from the issuance of common stock pursuant to the employee stock purchase plan | 1,275 | 659 |
Proceeds from the issuance of common stock, net of commissions | 2,696 | 0 |
Cash paid on license technology obligations | (1,850) | 0 |
Net distributions to VIE member | (30) | (337) |
Net cash (used in) provided by financing activities | (2,035) | 9,124 |
Net change in cash and cash equivalents | (16,185) | (6,482) |
Cash and cash equivalents - beginning of period | 30,025 | 12,917 |
Cash and cash equivalents - end of period | 13,840 | 6,435 |
Supplemental disclosure of cash flow information: | ||
Interest | 1,286 | 882 |
Income taxes | 0 | 2 |
Noncash investing and financing activity: | ||
Capital expenditures incurred, not yet paid | 421 | 1,537 |
Equipment acquired through capital lease obligations | 765 | 9,035 |
Intangible assets acquired, not yet paid | $ 500 | $ 1,628 |
Nature of Business
Nature of Business | 3 Months Ended |
Apr. 02, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | Nature of Business SkyWater Technology, Inc., together with its consolidated subsidiaries (collectively, "SkyWater", the "Company", “we”, “us”, or “our”), is a U.S.-based, independent, pure-play technology foundry that offers advanced semiconductor development and manufacturing services from its fabrication facility, or fab, in Minnesota and advanced packaging services from its Florida facility. In its 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. SkyWater is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012. |
Basis of Presentation and Princ
Basis of Presentation and Principles of Consolidation | 3 Months Ended |
Apr. 02, 2023 | |
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 2, 2023, and for the three months ended April 2, 2023 and April 3, 2022, 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 1, 2023 and for the year then ended. 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 2, 2023, our results of operations, shareholders' equity and cash flows for the three months ended April 2, 2023 and April 3, 2022. The results of operations for the three months ended April 2, 2023 are not necessarily indicative of the results of operations to be expected for the year ending December 31, 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 the variable interest entity (“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 and cash flows are for the three months ended April 2, 2023 and April 3, 2022. Liquidity and Cash Requirements The accompanying condensed consolidated financial statements have been prepared on the basis of the realization of assets and the satisfaction of liabilities and commitments in the normal course of business and do not include any adjustments to the recoverability and classifications of recorded assets and liabilities as a result of uncertainties. For the three months ended April 2, 2023, we incurred losses of $4,273. As of April 2, 2023, we had cash and cash equivalents of $13,840. Our ability to execute our operating strategy is dependent on our ability to maintain liquidity and 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 may require additional liquidity to continue our operations for the next 12 months from the issuance of the condensed consolidated financial statements. We have identified specific actions we could take to reduce operating costs and improve cash flow, including reductions in spending and delays in hiring certain personnel. If such actions are taken, it may require us to decrease our level of investment in new products and technologies, or discontinue further expansion of our business. The Company also obtained a support letter from Oxbow Industries, LLC ("Oxbow Industries"), an affiliate of our principal stockholder CMI Oxbow Partners, LLC ("Oxbow"), to provide funding in an amount up to $12,500, if necessary, to enable the Company to meet its obligations as they become due through at least one year beyond the issuance of these financial statements. Management believes that based upon SkyWater's operating forecasts, cash and cash equivalents on hand, available borrowings on the Revolver, potential cost reduction measures, and the support letter from Oxbow Industries, as needed, will provide sufficient liquidity to fund its operations for the next twelve months from the issuance of the condensed consolidated financial statements. Additionally, we could raise additional capital through the ATM Program (as defined below) and seek additional equity or debt financing, including a refinancing and/or expansion of the Revolver, however we cannot provide any assurance that additional funds will be available when needed from any source or, if available, will be available on terms that are acceptable to us. See Note 8 – Shareholders’ Equity for information regarding the ATM Program. SkyWater 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. Net Loss Per Share Basic net loss per common 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 common 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 2, 2023 and April 3, 2022, 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 2, 2023 and April 3, 2022, there were restricted stock units and stock options totaling 2,949,000 and 3,414,000, 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 2, 2023 and April 3, 2022: Three Months Ended April 2, 2023 April 3, 2022 (in thousands, except per share data) Numerator: Net loss attributable to SkyWater Technology, Inc. $ (4,273) $ (16,606) Denominator: Weighted-average common shares outstanding, basic and diluted 43,817 39,862 Net loss per common share, basic and diluted $ (0.10) $ (0.42) 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. SkyWater operates and manages its business as a single operating segment. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Apr. 02, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting PoliciesOur audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended January 1, 2023 include an additional discussion of the significant accounting policies and estimates used in the preparation of the condensed consolidated financial statements. There were no material changes to our significant accounting policies and estimates during the three months ended April 2, 2023. However, we adopted the provision of the new credit loss accounting standard as discussed below. Recently Adopted Accounting Standards In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842), later codified in FASB Accounting Standards Codification ("ASC") Topic 842, Leases ("Topic 842"). Topic 842 was effective for public business entities for fiscal years beginning after December 15, 2018. As an emerging growth company, we adopted Topic 842 on January 3, 2022 for our year ending January 1, 2023. The guidance in Topic 842 supersedes the leasing guidance in Topic 840, Leases. Under Topic 842, lessees are required to recognize lease right of use assets and lease liabilities on the balance sheet. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statement of operations. We adopted Topic 842, and all related amendments using the "Comparatives Under 840 Option" transition approach. Under this transition approach, we did not restate prior periods, nor restate prior lease disclosures. We also elected certain practical expedients allowed by Topic 842 which, among other things, allowed us to carry forward historical lease classification conclusions previously made under Topic 840 and to exclude from the scope of our application of Topic 842 lease arrangements with terms less than twelve months. The most significant impact of adopting Topic 842 was the recognition of lease right-of-use assets and lease liabilities for operating leases. The adoption of Topic 842 resulted in the recognition of an initial right-of-use asset of $184 and an initial lease liability of $184 for our operating leases. Our accounting for finance leases remained substantially unchanged. |
Revenue
Revenue | 3 Months Ended |
Apr. 02, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Wafer Services Contract In March 2022, we signed a contract with a significant wafer services customer. Under the contract, orders are non-cancellable and we have an enforceable right 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. 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. The contract 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. The contract terms and pricing is applicable to all in-process and future wafers. We recorded revenue of $8,230 in the three months ended April 3, 2022 to account for recognition of wafer services activities in process. Revenue Recognition of Advanced Technology Services Contract Revenue on fixed price contracts is recognized over time as work progresses using either the input or output method based upon which method we believe represents the best indication of the overall progress toward satisfying each performance obligation. Over time revenue recognition using the output method relies on performance completed to date or contractual milestones if they correlate directly with the progress to satisfy our performance obligations. Over time revenue recognition using the input method is based on costs incurred to date compared to estimated total cost required to complete each performance obligation as of the reporting date. We measure progress by comparing total costs incurred to date to the total estimated costs of each performance obligation, and record that proportion of the contract price allocated to that performance obligation as revenue. Costs include labor, manufacturing costs, materials and other direct costs related to the customer contract. During the third quarter of 2022, we signed contracts with a significant Advanced Technology Services customer that for which revenue is recognized based upon the input method using a cost-based measure of progress. 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 2, 2023 Topic 606 Revenue Point-in-Time Over Time Lease Revenue Total Revenue Wafer Services $ 3,950 $ 13,838 $ — $ 17,788 Advanced Technology Services Time & materials contracts — 27,831 — 27,831 Fixed price contracts — 19,308 — 19,308 Other — — 1,167 1,167 Total Advanced Technology Services 1 — 47,139 1,167 48,306 Total revenue $ 3,950 $ 60,977 $ 1,167 $ 66,094 __________________ 1 Total Advanced Technology Services revenues include $536 of tool revenue. 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 Time & materials contracts — 18,908 — 18,908 Fixed price contracts — 6,500 — 6,500 Other — — 1,167 1,167 Total Advanced Technology Services 1 — 25,408 1,167 26,575 Total revenue $ 13,205 $ 33,749 $ 1,167 $ 48,121 __________________ 1 Total Advanced Technology Services revenues include $984 of tool revenue. The following table discloses revenue by country as determined based on customer address: Three Months Ended April 2, 2023 April 3, 2022 United States $ 58,202 $ 42,359 Hong Kong 3,019 936 Canada 2,388 1,670 United Kingdom 104 1,781 All others 2,381 1,375 $ 66,094 $ 48,121 The following customers accounted for 10% or more of revenue for the three months ended April 2, 2023 and April 3, 2022: Three Months Ended April 2, 2023 April 3, 2022 Customer A 19 % 16 % Customer B 19 % 40 % Customer E 16 % * 54 % 56 % __________________ * Represents less than 10% of revenue. The loss of a major customer could adversely affect our operating results and financial condition. Deferred Contract Costs We recognized amortization of deferred contract costs in our condensed consolidated statements of operations totaling $746 and $195 for the three months ended April 2, 2023 and April 3, 2022, respectively. Contract Assets Contract assets were $35,605 and $34,625 at April 2, 2023 and January 1, 2023, respectively, and are included in accounts receivable, net in our condensed consolidated balance sheets. Contract Liabilities The contract liabilities and other significant components of deferred revenue are as follows: April 2, 2023 January 1, 2023 Contract Deferred Total Contract Deferred Total Current $ 23,501 $ 4,667 $ 28,168 $ 23,519 $ 4,667 $ 28,186 Long-term 57,296 5,444 62,740 61,356 6,611 67,967 Total $ 80,797 $ 10,111 $ 90,908 $ 84,875 $ 11,278 $ 96,153 The decrease in contract liabilities from January 1, 2023 to April 2, 2023 was primarily the result of completion of specific performance obligations for our customers. Of our total contract liabilities at January 1, 2023, 6% were recognized in revenue during the three months ended April 2, 2023. Of our total contract liabilities at January 2, 2022, 3% were recognized in revenue in the three months ended April 3, 2022. Remaining Performance Obligations As of April 2, 2023, we had approximately $139,152 of remaining performance obligations that had not been fully satisfied on contracts with an original expected duration of one year or more, which were primarily related to Advanced Technology Services contracts. We expect to recognize those revenues as we satisfy our performance obligations, which do not exceed 6.5 years. 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 financing 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. 02, 2023 | |
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 2, 2023 January 1, 2023 Accounts receivable: Trade accounts receivable $ 35,578 $ 29,683 Unbilled revenue (contract assets) 35,605 34,625 Allowance for credit losses (4,167) (1,638) Total accounts receivable, net $ 67,016 $ 62,670 April 2, 2023 April 3, 2022 Allowance for credit losses: Balance at beginning of period 1,638 — Add Adoption of Credit Loss Standard (Topic 326) 375 Provision for credit losses 2,154 — Deduct Accounts charged-off — Less recoveries of accounts charged-off — Net account charge-offs (recoveries) — — Balance at end of period $ 4,167 $ — April 2, 2023 January 1, 2023 Inventories: Raw materials $ 4,096 $ 3,991 Work-in-process 122 359 Supplies and spare parts 10,148 9,047 Total inventories—current 14,366 13,397 Supplies and spare parts classified as other assets 2,696 2,605 Total inventories $ 17,062 $ 16,002 April 2, 2023 January 1, 2023 Prepaid expenses and other current assets: Prepaid expenses $ 5,947 $ 2,395 Prepaid inventory — 129 Equipment purchased for customers 1 5,686 5,669 Deferred contract costs 824 2,097 Total prepaid assets and other current assets $ 12,457 $ 10,290 __________________ 1 We acquired equipment for a customer that is being installed and calibrated in our facility. Prior to the customer obtaining ownership and control of the equipment, we recorded costs incurred to date within prepaid expenses and other current assets. April 2, 2023 January 1, 2023 Property and equipment, net: Land $ 5,396 $ 5,396 Buildings and improvements 88,522 88,141 Machinery and equipment 188,735 187,276 Fixed assets not yet in service 10,215 9,746 Total property and equipment, at cost 1 292,868 290,559 Less: Accumulated depreciation 1 (117,500) (110,644) Total property and equipment, net 1 $ 175,368 $ 179,915 __________________ 1 Includes $13,287 and $12,521 of cost and $(3,287) and $(2,781) of accumulated depreciation associated with capital assets subject to financing leases as of April 2, 2023 and January 1, 2023, respectively. Depreciation expense was $6,856 and $6,031 for the three months ended April 2, 2023 and April 3, 2022, respectively, substantially all of which was classified as cost of revenue. April 2, 2023 January 1, 2023 Intangible assets, net: Software and licensed technology $ 10,489 $ 10,277 Less: Accumulated amortization (5,165) (4,669) Total intangible assets, net $ 5,324 $ 5,608 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 2, 2023, we acquired third-party software and licensed technology of $213, which will be amortized over a weighted average estimated life of 3 years. For the three months ended April 2, 2023 and April 3, 2022, amortization of software and licensed technology was $496 and $425, respectively. Remaining estimated aggregate annual amortization expense is as follows for the years ending: Amortization Remainder of 2023 $ 1,289 2024 1,015 2025 814 2026 587 2027 306 Thereafter 1,313 Total $ 5,324 April 2, 2023 January 1, 2023 Other assets: Supplies and spare parts $ 2,696 $ 2,605 Deferred contract costs 102 — Operating lease right-of-use assets 130 141 Other assets 1,358 944 Total other assets $ 4,286 $ 3,690 April 2, 2023 January 1, 2023 Accrued expenses: Accrued compensation $ 7,355 $ 5,705 Licensed technology 500 1,500 Accrued commissions 140 30 Accrued fixed asset expenditures — 20 Accrued royalties 4,574 4,734 Current portion of operating lease liabilities 45 44 Current portion of finance lease liabilities 598 786 Accrued inventory 1,180 1,294 Other accrued expenses 11,872 11,099 Total accrued expenses $ 26,264 $ 25,212 April 2, 2023 January 1, 2023 Other long-term liabilities: Finance lease obligations $ 9,769 $ 9,257 Operating lease liability 88 100 Accrued customer payable 3,727 3,728 Licensed technology — 500 Total other long-term liabilities $ 13,584 $ 13,585 |
Debt
Debt | 3 Months Ended |
Apr. 02, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt The components of debt outstanding at April 2, 2023 and January 1, 2023 are as follows: April 2, 2023 January 1, 2023 Revolver $ 56,132 $ 60,093 Financing (by VIE) 36,558 36,826 Tool financing loan 3,385 3,037 Unamortized debt issuance costs 1 (6,647) (7,103) Total long-term debt, including current maturities 89,428 92,853 Less: Current portion of long-term debt (54,234) (57,672) Total long-term debt, excluding current portion $ 35,194 $ 35,181 __________________ 1 Unamortized debt issuance costs as of April 2, 2023 included $3,905 for the Revolver (as defined below) and $2,742 for the Financing (as defined below). Unamortized debt issuance costs as of January 1, 2023 included $4,277 for the Revolver and $2,826 for the Financing. Revolver The outstanding balance of our revolving line of credit (the “Revolver”) under our Loan and Security Agreement with Siena Lending Group LLC was $56,132 as of April 2, 2023 at an interest rate of 11.1% due in December 2025. Our remaining availability under the Revolver was $19,700 as of April 2, 2023. As of April 2, 2023, 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. VIE Financing On September 30, 2020, Oxbow Realty, an affiliate of Oxbow and the VIE which we consolidate (see Note 12 – Related Party Transactions , and Note 13 – Variable Interest Entity ) entered into a loan agreement with Citi Real Estate Fund ("Citi") for $39,000 (the “Financing”) to finance its acquisition of the building and land associated with our primary operating location in Bloomington, Minnesota. 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. The interest rate under the Financing is fixed at 3.44%. The Financing is guaranteed by our principal stockholder, Oxbow, who is also the sole equity holder of Oxbow Realty. Tool Financing Loan In the fourth quarter of 2022, we entered into an agreement to sell a manufacturing tool to an equipment financing lender for $3,100 in the fourth quarter of 2022, and an additional $496 in the first quarter of 2023. We entered into agreements to lease the tool from the lender for combined monthly payments of $101 over 42 months. The agreements provide for a bargain purchase option at the end of the lease term which we intend to exercise. The transactions represent a failed sale leaseback with the manufacturing tool retained on our balance sheet and the proceeds received recorded as a financial obligation. Maturities Future principal payments of our Revolver, consolidated VIE’s financing, and tool financing loan, excluding unamortized debt issuance costs, are as follows: Remainder of 2023 $ 57,696 2024 2,109 2025 2,248 2026 1,670 2027 1,219 Thereafter 31,133 Total $ 96,075 |
Income Taxes
Income Taxes | 3 Months Ended |
Apr. 02, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rates for the three months ended April 2, 2023 and April 3, 2022 differ from the statutory tax rates due to state income taxes, permanent tax differences, the tax impact of the vesting of restricted stock units 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 2, 2023 and April 3, 2022 was 0.0% and 1.2%, respectively. The income tax rate applied to our pre-tax loss was lower than our statutory tax rate of 21% for both the three months ended April 2, 2023 and April 3, 2022 primarily due to a deferred tax asset valuation allowance. 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 $19,855 was recorded as of April 3, 2022 and January 1, 2023 to reduce our net deferred tax assets to the amount that is more likely than not to be realized. No liability has been recorded for uncertain tax positions. We would accrue, if applicable, income tax related interest and penalties in income tax expense in our condensed consolidated statement of operations. There were no interest and penalties incurred during the three months ended April 2, 2023 and April 3, 2022. In August 2022, the U.S. enacted the Creating Helpful Incentives to Produce Semiconductors and Science Act of 2022 (the "CHIPS" Act). The CHIPS Act provides incentives to semiconductor chip manufacturers in the United States, including providing a 25% manufacturing investment credit for investments in semiconductor manufacturing property placed in service after December 31, 2022, for which construction begins before January 1, 2027. Property investments qualify for the 25% credit if, among other requirements, the property is integral to the operation of an advanced manufacturing facility, defined as having a primary purpose of manufacturing semiconductors or semiconductor manufacturing equipment. Currently, we are evaluating the impact of the CHIPS Act on our business. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Apr. 02, 2023 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders’ Equity On September 2, 2022, SkyWater entered into an Open Market Sale Agreement with Jefferies LLC with respect to an at the market offering program (the "ATM Program"). Pursuant to the agreement, the Company may, from time to time, offer and sell up to $100,000 in shares of the Company’s common stock. During the three months ended April 2, 2023, the Company sold approximately 245,289 shares at an average sale price of $11.33 per share, resulting in gross proceeds of approximately $2,779 before deducting sales commissions and fees of approximately $83. The Company used the net proceeds of approximately $2,695 to pay down its Revolver and fund its operations. Subsequent to April 2, 2023, the Company sold approximately 177,065 shares under the Open Market Sale Agreement at an average sale price of $10.80 per share, resulting in gross proceeds of approximately $1,912 before deducting sales commissions and fees of approximately $57. As of April 2, 2023, approximately $93,181 in shares were available for issuance under the Open Market Sale Agreement. Taking into account the sales that settled subsequent to April 2, 2023, approximately $91,268 in shares are available for issuance under the ATM Program as of the date of this report. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Apr. 02, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation Share-based compensation expense was allocated in the condensed consolidated statements of operations as follows: Three Months Ended April 2, 2023 April 3, 2022 Cost of revenue $ 513 $ 1,040 Research and development 162 207 Selling, general and administrative expenses 1,178 1,760 $ 1,853 $ 3,007 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Apr. 02, 2023 | |
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 were 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: Contingent Consideration Balance at April 4, 2021 $ 7,600 Payments (4,018) Change in fair value (2,766) Balance at April 3, 2022 816 Payments (816) Change in fair value — Balance at April 2, 2023 $ — Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Apr. 02, 2023 | |
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. Capital Expenditures We have various contracts outstanding with third parties which primarily relate to the completion of a building expansion project to increase manufacturing capacity at our Minnesota facility. We have approximately $4.4 million of contractual commitments outstanding as of April 2, 2023 that we expect to be paid in the remainder of 2023, through cash on hand and operating cash flows. Center for NeoVation On January 25, 2021, we entered into a technology and economic development agreement (the “TED Agreement”), and a lease agreement (the “CfN Lease”) with the government of Osceola County, Florida (“Osceola”) and ICAMR, Inc., a Florida non-profit corporation (“BRIDG”), to lease and operate the Center for NeoVation (the “CfN”), a semiconductor research and development and manufacturing facility that serves as our primary operating location in Kissimmee, Florida. Under the CfN Lease, we agree to bring the plant to full production capacity within 5 years, and then to operate the plant at full capacity for an additional 15 years. At the end of the lease, we will take ownership of the facility. We are responsible for taxes, utilities, insurance, maintenance, operation of the assets, and making capital investments in the facility to bring it to full production capacity. Investments and costs required to bring the facility to full capacity will be substantial. We may terminate the TED Agreement and CfN Lease with 18 months' notice. In the event we terminate the agreements, we are required to continue to operate the CfN until we find a replacement operator or the 18 months expire, and may be required to make a payment of up to $15,000 to Osceola. Build Back Better Grant |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Apr. 02, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions In August 2022, we entered into an agreement with Oxbow Industries, an affiliate of our principal stockholder, Oxbow, to provide funding in an amount up to $12,500, if necessary, to enable the Company to meet its obligations as they become due. In March 2023, the agreement was amended to extend the term through March 2025. No amounts have been provided to the Company under this agreement. 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 back 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 2, 2023 were as follows (such amounts are eliminated from our condensed consolidated financial statements due to the consolidation of Oxbow Realty, see Note 13 – Variable Interest Entity ): Remainder of 2023 3,703 2024 5,031 2025 5,132 2026 5,234 2027 5,339 Thereafter 78,776 Total lease payments 103,215 Less: imputed interest (75,533) Total $ 27,682 |
Variable Interest Entity
Variable Interest Entity | 3 Months Ended |
Apr. 02, 2023 | |
Condensed Financial Information Disclosure [Abstract] | |
Variable Interest Entity | Variable Interest Entity Oxbow Realty was established for the purpose of holding real estate and facilitating real estate transactions. This included facilitating the purchase of the land and building of our primary operating location in Bloomington, Minnesota with proceeds from a bank loan from Citi (see Note 6 – Debt ) and managing the leaseback of the land and building to us (see Note 12 – Related Party Transactions ). We determined that Oxbow Realty meets the definition of a VIE under FASB Topic 810, Consolidation, because it lacks sufficient equity to finance its activities. Furthermore, we are the primary beneficiary of Oxbow Realty as we have the power to direct operating and maintenance decisions of our Bloomington, Minnesota facility 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 2, 2023 and January 1, 2023. The assets and liabilities are presented prior to consolidation, and thus a portion of these assets and liabilities are eliminated in consolidation. April 2, 2023 January 1, 2023 Cash and cash equivalents $ 40 $ 16 Prepaid expenses 3,315 860 Finance receivable 37,690 37,652 Other assets 256 256 Total assets $ 41,301 $ 38,784 Accounts payable $ 1,655 $ 117 Accrued expenses 2,321 1,581 Debt 36,340 36,778 Total liabilities $ 40,316 $ 38,476 The following table shows the revenue and expenses of Oxbow Realty that are consolidated by us for the three months ended April 2, 2023 and April 3, 2022. 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 2, 2023 Three Months Ended April 3, 2022 Revenue $ 1,318 $ 1,260 General and administrative expenses 293 77 Interest expense 318 324 Total expenses 611 401 Net income $ 707 $ 859 |
Leases
Leases | 3 Months Ended |
Apr. 02, 2023 | |
Leases [Abstract] | |
Leases | Leases SkyWater as the Lessor In March 2020, we executed a contract with a customer that includes an operating lease for the right to use a specified portion of our primary operating location in Bloomington, Minnesota 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 for additional information on revenue recognition and deferred revenue of the operating lease). The carrying value of the facility space utilized by the lessee was approximately $27,000, net of accumulated depreciation of $3,230 and $2,902 as of April 2, 2023 and January 1, 2023, respectively, and is included in property and equipment on our condensed consolidated balance sheets. |
Leases | Leases SkyWater as the Lessor In March 2020, we executed a contract with a customer that includes an operating lease for the right to use a specified portion of our primary operating location in Bloomington, Minnesota 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 for additional information on revenue recognition and deferred revenue of the operating lease). The carrying value of the facility space utilized by the lessee was approximately $27,000, net of accumulated depreciation of $3,230 and $2,902 as of April 2, 2023 and January 1, 2023, respectively, and is included in property and equipment on our condensed consolidated balance sheets. |
Lesses | Leases SkyWater as the Lessor In March 2020, we executed a contract with a customer that includes an operating lease for the right to use a specified portion of our primary operating location in Bloomington, Minnesota 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 for additional information on revenue recognition and deferred revenue of the operating lease). The carrying value of the facility space utilized by the lessee was approximately $27,000, net of accumulated depreciation of $3,230 and $2,902 as of April 2, 2023 and January 1, 2023, respectively, and is included in property and equipment on our condensed consolidated balance sheets. |
Basis of Presentation and Pri_2
Basis of Presentation and Principles of Consolidation (Policies) | 3 Months Ended |
Apr. 02, 2023 | |
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 the variable interest entity (“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 and cash flows are for the three months ended April 2, 2023 and April 3, 2022. |
Liquidity and Cash Requirements | Liquidity and Cash Requirements The accompanying condensed consolidated financial statements have been prepared on the basis of the realization of assets and the satisfaction of liabilities and commitments in the normal course of business and do not include any adjustments to the recoverability and classifications of recorded assets and liabilities as a result of uncertainties. For the three months ended April 2, 2023, we incurred losses of $4,273. As of April 2, 2023, we had cash and cash equivalents of $13,840. Our ability to execute our operating strategy is dependent on our ability to maintain liquidity and 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 may require additional liquidity to continue our operations for the next 12 months from the issuance of the condensed consolidated financial statements. We have identified specific actions we could take to reduce operating costs and improve cash flow, including reductions in spending and delays in hiring certain personnel. If such actions are taken, it may require us to decrease our level of investment in new products and technologies, or discontinue further expansion of our business. The Company also obtained a support letter from Oxbow Industries, LLC ("Oxbow Industries"), an affiliate of our principal stockholder CMI Oxbow Partners, LLC ("Oxbow"), to provide funding in an amount up to $12,500, if necessary, to enable the Company to meet its obligations as they become due through at least one year beyond the issuance of these financial statements. Management believes that based upon SkyWater's operating forecasts, cash and cash equivalents on hand, available borrowings on the Revolver, potential cost reduction measures, and the support letter from Oxbow Industries, as needed, will provide sufficient liquidity to fund its operations for the next twelve months from the issuance of the condensed consolidated financial statements. Additionally, we could raise additional capital through the ATM Program (as defined below) and seek additional equity or debt financing, including a refinancing and/or expansion of the Revolver, however we cannot provide any assurance that additional funds will be available when needed from any source or, if available, will be available on terms that are acceptable to us. See Note 8 – Shareholders’ Equity for information regarding the ATM Program. SkyWater 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. |
Net Loss Per Share | Net Loss Per Share Basic net loss per common 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 common 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 2, 2023 and April 3, 2022, 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 2, 2023 and April 3, 2022, there were restricted stock units and stock options totaling 2,949,000 and 3,414,000, respectively, excluded from the computation of diluted weighted-average shares outstanding because their inclusion would have been anti-dilutive. |
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. SkyWater operates and manages its business as a single operating segment. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842), later codified in FASB Accounting Standards Codification ("ASC") Topic 842, Leases ("Topic 842"). Topic 842 was effective for public business entities for fiscal years beginning after December 15, 2018. As an emerging growth company, we adopted Topic 842 on January 3, 2022 for our year ending January 1, 2023. The guidance in Topic 842 supersedes the leasing guidance in Topic 840, Leases. Under Topic 842, lessees are required to recognize lease right of use assets and lease liabilities on the balance sheet. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statement of operations. We adopted Topic 842, and all related amendments using the "Comparatives Under 840 Option" transition approach. Under this transition approach, we did not restate prior periods, nor restate prior lease disclosures. We also elected certain practical expedients allowed by Topic 842 which, among other things, allowed us to carry forward historical lease classification conclusions previously made under Topic 840 and to exclude from the scope of our application of Topic 842 lease arrangements with terms less than twelve months. The most significant impact of adopting Topic 842 was the recognition of lease right-of-use assets and lease liabilities for operating leases. The adoption of Topic 842 resulted in the recognition of an initial right-of-use asset of $184 and an initial lease liability of $184 for our operating leases. Our accounting for finance leases remained substantially unchanged. |
Basis of Presentation and Pri_3
Basis of Presentation and Principles of Consolidation (Tables) | 3 Months Ended |
Apr. 02, 2023 | |
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 2, 2023 and April 3, 2022: Three Months Ended April 2, 2023 April 3, 2022 (in thousands, except per share data) Numerator: Net loss attributable to SkyWater Technology, Inc. $ (4,273) $ (16,606) Denominator: Weighted-average common shares outstanding, basic and diluted 43,817 39,862 Net loss per common share, basic and diluted $ (0.10) $ (0.42) |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Apr. 02, 2023 | |
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 2, 2023 Topic 606 Revenue Point-in-Time Over Time Lease Revenue Total Revenue Wafer Services $ 3,950 $ 13,838 $ — $ 17,788 Advanced Technology Services Time & materials contracts — 27,831 — 27,831 Fixed price contracts — 19,308 — 19,308 Other — — 1,167 1,167 Total Advanced Technology Services 1 — 47,139 1,167 48,306 Total revenue $ 3,950 $ 60,977 $ 1,167 $ 66,094 __________________ 1 Total Advanced Technology Services revenues include $536 of tool revenue. 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 Time & materials contracts — 18,908 — 18,908 Fixed price contracts — 6,500 — 6,500 Other — — 1,167 1,167 Total Advanced Technology Services 1 — 25,408 1,167 26,575 Total revenue $ 13,205 $ 33,749 $ 1,167 $ 48,121 __________________ |
Schedule of Revenue by Country | The following table discloses revenue by country as determined based on customer address: Three Months Ended April 2, 2023 April 3, 2022 United States $ 58,202 $ 42,359 Hong Kong 3,019 936 Canada 2,388 1,670 United Kingdom 104 1,781 All others 2,381 1,375 $ 66,094 $ 48,121 |
Schedule of Revenue by Major Customers by Reporting Segments | The following customers accounted for 10% or more of revenue for the three months ended April 2, 2023 and April 3, 2022: Three Months Ended April 2, 2023 April 3, 2022 Customer A 19 % 16 % Customer B 19 % 40 % Customer E 16 % * 54 % 56 % __________________ * Represents less than 10% of revenue. |
Schedule of Contract Liabilities | The contract liabilities and other significant components of deferred revenue are as follows: April 2, 2023 January 1, 2023 Contract Deferred Total Contract Deferred Total Current $ 23,501 $ 4,667 $ 28,168 $ 23,519 $ 4,667 $ 28,186 Long-term 57,296 5,444 62,740 61,356 6,611 67,967 Total $ 80,797 $ 10,111 $ 90,908 $ 84,875 $ 11,278 $ 96,153 |
Balance Sheet Information (Tabl
Balance Sheet Information (Tables) | 3 Months Ended |
Apr. 02, 2023 | |
Balance Sheet Information [Abstract] | |
Schedule of Accounts Receivable, Net | April 2, 2023 January 1, 2023 Accounts receivable: Trade accounts receivable $ 35,578 $ 29,683 Unbilled revenue (contract assets) 35,605 34,625 Allowance for credit losses (4,167) (1,638) Total accounts receivable, net $ 67,016 $ 62,670 |
Schedule of Allowance for Credit Loss | April 2, 2023 April 3, 2022 Allowance for credit losses: Balance at beginning of period 1,638 — Add Adoption of Credit Loss Standard (Topic 326) 375 Provision for credit losses 2,154 — Deduct Accounts charged-off — Less recoveries of accounts charged-off — Net account charge-offs (recoveries) — — Balance at end of period $ 4,167 $ — |
Schedule of Inventories | April 2, 2023 January 1, 2023 Inventories: Raw materials $ 4,096 $ 3,991 Work-in-process 122 359 Supplies and spare parts 10,148 9,047 Total inventories—current 14,366 13,397 Supplies and spare parts classified as other assets 2,696 2,605 Total inventories $ 17,062 $ 16,002 |
Schedule of Prepaid Expenses and Other Current Assets | April 2, 2023 January 1, 2023 Prepaid expenses and other current assets: Prepaid expenses $ 5,947 $ 2,395 Prepaid inventory — 129 Equipment purchased for customers 1 5,686 5,669 Deferred contract costs 824 2,097 Total prepaid assets and other current assets $ 12,457 $ 10,290 __________________ 1 We acquired equipment for a customer that is being installed and calibrated in our facility. Prior to the customer obtaining ownership and control of the equipment, we recorded costs incurred to date within prepaid expenses and other current assets. |
Schedule of Property and Equipment, Net | April 2, 2023 January 1, 2023 Property and equipment, net: Land $ 5,396 $ 5,396 Buildings and improvements 88,522 88,141 Machinery and equipment 188,735 187,276 Fixed assets not yet in service 10,215 9,746 Total property and equipment, at cost 1 292,868 290,559 Less: Accumulated depreciation 1 (117,500) (110,644) Total property and equipment, net 1 $ 175,368 $ 179,915 __________________ |
Schedule of Intangible Assets | April 2, 2023 January 1, 2023 Intangible assets, net: Software and licensed technology $ 10,489 $ 10,277 Less: Accumulated amortization (5,165) (4,669) Total intangible assets, net $ 5,324 $ 5,608 |
Schedule of Remaining Estimated Aggregate Annual Amortization Expense | Remaining estimated aggregate annual amortization expense is as follows for the years ending: Amortization Remainder of 2023 $ 1,289 2024 1,015 2025 814 2026 587 2027 306 Thereafter 1,313 Total $ 5,324 |
Schedule of Other Assets | April 2, 2023 January 1, 2023 Other assets: Supplies and spare parts $ 2,696 $ 2,605 Deferred contract costs 102 — Operating lease right-of-use assets 130 141 Other assets 1,358 944 Total other assets $ 4,286 $ 3,690 |
Schedule of Accrued Expenses | April 2, 2023 January 1, 2023 Accrued expenses: Accrued compensation $ 7,355 $ 5,705 Licensed technology 500 1,500 Accrued commissions 140 30 Accrued fixed asset expenditures — 20 Accrued royalties 4,574 4,734 Current portion of operating lease liabilities 45 44 Current portion of finance lease liabilities 598 786 Accrued inventory 1,180 1,294 Other accrued expenses 11,872 11,099 Total accrued expenses $ 26,264 $ 25,212 |
Schedule of Other Noncurrent Liabilities | April 2, 2023 January 1, 2023 Other long-term liabilities: Finance lease obligations $ 9,769 $ 9,257 Operating lease liability 88 100 Accrued customer payable 3,727 3,728 Licensed technology — 500 Total other long-term liabilities $ 13,584 $ 13,585 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Apr. 02, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Outstanding | The components of debt outstanding at April 2, 2023 and January 1, 2023 are as follows: April 2, 2023 January 1, 2023 Revolver $ 56,132 $ 60,093 Financing (by VIE) 36,558 36,826 Tool financing loan 3,385 3,037 Unamortized debt issuance costs 1 (6,647) (7,103) Total long-term debt, including current maturities 89,428 92,853 Less: Current portion of long-term debt (54,234) (57,672) Total long-term debt, excluding current portion $ 35,194 $ 35,181 __________________ 1 Unamortized debt issuance costs as of April 2, 2023 included $3,905 for the Revolver (as defined below) and $2,742 for the Financing (as defined below). Unamortized debt issuance costs as of January 1, 2023 included $4,277 for the Revolver and $2,826 for the Financing. |
Schedule of Future Principal Payments | Future principal payments of our Revolver, consolidated VIE’s financing, and tool financing loan, excluding unamortized debt issuance costs, are as follows: Remainder of 2023 $ 57,696 2024 2,109 2025 2,248 2026 1,670 2027 1,219 Thereafter 31,133 Total $ 96,075 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Apr. 02, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
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 2, 2023 April 3, 2022 Cost of revenue $ 513 $ 1,040 Research and development 162 207 Selling, general and administrative expenses 1,178 1,760 $ 1,853 $ 3,007 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Apr. 02, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Change in Level 3 Assets Measured at Fair Value On a Recurring Basis | Level 3 inputs were 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: Contingent Consideration Balance at April 4, 2021 $ 7,600 Payments (4,018) Change in fair value (2,766) Balance at April 3, 2022 816 Payments (816) Change in fair value — Balance at April 2, 2023 $ — |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Apr. 02, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Future Minimum Lease Commitments | Future minimum lease commitments to Oxbow Realty as of April 2, 2023 were as follows (such amounts are eliminated from our condensed consolidated financial statements due to the consolidation of Oxbow Realty, see Note 13 – Variable Interest Entity ): Remainder of 2023 3,703 2024 5,031 2025 5,132 2026 5,234 2027 5,339 Thereafter 78,776 Total lease payments 103,215 Less: imputed interest (75,533) Total $ 27,682 |
Variable Interest Entity (Table
Variable Interest Entity (Tables) | 3 Months Ended |
Apr. 02, 2023 | |
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 2, 2023 and January 1, 2023. The assets and liabilities are presented prior to consolidation, and thus a portion of these assets and liabilities are eliminated in consolidation. April 2, 2023 January 1, 2023 Cash and cash equivalents $ 40 $ 16 Prepaid expenses 3,315 860 Finance receivable 37,690 37,652 Other assets 256 256 Total assets $ 41,301 $ 38,784 Accounts payable $ 1,655 $ 117 Accrued expenses 2,321 1,581 Debt 36,340 36,778 Total liabilities $ 40,316 $ 38,476 |
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 2, 2023 and April 3, 2022. 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 2, 2023 Three Months Ended April 3, 2022 Revenue $ 1,318 $ 1,260 General and administrative expenses 293 77 Interest expense 318 324 Total expenses 611 401 Net income $ 707 $ 859 |
Basis of Presentation and Pri_4
Basis of Presentation and Principles of Consolidation - Narrative (Details) $ in Thousands | 3 Months Ended | |||||
Apr. 02, 2023 USD ($) shares | Aug. 17, 2022 USD ($) | Apr. 03, 2022 shares | Apr. 02, 2023 USD ($) segment | Apr. 03, 2022 USD ($) | Jan. 01, 2023 USD ($) | |
Organization, Consolidation And Presentation Of Financial Statements [Line Items] | ||||||
Net income (loss) attributable to SkyWater Technology, Inc. | $ (4,273) | $ (16,606) | ||||
Cash and cash equivalents | $ 13,840 | $ 13,840 | $ 30,025 | |||
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 | 2,949,000 | 3,414,000 | ||||
Funding to Meet Obligations as they Become Due | Oxbow | ||||||
Organization, Consolidation And Presentation Of Financial Statements [Line Items] | ||||||
Funding agreement with related party (up to) | $ 12,500 |
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 | 3 Months Ended | |
Apr. 02, 2023 | Apr. 03, 2022 | |
Numerator: | ||
Net loss attributable to SkyWater Technology, Inc. | $ (4,273) | $ (16,606) |
Denominator: | ||
Weighted-average common shares outstanding, basic (in shares) | 43,817,417 | 39,861,688 |
Weighted-average common shares outstanding, diluted (in shares) | 43,817,417 | 39,861,688 |
Net loss per common share, basic (in USD per share) | $ (0.10) | $ (0.42) |
Net loss per common share, diluted (in USD per share) | $ (0.10) | $ (0.42) |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Apr. 02, 2023 | Jan. 02, 2023 | Jan. 01, 2023 | Apr. 03, 2022 | Jan. 03, 2022 | Jan. 02, 2022 |
Organization, Consolidation And Presentation Of Financial Statements [Line Items] | ||||||
Operating lease right-of-use assets | $ 130 | $ 141 | $ 184 | |||
Operating Lease, Liability | $ 184 | |||||
Stockholders' equity, including portion attributable to noncontrolling interest | 57,472 | 53,977 | $ 47,509 | $ 59,927 | ||
Retained Earnings (Accumulated Deficit) | ||||||
Organization, Consolidation And Presentation Of Financial Statements [Line Items] | ||||||
Stockholders' equity, including portion attributable to noncontrolling interest | $ (98,720) | (94,072) | $ (71,085) | $ (54,479) | ||
Cumulative Effect, Period of Adoption, Adjustment | ||||||
Organization, Consolidation And Presentation Of Financial Statements [Line Items] | ||||||
Stockholders' equity, including portion attributable to noncontrolling interest | (375) | |||||
Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings (Accumulated Deficit) | ||||||
Organization, Consolidation And Presentation Of Financial Statements [Line Items] | ||||||
Stockholders' equity, including portion attributable to noncontrolling interest | $ 375 | $ (375) |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 02, 2023 | Apr. 03, 2022 | Jan. 01, 2023 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Amortization of deferred contract costs | $ 746 | $ 195 | |
Contract assets | $ 35,605 | $ 34,625 | |
Contract liabilities recognized in revenue (as a percent) | 6,000% | 3,000% | |
Wafer Services | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Deferred revenue recognized | $ 8,230 |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregated Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2023 | Apr. 03, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Lease Revenue | $ 1,167 | $ 1,167 |
Total Revenue | 66,094 | 48,121 |
Wafer Services | ||
Disaggregation of Revenue [Line Items] | ||
Lease Revenue | 0 | 0 |
Total Revenue | 17,788 | 21,546 |
Time & materials contracts | ||
Disaggregation of Revenue [Line Items] | ||
Lease Revenue | 0 | 0 |
Total Revenue | 27,831 | 18,908 |
Fixed price contracts | ||
Disaggregation of Revenue [Line Items] | ||
Lease Revenue | 0 | 0 |
Total Revenue | 19,308 | 6,500 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Lease Revenue | 1,167 | 1,167 |
Total Revenue | 1,167 | 1,167 |
Advanced Technology Services | ||
Disaggregation of Revenue [Line Items] | ||
Lease Revenue | 1,167 | 1,167 |
Total Revenue | 48,306 | 26,575 |
Tool | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 536 | 984 |
Point-in-Time | ||
Disaggregation of Revenue [Line Items] | ||
Topic 606 Revenue | 3,950 | 13,205 |
Point-in-Time | Wafer Services | ||
Disaggregation of Revenue [Line Items] | ||
Topic 606 Revenue | 3,950 | 13,205 |
Point-in-Time | Time & materials contracts | ||
Disaggregation of Revenue [Line Items] | ||
Topic 606 Revenue | 0 | 0 |
Point-in-Time | Fixed price contracts | ||
Disaggregation of Revenue [Line Items] | ||
Topic 606 Revenue | 0 | 0 |
Point-in-Time | Other | ||
Disaggregation of Revenue [Line Items] | ||
Topic 606 Revenue | 0 | 0 |
Point-in-Time | Advanced Technology Services | ||
Disaggregation of Revenue [Line Items] | ||
Topic 606 Revenue | 0 | 0 |
Over Time | ||
Disaggregation of Revenue [Line Items] | ||
Topic 606 Revenue | 60,977 | 33,749 |
Over Time | Wafer Services | ||
Disaggregation of Revenue [Line Items] | ||
Topic 606 Revenue | 13,838 | 8,341 |
Over Time | Time & materials contracts | ||
Disaggregation of Revenue [Line Items] | ||
Topic 606 Revenue | 27,831 | 18,908 |
Over Time | Fixed price contracts | ||
Disaggregation of Revenue [Line Items] | ||
Topic 606 Revenue | 19,308 | 6,500 |
Over Time | Other | ||
Disaggregation of Revenue [Line Items] | ||
Topic 606 Revenue | 0 | 0 |
Over Time | Advanced Technology Services | ||
Disaggregation of Revenue [Line Items] | ||
Topic 606 Revenue | $ 47,139 | $ 25,408 |
Revenue - Schedule of Revenue b
Revenue - Schedule of Revenue by Country (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2023 | Apr. 03, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 66,094 | $ 48,121 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 58,202 | 42,359 |
Hong Kong | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 3,019 | 936 |
Canada | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 2,388 | 1,670 |
United Kingdom | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 104 | 1,781 |
All others | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 2,381 | $ 1,375 |
Revenue - Schedule of Revenue_2
Revenue - Schedule of Revenue by Major Customers (Details) - Revenue Benchmark - Customer Concentration Risk | 3 Months Ended | |
Apr. 02, 2023 | Apr. 03, 2022 | |
Customer A | ||
Disaggregation of Revenue [Line Items] | ||
Customer percentage of revenue (as a percent) | 19% | 16% |
Customer B | ||
Disaggregation of Revenue [Line Items] | ||
Customer percentage of revenue (as a percent) | 19% | 40% |
Customer E | ||
Disaggregation of Revenue [Line Items] | ||
Customer percentage of revenue (as a percent) | 16% | |
Major Customers | ||
Disaggregation of Revenue [Line Items] | ||
Customer percentage of revenue (as a percent) | 54% | 56% |
Revenue - Schedule of Contract
Revenue - Schedule of Contract Liabilities (Details) - USD ($) $ in Thousands | Apr. 02, 2023 | Jan. 01, 2023 |
Revenue from Contract with Customer [Abstract] | ||
Current contract liabilities | $ 23,501 | $ 23,519 |
Long-term contract liabilities | 57,296 | 61,356 |
Total contract liabilities | 80,797 | 84,875 |
Current deferred lease revenue | 4,667 | 4,667 |
Long-term deferred lease revenue | 5,444 | 6,611 |
Total deferred revenue | 10,111 | 11,278 |
Total current deferred revenue | 28,168 | 28,186 |
Total long-term deferred revenue | 62,740 | 67,967 |
Total deferred revenue | $ 90,908 | $ 96,153 |
Revenue - Schedule of Performan
Revenue - Schedule of Performance Obligations (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-03 $ in Thousands | Apr. 02, 2023 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue obligation amount | $ 139,152 |
Revenue recognition period | 6 years 6 months |
Balance Sheet Information - Sum
Balance Sheet Information - Summary of Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Apr. 02, 2023 | Jan. 01, 2023 | Apr. 03, 2022 | Jan. 02, 2022 |
Balance Sheet Information [Abstract] | ||||
Trade accounts receivable | $ 35,578 | $ 29,683 | ||
Unbilled revenue (contract assets) | 35,605 | 34,625 | ||
Allowance for credit losses | (4,167) | (1,638) | $ 0 | $ 0 |
Total accounts receivable, net | $ 67,016 | $ 62,670 |
Balance Sheet Information - S_2
Balance Sheet Information - Summary of Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2023 | Apr. 03, 2022 | |
Allowance for credit losses: | ||
Balance at beginning of period | $ 1,638 | $ 0 |
Provision for credit losses | 2,154 | 0 |
Accounts charged-off | 0 | |
Less recoveries of accounts charged-off | 0 | |
Net account charge-offs (recoveries) | 0 | 0 |
Balance at end of period | 4,167 | $ 0 |
Cumulative Effect, Period of Adoption, Adjustment | ||
Allowance for credit losses: | ||
Balance at beginning of period | $ 375 |
Balance Sheet Information - S_3
Balance Sheet Information - Summary of Inventories (Details) - USD ($) $ in Thousands | Apr. 02, 2023 | Jan. 01, 2023 |
Balance Sheet Information [Abstract] | ||
Raw materials | $ 4,096 | $ 3,991 |
Work-in-process | 122 | 359 |
Supplies and spare parts | 10,148 | 9,047 |
Total inventories—current | 14,366 | 13,397 |
Supplies and spare parts classified as other assets | 2,696 | 2,605 |
Total inventories | $ 17,062 | $ 16,002 |
Balance Sheet Information - S_4
Balance Sheet Information - Summary of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Apr. 02, 2023 | Jan. 01, 2023 |
Balance Sheet Information [Abstract] | ||
Prepaid expenses | $ 5,947 | $ 2,395 |
Prepaid inventory | 0 | 129 |
Equipment purchased for customers | 5,686 | 5,669 |
Deferred contract costs | 824 | 2,097 |
Prepaid expenses and other current assets | $ 12,457 | $ 10,290 |
Balance Sheet Information - S_5
Balance Sheet Information - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Apr. 02, 2023 | Jan. 01, 2023 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, at cost | $ 292,868 | $ 290,559 |
Less: Accumulated depreciation | (117,500) | (110,644) |
Total property and equipment, net | 175,368 | 179,915 |
Finance lease, right-of-use asset, before accumulated amortization | 13,287 | 12,521 |
Finance lease, right-of-use asset, accumulated amortization | (3,287) | (2,781) |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, at cost | 5,396 | 5,396 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, at cost | 88,522 | 88,141 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, at cost | 188,735 | 187,276 |
Fixed assets not yet in service | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, at cost | $ 10,215 | $ 9,746 |
Balance Sheet Information - Nar
Balance Sheet Information - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2023 | Apr. 03, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation expense | $ 6,856 | $ 6,031 |
Software and licensed technology | ||
Property, Plant and Equipment [Line Items] | ||
Acquired third-party intangible assets | $ 213 | |
Weighted average estimated life of acquired intangibles (in years) | 3 years | |
Amortization of intangible assets | $ 496 | $ 425 |
Balance Sheet Information - S_6
Balance Sheet Information - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | Apr. 02, 2023 | Jan. 01, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, net | $ 5,324 | $ 5,608 |
Software and licensed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, at cost | 10,489 | 10,277 |
Less: Accumulated amortization | (5,165) | (4,669) |
Total intangible assets, net | $ 5,324 | $ 5,608 |
Balance Sheet Information - S_7
Balance Sheet Information - Summary of Remaining Estimated Aggregate Annual Amortization Expense (Details) - USD ($) $ in Thousands | Apr. 02, 2023 | Jan. 01, 2023 |
Balance Sheet Information [Abstract] | ||
Remainder of 2023 | $ 1,289 | |
2024 | 1,015 | |
2025 | 814 | |
2026 | 587 | |
2027 | 306 | |
Thereafter | 1,313 | |
Total intangible assets, net | $ 5,324 | $ 5,608 |
Balance Sheet Information - S_8
Balance Sheet Information - Summary of Other Assets (Details) - USD ($) $ in Thousands | Apr. 02, 2023 | Jan. 01, 2023 | Jan. 03, 2022 |
Balance Sheet Information [Abstract] | |||
Supplies and spare parts | $ 2,696 | $ 2,605 | |
Deferred contract costs | 102 | 0 | |
Operating lease right-of-use assets | 130 | 141 | $ 184 |
Other assets | 1,358 | 944 | |
Total other assets | $ 4,286 | $ 3,690 |
Balance Sheet Information - S_9
Balance Sheet Information - Summary of Accrued Expenses (Details) - USD ($) $ in Thousands | Apr. 02, 2023 | Jan. 01, 2023 |
Balance Sheet Information [Abstract] | ||
Accrued compensation | $ 7,355 | $ 5,705 |
Licensed technology | 500 | 1,500 |
Accrued commissions | 140 | 30 |
Accrued fixed asset expenditures | 0 | 20 |
Accrued royalties | 4,574 | 4,734 |
Current portion of operating lease liabilities | 45 | 44 |
Current portion of finance lease liabilities | 598 | 786 |
Accrued inventory | 1,180 | 1,294 |
Other accrued expenses | 11,872 | 11,099 |
Total accrued expenses | $ 26,264 | $ 25,212 |
Balance Sheet Information - Sch
Balance Sheet Information - Schedule of Other Long-term Liabilities (Details) - USD ($) $ in Thousands | Apr. 02, 2023 | Jan. 01, 2023 |
Balance Sheet Information [Abstract] | ||
Finance lease obligations | $ 9,769 | $ 9,257 |
Operating lease liability | 88 | 100 |
Accrued customer payable | 3,727 | 3,728 |
Licensed technology | 0 | 500 |
Other long-term liabilities | $ 13,584 | $ 13,585 |
Debt - Summary of Debt Outstand
Debt - Summary of Debt Outstanding (Details) - USD ($) $ in Thousands | Apr. 02, 2023 | Jan. 01, 2023 | Dec. 28, 2022 |
Debt Instrument [Line Items] | |||
Unamortized debt issuance costs | $ (6,647) | $ (7,103) | |
Total long-term debt, including current maturities | 89,428 | 92,853 | |
Less: Current portion of long-term debt | (54,234) | (57,672) | |
Total long-term debt, excluding current portion | 35,194 | 35,181 | |
VIEs | |||
Debt Instrument [Line Items] | |||
Total long-term debt, including current maturities | 36,340 | 36,778 | |
Revolver | |||
Debt Instrument [Line Items] | |||
Long-term debt | 60,093 | ||
Unamortized debt issuance costs | 4,277 | $ 3,905 | |
Financing loan | |||
Debt Instrument [Line Items] | |||
Long-term debt | 3,385 | 3,037 | |
Financing loan | VIEs | |||
Debt Instrument [Line Items] | |||
Long-term debt | 36,558 | 36,826 | |
Unamortized debt issuance costs | $ 2,742 | $ 2,826 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 02, 2023 | Jan. 01, 2023 | Sep. 30, 2020 | |
Debt Instrument [Line Items] | |||
Proceeds from sale of other productive assets | $ 496 | $ 3,100 | |
Sale leaseback transaction, monthly payments | $ 101 | ||
Sale leaseback transaction, lease terms | 42 months | ||
Revolver | |||
Debt Instrument [Line Items] | |||
Outstanding balance of loan | 60,093 | ||
Revolver | Wells Fargo Bank | |||
Debt Instrument [Line Items] | |||
Outstanding balance of loan | $ 56,132 | ||
Debt instrument, interest rate (as a percent) | 11.10% | ||
Remaining balance of revolver | $ 19,700 | ||
Term Loan | |||
Debt Instrument [Line Items] | |||
Outstanding balance of loan | 3,385 | 3,037 | |
Term Loan | VIEs | |||
Debt Instrument [Line Items] | |||
Outstanding balance of loan | 36,558 | $ 36,826 | |
Debt instrument, interest rate (as a percent) | 3.44% | ||
Principal amount of debt | $ 39,000 | ||
Periodic payment installments | $ 194 | ||
Debt instrument, term (in years) | 10 years |
Debt - Summary of Future Princi
Debt - Summary of Future Principal Payments (Details) $ in Thousands | Apr. 02, 2023 USD ($) |
Debt Instruments [Abstract] | |
2023 | $ 57,696 |
2024 | 2,109 |
2025 | 2,248 |
2026 | 1,670 |
2027 | 1,219 |
Thereafter | 31,133 |
Total | $ 96,075 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | ||
Apr. 02, 2023 | Apr. 03, 2022 | Jan. 01, 2023 | |
Income Tax Disclosure [Abstract] | |||
Effective income tax rate (as a percent) | 0% | 1.20% | |
Federal statutory income tax rate (as a percent) | 21% | 21% | |
Valuation allowance | $ (19,855,000) | $ (19,855,000) | |
Penalties and interest expense | $ 0 | $ 0 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - Jefferies LLC - Open Market Sales - USD ($) | 1 Months Ended | 3 Months Ended | ||
Sep. 02, 2022 | May 12, 2023 | May 10, 2023 | Apr. 02, 2023 | |
Class of Stock [Line Items] | ||||
Sale of stock, ATM authorized amount | $ 100,000,000 | |||
Shares issued in public offering (in shares) | 245,289 | |||
Public offering price per share (in USD per share) | $ 11.33 | |||
Gross proceeds from issuance or sale of equity | $ 2,779,000 | |||
Net proceeds from issuance or sale of equity | 2,695,000 | |||
Stock offering costs | $ 83,000 | |||
Sale of stock, remaining authorized shares (in shares) | 93,181,000 | |||
Subsequent Event | ||||
Class of Stock [Line Items] | ||||
Shares issued in public offering (in shares) | 177,065 | |||
Public offering price per share (in USD per share) | $ 10.80 | |||
Gross proceeds from issuance or sale of equity | $ 1,912,000 | |||
Stock offering costs | $ 57,000 | |||
Sale of stock, remaining authorized shares (in shares) | 91,268,000 |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2023 | Apr. 03, 2022 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | $ 1,853 | $ 3,007 |
Cost of revenue | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | 513 | 1,040 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | 162 | 207 |
Selling, general and administrative expenses | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation expense | $ 1,178 | $ 1,760 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Contingent Consideration - USD ($) $ in Thousands | 12 Months Ended | |
Apr. 02, 2023 | Apr. 03, 2022 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Contingent consideration balance at beginning of period | $ 816 | $ 7,600 |
Payments | (816) | (4,018) |
Change in fair value | 0 | (2,766) |
Contingent consideration balance at end of period | $ 0 | $ 816 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | Jan. 25, 2021 | Apr. 02, 2023 | Feb. 28, 2023 |
Commitments And Contingencies [Line Items] | |||
Contractual commitments outstanding | $ 4,400 | ||
Matching Share of Osceola Project Costs | |||
Commitments And Contingencies [Line Items] | |||
Total amount committed | $ 9,100 | ||
Matching share commitment (as a percent) | 20% | ||
Maximum | Matching Share of Osceola Project Costs | |||
Commitments And Contingencies [Line Items] | |||
Funding commitment per single calendar quarter | $ 1,000 | ||
Center For NeoVation | |||
Commitments And Contingencies [Line Items] | |||
Contract, termination period | 18 months | ||
Center For NeoVation | Maximum | |||
Commitments And Contingencies [Line Items] | |||
Contract termination fee | $ 15,000 | ||
Term To Bring The Plant To Full Production Capacity | Center For NeoVation | |||
Commitments And Contingencies [Line Items] | |||
Lease term | 5 years | ||
Term To Operate The Plant At Full Capacity | Center For NeoVation | |||
Commitments And Contingencies [Line Items] | |||
Lease term | 15 years |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Aug. 17, 2022 | Sep. 29, 2020 | Apr. 02, 2023 | Apr. 03, 2022 | |
Related Party Transaction [Line Items] | ||||
Lease payment per month | $ 12 | $ 12 | ||
Oxbow Realty | ||||
Related Party Transaction [Line Items] | ||||
Lease payment per month | $ 394 | |||
Lease term | 20 years | |||
Annual percentage increase in monthly lease payments (as a percent) | 2% | |||
Funding to Meet Obligations as they Become Due | Oxbow | ||||
Related Party Transaction [Line Items] | ||||
Funding agreement with related party (up to) | $ 12,500 |
Related Party Transactions - Su
Related Party Transactions - Summary of Minimum Lease Payments Sale Lease back Transactions (Details) - USD ($) $ in Thousands | Apr. 02, 2023 | Jan. 03, 2022 |
Related Party Transaction [Line Items] | ||
Total | $ 184 | |
Oxbow Realty | ||
Related Party Transaction [Line Items] | ||
Lessee, Operating Lease, Liability, to be Paid, Remainder of Fiscal Year | $ 3,703 | |
Lessee, Operating Lease, Liability, to be Paid, Year One | 5,031 | |
Lessee, Operating Lease, Liability, to be Paid, Year Two | 5,132 | |
Lessee, Operating Lease, Liability, to be Paid, Year Three | 5,234 | |
Lessee, Operating Lease, Liability, to be Paid, Year Four | 5,339 | |
Lessee, Operating Lease, Liability, To Be Paid, After Year Four | 78,776 | |
Lessee, Operating Lease, Liability, to be Paid | 103,215 | |
Less: imputed interest | (75,533) | |
Total | $ 27,682 |
Variable Interest Entity - Summ
Variable Interest Entity - Summary of Condensed Balance Sheet Statements (Details) - USD ($) $ in Thousands | Apr. 02, 2023 | Jan. 01, 2023 |
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Cash and cash equivalents | $ 13,840 | $ 30,025 |
Total assets | 292,826 | 305,764 |
Debt | 89,428 | 92,853 |
Total liabilities | 235,354 | 251,787 |
VIEs | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Cash and cash equivalents | 40 | 16 |
Prepaid expenses | 3,315 | 860 |
Finance receivable | 37,690 | 37,652 |
Other assets | 256 | 256 |
Total assets | 41,301 | 38,784 |
Accounts payable | 1,655 | 117 |
Accrued expenses | 2,321 | 1,581 |
Debt | 36,340 | 36,778 |
Total liabilities | $ 40,316 | $ 38,476 |
Variable Interest Entity - Su_2
Variable Interest Entity - Summary of Condensed Income Statements (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 02, 2023 | Apr. 03, 2022 | |
Condensed Income Statements, Captions [Line Items] | ||
Interest expense | $ 2,471 | $ 1,029 |
Net income (loss) attributable to SkyWater Technology, Inc. | (4,273) | (16,606) |
VIEs | ||
Condensed Income Statements, Captions [Line Items] | ||
Revenue | 1,318 | 1,260 |
General and administrative expenses | 293 | 77 |
Interest expense | 318 | 324 |
Total expenses | 611 | 401 |
Net income (loss) attributable to SkyWater Technology, Inc. | $ 707 | $ 859 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | Apr. 02, 2023 | Jan. 01, 2023 | Mar. 31, 2020 |
Leases [Abstract] | |||
Revenue from operating lease | $ 21,000 | ||
Estimated lease term (in years) | 4 years 6 months | ||
Carrying value, net of lease | $ 27,000 | $ 27,000 | |
Accumulated depreciation of carrying value of lease | $ 3,230 | $ 2,902 |