Earnings call transcript Q4 2022

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Operator

Hello. Thank you for joining us and welcome to today's Terran Orbital Fourth Quarter and Full Year 2022 Earnings Call. My name is Leo, and I'll be your moderator for today. [Operator Instructions]

I would now hand over to our host today, Jon Siegmann, Senior Vice President of Corporate Development. ahead. go please Jon,

Jonathan Siegmann

Chief your Good year-end and me will XXXX Orbital business Co-Founder, executive from Leo. and quarterly Chief answer Gary joining highlights Officer. Financial this you Terran Terran Chairman, Bell, available annual Marc Terran Orbital's earnings are Orbital’s update Marc Officer; morning will you, and thank Hobart, everyone, for morning Executive Thank for full then and to call. the quarter provide will XXXX, and review a team be year and and the questions. then Gary results. With

call, could make expectations statements and today's actual materially differ cause and are statements forward-looking current are as and statements. risks a result, events on to During These we forward-looking this may call. assumptions, subject from our factors based made Many on to certain uncertainties.

and website, these the Commission, and refer For undue our on company which risks discussed the the information forward-looking any to of forward-looking be not cautioned specifically reliance call. Securities update each uncertainties, during more the that on statements filings obligation and Exchange put statements, to company's www.terranorbital.com. may are please this any Readers found with be disclaims about to can

financial we refer that note also Please today's to information certain will call. non-GAAP on

You GAAP can with measures find release. measures reconciliations comparable of these in most press the non-GAAP financial our earnings

Marc. over With to that, it will I turn

Marc Bell

earnings and conference and Jon welcome you end thank call. everyone our XXXX you, Thank joining for year

XXXX. LLAP, started prosper. became Stock on built exciting York livelong publicly an the year XXXX was symbol revenues capacity and under and We March, Terran and pivotal trading and the throughout backlog Exchange a In for traded company Orbital. we New

satellite industrializing made to vision of production. progress a time. our achieving We in are small on short way very We well extraordinary the space

XXXX a financial on will your last from then billion results thrilled which provide we're I happy update, the more Space company's the all detail $X.X our to Rivada provide review announced month. and business Gary contract including record take highlights from Networks, Today, am to we and questions.

Orbital's In year-over-year merger with then, Tailwind XXX% achievements public Since with marketing has recap to Starting million. grown from Terran revenue conditions. our company became $XX.X our challenging by March, of XXXX. Corp. capital Two during Acquisition a via

percentage Our rose XX over million last similar million a December under over as months the backlog to from of $XXX XXst. $XX

expect backlog XX coming Our various over includes in and of to the we which stages completion, deliver satellites quarters.

and last low the unprecedented beyond geopolitical tensions new advances Over earth satellite and even escalating urgent space for expectations. year, earlier technology orbit solutions demand drove our

decisively integrate moved expand our vertically facilities. and to Our strategically and team production has

that delighted record off. our am to report XXXX. I to you strategy in a satellites paying We is XX delivered

investment are million in and with And our Our partner in $XXX automation October, to Irvine, base complete of and in to thrilled Martin. year strategic our creating Lockheed a extension facilities, investments cooperation agreement new California XXXX, industry-leading production workforce, were we the facilities. an XXXX

be any early X. Our Transport of of in -- team's be commitment. performance I this the I Orbital in more steady Martin by customer Terran Lockheed Agency's prouder XX couldn't proud to could satellites was Development Space demonstrated execution of Layer the our important support more Tranche our delivering delivery

for goal our the since goal we war for Lockheed performance this competitors. Development believe top on team to thank entire a Martin, working our I the to engineering meeting and and was Agency accomplish commitments program discussed missions, listing, earnings our every critical nation's program As on to XXXX. into our call continues Space teams our differentiates this relative hard our in which customers' serve production and our and XXXX fighters

mode. are shattering Accordingly, even our landing new a competitive mover with we expanding first As record contracts. bigger an established small are satellite we manufacturer advantage, and

of the Martin the internal has tranches Agency the SDA's Development Space Lockheed the awarded two Layer. example, Transport For of team successive

first XX just completed. which The an XXXX, we awarded was which was award for satellites, early

XX second X months just awarded was ago. is XX for satellites and award The tranche

on executing this are later expect tranche We and this to begin deliveries year.

the Tranche contracts as year this Development Layer the X expect to well. Transport award later Space We Agency

both largest available month, satellites And contract XXX $X.X Networks. the ever. We to most support last and -- billion we to constellation, meet will time for provide Rivada space This to satellite design protection contract purchase just communications and proliferated received secure mission production architecture Terran a mission data were a and and well. half and advanced an to Orbital stones in a Rivada of the advanced Europe. the provides advanced cyber critical utilize U.S. our has to satellites the deliver assurance. its allies low additional earth services rewarded Space regulatory more also manufacturing Rivada constellation the offered orbit technologies ground to and XXX and option as capable

the we in satellite of we position as Rivada announced leadership our add the our facility space others our support up customers manufacturing and XXX the to buildup expanding in are small in progress announce square of fully This per to capacity. California. feet XX,XXX solidify pleased expected Irvine, and Agency, facility year. To further new to and support satellites commissioning manufacturing Space Development Today phase once are previously in ramped diverse such is

in lease step, announce space, thrilled of addition, our incremental manufacturing In assembly California. square to are feet next an today expansion also Irvine, and capacity XX,XXX we

this along to of construction facility, Importantly, assembly which will integration complete high new and has their accommodate payloads. satellites bay space slide the have become larger with assembly XX-foot already

production facilities We transition This facility of this to year satellite our our capacity capacity a satellite optimization system. prior components addition has will modules raise to new entire to and our this are of XXX planning our enhance and potential will assembly satellites. When all multiples to the comprise our target. and that fully production of efficiency the dedicate to ramped, existing per

to expect commissioning ground We groundbreaking formal ceremony begin facility have year XXXX. of in -- the we have this a will formal a in May and

and Let's outlook. talk a moment take about our

to commitments. we continuing billion of on ahead, government $XX our into pipeline to customer our capacity As our convert focused executing contracts, remain opportunities firm and -- the scaling our we look year

and impact intend our of phase has sufficiently other on provide contract performance, Rivada us results. progressed Rivada XXXX financial material our potential of do good of commenced our first and to the the permit the to Given until to projected XXXX program not sense guidance we a opportunities, have

expect program We throughout accelerate and with XXXX and progress XXXX. concentrated in on this XXXX to deliveries XXXX

replacement these affordable all as as every low are orbit a they do designed potential years, need be As reminder, orbits satellites. recurring few revenue replaced for for earth earth a with to continuously low satellites stream

over Layer XXXX. their in They they tranches indicated Additionally, plan SDA every next to which The multiple we years. plan satellites intend two expect run Tranche to to begin delivering has announced we participate. for year, Transport new procurements X satellites the procurements have SDA of

-- positions are SDA future programs We that pleased transport on the year well include and awards. TX's experimentation, priorities of tranche the additional demonstration represent of the and XXX our SDA layer SDA's X the and missions layer us satellites. delivery of tranche next early for this time and program nearly support X tracking

and legacy A prop one last XXXX achievements week the of the when cube Orbital's to and recognized We earliest you We of it long and satellites permanent ahead. of receipt at in there highly in thrilled satellites, on year Air team's go for our now and which the encourage year our perpetuity. just Space was to Smithsonian Museum displayed DC. display by highlighted our excited success in museum was Washington, is see at are Terran the have proud National

Gary to over to I hand year-end will the for and review meeting the Gary? Now financial performance our XXXX.

Gary Hobart

everyone. I'm support The morning, resulted the primarily SDA's increase of the continued prior finish a due Layer, to Marc in to contracts. Thank the of of made happy our Lockheed increase quarter, over completion X XXX% in strong million for revenue Trance good other year. you, continued Martin and in the progress Transport revenue satellites of delivery and year was the report program inclusive $XX.X to satisfying for fourth our customer XX to and the

actively with the initiatives on Overall, XXXX million, to revenue XXX% in be executing revenues year contracts recurring awarded ourselves to growth over our order $XX.X constellation Full increase year. we position were prior opportunities. large are a

most recognize at EAC, and and will completion on changes on which program EAC generally cost our a the or program, cumulative of an in make result revenues of a margins reminder, in estimated a for completion period adjustment. on to programs basis, we percentage impact our As in revenue a we

estimated XXXX During million. EACs adjustments revenues to by reduced our an $X

and million for year $XX.X negative the for and million Gross the and compared in to XXXX. $X for negative million $XX.X was in full year fourth fourth the profit $X.X quarter quarter million XXXX

for million $X.X compares million year. and compensation amortization, the profit the XXXX. and million cost in same quarter fourth gross year Excluding in $X.X negative periods negative adjusted depreciation with of in and prior $X.X the share-based sales, million for the full $X.X and This was including

profit gross early large A profit large impacted XXXX. that of portion programs involve the gross negatively cost million adjustments in and previously $XX.X customer approximately from estimated approximately of noted relate in revenue million This potentially sales. $X EAC and from missions. adjustments includes million to prototypes by phases adjusted $XX.X an of

often delivering on quality tight on solutions We chain XXXX. involving design During and timeframes, satellite focused challenges. supply technical

are in the this the possible future, substantially adjustments relate to XXXX are of I'm that say adjustments EAC EAC at the that drivers programs of point. most While pleased to complete

and to compared $XX.X million million compared the was fourth the the year $XX.X and -- the in compensation and primarily were prior XXXX of same and expenses increases administrative fees. Tailwind $XX.X capacity and due increase The of and a full XXXX. expansions full facility the an Two in research $XXX.X general year development for operating share-based million for year full year partially legal of salaries wages, XXXX wages of costs, the in offset period quarter to million costs for and increase result a Selling, to other sales merger, in in increase by decrease expense, accounting in to in as a a related expense in

of During the satellites. quarter company-owned the company abandoned observation fourth a of in constellation earth to plans invest XXXX,

recorded construction and as progress of those satellites. of million on As development previously a a associated result, cost impairment loss to $XX.X initial and we the capitalized with related construction

the of prior Our net million year. was fourth quarter the $XX.X the in of a million $XX.X XXXX period for same loss to net for loss compared

year. loss in Our prior the $XXX for $XXX net to of net million was the loss a million year compared

loss XXXX. decrease the interest of to items extinguishment the liabilities value a in earlier, XXXX, warrant partially higher by decrease offset increase by discussed loss expense fair recorded in net in in and driven derivative debt addition and the was In a in on of a

for negative same negative was EBITDA period $XX.X of XXXX. $XX.X the a negative negative EBITDA in EBITDA to to million other a an salaries compared operating in to was profit million for was year increase year. adjusted in for costs. and million $XX.X related $XX.X and the research expenses million development, and and fourth with prior primarily selling, decrease in adjusted year. and Adjusted gross compares prior The in This Adjusted the the quarter wages, decrease general the in due XXXX administrative

does was this backlog the contribution of February. Our $XXX.X the announced not end $XX.X expenditures the contract and year include approximately award were in any at XXXX Capital for million year Rivada million. the from

cash $XX.X December debt hand of Finally, million in XXst, gross million approximately approximately and obligations. $XXX XXXX, we had on

I now over back call the to will Marc. turn

Marc Bell

support Gary thank and of the on continued call your Great. Thank Terran you Orbital. for you everyone

questions taking and it operator. to I to over turn forward the now your look I'll

Operator

Thank you, Marc. Instructions] [Operator

the Austin Canaccord from on Please got we've go Moeller ahead. line. Firstly,

Austin Moeller

Hi, Marc and morning. Gary. Good

Marc Bell

joining for us. Thanks morning. Good

Austin Moeller

the I have question year XXXX So, on here just budget. a fiscal

So, Congress added million XXXX. $XXX budget the for Space Agency's to Development incremental an

deterrence this So, X where bid and along into with you do of tracking constellations, as other how the benefiting where? going transport, like planned Orbital tranche Terran see the on

Marc Bell

to integrate allies of fiscal The Defense, partners. continues space collaborating Department our across fabric security international commercial aggressively interagency and into industry, request national, the XXXX the by of force our

X% almost quickly $XX.X X% see budget approaching more a an and funding We of moving satellites the just $X comfortable our and of prove of rapidly for gets We positive XXX% investment more billion now budget. results they're billion, and the in that and as of they the less budget. ago, total years deliver their as requested Congress five of is on request, see request perspective With mission the billion than the direction which specifically time very on us. with this able SDA growing to $X.X higher than this represented is which

Austin Moeller

improvements think answer. would in up follow we more is but to now? on for XXXX materials And probably see cash is and do is question a Great the be then in maybe And pipeline a timeline EBITDA labor -- costs? flow we just Gary, positive, the for that and

Gary Hobart

Austin. Hi, Yes.

improvements. seeing are we So,

our of in and missions. mentioned paired programs I been we've on working remarks, bigger a versions As prototypes lot the of early are

bigger those scaling manifest programs are ability as of up economies we and leverage and to starting and we're and building scale our so, with really have are retired scale have And to themselves. programs,

going I over out the next think several quarters. that's play to

Our to response of a have question debt we general that EBITDA EBITDA, June to in positive update XXXX. with your our be covenants or a to regard requirement LTM reference about continues be by to breakeven

Austin Moeller

Okay. the color. Great. all Thanks for

Operator

Okay.

have Mike from a from Riley. Crawford go ahead. we question B. Please Next

Mike Crawford

Thank you. you show billion the QX at Hey, to contract? Marc, expect what of your backlog Rivada now do in $X.X to for end the [indiscernible]

Gary Hobart

Mike. Hi,

-- have evaluating how still want to contract. are present we Rivada We the

quarter as that make be the release how the just approach seeing separate overall this terms For and finish on backlog Rivada going the And to determinations March presentation. the we'll of in a in you're press to to now, is what reference in we properly XX-K contract. of

we're now, separate can -- backlog. our separately guys year-end so separate to it present just see to you For it going from you

Mike Crawford

Okay.

differently. Let try me

So, first intriguing to well, find these, it understanding that to first, both its XXX of needs build and that launching spectrum these that the can pay about start we over satellites rights Starlink. least satellites. what us also have regarding approvals But that tell you your have you priority at appears Rivada to to has funding Rivada

So a portion thereof.

Marc Bell

Sure.

process. the Board, the a actions comment submitted until the submission positions, the this their of about on is waiver XX% necessary and Office instead. clear to experts can that as from understands be in be maximum orbital the Lichtenstein, would customer's of considered Radio regulator of the the of against be allows Communications the which evidence It the the The this. receive of business to this that. grant submitted believes meeting Principality country which you deployment against a Rivada not all decision deadline Bureau But early can't on and end where tell March. I at asks of Rivada So, requested letter to as as we a positive entitled specifically. RRB relevant can -- I Regulations constellation know March you this evidence time. elected to on Regulations consists uses for time year. about filed the XX in IX contains the do German of The taken IT argue possible the to full for documentation of job framework procedure. as the what That's its the in Rivada's is Radio time Rivada for the RRB The the granting waiver. did applied. scene June merely will July reading that process Rivada

tell And to the funding they and as can their comfort goes, far I they're process did to you, they have they already. funding have first as our in stuff given get IT finished. And payment attorneys us our they where make -- otherwise

Mike Crawford

just then Irvine your new expansion. final And question Thank you. Excellent. one regarding Okay. is

facility next bigger for that components Is then move but that your have to the be just size higher also will to new factory, would you Bay size, plan? that existing components also new So, High Irvine. right the you

Marc Bell

-- all TVAC move line will -- is our just be plan Barranca, module the a final coming that April on the it to our testing. and for that this which to development door, assembly the is set original two to All building. module and And our street and new testing. of take all new will manufacturing assembly what do component Tech, call down and Those XX and will the be we're is The we will building which which to facility going buildings next is facility, attach Xst.

you're the but Bay, referring to to is Tech And High satellites. building is so XX XX sized building hybrid with new it's -- XX -- High the The allowing talking foot significantly larger do Bay. us tall foot

we're a building. seeing and We're we're the seeing -- it larger seen though wants decade opposite now going now Even for satellite get are direction. ago, Everybody buses set invented over cube go, the larger. want larger. We've people and the people smaller request we

that's a we single I house satellite kilograms. have think down XXX

So, model getting we're and than people the larger things learning quickly. But get seeing price space power. also important we've go-fast anything and than what is is more and it requests that more want else important more because are larger responsive is

are into incredible go to payloads And to that'll so, have reducing to payloads looking us we seeing interest expand being as and in able ahead well. But down to deliver and our also buses, cycle stocking stocking payloads buses. be and we're do

dramatically. design, shorten satellite, conversation. to XXXX. coming prefer a -- to It satellite of instead DC want very two-year And that interesting we having price. deliver outta conference to a and The build, up big a was now in customers speed cycle to have especially we So, right overwhelmingly

putting excel with is robotics all profitable. our go to how something we're And margin that at. make speed so, that price is and in, become the will we're we is going And where

Mike Crawford

much. Okay. very you Thank

Marc Bell

Thank you.

Operator

Okay.

we a Erik, Next please Erik Rasmussen Stifel. from ahead. go question from have

Erik Rasmussen

just with like up Thanks to Yeah. questions. expect capital be run do bringing XXX satellites you there? you're for needed to is the staying to Irvine expansion, on get And throughout there the taking at additional Maybe year. rate? seems working capacity the that When

Marc Bell

at the online, but in planned, working to enter say next some XX capacity. make April give is basically, will I'd go run able to through how by That's we and -- we these the produce, humming at we're be that look that view to end things. this take. month satellites facility or rate what of coming along that XX -- as days. bring QX, a everything's The the expect Xst. I new over sure be testing We'll facility's

we So, a XX can month. we -- do do

that because that increases new XX with that TX dramatically just constructing in now do the assembly, and the can it a month for facility Now, a facility we designed nothing is space purely we're learn else. we

Erik Rasmussen

you So, XXX, point looking at then so XXX, you said say some would a and mentioned you're of that, at you -- multiples X,XXX…

Marc Bell

We have-- haven't the satellite. of the all it the on numbers yet. but size we released depends size It's dependent,

we -- get ahead ahead we'll to -- will we will and We just hire are that build to down be, always we where programs have and to getting. we as preface, year this have we of to further continue

a like, great Rivada And that is reality our of deal. back $XX look a that billion and the pipeline, converted just that's wow, was such at active. we talk we everyone's number. pipeline, quite about pipeline and billion big -- $X.X So, But that a is our pipeline. our People shows crazy quite real and

so, try programs. we of we -- have to build programs we And have hire ahead ahead to people of and

So, to of over we facilities later coming other next announcements will for would see that terms in other I online the be that of year be couple making expect people will this new years.

Erik Rasmussen

Got then up. And my it. follow just maybe

support to you on it program. delivery delivered Can XX XX now You the are year-end though the us next like satellites transitioning these build are to remind for the what TX TL that you're guys timing the just satellites. milestones, time the satellites, And by of of seems you trenches targeting?

And be think by that color SDA. the maybe tranches positioned then that more Thanks. awarded will you for how the give you a little just on other

Marc Bell

of on by SDA, with we've our have are well to the far we They I And well, -- SDA. we to we've how we proven we all can are we already do are Sure. believe way well begun manufacturing. tell as XXXX. -- the the we And doing going we win, satellites on as And in to QX But ourself deliver you, have I as delivering the said we're Tranche everything think those to who will will to and do we delivering. continue start X those was start -- are do. continue We're that. said, said we to continue win, we obviously quote. we who deliver to XXXX. they will And will delivered

So that I a -- and price will it do sense. at makes

X. all, very we're competitive So, obviously think -- like Tranche pretty bid feel XX good that I a bid we're we it's people a on who in

expect to continue means that a to But lot and we So, we something. bidders. of ourselves have prove

Erik Rasmussen

Great. Thank you.

Marc Bell

you. Thank

Operator

Grenfell Elizabeth from question Please of America. Bank a from go have we ahead. Next

Elizabeth Grenfell

Hi. Good morning.

Marc Bell

you. Thank Good morning.

Elizabeth Grenfell

additional -- give CapEx to Thanks. just associated the or this in you expansions give any terms color modeling color what on Did growth of you Did facility expect revenue any yeah. year, or be year? with for you general this

Gary Hobart

that are to But guidance, years. Elizabeth. we revenue from other Rivada. is In on to as only Rivada, color of looking will. we've the but Away doing providing guiding is if what conversions in more Rivada, in past, of given we're And I until -- middle coming of the the we Hi, our would still pipeline just really matter not each double said not the doing. the regarding principle we you guidance, of magnitude a general, we're have general are look not that a award

Elizabeth Grenfell

you any give we us of and Okay. that? cadence And come the should in, you what -- how Rivada of think sort idea can how to expect around about

Marc Bell

waiting everything are got license -- speed then they Rivada to and for they have We to finished, -- IT their get ahead. goes to their get full

step to So, one the one go. more more -- then we're great. in to Good they and -- do, step

Elizabeth Grenfell

Okay. All the we facility horse bit of these right. CapEx And should about about the with how think what a point that? --? it the putting little cart And in before is associated at expansions? What

Marc Bell

put deep cart place the because then trouble. if the is business, in -- the We and in we're you have no horse horse always before to to always our go, up shows

to because always and rate So, be PX in XXth what has programs And to believe right? we're we our going XX winning, what good think going to we're month an we building pretty we you're get. everybody horizon, know -- have we of insight

-- not know building for of We a of the we're win high for going were we to building. going we to so knew, we confidence, we had knew example, we sake winning. And were be We -- not had TX.

space TX. won an started big square TX our addition onto wasn't we because XX,XXX our have and to existing and now we ahead facility we went feet, we So, build exist And to TX. we've enough building enough knew do

were winning we a we good Rivada. to be had like feeling -- something have that going now We

earlier gives So ahead to this space lease signed we leased year a -- and we a begin building another that went go us to facility we build Rivada.

as -- customers I to indicator in at if market to house. you more we the be should space, manufacturing assembly be space, so and good sign Now, more we expect that for leases more that us a space getting look

Elizabeth Grenfell

very Okay. Thank much. you

Marc Bell

other Yeah. lot add to -- I'd facilities, building time things. that like into long for these equipment thing a is, in And one very these of specialized a there's goes lead

So, stuff as we have -- of so, to takes as much weeks get. some XX the

And so -- but to wait say got when we we on weeks want get time. get it a XX they delivered to program, we can't And equipment.

-- capital a we business, -- is business. be technology a printing forward. mean, it intensive So, a not strides we're made we'll up opening just we've I facility. massive XD We're but opened intensive

circuit assembly month We facility. up are printed about our board opening in a

We shaker be satellite our have a an sat facility could chambers entire with will now our also that about entire own we fit -- our and it in testing own month opening tables. -- fit could TVAC own

control used taking we are So, we -- you it to outside, your destiny. chain, if back control inside, And the send bringing are you supply a integrating. of we to vertically stuff your lot going

So, the other of one people road, we having. supply like keys don't is control chain, down our issues And supply we a of success. chain lot have to are this the our so

Operator

Konrad Greg a ahead. have we from go please Greg, from next Jefferies. question And Okay.

Greg Konrad

morning. good Maybe Hey, …

Marc Bell

Good morning.

Greg Konrad

satellites you in XXXX? XX I delivered seems sorry, X not deliver in X XXXX. or majority Tranche How you're appreciate that to plan like start, delivered giving in but and Tranche it to XXXX, you out, many of you maybe satellites … guidance, do called

Marc Bell

you Gary, to want that? Gary? answer

Gary Hobart

that The is little end $XXX years year million. Greg, this at the Sure. in are XX over backlog there speaking, guide the help inside stages And at may of a generally from various are two In you our converts little date the construction. -- about backlog least of our in of And order. that bit. of a satellites backlog,

years. not to to those when guiding of to backlog that converted are going precisely inside be closer delivered, So, will two it's satellites or be while we're

probably modeling as could a so, you And around reference using least point. those start at

the And are then that XX XXXX. the Marc first for mentioned end satellites before the X Tranche earlier of quarter of due

So little more hopefully that color. a gives you

Greg Konrad

the called on the award. And mean, then you I just out Rivada pipeline, $XX billion

you awards pipeline awards? how catalyst If chunky these think just smaller Just some maybe thinking that converts. much about versus about is larger, as of the of breakdown, that

Marc Bell

Well, is NASA chunk billion contract the Rewards Rapid of the biggest for. pipeline $X the

us that can that and contract. up satellites off So is call order NASA where

just -- haven't we other the day. with NASA met We

We haven't that, Rivada after. the that spending of size the but going really seen a our time lot we of demonstrates things are

satellite. marketplace satellite who we a trying whale And with can lot to are a that We build hunting, as time to build want Rivada in trying it -- people people it spending the with we're us did is of satellites. large bulk a it business gave for the who -- is hundreds time that. build what less us a working. we gave us our are credibility and we We're spending of to one than do But are

people in spent very was past we some week the the constellation it -- larger, an size but So, multiple smaller, differently, now opportunities, commercial are lot meeting the interest of that governments marketplace. us a both foreign DOD of very and before. Rivada, viewing some with from didn't incredibly we credibly, within see now seeing And companies we're both around foreign the -- and

buy mean, advantage. buy lots and XX% of all you It's us kicking doesn't them components in time. all And different know just opportunities gives our when the doing, huge together, different keep look make different with from other every if manufacturers. -- And XXX mind, put there. -- we're with announced X,XXX really competitors over facility today, -- new of we with been house, and you transformation. perfectly work from and manufacturers that we positive our a automation XX all pipeline, you huge in we we a I around we And have our of the they It have at components most work. in satellites components

So, it doesn't that. work like

And the with to designed They're other. and all all of each stuff of is plug that's our work one reasons, play.

proven at flight our us this all -- a most is also huge So -- of point, pro and which gives stuff advantage. flight

-- shouldn't dollars States. impact real that next -- like And we as USA. coming that of up DOD foreign we and People here want in on becoming defense is year then a create lot to on and they hill. you have the business into the and Congress over to have the but foreigners. in United coming to the topic of be lot getting some the point in, programs taxpayer people our that And bigger, like entries So expect built foreigners the is jobs Airbus, suspending a a is bigger made getting on U.S. we by a are Leostella,

Greg Konrad

had -- XXXX, the capital? then, into last might two-part one, in just given on terms XXXX, of you that does tie And carry to plans, of staying working I cash. or actually CapEx upcoming you And contracts, in peak good XXXX? and I missed just and kind have in of for terms really it, CapEx mean, would given in but kind XXXX just on positive kind XXXX expect working that capital expansion of question of just

Gary Hobart

Yeah.

a CapEx. maybe to new Irvine a be think now a zero, be $XX exquisite facilities how as and in scoped self-funded next. on combination So, Predominantly expansion. On year million that the all that, for right ceased facility the and two that's that to bit of reduce spent expansion, We Irvine constellation, but CapEx, spend the more, in. that number about we already could the will and facility. pursuing now for get each we depending question. little existing will It both year of I haven't equipment this type -- that roughly in fully of two the parts as we've in this facility CapEx

I five, maybe say would spend depending that that's IT there's CapEx high maybe from we $XX on an a million anywhere or how about also maintenance as as equipment. think

facility the bringing right on million, So, that's speaking, as more that depending generically on about or now, looking Irvine, plus well from we this as are at adding minus how we're profile anywhere now, testing and we think on maybe accelerated equipment a maybe how additional capabilities. I'm in less, CapEx $XX

of significant have do swings we capital, working capital. Regarding fairly working

bit A almost working is last be we chunky swings in growing. frankly, capital growth is, quarter little can of part quite teeing had had the quite dramatic. year. the throughout revenue a swings that You working When capital We and saw the XXX%, pretty of that swings. fourth working capital positive

our And also reasons how how working manage about at capital. it's to profile. we one growth and the and And think so, is in about of our our both looking liquidity cash thinking factoring of flows we're liquidity constantly part that our why

Greg Konrad

Thank you.

Operator

Spingarn a question Robert from Please ahead. have we Melius. go Next from

Robert Spingarn

then say market? all us how morning competition maybe from the has moving of demand exit Are and Hey, seeing is economy away? as your is demand the everyone. the the players the supply Marc, any you you've good And just marginalized how given the a how market color changed? perspective changed you would net-net, So, are changes chain?

Marc Bell

Sure.

So, let's bring this down a couple pieces.

We unanimous. budget we market been always It's So, NDA us don't only thing on. well. as see our We interest don't It's -- world be anytime as biggest near agree years. rate soon. is just reality. XX It It's defense that a China, or business peace. the on With the everything we always Ukraine see side, proof. recession in happening our for soon always is threat don't see will proof. to Democrats We going see and that Republicans that don't on cutting see our anytime

commercial XG, now and million building in they satellite you're building it's whether owned sorts light we can things commercially side weren't are changed it made do for low make do is to viable. world When it that applications economically are in seeing for are things to are the other see of that can business become There constellations viable, billion things, productive dollar they has has orbit, -- things. What orbit, dollar -- economically economically were do the internet to satellites people they of satellites geosynchronous we When earth we business. there -- all do viable. companies become more

supply chain supply continuing we issues. are chain by On the in seeing and side, less house, build to less things

new lot a them continuing our competitors into people see a of space of competitors to -- spacs, get and trouble. we seeing are a our of per lot lot se, the We

You come unless first. hope they us build come. to don't our these building and In Virgin saw case, what they All are something to Orbit. we guys it will happened

just into So, when a that. neighborhood, business we -- unfortunately lumped a we're stock different but doesn't have represent and model, very bad our

Robert Spingarn

of just regard about talked Gary, Okay. with and negatives, positives a numbers. And lot to then, you -- the

against continue that down, burn on? you winding free when to expect the what between together, and all put I we cash should so the year? So, but the prototyping, be guiding, how go trend through the as facility we you're know expansions not should

Gary Hobart

for $XX onboards our a Rob, as see near point million providing lower, take one Could on history free a a the could -- -- the term impact the particularly be history we flow million than Yeah. liquidity tune The timeframe, little bit I particularly the $XX quarter. cash our to say, addition least little difficult to bit if as in but that the not working be that higher any but could in much at to capital guidance, bit in or question. to thinking Rivada about. it's to little thanks that, swings can

it So, managing. has awards, probably execution of those swing one fairly awards that, biggest timing well working the that -- And that is dramatic new one, capital we overall as impact. is that the and big of a a are very the as

them Generally positive with on. bring awards new is we

And at it use makes of but liquidity. of and guide, of terms it function it in we're a so to also is kind of where difficult growth

it's pause in give there, because guidance really me And let difficult much to more that. so,

Robert Spingarn

B a Riley the housekeeping are just And question. facility? Where Okay. on you

Marc Bell

B. still So, Riley the to open facility available us. is and

proceeds shares. sale or XX about the We have of The of of $XX to us. about million available million lesser

tapped barely last year. So, we've it

Robert Spingarn

Okay. Thanks.

Okay. you Thank both.

Operator

ahead. Please from have a we from go Next Sullivan Benchmark. question Josh

Josh Sullivan

Hey, good morning.

Marc Bell

morning. Good

Josh Sullivan

you of any lessons far think the or areas been or to out As legacy as mentioned call some learned? I the contracts EACs, to program. for aspects might related have

Marc Bell

be specific. I mean, more it'd

Josh Sullivan

forward, legacy position mean, so about, should think just? they I going anticipate were far forward we programs, or in better mentioned as just should of part you we a going So,

Gary Hobart

Yeah.

I future. in we We've estimates we as that it's like, the finished the our possible on year with mentioned, So, EAC have what additional knew. EAC based our adjustments in

So, throughout programs -- XXXX, a on completed reiterate we is, saw the large of that substantially just what on. adjustments I we we're we'll EAC are portion

contributed running things to tended things quite just programs those the technical to additional more and prototype challenges, also be and the early where things so shifts, to accelerate supply out get quite all frankly, And move door. phase those And costs. frankly, additional chain challenges, programs, speed trying to

a that's but here you you tend things, to seeing. where So, impact. or programs as And bit on ones a teething that, have adds be million if bring a programs the million those we're like what board $X we couple it each there's have little one-off quarter. of And up of

are we What we where is can more have lot an now programs much if going programs program scaled relatively size muted. a impact the the impact, more is of our see forward bigger, do overall

have the EAC we're we a in our by are adjustments, are have possible, begin to lot of view the is we there So, -- but hopefully some we encouraged year. And mirror, the future. -- we where rear but

Marc Bell

people we'll stabilizing. in But the learning palm but we holding the can truck, the satellites a ranges stabilizing, less be now and are curve ago you kilogram see things XX seems where to we hold into XXX in to to sizing the building size of was have go a I need -- going past. to point. hand. soon there to than Today, Yeah. NREs stabilizing be more we're months but XXX were But to of that most get mean, that forward your

Josh Sullivan

maybe one Got and there? you you include about going by the it. the with just does cognitive space. on it owned any Monday announcement talk that Is And be dual Can SAR? use to on then assets

Marc Bell

Terran [ph] cognitive software on spaces, Sentient Orbital is using And asset now scheduling. orbit platform.

drive I as the our of all That's well help to internal can't grow I We we're costs as operations larger easier. using constellation point. as comment it at down expect could say for. customers what this partnership this to

Josh Sullivan

time. for you the Thank

Operator

Next we go ahead. have a question from [indiscernible]. Please

Unidentified Analyst

you assume convert question. give X.X XXXX question us that in stage the I of for to what a the would on you $XX and that would color pipeline, into in the composition of Rivada. a Can what billion and regarding any Thank taking of include the you XXXX? that that pipeline go I expecting Hi. are do have doesn't

Marc Bell

billion very a programs pipeline. now and that is billion $XX make contract. $XX.X Well, up biggest as programs could of satellites. there $XX The Sure. pipeline. Rewards got are well. some Rapid large That's about there it a And then $X in X,XXX billion that very, that about was NASA you've smaller XXX a some after But billion programs

Unidentified Analyst

Thank you.

Operator

[ph]. from ahead. question Byron a James Please have We go

Unidentified Analyst

there question, really you career. have whole call. that see. kind much but when see finance folks the I've a sure Thank if be Hi. fundamental for in I guy see observation. of taking problems concerned up I'm so just year, kinds last any losses not an of get my operations I I a I you to act the that very are just my hard been And might manufacturing

it's just your few shares have stock. I -- I so, of a quite And --

strong very or how that this they think say have that group to cost you more, is be satellite, person staff a can you ship satellite immediately when we I hope of but did this I'm a going so on I acquiring accounting your on satellites.

my only And comment. that's so,

startups involved of more that I've much I been number focused is The more are at is and thing been thing has of one me, one succeeded. get and other -- not very in for and also to on them And a see very people I sales. trying more I've unfortunately see

guys a on Never business. get You that. billion any got of mind contract, trying worth to $X.X more focus

company's a next very and all succeed the you're problem. cash $X.X And or overwhelmed. then of people I need out run on sudden You And see quickly to to billion thing, of gone. a the get this there's going

experience So, lot of of I'm some you my in I've giving you I'm I'm and but got in acquire guys. just future. putting more, lot the my shares. faith some a a thoughts to of going

a on make in and don't get huge you more. sure and what's front got be so of You trying contract focused to with succeed you

Marc Bell

So, very much we I comments. appreciate -- your

We've comedies be so -- I, my business we've will to a be -- are Staton seven XX This built partner taken public We successfully. and our unicorns. Dan eighth.

is, that programs. part understand of experience we hiring had We and we've that ahead are We losses management team. are of old

knew hundred We scale, knew and we are you But to ahead forward. flow to the because percent we programs committed build financials some And positive have to Rivada out all see profitably. we EBITDA important door obviously the all XXXX in -- we to free needed the of will getting cash to you that hire time us. have programs going be gain would we big of getting start is going enormously up into programs we and would what because are to on to scale. a we and But as it be positive improve

also Gary, money but very great to Running place. Martin, of investors thankfully make all get with have as to with tour. -- our come help busy. have been lot the a be a concerns and the down, of your today, our to work understand and week And a the on invite to see been a trust cycle. we totally come we've normal have day, to costs investor in call, -- people a two a we seven partner And -- supportive And with we to of to the And spend they will more facilities, days new get myself, are be us especially Lockheed are see a we keep building. We're existing what welcome will sure enormously do. facility. in keeping shifts us me, so but any had -- and our with robotics to we rest we're team take where facilities, And management are working we we the always like we'll

Unidentified Analyst

much. Very good. so you Thank

Marc Bell

you. Thank

Operator

Instructions] [Operator

have ahead. from go Please Den [ph] Capital. we Now question from Ascending a Ramp

Unidentified Analyst

the -- -- to guys. time Could of how change a when and your this your approval. In possibility that Rivada your could you needs? you would upfront if Appreciate ameliorate once or benefit your cash guys, gets kicks could cash off could there is large ICU of payment needs words, to cash a project Hi. this that that speak the some make getting worse? is wondering other that a needs I'm

Gary Hobart

Yeah.

in cash of advance commercial trust, any advance cash. of of We're don't we a cash must people, a we with So, kind -- all lot but them credit. program, in give God see, pay the and

credit. then commercial It's try pay a very are we most of in the in to, And pay very give -- but we so We a law little Department firm working advance, pay they advance, Unlike off retainer. give very, we like work. Defense then we quickly. credit work, want -- where contracts

of So we our we side, little of -- spend. but are all we upfront are commercial written, all to so contracts under commercial the very have very, cash

Unidentified Analyst

of a kind up that. And Okay. to follow

coming that cash of today, require and the what now the any market in this and able the is capital. that your radar dilution be few concerns, mind feel market, of because stock of Rivada some and of last this banking in banks, and as there with the are one, you a kind some et your has reason on seeing you're crunch I'm you're really do cetera. far I but funding get And there companies stock pressure in well, have that the on a punished regional in go crunch if know? the into sort further would financing you -- alternatives been the you comfortable the if have risk that And as wondering you the days before Regarding space, seen crisis, across part to part any seeing to think of we've is that may banking need to as for lawyers limit Rivada, if

Gary Hobart

have contract. any we thrilled While we one don't Rivada, are on we count that

bid And rate out. like programs go be we on we continue on. coming bid what up, high winning to bidding the to and have very of lots we things, success on just in a new continue will we SDA We

So, and to Lockheed now, together. and had partner XX success we've in a to house continue continue they think high I be We continue rate, we to Martin, tremendously programs a Lockheed with right bid. working be we -- have -- and we phenomenal

from no this a have the don't we cash. just hundred our feel about well have we last we are raised where done on pretty We very about side. -- point are and million year Lockheed. We management cash good we So, -- concerns at

Unidentified Analyst

you. Thank Okay.

Gary Hobart

Thanks.

Operator

back it currently no so further over hand team. We management have I'll questions, the to

Marc Bell

always, those myself you very accessible Thursday to as rest the We on of for -- we conference make continuing possible management as today's and week the continue of in available. week Orbital. Well, attend our investing to call. Gary thank everybody we Wednesday the be Terran for and Hobart, much make this all Sidoti at try team tomorrow of Great. Terran we in of who to your ourselves as and And going wish employees, to to tuning and ourselves the confidence community. you appreciate We're behalf support for this and Orbital your

you very to free look we to questions, reach to and in much. us forward any another quarter. you and out answer happy to at Thank feel So, and all ir@terranorbital.com are seeing

Operator

call. for today's concludes This joining. you Thank

now disconnect your may You lines.

Terran Orbital (LLAP) 21 Mar 232022 Q4 Earnings call transcript