SAN FRANCISCO, Dec. 15, 2022 (GLOBE NEWSWIRE) -- Tempo Automation Holdings, Inc. (Nasdaq: TMPO, “Tempo”, or the “Company”), a leading software-accelerated electronics manufacturer, is providing commentary on its previously issued financial results for the three and nine-month periods ended September 30, 2022 and 2021 and is updating its guidance for anticipated annual 2022 and 2023 results.
Third Quarter 2022 and Recent Operational Highlights
| • | The Company (formerly known as ACE Convergence Acquisition Corp.) completed its business combination with Tempo Automation, Inc., resulting in Tempo becoming a publicly traded company. The combined company now operates under the name “Tempo Automation Holdings, Inc.” and its common stock and warrants are listed on the Nasdaq Stock Market under the ticker symbols “TMPO” and “TMPOW”, respectively. | |
| • | The Company continues to make progress on the next major release of its customer portal, which is designed to enhance the self-service experience for customers and drive operational efficiencies by providing further automation and utility from data. This release will augment the Company’s highly scalable, cloud-native platform, enabling future growth, including the ability to readily integrate future strategic acquisitions. The release is currently scheduled to launch during the first quarter of 2023. |
Management Commentary
“We are thrilled to announce the successful completion of our business combination and public listing, which allows us to fully focus on executing our strategic plans and achieving our growth objectives. As a company that specializes in helping other businesses design new products, we are excited to bring technology to help industry participants better cope with supply chain disruptions and shortages,” said Joy Weiss Chief Executive Officer.
“As such, we are excited to reveal our upcoming customer-facing portal software upgrades, which will bring much-needed innovations in areas such as inventory management. The portal upgrade is scheduled to launch in Q1 2023 and will help us better engage with our customers. In support of this launch, we plan to slightly increase our marketing expenditures in 2023 to promote the new platform and associated services. Overall, we are confident in our ability to continue delivering value to our customers and shareholders as we move forward with our plans.”
Financial Results for the Three Months Ended September 30, 2022
Results compare the three months ended September 30, 2022 to the three months ended September 30, 2021, unless otherwise indicated.
| • | Revenue decreased 56% to $2.4 million from $5.4 million in the third quarter of 2021. The decrease in revenue was primarily due to ongoing semiconductor industry supply chain shortages, along with the termination of the new product introduction (“NPI”) portion of the product development lifecycle of a significant customer program. | |
| • | Net loss increased to $76.5 million from a $10.3 million net loss in the third quarter of 2021. The increase in net loss was primarily due to other financing costs of $30.8 million and the loss on debt extinguishment of $38.9 million, both as a result of the Company’s financing activities during the third quarter of 2022. | |
| • | Adjusted EBITDA improved to a $3.8 million loss from a $7.5 million loss in the third quarter of 2021. The improvement in Adjusted EBITDA loss was driven by successful cost-cutting initiatives, including workforce reductions in response to delays and changes in consummating the Company’s business combination. |
Financial Results for the Nine Months Ended September 30, 2022
Results compare the nine months ended September 30, 2022 to the nine months ended September 30, 2021, unless otherwise indicated.
| • | Revenue decreased 32% to $9.1 million from $13.4 million for the nine months ended September 30, 2021. The decrease in revenue was primarily due to semiconductor supply chain shortages, along with the end of the new product introduction (“NPI”) portion of the product development lifecycle of a significant customer program and workforce reductions and furloughs in response to delays and changes in the SPAC merger process. | |
| • | Net loss increased to $96.5 million from a $24.4 million net loss in the third quarter of 2021. The increase in net loss was primarily due to other financing costs of $30.8 million and the loss on debt extinguishment of $38.9 million, both as a result of the Company’s financing activities during the third quarter of 2022. | |
| • | Adjusted EBITDA increased to a $17.8 million loss from a $16.5 million loss for the nine months ended September 30, 2021. The increase in Adjusted EBITDA loss was primarily due to the decrease in year-over-year revenue, along with costs incurred in connection to delays in consummating the Company’s business combination. |
Financial Outlook
Management anticipates that the completion of the Company’s business combination and public listing of the combined company’s securities will have a positive impact on the Company’s financial performance in the fourth quarter and throughout 2023. With the business combination completed, the Company expects that management will be able to focus on growth opportunities, both through organic means and possibly strategic acquisitions. Additionally, the Company expects to be able to increase its investments in key areas such as marketing, sales, and the further development of its software platform.
The Company is providing the following financial outlook for the fourth quarter and full year 2022:
| • | For the quarter ending December 31, 2022, revenue is expected to be between $2.3 million and $2.9 million. For the full year 2022, revenue is anticipated to be between $11.4 million and $12.0 million. The Company expects that customer shipments for the quarter will be in line with its internal expectations. These revenue figures may be impacted by various other factors, including the volume and progress of partially completed customer orders as of the end of the year. | |
| • | For the quarter ending December 31, 2022, Adjusted EBITDA is expected to be between a $2.8 million loss and a $3.8 million loss. For the full year of 2022 Adjusted EBITDA is expected to be between a $20.6 million loss and a $21.6 million loss. |
In addition, the Company is providing the following financial outlook for the full year 2023:
| • | For the full year ending December 31, 2023, revenue is anticipated to be between $14.0 million and $17.0 million. This growth is expected to be fueled by continued investments in organic growth initiatives while still recognizing challenges associated with bringing back furloughed workforce members as well as recent softness in demand from key customer programs. These revenue figures may be impacted by volume and progress of partially completed customer orders as of the end of the year. | |
| • | For the full year ending December 31, 2023, Adjusted EBITDA is expected to be between a $6.5 million loss and a $8.5 million loss, representing an improvement from the forecasted range for the full year ending December 31, 2022. This improvement is expected to be driven by higher revenue and a lower cost structure partly as a result of the deployment of the software releases described above. However, these estimates are also adjusted to account for the negative impacts mentioned above. |
