Rocket Lab Announces Fourth Quarter and Full Year 2022 Financial Results, Issues Guidance for the First Quarter 2023

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

+ USE OF NON-GAAP FINANCIAL MEASURES

We supplement the reporting of our financial information determined under Generally Accepted Accounting Principles in the United States of America (“GAAP”) with certain non-GAAP financial information. The non-GAAP financial information presented excludes certain significant items that may not be indicative of, or are unrelated to, results from our ongoing business operations. We believe that these non-GAAP measures provide investors with additional insight into the company's ongoing business performance. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. Reconciliation of the non-GAAP financial information to the corresponding GAAP measures for the historical periods disclosed are included at the end of the tables in this press release. We have not provided a reconciliation for forward-looking non GAAP financial measures because, without unreasonable efforts, we are unable to predict with reasonable certainty the amount and timing of adjustments that are used to calculate these non-GAAP financial measures, particularly related to stock based compensation and its related tax effects. The following definitions are provided:

+ ADJUSTED EDITDA

EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA further excludes items of income or loss that we characterize as unrepresentative of our ongoing operations. Such items are excluded from net income or loss to determine Adjusted EBITDA. Management believes this measure provides investors meaningful insight into results from ongoing operations.

+ OTHER NON-GAAP FINANCIAL MEASURES

Non-GAAP gross profit, research and development, net, selling, general and administrative, operating expenses, operating loss and total other income (expense), net, further excludes items of income or loss that we characterize as unrepresentative of our ongoing operations. Such items are excluded from the applicable GAAP financial measure. Management believes these non-GAAP measures provide investors meaningful insight into results from ongoing operations.

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

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS AND YEARS ENDED DECEMBER 31, 2022 AND 2021

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

 

 

 

Three Months Ended December 31,

 

Years Ended December 31,

 

 

2022

 

2021

 

2022

 

2021

Revenues

 

$

51,762

 

 

$

27,478

 

 

$

210,996

 

 

$

62,237

 

Cost of revenues

 

 

49,932

 

 

 

20,793

 

 

 

192,006

 

 

 

64,130

 

Gross profit (loss)

 

 

1,830

 

 

 

6,685

 

 

 

18,990

 

 

 

(1,893

)

Operating expenses:

 

 

 

 

 

 

 

 

Research and development, net

 

 

15,018

 

 

 

11,968

 

 

 

65,168

 

 

 

41,765

 

Selling, general and administrative

 

 

24,035

 

 

 

19,048

 

 

 

89,026

 

 

 

58,395

 

Total operating expenses

 

 

39,053

 

 

 

31,016

 

 

 

154,194

 

 

 

100,160

 

Operating loss

 

 

(37,223

)

 

 

(24,331

)

 

 

(135,204

)

 

 

(102,053

)

Other income (expense):

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(892

)

 

 

(2,751

)

 

 

(7,799

)

 

 

(6,128

)

Loss on foreign exchange

 

 

(488

)

 

 

(178

)

 

 

(4,435

)

 

 

(567

)

Change in fair value of liability classified warrants

 

 

 

 

 

24,130

 

 

 

13,482

 

 

 

(15,294

)

Other income (expense), net

 

 

385

 

 

 

(215

)

 

 

1,010

 

 

 

(798

)

Total other income (expense), net

 

 

(995

)

 

 

20,986

 

 

 

2,258

 

 

 

(22,787

)

Loss before income taxes

 

 

(38,218

)

 

 

(3,345

)

 

 

(132,946

)

 

 

(124,840

)

Benefit (provision) for income taxes

 

 

1,010

 

 

 

6,541

 

 

 

(2,998

)

 

 

7,520

 

Net income (loss)

 

$

(37,208

)

 

$

3,196

 

 

$

(135,944

)

 

$

(117,320

)

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

 

 

 

 

 

 

 

 

Basic

 

$

(0.08

)

 

$

0.01

 

 

$

(0.29

)

 

$

(0.56

)

Diluted

 

$

(0.08

)

 

$

(0.05

)

 

$

(0.29

)

 

$

(0.56

)

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

 

473,644,862

 

 

 

449,270,950

 

 

 

466,214,095

 

 

 

209,895,135

 

Diluted

 

 

473,644,862

 

 

 

451,945,594

 

 

 

466,214,095

 

 

 

209,895,135

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

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2022 AND 2021

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

 

 

December 31,

 

 

2022

 

2021

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

242,515

 

 

$

690,959

 

Marketable securities, current

 

 

229,276

 

 

 

 

Accounts receivable, net

 

 

36,572

 

 

 

13,957

 

Contract assets

 

 

9,451

 

 

 

2,490

 

Inventories

 

 

92,279

 

 

 

47,904

 

Prepaids and other current assets

 

 

52,201

 

 

 

19,454

 

Total current assets

 

 

662,294

 

 

 

774,764

 

Non-current assets:

 

 

 

 

Property, plant and equipment, net

 

 

101,514

 

 

 

65,339

 

Intangible assets, net

 

 

79,692

 

 

 

57,487

 

Goodwill

 

 

71,020

 

 

 

43,308

 

Right-of-use assets - operating leases

 

 

35,239

 

 

 

28,424

 

Right-of-use assets - finance leases

 

 

15,614

 

 

 

 

Marketable securities, non-current

 

 

9,193

 

 

 

 

Restricted cash

 

 

3,356

 

 

 

1,116

 

Deferred income tax assets, net

 

 

3,898

 

 

 

5,859

 

Other non-current assets

 

 

7,303

 

 

 

4,550

 

Total assets

 

$

989,123

 

 

$

980,847

 

Liabilities and Stockholders’ Equity

 

 

 

 

Current liabilities:

 

 

 

 

Trade payables

 

$

12,084

 

 

$

3,489

 

Accrued expenses

 

 

8,723

 

 

 

10,977

 

Employee benefits payable

 

 

8,634

 

 

 

8,266

 

Contract liabilities

 

 

108,344

 

 

 

59,749

 

Current installments of long-term borrowings

 

 

2,906

 

 

 

2,827

 

Other current liabilities

 

 

22,249

 

 

 

10,999

 

Total current liabilities

 

 

162,940

 

 

 

96,307

 

Non-current liabilities:

 

 

 

 

Long-term borrowings, excluding current installments

 

 

100,043

 

 

 

97,297

 

Non-current operating lease liabilities

 

 

34,266

 

 

 

28,302

 

Non-current finance lease liabilities

 

 

15,568

 

 

 

 

Deferred tax liabilities

 

 

95

 

 

 

466

 

Public and private warrant liabilities

 

 

 

 

 

58,227

 

Other non-current liabilities

 

 

3,005

 

 

 

1,800

 

Total liabilities

 

 

315,917

 

 

 

282,399

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

Stockholders’ equity:

 

 

 

 

Common stock, $0.0001 par value; authorized shares: 2,500,000,000; issued and outstanding shares: 475,356,517 and 450,180,479 at December 31, 2022 and December 31, 2021, respectively

 

 

48

 

 

 

45

 

Additional paid-in capital

 

 

1,112,977

 

 

 

1,002,106

 

Accumulated deficit

 

 

(440,955

)

 

 

(305,011

)

Accumulated other comprehensive income

 

 

1,136

 

 

 

1,308

 

Total stockholders’ equity

 

 

673,206

 

 

 

698,448

 

Total liabilities and stockholders’ equity

 

$

989,123

 

 

$

980,847

 

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

(unaudited; in thousands)

 

 

 

Years Ended December 31,

 

 

2022

 

2021

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

Net loss

 

$

(135,944

)

 

$

(117,320

)

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

 

 

 

 

Depreciation and amortization

 

 

29,947

 

 

 

10,851

 

Stock-based compensation expense

 

 

55,649

 

 

 

32,557

 

Loss on disposal of assets

 

 

923

 

 

 

156

 

Loss on extinguishment of long-term debt

 

 

 

 

 

496

 

Amortization of debt issuance costs and discount

 

 

2,827

 

 

 

1,546

 

Noncash lease expense

 

 

3,199

 

 

 

2,010

 

Noncash (income) expense associated with liability-classified warrants

 

 

(13,482

)

 

 

15,294

 

Accretion of marketable securities purchased at a discount

 

 

(1,395

)

 

 

 

Deferred income taxes

 

 

(576

)

 

 

(9,979

)

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable, net

 

 

(9,430

)

 

 

(7,789

)

Contract assets

 

 

(7,545

)

 

 

1,816

 

Inventories

 

 

(25,964

)

 

 

(12,072

)

Prepaids and other current assets

 

 

(15,059

)

 

 

(10,504

)

Other non-current assets

 

 

(7,072

)

 

 

(4,548

)

Trade payables

 

 

(2,129

)

 

 

(4,517

)

Accrued expenses

 

 

(3,518

)

 

 

3,074

 

Employee benefits payables

 

 

2,108

 

 

 

(326

)

Contract liabilities

 

 

22,661

 

 

 

28,057

 

Other current liabilities

 

 

1,280

 

 

 

838

 

Non-current lease liabilities

 

 

(3,686

)

 

 

(1,801

)

Other non-current liabilities

 

 

668

 

 

 

370

 

Net cash used in operating activities

 

 

(106,538

)

 

 

(71,791

)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

Purchases of property, equipment and software

 

 

(42,412

)

 

 

(25,699

)

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

 

 

(65,824

)

 

 

(66,435

)

Purchases of marketable securities

 

 

(259,567

)

 

 

 

Maturities of marketable securities

 

 

21,724

 

 

 

 

Net cash used in investing activities

 

 

(346,079

)

 

 

(92,134

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

Proceeds from the exercise of stock options and public warrants

 

 

3,874

 

 

 

3,147

 

Proceeds from Employee Stock Purchase Plan

 

 

4,380

 

 

 

 

Proceeds from sale of employees restricted stock units to cover taxes

 

 

31,166

 

 

 

 

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

 

 

(31,164

)

 

 

 

Tax payment for net settled option shares

 

 

(444

)

 

 

 

Payment of contingent consideration

 

 

(5,500

)

 

 

 

Finance lease principal payments

 

 

(271

)

 

 

 

Proceeds from long-term revolving line of credit

 

 

 

 

 

15,000

 

Proceeds from long-term secured term loan

 

 

 

 

 

98,895

 

Repayments on long-term revolving line of credit

 

 

 

 

 

(15,000

)

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

 

 

 

 

 

728,255

 

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

 

 

 

 

 

(30,358

)

Net cash provided by financing activities

 

 

2,041

 

 

 

799,939

 

Effect of exchange rate changes on cash and cash equivalents

 

 

4,372

 

 

 

2,128

 

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

 

 

(446,204

)

 

 

638,142

 

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

 

 

692,075

 

 

 

53,933

 

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

 

$

245,871

 

 

$

692,075

 

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

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

FOR THE THREE MONTHS AND YEARS ENDED DECEMBER 31, 2022 AND 2021

(unaudited; in thousands)

 

The tables provided below reconcile the non-GAAP financial measures Adjusted EBITDA, Non-GAAP gross profit, Non-GAAP research and development, net, Non-GAAP selling, general and administrative, Non-GAAP operating expenses, Non-GAAP operating loss and Non-GAAP total other income (expense), net with the most directly comparable GAAP financial measures. See above for additional information on the use of these non-GAAP financial measures.

 

 

 

Three Months Ended
December 31,

 

Years Ended December 31,

 

 

2022

 

2021

 

2022

 

2021

NET INCOME (LOSS)

 

$

(37,208

)

 

$

3,196

 

 

$

(135,944

)

 

$

(117,320

)

Depreciation

 

 

4,809

 

 

 

2,030

 

 

 

16,720

 

 

 

7,530

 

Amortization

 

 

3,548

 

 

 

1,411

 

 

 

13,227

 

 

 

3,321

 

Stock-based compensation expense

 

 

12,337

 

 

 

8,384

 

 

 

55,649

 

 

 

32,557

 

Management redemption compensation expense

 

 

 

 

 

 

 

 

 

 

 

9,724

 

Transaction costs

 

 

144

 

 

 

1,836

 

 

 

649

 

 

 

2,495

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

 

 

 

795

 

Interest expense, net

 

 

892

 

 

 

2,751

 

 

 

7,799

 

 

 

6,128

 

Change in fair value of liability classified warrants

 

 

 

 

 

(24,130

)

 

 

(13,482

)

 

 

15,294

 

Change in fair value of contingent consideration

 

 

(200

)

 

 

 

 

 

 

 

 

 

Performance reserve escrow

 

 

1,895

 

 

 

1,895

 

 

 

7,579

 

 

 

1,895

 

Amortization of inventory step-up

 

 

 

 

 

616

 

 

 

2,618

 

 

 

616

 

(Benefit) provision for income taxes

 

 

(1,010

)

 

 

(6,541

)

 

 

2,998

 

 

 

(7,520

)

Loss on foreign exchange

 

 

488

 

 

 

178

 

 

 

4,435

 

 

 

567

 

Accretion of marketable securities and cash equivalents purchased at a discount

 

 

(1,092

)

 

 

 

 

 

(1,696

)

 

 

 

Loss on disposal of assets

 

 

891

 

 

 

93

 

 

 

923

 

 

 

156

 

ADJUSTED EBITDA

 

$

(14,506

)

 

$

(8,281

)

 

$

(38,525

)

 

$

(43,762

)

 

 

Three Months Ended
December 31,

 

Years Ended December 31,

 

 

2022

 

2021

 

2022

 

2021

GAAP Gross profit (loss)

 

$

1,830

 

 

$

6,685

 

 

$

18,990

 

 

$

(1,893

)

Stock-based compensation

 

 

3,857

 

 

 

2,455

 

 

 

17,948

 

 

 

10,996

 

Amortization of purchased intangibles

 

 

1,710

 

 

 

144

 

 

 

4,782

 

 

 

312

 

Amortization of inventory step-up

 

 

 

 

 

616

 

 

 

2,618

 

 

 

616

 

Performance reserve escrow

 

 

114

 

 

 

114

 

 

 

456

 

 

 

114

 

Non-GAAP Gross profit (loss)

 

$

7,511

 

 

$

10,014

 

 

$

44,794

 

 

$

10,145

 

Non-GAAP Gross margin

 

 

14.5

%

 

 

36.4

%

 

 

21.2

%

 

 

16.3

%

 

 

 

 

 

 

 

 

 

GAAP Research and development, net

 

$

15,018

 

 

$

11,968

 

 

$

65,168

 

 

$

41,765

 

Stock-based compensation

 

 

(4,442

)

 

 

(3,039

)

 

 

(21,127

)

 

 

(9,973

)

Amortization of purchased intangibles

 

 

(9

)

 

 

(976

)

 

 

(3,342

)

 

 

(2,081

)

Non-GAAP Research and development, net

 

$

10,567

 

 

$

7,953

 

 

$

40,699

 

 

$

29,711

 

 

 

 

 

 

 

 

 

 

GAAP Selling, general and administrative

 

$

24,035

 

 

$

19,048

 

 

$

89,026

 

 

$

58,395

 

Stock-based compensation

 

 

(4,038

)

 

 

(2,890

)

 

 

(16,574

)

 

 

(11,588

)

Management redemption compensation expense

 

 

 

 

 

 

 

 

 

 

 

(9,724

)

Amortization of purchased intangibles

 

 

(1,494

)

 

 

(113

)

 

 

(4,401

)

 

 

(185

)

Transaction costs

 

 

(144

)

 

 

(1,836

)

 

 

(649

)

 

 

(2,495

)

Performance reserve escrow

 

 

(1,780

)

 

 

(1,781

)

 

 

(7,123

)

 

 

(1,781

)

Change in fair value of contingent consideration

 

 

200

 

 

 

 

 

 

 

 

 

 

Non-GAAP Selling, general and administrative

 

$

16,779

 

 

$

12,428

 

 

$

60,279

 

 

$

32,622

 

 

 

 

 

 

 

 

 

 

GAAP Operating expenses

 

$

39,053

 

 

$

31,016

 

 

$

154,194

 

 

$

100,160

 

Stock-based compensation

 

 

(8,480

)

 

 

(5,929

)

 

 

(37,701

)

 

 

(21,561

)

Management redemption compensation expense

 

 

 

 

 

 

 

 

 

 

 

(9,724

)

Amortization of purchased intangibles

 

 

(1,503

)

 

 

(1,089

)

 

 

(7,743

)

 

 

(2,266

)

Transaction costs

 

 

(144

)

 

 

(1,836

)

 

 

(649

)

 

 

(2,495

)

Performance reserve escrow

 

 

(1,780

)

 

 

(1,781

)

 

 

(7,123

)

 

 

(1,781

)

Change in fair value of contingent consideration

 

 

200

 

 

 

 

 

 

 

 

 

 

Non-GAAP Operating expenses

 

$

27,346

 

 

$

20,381

 

 

$

100,978

 

 

$

62,333

 

 

 

 

 

 

 

 

 

 

GAAP Operating loss

 

$

(37,223

)

 

$

(24,331

)

 

$

(135,204

)

 

$

(102,053

)

Total non-GAAP adjustments

 

 

17,388

 

 

 

13,964

 

 

 

79,020

 

 

 

49,865

 

Non-GAAP Operating loss

 

$

(19,835

)

 

$

(10,367

)

 

$

(56,184

)

 

$

(52,188

)

 

 

 

 

 

 

 

 

 

GAAP Total other income (expense), net

 

$

(995

)

 

$

20,986

 

 

$

2,258

 

 

$

(22,787

)

Change in fair value of liability classified warrants

 

 

 

 

 

(24,130

)

 

 

(13,482

)

 

 

15,294

 

Loss on foreign exchange

 

 

488

 

 

 

178

 

 

 

4,435

 

 

 

567

 

Non-GAAP Total other income (expense), net

 

$

(507

)

 

$

(2,966

)

 

$

(6,789

)

 

$

(6,926

)


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