BLOOMINGTON, Minn.--(BUSINESS WIRE)-- SkyWater Technology (NASDAQ: SKYT), the trusted technology realization partner, today announced financial results for the fourth quarter and full year 2021, ended January 2, 2022.
Sonderman concluded, “Fourth quarter revenue grew 15% year-over-year, excluding the extra operating week in Q4 2020 and tool revenue. Labor market inflation and supply chain challenges persisted throughout the quarter, and we expect to continue to navigate these constraints, while investing strategically for growth. In 2022, we expect revenue growth near our long-term growth target of 25% and gross margin expansion. This is supported by our 2021 pipeline growth, new and expected program wins, and the expected movement of our radiation hardened technology to the productization phase.”
Recent Business Updates:
Investor Webcast
SkyWater will host a conference call on Wednesday, February 23, 2022, at 9:00 a.m. CT to discuss its fourth quarter and full year 2021 financial results. A live webcast of the call will be available online at IR.SkyWaterTechnology.com.
About SkyWater Technology
SkyWater (NASDAQ: SKYT) is a U.S. investor-owned semiconductor manufacturer and a DOD-accredited Trusted supplier. SkyWater’s Technology as a ServiceSM model streamlines the path to production for customers with development services, volume production and heterogeneous integration solutions in its world-class U.S. facilities. This pioneering model enables innovators to co-create the next wave of technology with diverse categories including mixed-signal CMOS, read-out ICs, rad-hard, power discretes, MEMS, superconducting ICs, photonics, carbon nanotubes and interposers. SkyWater serves growing markets including aerospace & defense, automotive, biomedical, cloud & computing, consumer, industrial and IoT. For more information, visit: www.skywatertechnology.com.
Cautionary Statement Regarding Preliminary Results
The Company’s results for the fiscal quarter and year ended January 2, 2022 are preliminary, unaudited and subject to the finalization of the Company’s fourth quarter review and full-year audit and should not be viewed as a substitute for full financial statements prepared in accordance with GAAP. The Company cautions you that actual results may differ materially from those described in this press release.
SkyWater Technology Forward-Looking Statements
This press release contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements that are based on the Company’s current expectations or forecasts of future events, rather than past, events and outcomes, and such statements are not guarantees of future performance. Forward-looking statements include all statements other than statements of historical fact contained in this presentation, including information or predictions concerning the Company’s future business, results of operations, financial performance, plans and objectives, competitive position, market trends, and potential growth and market opportunities. In some cases, you can identify forward-looking statements by words such as “intends,” “estimates,” “predicts,” “potential,” “continues,” “anticipates,” “plans,” “expects,” “believes,” “should,” “could,” “may,” “will,” “targets,” “projects,” “seeks” or the negative of these terms or other comparable terminology.
Forward-looking statements are subject to risks, uncertainties and assumptions, which may cause the Company’s actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Key factors that could cause the Company’s actual results to be different than expected or anticipated include, but are not limited to: our goals and strategies; our future business development, financial condition and results of operations; our ability to continue operating our sole semiconductor foundry at full capacity; our ability to appropriately respond to changing technologies on a timely and cost-effective basis; our customer relationships and our ability to retain and expand our customer relationships; our ability to accurately predict our future revenues for the purpose of appropriately budgeting and adjusting our expenses; our expectations regarding dependence on our largest customers; our ability to diversify our customer base and develop relationships in new markets; the performance and reliability of our third-party suppliers and manufacturers; our ability to procure tools, materials, and chemicals amid industry-wide supply chain shortages; our ability to control costs, including our operating and capital expenses; the size and growth potential of the markets for our solutions, and our ability to serve and expand our presence in those markets; the level of demand in our customers’ end markets; our ability to attract, train and retain key qualified personnel in a competitive labor market; adverse litigation judgments, settlements or other litigation-related costs; changes in trade policies, including the imposition of tariffs; our ability to raise additional capital or financing; our ability to accurately forecast demand; the impact of the COVID-19 pandemic on our business, results of operations and financial condition and our customers, suppliers and workforce; the impact of the COVID-19 pandemic on the global economy; the level and timing of U.S. government program funding; our ability to maintain compliance with certain U.S. government contracting requirements; regulatory developments in the United States and foreign countries; our ability to protect our intellectual property rights; and other factors discussed in the “Risk Factors” section of the prospectus the Company filed with the SEC on April 22, 2021 and in other documents that the Company files with the SEC, which are available at http://www.sec.gov. The Company assumes no obligation to update any forward-looking statements, which speak only as of the date of this press release.
- Record annual revenue increased 16% year-over-year to $162.8 million. Quarterly revenue decreased 3% year-over-year to $38.5 million.
- Annual net loss to shareholders of $50.7 million, or (31)% of revenue. Quarterly net loss to shareholders of $27.0 million, or (70)% of revenue, includes a $13.4 million one-time inventory write-down.
- Annual adjusted EBITDA of $(2.6) million, or (1.6)% of revenue. Quarterly adjusted EBITDA of $(4.9) million, or (12.6)% of revenue.
Sonderman concluded, “Fourth quarter revenue grew 15% year-over-year, excluding the extra operating week in Q4 2020 and tool revenue. Labor market inflation and supply chain challenges persisted throughout the quarter, and we expect to continue to navigate these constraints, while investing strategically for growth. In 2022, we expect revenue growth near our long-term growth target of 25% and gross margin expansion. This is supported by our 2021 pipeline growth, new and expected program wins, and the expected movement of our radiation hardened technology to the productization phase.”
Recent Business Updates:
- Won nine new Advanced Technology Services programs in the fourth quarter of 2021.
- Achieved a critical radiation hardened (rad-hard) technology qualification milestone.
- Established presence in Indiana at WestGate@Crane Technology Park, adjacent to the Naval Surface Warfare Center, Crane Division (NSWC Crane) as part of the company’s rad-hard technology roadmap.
- Introduced a breakthrough silicon power MOSFET device with Applied Novel Devices, Inc. (AND) enabling improved energy efficiency for power conversion applications.
- Continued to make strong progress at the company’s heterogeneous integration fab in Florida including the fabrication of the company’s first full flow interposer within the first year after taking over operations.
- Increased activities, a common measure of productivity, in the Minnesota facility by 12% year-over-year led by strong Advanced Technology Services execution.
- Continued to amplify the company’s unique capabilities within all levels of government to support our nation’s commitment to invest strategically in domestic semiconductor manufacturing.
- Announced technology development to rapidly enable the production ramp of nanoscale sensors with NanoDx to enhance and expand accurate, rapid testing for several indications, including COVID-19, traumatic brain injury, sepsis and stroke.
- Lauded the U.S. House of Representatives in the passage of the America COMPETES Act, which includes funding of $52 billion for the CHIPS for America Act.
- Continued to navigate a dynamic supply chain for substrates, chemicals, and gases as well as inflationary pressures pervasive in the markets.
- Achieved AS9100 certification, the standardized quality management system for organizations that design, develop, or provide aviation, space and defense products and services, at Minnesota facility.
- Expanded Board of Directors with appointments of independent directors Nancy Fares, Amy Leong and Greg Graves.
- Revenue: Revenue of $38.5 million decreased 3% year-over-year. Advanced Technology Services revenue of $24.4 million decreased 7% year-over-year due to less non-recurring tool revenue. Advanced Technology Services revenue contains $1.1 million of tool revenue in fourth quarter 2021 and $4.9 million in fourth quarter 2020. Wafer Services revenue of $14.2 million increased 5% compared to the fourth quarter of 2020 driven by increased revenue from a large customer contract.
- Gross Profit (Loss): GAAP gross loss was $16.6 million, or (43.1)% of revenue, compared to gross profit of $3.5 million, or 8.9% of revenue, in the fourth quarter of 2020. GAAP gross loss for the fourth quarter of 2021 includes a $13.4 million inventory write-down charge for temperature differential sensing wafers. Cost of revenues in fourth quarter of 2021 contained $2.7 million for heterogeneous integration and $1.7 million in depreciation for the radiation hardened facility. Non-GAAP gross loss was $1.9 million, or (4.8)% of revenue, compared to gross profit of $4.8 million, or 12.2% of revenue, in the fourth quarter of 2020.
- Net Loss: GAAP net loss to shareholders of $27.0 million, or $(0.69) per share, compared to a net loss to shareholders of $12.3 million, or $(0.68) per share, in the fourth quarter of 2020. Non-GAAP net loss to shareholders of $11.2 million, or $(0.28) per share, compared to a net loss to shareholders of $11.4 million, or $(0.63) per share, in the fourth quarter of 2020.
- Adjusted EBITDA: Adjusted EBITDA was $(4.9) million, or (12.6)% of revenue, compared to $1.3 million or 3.2% of revenue in the fourth quarter of 2020.
- Balance Sheet: Cash and cash equivalents of $12.9 million compared to $7.4 million from January 3, 2021.
Investor Webcast
SkyWater will host a conference call on Wednesday, February 23, 2022, at 9:00 a.m. CT to discuss its fourth quarter and full year 2021 financial results. A live webcast of the call will be available online at IR.SkyWaterTechnology.com.
About SkyWater Technology
SkyWater (NASDAQ: SKYT) is a U.S. investor-owned semiconductor manufacturer and a DOD-accredited Trusted supplier. SkyWater’s Technology as a ServiceSM model streamlines the path to production for customers with development services, volume production and heterogeneous integration solutions in its world-class U.S. facilities. This pioneering model enables innovators to co-create the next wave of technology with diverse categories including mixed-signal CMOS, read-out ICs, rad-hard, power discretes, MEMS, superconducting ICs, photonics, carbon nanotubes and interposers. SkyWater serves growing markets including aerospace & defense, automotive, biomedical, cloud & computing, consumer, industrial and IoT. For more information, visit: www.skywatertechnology.com.
Cautionary Statement Regarding Preliminary Results
The Company’s results for the fiscal quarter and year ended January 2, 2022 are preliminary, unaudited and subject to the finalization of the Company’s fourth quarter review and full-year audit and should not be viewed as a substitute for full financial statements prepared in accordance with GAAP. The Company cautions you that actual results may differ materially from those described in this press release.
SkyWater Technology Forward-Looking Statements
This press release contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements that are based on the Company’s current expectations or forecasts of future events, rather than past, events and outcomes, and such statements are not guarantees of future performance. Forward-looking statements include all statements other than statements of historical fact contained in this presentation, including information or predictions concerning the Company’s future business, results of operations, financial performance, plans and objectives, competitive position, market trends, and potential growth and market opportunities. In some cases, you can identify forward-looking statements by words such as “intends,” “estimates,” “predicts,” “potential,” “continues,” “anticipates,” “plans,” “expects,” “believes,” “should,” “could,” “may,” “will,” “targets,” “projects,” “seeks” or the negative of these terms or other comparable terminology.
Forward-looking statements are subject to risks, uncertainties and assumptions, which may cause the Company’s actual results, performance or achievements to be materially different from those expressed or implied by such forward-looking statements. Key factors that could cause the Company’s actual results to be different than expected or anticipated include, but are not limited to: our goals and strategies; our future business development, financial condition and results of operations; our ability to continue operating our sole semiconductor foundry at full capacity; our ability to appropriately respond to changing technologies on a timely and cost-effective basis; our customer relationships and our ability to retain and expand our customer relationships; our ability to accurately predict our future revenues for the purpose of appropriately budgeting and adjusting our expenses; our expectations regarding dependence on our largest customers; our ability to diversify our customer base and develop relationships in new markets; the performance and reliability of our third-party suppliers and manufacturers; our ability to procure tools, materials, and chemicals amid industry-wide supply chain shortages; our ability to control costs, including our operating and capital expenses; the size and growth potential of the markets for our solutions, and our ability to serve and expand our presence in those markets; the level of demand in our customers’ end markets; our ability to attract, train and retain key qualified personnel in a competitive labor market; adverse litigation judgments, settlements or other litigation-related costs; changes in trade policies, including the imposition of tariffs; our ability to raise additional capital or financing; our ability to accurately forecast demand; the impact of the COVID-19 pandemic on our business, results of operations and financial condition and our customers, suppliers and workforce; the impact of the COVID-19 pandemic on the global economy; the level and timing of U.S. government program funding; our ability to maintain compliance with certain U.S. government contracting requirements; regulatory developments in the United States and foreign countries; our ability to protect our intellectual property rights; and other factors discussed in the “Risk Factors” section of the prospectus the Company filed with the SEC on April 22, 2021 and in other documents that the Company files with the SEC, which are available at http://www.sec.gov. The Company assumes no obligation to update any forward-looking statements, which speak only as of the date of this press release.