Sarcos Technology and Robotics Corporation (“Sarcos”) (NASDAQ: STRC
and STRCW), a leader in the design, development, and manufacture of
advanced robotic systems, solutions and software that redefine
human possibilities, today announced financial results for the
quarter ended June 30, 2023.
Second Quarter and Recent Highlights
- Optimized ongoing operations, taking steps to improve
efficiency and reduce cash spend
- Formed new Advanced Technologies software business division to
drive emerging artificial intelligence (AI) SaaS revenue
opportunities; bolstered by an expanded contract from the Air Force
Research Laboratory (AFRL) for continued development of AI driven
technologies
- Announced an agreement with Blattner Company to develop an
autonomous robotic solar construction system
“As we announced on July 12, 2023, we are realigning the
business and focusing our operations to capitalize on our most
promising revenue opportunities, including Guardian® Sea Class,
aviation and solar solutions, and our newly announced Advanced
Technologies division,” said Laura Peterson, Interim President and
Chief Executive Officer at Sarcos. “Additionally, we made the
difficult, but strategic decision to reduce our workforce by
approximately 25% and optimize our manufacturing facilities by
consolidating our Pittsburgh manufacturing into our Salt Lake City
location.
“I am confident these strategic decisions are right for Sarcos
at this point in its growth as evidenced by recent milestones
including our agreement with Blattner Company to develop an
autonomous robotic solar construction system, our extended
agreement with the Air Force Research Laboratory to continue to
develop AI and software and services, and our agreement with
VideoRay to develop underwater robotic systems.
“In addition, we have taken steps to significantly reduce our
future cash usage and ended the quarter with $75 million in cash.
We believe we have sufficient liquidity to operate into 2025
without additional financing.”
Financial resultsSecond quarter 2023 total
revenue was $1.3 million, compared to $3.0 million during the
second quarter of 2022.
Total operating expenses for the second quarter
of 2023 were $31.2 million, compared to operating expenses of $32.0
million during the second quarter of 2022. In connection with the
July 12, 2023, announced restructuring, the Company incurred
charges of $5.1 million in the second quarter of 2023, including
$4.4 million due to the write-down of inventory and $0.7 million
related to the impairment of certain fixed assets. Cost of revenue
decreased to $0.9 million in Q2 2023 as compared to $3.1 million in
Q2 2022, mainly due to decreased labor and material expenses
charged to product development contracts. Second quarter 2023 gross
margin was 26%, compared to negative 4% in the second quarter of
2022.
Research and development expenses increased to
$11.7 million as compared to $7.6 million in the second quarter of
2022, due to increased labor and overhead expense as a result of
increased headcount (due in part to the RE2 acquisition) and
increased direct materials charges. General and administrative
expenses decreased to $8.3 million in Q2 2023 as compared to $18.1
million in Q2 2022, primarily due to decreased stock-based
compensation.
Second quarter 2023 net loss was $28.7 million or $1.12 per
share, compared to a net loss of $23.1 million or $0.95 per share
in the second quarter of the prior year.
Second quarter 2023 non-GAAP net loss was $21.9 million or $0.86
per diluted share. Reconciliation of net loss to non-GAAP net loss
is included at the end of this release.
Please note, on July 5, 2023, Sarcos effected a
1-for-6 reverse stock of the Company's outstanding shares of common
stock. All share and per share amounts have been retroactively
adjusted for all periods presented to reflect the reverse stock
split.
Sarcos ended the quarter with $75.1 million in unrestricted
cash, cash equivalents, and marketable securities.
Financial guidance
Sarcos believes that its third quarter 2023 total revenue will
range between $1.1 and $1.4 million. The Company anticipates
incurring additional restructuring expense related to the reduction
of headcount of approximately $6.0 million, net, during the third
quarter of 2023, which includes approximately $1.5 million in cash
severance and benefit payments. The restructuring is expected to
reduce personnel related cash usage by approximately $14.6 million
annually beginning in 2024.
The Company estimates cash used in operating activities to
average approximately $5.5 million per month during the third
quarter of 2023. Sarcos intends to manage its average monthly cash
usage to approximately $3.0 million in 2024.
Conference call and webcastA conference call
and audio webcast with analysts and investors will be held today at
4:30 p.m. Eastern Time/1:30 p.m. Pacific Time to discuss the
results and answer questions.
- To access the conference call, please pre-register using this
link. Registrants will receive confirmation with dial-in
details.
- Live and archived webcast will be available on Sarcos investor
relations website at investor.sarcos.com.
About Sarcos Technology and Robotics
CorporationSarcos Technology and Robotics Corporation
(NASDAQ: STRC and STRCW) designs, develops, and manufactures a
broad range of advanced mobile robotic systems, solutions, and
software that redefine human possibilities and are designed to
enable the safest most productive workforce in the world. Sarcos
robotic solutions address the challenging, unstructured, industrial
environments for markets that require a high degree of accuracy,
efficiency and can benefit from task autonomy. For more
information, please visit www.sarcos.com and connect with us on
LinkedIn at www.linkedin.com/company/sarcos.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements regarding Sarcos’ product development,
products to be commercialized, financial results and performance
and cash use, market and revenue opportunities and customer demand.
Forward-looking statements are inherently subject to risks,
uncertainties, and assumptions. Generally, statements that are not
historical facts, including statements concerning possible,
intended, or assumed future actions, business strategies, events,
business conditions or results of operations, are forward-looking
statements. These statements may be preceded by, followed by, or
include the words “believes,” “estimates,” “expects,” “projects,”
“forecasts,” “may,” “will,” “aim,” “should,” “seeks,” “plans,”
“scheduled,” “anticipates,” “intends” or “continue” or similar
expressions. Such forward-looking statements involve risks and
uncertainties that may cause actual events, results, or performance
to differ materially from those indicated by such statements. These
forward-looking statements are based on Sarcos’ management’s
current expectations and beliefs, as well as a number of
assumptions concerning future events. However, there can be no
assurance that the events, results, or trends identified in these
forward-looking statements will occur or be achieved.
Forward-looking statements speak only as of the date they are made,
and Sarcos is not under any obligation and expressly disclaims any
obligation, to update, alter or otherwise revise any
forward-looking statement, whether as a result of new information,
future events, or otherwise, except as required by law.
Readers should carefully review the statements set forth in the
reports which Sarcos has filed or will file from time to time with
the Securities and Exchange Commission (the “SEC”), in
particular the risks and uncertainties set forth in the sections of
those reports entitled “Risk Factors” and “Cautionary Note
Regarding Forward-Looking Statements,” for a description of risks
facing Sarcos and that could cause actual events, results or
performance to differ from those indicated in the forward-looking
statements contained herein. The documents filed by Sarcos with
the SEC may be obtained free of charge at the SEC’s
website at www.sec.gov.
SARCOS TECHNOLOGY AND ROBOTICS
CORPORATIONCONDENSED CONSOLIDATED BALANCE
SHEETS(Unaudited)(in thousands, except
share data)
|
|
As of |
|
|
|
June 30, 2023 |
|
|
December 31, 2022 |
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
25,566 |
|
|
$ |
35,159 |
|
Marketable securities |
|
|
49,579 |
|
|
|
79,337 |
|
Accounts receivable |
|
|
1,280 |
|
|
|
1,866 |
|
Unbilled receivables |
|
|
1,527 |
|
|
|
4,160 |
|
Inventories, net |
|
|
3,723 |
|
|
|
3,562 |
|
Prepaid expenses and other current assets |
|
|
3,594 |
|
|
|
5,015 |
|
Total current assets |
|
|
85,269 |
|
|
|
129,099 |
|
Property and equipment, net |
|
|
6,763 |
|
|
|
7,640 |
|
Intangible assets, net |
|
|
17,479 |
|
|
|
19,116 |
|
Operating lease assets |
|
|
10,692 |
|
|
|
11,283 |
|
Other non-current assets |
|
|
463 |
|
|
|
487 |
|
Total assets |
|
$ |
120,666 |
|
|
$ |
167,625 |
|
Liabilities and
stockholders’ equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
4,597 |
|
|
$ |
3,620 |
|
Accrued liabilities |
|
|
4,049 |
|
|
|
6,025 |
|
Current operating lease liabilities |
|
|
1,040 |
|
|
|
887 |
|
Total current liabilities |
|
|
9,686 |
|
|
|
10,532 |
|
Operating lease liabilities |
|
|
11,736 |
|
|
|
12,387 |
|
Other non-current liabilities |
|
|
195 |
|
|
|
256 |
|
Total liabilities |
|
|
21,617 |
|
|
|
23,175 |
|
Commitments and
contingencies |
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
Common stock, $0.0001 par value,
165,000,000 shares authorized as of June 30, 2023, and December 31,
2022; 25,841,889 and 25,708,519 shares issued and outstanding as of
June 30, 2023, and December 31, 2022, respectively |
|
|
3 |
|
|
|
3 |
|
Additional paid-in capital |
|
|
451,815 |
|
|
|
447,085 |
|
Accumulated other comprehensive
loss |
|
|
(12 |
) |
|
|
(17 |
) |
Accumulated deficit |
|
|
(352,757 |
) |
|
|
(302,621 |
) |
Total stockholders’ equity |
|
|
99,049 |
|
|
|
144,450 |
|
Total liabilities and
stockholders’ equity |
|
$ |
120,666 |
|
|
$ |
167,625 |
|
See Sarcos 10-Q filing dated August 9, 2023, for
accompanying notes to the consolidated financial statements.
SARCOS TECHNOLOGY AND ROBOTICS
CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited)(in thousands,
except share and per share data)
|
|
Three Months Ended June 30, |
|
|
For the Six Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Revenue, net |
|
$ |
1,277 |
|
|
$ |
3,038 |
|
|
$ |
3,573 |
|
|
$ |
3,781 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue (exclusive of items shown separately below) |
|
|
943 |
|
|
|
3,146 |
|
|
|
2,729 |
|
|
|
3,634 |
|
Research and development |
|
|
11,706 |
|
|
|
7,569 |
|
|
|
21,109 |
|
|
|
13,450 |
|
General and administrative |
|
|
8,252 |
|
|
|
18,146 |
|
|
|
17,987 |
|
|
|
35,938 |
|
Sales and marketing |
|
|
4,410 |
|
|
|
2,586 |
|
|
|
8,151 |
|
|
|
4,797 |
|
Intangible amortization expense |
|
|
819 |
|
|
|
574 |
|
|
|
1,638 |
|
|
|
574 |
|
Asset write-down and restructuring |
|
|
5,106 |
|
|
|
— |
|
|
|
5,106 |
|
|
|
— |
|
Total operating expenses |
|
|
31,236 |
|
|
|
32,021 |
|
|
|
56,720 |
|
|
|
58,393 |
|
Loss from operations |
|
|
(29,959 |
) |
|
|
(28,983 |
) |
|
|
(53,147 |
) |
|
|
(54,612 |
) |
Interest income, net |
|
|
874 |
|
|
|
148 |
|
|
|
1,973 |
|
|
|
159 |
|
Gain on warrant liability |
|
|
439 |
|
|
|
4,113 |
|
|
|
3 |
|
|
|
10,527 |
|
Other (loss) income, net |
|
|
(11 |
) |
|
|
(2 |
) |
|
|
1,038 |
|
|
|
— |
|
Loss before income tax (expense)
benefit |
|
|
(28,657 |
) |
|
|
(24,724 |
) |
|
|
(50,133 |
) |
|
|
(43,926 |
) |
Income tax (expense) benefit |
|
|
(3 |
) |
|
|
1,606 |
|
|
|
(3 |
) |
|
|
1,606 |
|
Net loss |
|
$ |
(28,660 |
) |
|
$ |
(23,118 |
) |
|
$ |
(50,136 |
) |
|
$ |
(42,320 |
) |
Net loss per share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(1.12 |
) |
|
$ |
(0.95 |
) |
|
$ |
(1.97 |
) |
|
$ |
(1.79 |
) |
Weighted-average shares used in
computing net loss per share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
25,512,057 |
|
|
|
24,379,549 |
|
|
|
25,491,654 |
|
|
|
23,685,766 |
|
See Sarcos 10-Q filing dated August 9, 2023, for
accompanying notes to the consolidated financial statements.
SARCOS TECHNOLOGY AND ROBOTICS
CORPORATIONCONDENSED CONSOLIDATED STATEMENT OF
CASH FLOWS(Unaudited)(in thousands)
|
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
Cash flows from operating
activities: |
|
|
|
|
|
|
Net loss |
|
$ |
(50,136 |
) |
|
$ |
(42,320 |
) |
Adjustments to reconcile net loss
to net cash used in operating activities: |
|
|
|
|
|
|
Stock-based compensation |
|
|
4,734 |
|
|
|
21,120 |
|
Depreciation of property and equipment |
|
|
843 |
|
|
|
594 |
|
Amortization of intangible assets |
|
|
1,638 |
|
|
|
574 |
|
Change in fair value of warrant liability |
|
|
(3 |
) |
|
|
(10,527 |
) |
Amortization of investment discount |
|
|
(1,365 |
) |
|
|
— |
|
Asset write-down and restructuring |
|
|
5,106 |
|
|
|
— |
|
Changes in operating assets and
liabilities |
|
|
|
|
|
|
Accounts receivable |
|
|
586 |
|
|
|
463 |
|
Unbilled receivable |
|
|
2,634 |
|
|
|
(635 |
) |
Inventories |
|
|
(4,588 |
) |
|
|
(424 |
) |
Prepaid expenses and other current assets |
|
|
1,420 |
|
|
|
3,941 |
|
Other non-current assets |
|
|
615 |
|
|
|
356 |
|
Accounts payable |
|
|
1,005 |
|
|
|
(401 |
) |
Accrued liabilities |
|
|
(1,823 |
) |
|
|
1,242 |
|
Other non-current liabilities |
|
|
(651 |
) |
|
|
(1,907 |
) |
Net cash used in operating
activities |
|
|
(39,985 |
) |
|
|
(27,924 |
) |
Cash flows from investing
activities: |
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(673 |
) |
|
|
(690 |
) |
Acquisition of a business, net of cash acquired |
|
|
— |
|
|
|
(29,687 |
) |
Purchases of marketable securities |
|
|
(48,872 |
) |
|
|
(79,507 |
) |
Maturities of marketable securities |
|
|
80,000 |
|
|
|
— |
|
Net cash provided by (used in)
investing activities |
|
|
30,455 |
|
|
|
(109,884 |
) |
Cash flows from financing
activities: |
|
|
|
|
|
|
Proceeds from exercise of stock options |
|
|
— |
|
|
|
551 |
|
Shares repurchased for payment of tax withholdings |
|
|
(61 |
) |
|
|
(6,596 |
) |
Payment of obligations under capital leases |
|
|
(2 |
) |
|
|
(2 |
) |
Net cash used in financing
activities |
|
|
(63 |
) |
|
|
(6,047 |
) |
Net decrease in cash, cash
equivalents |
|
|
(9,593 |
) |
|
|
(143,855 |
) |
Cash, cash equivalents at
beginning of period |
|
|
35,159 |
|
|
|
217,114 |
|
Cash, cash equivalents at end of
period |
|
$ |
25,566 |
|
|
$ |
73,259 |
|
Supplemental disclosure
of cash flow information: |
|
|
|
|
|
|
Cash paid for income taxes |
|
$ |
3 |
|
|
$ |
— |
|
Supplemental disclosure
of non-cash activities: |
|
|
|
|
|
|
Common stock and assumed equity
awards in connection with a business acquisition |
|
$ |
— |
|
|
$ |
59,556 |
|
Purchases of property and
equipment included in accounts payable at period-end |
|
$ |
12 |
|
|
$ |
— |
|
See Sarcos 10-Q filing dated August 9, 2023, for
accompanying notes to the consolidated financial statements.
SARCOS TECHNOLOGY AND ROBOTICS
CORPORATIONREVENUE BY
TYPE(Unaudited)(in thousands)
|
|
Three Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
Product Development Contract
Revenue |
|
$ |
1,274 |
|
|
$ |
2,982 |
|
Product Revenue |
|
|
3 |
|
|
|
56 |
|
Revenue, net |
|
$ |
1,277 |
|
|
$ |
3,038 |
|
SARCOS TECHNOLOGY AND ROBOTICS
CORPORATIONNON-GAAP FINANCIAL
MEASURES(Unaudited)
To supplement our financial statements presented
in accordance with GAAP and to provide investors with additional
information regarding our financial results, we have presented in
this release non-GAAP net loss and non-GAAP net loss per share,
each of which are non-GAAP financial measures. Non-GAAP net loss
and non-GAAP net loss per share are not based on any standardized
methodology prescribed by GAAP and are not necessarily comparable
to similarly titled measures presented by other companies.
We define non-GAAP net loss as our GAAP measured
net loss excluding the impacts of stock-based compensation expense,
gain on forgiveness of notes payable, gain or loss on change in
fair value of derivative instruments and warrant liabilities,
expenses related to a business combination, asset write-down and
restructuring, goodwill impairment and other non-recurring
non-operating expenses. We define non-GAAP net loss per share as
non-GAAP net loss divided by weighted average outstanding
shares.
The most directly comparable GAAP measure to
non-GAAP net loss is net loss. The most directly comparable GAAP
measure to non-GAAP net loss per share is net loss per share. We
believe excluding the impact of the previously listed items in
calculating non-GAAP net loss and non-GAAP net loss per share can
provide a useful measure for period-to-period comparisons of our
core operating performance. We monitor, and have presented in this
release, non-GAAP net loss and non-GAAP net loss per share because
they are each a key measure used by our management and board of
directors to understand and evaluate our operating performance and
to establish budgets. We believe non-GAAP net loss and non-GAAP net
loss per share help identify underlying trends in our business that
could otherwise be masked by the effect of the expenses that we
include in net loss but not in non-GAAP net loss. Accordingly, we
believe non-GAAP net loss and non-GAAP net loss per share provide
useful information to investors, analysts and others in
understanding and evaluating our operating results, enhancing the
overall understanding of our past performance.
Non-GAAP net loss and non-GAAP net loss per
share are not prepared in accordance with GAAP and should not be
considered in isolation of, or as an alternative to, measures
prepared in accordance with GAAP. There are a number of limitations
related to the use of non-GAAP net loss and non-GAAP net loss per
share rather than net loss and net loss per share, which is for
each the most directly comparable financial measure calculated and
presented in accordance with GAAP. In addition, the expenses and
other items that we exclude in our calculations of non-GAAP net
loss and non-GAAP net loss per share may differ from the expenses
and other items, if any, that other companies may exclude from
non-GAAP net loss and non-GAAP net loss per share when they report
their operating results, limiting the usefulness of non-GAAP net
loss and non-GAAP net loss per share for comparative purposes.
In addition, other companies may use other
measures to evaluate their performance, all of which could reduce
the usefulness of non-GAAP net loss and non-GAAP net loss per share
as tools for comparison.
The following table reconciles non-GAAP net loss
to net loss, the most directly comparable financial measure
calculated and presented in accordance with GAAP (in thousands,
except share and per share data):
|
|
Three Months Ended June 30, |
|
|
For the Six Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net loss |
|
$ |
(28,660 |
) |
|
$ |
(23,118 |
) |
|
$ |
(50,136 |
) |
|
$ |
(42,320 |
) |
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense |
|
|
2,070 |
|
|
|
10,270 |
|
|
|
4,734 |
|
|
|
21,120 |
|
Gain on warrant liability |
|
|
(439 |
) |
|
|
(4,113 |
) |
|
|
(3 |
) |
|
|
(10,527 |
) |
Asset write-down and restructuring (1) |
|
|
5,106 |
|
|
|
— |
|
|
|
5,106 |
|
|
|
— |
|
Employee Retention Credit |
|
|
— |
|
|
|
— |
|
|
|
(1,019 |
) |
|
|
— |
|
Expenses related to business combinations (2) |
|
|
— |
|
|
|
1,053 |
|
|
|
— |
|
|
|
2,526 |
|
Income tax benefit related to business combinations |
|
|
— |
|
|
|
(1,606 |
) |
|
|
— |
|
|
|
(1,606 |
) |
Non-GAAP net loss |
|
$ |
(21,923 |
) |
|
$ |
(17,514 |
) |
|
$ |
(41,318 |
) |
|
$ |
(30,807 |
) |
Net loss per share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(1.12 |
) |
|
$ |
(0.95 |
) |
|
$ |
(1.97 |
) |
|
$ |
(1.79 |
) |
Non-GAAP net loss per share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(0.86 |
) |
|
$ |
(0.72 |
) |
|
$ |
(1.62 |
) |
|
$ |
(1.30 |
) |
Weighted-average shares used in
computing net loss per share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
25,512,057 |
|
|
|
24,379,549 |
|
|
|
25,491,654 |
|
|
|
23,685,766 |
|
- Expenses related to
our asset write-down and restructuring activities included $4.4
million due to the write-down of inventory and $0.7 million related
to the impairment of certain fixed assets.
- Expenses related to
our business combination with RE2, Inc., which are included within
general and administrative expenses within the condensed
consolidated statements of operations.
Investor Contact: Moriah
Shilton310.622.8251STRC@finprofiles.com
Press Contactmediarelations@sarcos.com
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