Archer Announces Second Quarter 2024 Financial
and Operating Results
- Reached agreement in principle on key terms of contract
manufacturing relationship with Stellantis1. Stellantis to
contribute up to ~$400M to help scale Archer’s Midnight
manufacturing to 650 aircraft annually through an obligation to
cover manufacturing labor costs as well as certain capital
expenditures at Archer’s Georgia manufacturing facility through
2030. This is in addition to Stellantis’ investment in today’s
equity capital raise, which is incremental to their $55M equity
investment in Archer last month.
- Secured $230M in additional equity capital since the end of
Q2. This new equity capital comes from strategic and
institutional investors, including Stellantis and United.
- Unveiled planned Los Angeles air taxi network ahead of major
worldwide sporting events. Archer’s planned network includes
take-off and landing locations at Los Angeles International
Airport, USC, Orange County, Santa Monica, Hollywood Burbank, Long
Beach and Van Nuys. Archer is also working with the Los Angeles
Rams and Hollywood Park, the 300-acre district centered around SoFi
Stadium, for a planned exclusive vertiport in the area2.
- Delivered first Midnight aircraft to the U.S. Air
Force. Archer delivered Midnight to the U.S. Air Force
(USAF) as part of Archer’s AFWERX Agility Prime contract valued at
up to $142M3.
- Announced plans for Future Flight Global to purchase up to
116 Archer Midnight aircraft worth up to $580M, bringing Archer’s
indicative order book to nearly $6B. Planned aircraft purchase
will support the companies’ joint goal of launching electric
vertical take-off and landing aircraft operations in key global
markets in Europe and Asia.
Archer Aviation Inc. (“Archer” or the “Company”) (NYSE: ACHR)
today announced operating and financial results for the second
quarter ended June 30, 2024. The Company issued a shareholder
letter discussing those results, as well as its third quarter 2024
estimates. The shareholder letter may be accessed on the Company’s
investor relations website here.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20240808890164/en/
Recent photo of Archer’s high-volume
manufacturing facility in Covington, GA (Photo: Business Wire)
Commenting on second quarter 2024 results, Adam Goldstein,
Archer’s CEO said:
“This has been one of Archer’s most productive quarters yet.
From Midnight’s first transition flight, to the progress we’ve made
on the build out of high-volume manufacturing facilities alongside
Stellantis, to the commercial progress we’re making with Southwest,
United, and more—we are working tirelessly to enable commercial
operations all over the world. Our indicative order book now sits
at nearly $6B. With the additional funding and planned LA network
we announced today, Archer is well positioned to meet our goal of
commercialization as early as next year.”
Stellantis Contract Manufacturing
Commitment
Archer announced today that it has reached an agreement in
principle on key terms of its planned contract manufacturing
relationship with Stellantis. In addition to the nearly $300M
Stellantis has previously invested to date, including $55M in July
2024, Stellantis is planning to fund the following to help ensure
Archer achieves its manufacturing goals:
- Manufacturing Labor: Stellantis to fund up to ~$370M of
the anticipated manufacturing labor costs necessary to support
Archer’s planned manufacturing ramp to 650 aircraft annually. In
exchange, Stellantis would receive Archer shares on a rolling
quarterly basis based on the total labor costs incurred in a
particular quarter and Archer’s then-current future stock
price.
- Manufacturing CapEx: Additionally, Stellantis will
contribute the identified initial incremental manufacturing capital
expenditures for the initial ramp of Midnight production, estimated
to be up to $20M.
Archer’s goal with this relationship is to incentivize
Stellantis to help Archer achieve its planned production ramp and
unit cost targets. Therefore, Archer intends to issue Stellantis
$30M of performance warrants that will vest based on Stellantis'
achievement of certain performance milestones under the contract
manufacturing relationship. Archer’s issuance of any equity to
Stellantis pursuant to this contract manufacturing relationship is
expected to be subject to approval by Archer’s stockholders.
Archer Secures $230M Of Additional Equity
Capital Since The End of Q2
This equity capital consists of the $55M Archer received from
Stellantis on July 1, 2024 under the parties’ strategic funding
agreement, as well as a $175 million investment from today that
included both institutional investors and long time strategic
investors, Stellantis and United. The funds from today’s investment
are intended to be used for working capital and general corporate
purposes. Moelis & Company LLC acted as exclusive placement
agent to Archer on this investment.
Los Angeles Air Taxi Network
Archer unveiled plans for a Los Angeles air taxi network. This
planned network includes vertiports at key locations such as Los
Angeles International Airport (LAX), Orange County, Santa Monica,
Hollywood Burbank, Long Beach and Van Nuys.
As part of its network planning, Archer is coordinating with the
Los Angeles Rams to collaborate on potential exclusive vertiports
at Woodland Hills and at Hollywood Park, the 300-acre district
centered around SoFi Stadium. The University of Southern California
is also engaged to be part of Archer’s planned LA network.
Archer’s goal is to begin its LA network operations by as early
as 2026.
Midnight Delivery To The United States Air
Force
This month, the U.S. Department of Defense accepted the military
airworthiness assessment of Archer’s Midnight aircraft, and Archer
subsequently delivered Midnight to the U.S. Air Force as part of
Archer’s AFWERX Agility Prime contract valued at up to $142M4.
Following the recent delivery-in-place handoff at Archer’s flight
test facility in Salinas, CA, a team of USAF personnel worked
alongside Archer’s flight test team to execute simulated medical
evacuation, cargo, intelligence, surveillance and reconnaissance
flights with the aircraft.
Nearly $6B Indicative Order
Book5
Archer announced Future Flight Global, a leader in business
aviation and private jet travel, plans to purchase up to 116
Midnight aircraft worth up to $580M. Future Flight Global has
already placed an initial cash deposit and plans to make additional
pre-delivery payments to Archer when the parties finalize the
definitive aircraft purchase agreement. In aggregate, with this
latest announcement, Archer now has nearly $6B in indicative orders
with associated pre-delivery payments.
Archer will be conducting its earnings conference call at 2:00
p.m. Pacific Time (5:00 p.m. Eastern Time) today. You can access a
live webcast on our investor relations website at
investors.archer.com or the conference call by dialing 404-975-4839
(domestic) or +1 833-470-1428 (international) and entering the
access code 013488.
A replay of the webcast will be available on our investor
relations website. In addition, a telephonic replay of the
conference call will be accessible for one week following the call
by dialing 866-813-9403 (domestic) or +44 204-525-0658
(international), and entering the access code 304206
____________
1
Agreement in principle; subject to
entering into further definitive agreement(s) relating thereto.
2
Agreement in principle; subject to
entering into further definitive agreement(s) relating thereto.
3
The “up to” contract value is subject to
certain conditions being met as provided for in the contracts.
4
The “up to” contract value is subject to
certain conditions being met as provided for in the contracts.
5
Orders under the order book remain
conditional, subject to the execution of further definitive
agreements with each customer and the satisfaction of certain
conditions. Order values represent the Company’s estimate based on
an indicative $5M per aircraft price. This is only a prediction and
actual results may differ materially due to a variety of
factors.
Second Quarter 2024 Financial Results
Q2 2024 (GAAP)
Q2 20241 (Non-GAAP)
Total Operating Expenses
$
121.2M
$
96.4M
Net Loss
$
(106.9M)
NA
Adjusted EBITDA
NA
$
(93.8M)
Cash and Cash Equivalents
$
360.4M2
NA
- A reconciliation of non-GAAP financial measures to the most
comparable GAAP measures is provided below in the section titled
“Reconciliation of Selected GAAP To Non-GAAP Results for Q2
2024.”
- Does not include proceeds from the $55.0 million Stellantis
investment that was received on July 1, 2024
Third Quarter 2024 Financial Estimates
Archer’s financial estimates for third quarter of 2024 are as
follows:
- Non-GAAP total operating expenses of $90M to $100M
We have not reconciled our non-GAAP total operating expense
estimates because certain items that impact non-GAAP total
operating expense are uncertain or out of our control and cannot be
reasonably predicted. In particular, stock-based compensation
expense is impacted by the future fair market value of our common
stock and other factors, all of which are difficult to predict,
subject to frequent change, or not within our control. The actual
amount of these expenses during 2024 will have a significant impact
on our future GAAP financials. Accordingly, a reconciliation of
non-GAAP total operating expenses is not available without
unreasonable effort.
About Archer
Archer is a leader in the electrification of aviation. We are
designing and developing the key enabling technologies and aircraft
that are necessary to power the next great transportation
revolution. Our goal is for our proprietary technology to deliver
unprecedented connectivity to the people and places across the most
congested cities in the world.
To learn more, visit www.archer.com.
Source: Archer
Text: ArcherIR
Forward-Looking Statements
This press release contains forward-looking statements regarding
Archer’s future business plans and expectations, including
statements regarding our expected financial results for the third
quarter of 2024, our business strategy and plans, aircraft
performance, the design and target specifications of our aircraft,
the pace at which we intend to design, develop, certify, conduct
test flights, manufacture and commercialize our planned eVTOL
aircraft, business opportunities, timing of the closing of our
equity investment round and use of proceeds, the design,
development and implementation of vertiport infrastructure, total
expected contract value with the U.S. Department of Defense, and
indicative orders for aircraft in agreements with third-party
partners. In addition, this press release refers to agreements with
Stellantis, Kroenke Sports & Entertainment and the Los Angeles
Rams on certain key terms which are conditioned on the future
execution by the parties of additional binding definitive
agreements incorporating those terms, which definitive agreements
may not be completed or may contain different terms. These
forward-looking statements are only predictions and may differ
materially from actual results due to a variety of factors. The
risks and uncertainties that could cause actual results to differ
from the results predicted are more fully detailed in our filings
with the Securities and Exchange Commission (SEC), including our
most recent Annual Report on Form 10-K and most recent Quarterly
Report on Form 10-Q, which are or will be available on our investor
relations website at investors.archer.com and on the SEC website at
www.sec.gov. In addition, please note that any forward-looking
statements contained herein are based on assumptions that we
believe to be reasonable as of the date of this press release. We
undertake no obligation to update these statements as a result of
new information or future events.
Reconciliation of Selected GAAP To Non-GAAP Results for Q2
2024
Reconciliation of Total Operating Expenses (in millions;
unaudited): A reconciliation of total operating expenses to
non-GAAP total operating expenses for the three months ended June
30, 2024 is set forth below.
Three Months Ended
June 30, 2024
Total operating expenses
$
121.2
Adjusted to exclude the following:
Stellantis warrant expense (1)
(2.0
)
Stock-based compensation (2)
(22.8
)
Non-GAAP total operating expenses
$
96.4
(1)
Amount includes non-cash warrant costs,
classified as research and development expenses, for the warrants
issued to Stellantis in connection with certain services they are
providing to the Company.
(2)
Amounts include stock-based compensation
for options and restricted stock units issued to both employees and
non-employees, including the grants issued to our founders in
connection with the closing of the business combination.
Reconciliation of Adjusted EBITDA (in millions; unaudited): A
reconciliation of net loss to Adjusted EBITDA for the three months
ended June 30, 2024 is set forth below.
Three Months Ended
June 30, 2024
Net loss
$
(106.9
)
Adjusted to exclude the following:
Other (income) expense, net (1)
(9.3
)
Interest income, net
(5.1
)
Income tax expense
0.1
Depreciation and amortization expense
2.6
Stellantis warrant expense (2)
2.0
Stock-based compensation (3)
22.8
Adjusted EBITDA
$
(93.8
)
(1)
Amount includes changes in fair value of
the public and private warrants, which are classified as warrant
liabilities.
(2)
Amount includes non-cash warrant costs,
classified as research and development expenses, for the warrants
issued to Stellantis in connection with certain services they are
providing to the Company.
(3)
Amount includes stock-based compensation
for options and restricted stock units issued to both employees and
non-employees, including the grants issued to our founders in
connection with the closing of the business combination.
Non-GAAP Financial Measures
To supplement our condensed consolidated financial results
prepared in accordance with GAAP, we use a number of non-GAAP
financial measures to help us in analyzing and assessing our
overall business performance, for making operating decisions and
for forecasting and planning future periods. We consider the use of
non-GAAP financial measures helpful in assessing our current
financial performance, ongoing operations and prospects for the
future as well as understanding financial and business trends
relating to our financial condition and results of
operations.
While we use non-GAAP financial measures as a tool to enhance
our understanding of certain aspects of our financial performance
and to provide incremental insight into the underlying factors and
trends affecting our performance, we do not consider these measures
to be a substitute for, or superior to, the information provided by
GAAP financial measures. Consistent with this approach, we believe
that disclosing non-GAAP financial measures to the readers of our
financial statements provides useful supplemental data that, while
not a substitute for GAAP financial measures, can offer insight in
the review of our financial and operational performance and enables
investors to more fully understand trends in our current and future
performance.
In assessing our business during the quarter ended June 30,
2024, we excluded items in the following general categories from
one or more of our non-GAAP financial measures, certain of which
are described below:
Stock-Based Compensation Expense:
We believe that providing non-GAAP measures excluding stock-based
compensation expense, in addition to the GAAP measures, allows for
better comparability of our financial results from period to
period. We prepare and maintain our budgets and forecasts for
future periods on a basis consistent with this non-GAAP financial
measure. Further, companies use a variety of types of equity awards
as well as a variety of methodologies, assumptions and estimates to
determine stock-based compensation expense. We believe that
excluding stock-based compensation expenses enhances our ability
and the ability of investors to understand the impact of non-cash
stock-based compensation on our operating results and to compare
our results against the results of other companies.
Warrant Expense and Gains or Losses from
Revaluation of Warrants: Expense from our common stock
warrants issued to Stellantis, which is recurring (but non-cash)
and gains or losses from change in fair value of public and private
warrants from revaluation will be reflected in our financial
results for the foreseeable future. We exclude warrant expense and
gains or losses from change in fair value for similar reasons to
our stock-based compensation expense.
Each of the non-GAAP financial measures presented in this
release should not be considered in isolation from, or as a
substitute for, a measure of financial performance prepared in
accordance with GAAP and are presented for supplemental
informational purposes only. Further, investors are cautioned that
there are inherent limitations associated with the use of each of
these non-GAAP financial measures as an analytical tool. In
particular, these non-GAAP financial measures have no standardized
meaning prescribed by GAAP and are not based on a comprehensive set
of accounting rules or principles and many of the adjustments to
the GAAP financial measures reflect the exclusion of items that are
recurring and may be reflected in our financial results for the
foreseeable future. In addition, the non-GAAP measures we use may
be different from non-GAAP measures used by other companies,
limiting their usefulness for comparison purposes. We compensate
for these limitations by providing specific information in the
reconciliation included in this release regarding the GAAP amounts
excluded from the non-GAAP financial measures. In addition, as
noted above, we evaluate the non-GAAP financial measures together
with the most directly comparable GAAP financial information.
Investors are encouraged to review the reconciliations of these
non-GAAP measures to their most directly comparable GAAP financial
measures included in this release.
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