“As of July 31st 2024, the Company’s cash and cash equivalents balance was approximately $14.6 million which, without additional funding, will not be sufficient to meet its obligations within the next twelve months from the issuance of this quarterly report.” So said the cautionary note which accompanied Terran Orbital’s quarterly trading statement (for the three months to June 30th) which warned that the business must raise more capital.
Terran, part-owned by Lockheed-Martin (LM), is busy equipping a new 94,000 sq. ft. factory and handling orders for LM as well as for the US government. However, its largest order is a 300 satellite commitment from Rivada Space Networks (Rivada’s OuterNET system).
Terran did not hold the typical Q&A with analysts after the financial announcements but during an event hosted by investment bank Jefferies on June 25th, Terran CEO Marc Bell said that pre-manufacturing design of Rivada’s satellites was taking longer than anticipated. As to the financing crunch, Bell said, “We feel very comfortable. No issues on our side.”
In other words, the cautionary notes on the August 12th statement might just be the usual ‘boilerplate.’ As to the specific financials, Terran posted revenues of $30.39 million for the quarter ended June 2024. Its share price tumbled 8.54 percent to just 65 cents per share. This is also a problem in that the NASDAQ exchange requires listed businesses to maintain a share price above $1 per share.
A breakdown of Terran’s order book reveals… “During the three months ended June 30, 2024 and 2023, Lockheed Martin represented approximately 69 percent and 84 percent of consolidated revenue, respectively, and Rivada Space Networks represented approximately 15 per cent and 4 per cent of consolidated revenue, respectively. During the six months ended June 30th 2024 and 2023, Lockheed Martin represented approximately 71 per cent and 79 per cent of consolidated revenue, respectively, and Rivada represented approximately 11 per cent and 2 per cent of consolidated revenue, respectively. There were no other individual customers who accounted for more than 10 percent of the Company’s revenue during these periods,” stated Terran.
On the upside, as of June 30th, Terran had approximately $312.7 million of remaining performance obligations. The Company estimates that approximately 90 percent of the remaining performance obligations will be recognised as revenue by December 31st 2025 and the remainder by December 31st 2026.
Rivada’s obligations amount to $2.4 billion. The amount of revenue recognised under the Rivada Agreement duringthe three months ended June 30th 2024 and 2023 was $4.6 million and $1.2 million, respectively, and $6.2 million and $1.2 million during the six months ended June 30th 2024 and 2023, respectively. As of June 30th 2024, the Company’s remaining performance obligations included $1.6 million related to the Rivada agreement, which represents the associated contract liability.
Terran’s existing debt totals some $200.39 million. On May 30th it announced a share sale and received $37.1 million from the exercise. It has similar options which, if carried out, could realise up to a total of $60 million in fresh cash over and above the $37 million.
On May 16th, the company hired a new CFO (Adarsh Parekh) and on May 20th a new COO (Peter Krauss), both of whom will, no doubt, be working hard to keep the company’s head above water.
