BlackSky Reports First Quarter 2022 Results

Non-GAAP Financial Measures

Adjusted EBITDA is defined as net income or loss attributable to BlackSky before interest expense, income taxes, depreciation and amortization, as well as significant non-cash and/or non-recurring expenses as management believes these items are not as useful in evaluating the Company’s core operating performance. These items include, but are not limited to, realized loss on conversion of bridge notes, stock-based compensation expense, unrealized (gain)/loss on certain warrants/shares classified as derivatives, satellite impairment loss, (gain)/loss on debt extinguishment, (gain)/loss from discontinued operations, loss/(gain) on equity method investment, transaction related legal settlements, and transaction costs associated with derivative liabilities.

Adjusted EBITDA is a non-GAAP financial performance measure. It should not be considered in isolation or as an alternative to measures determined in accordance with GAAP. Please refer to the schedule herein and our SEC filings for a reconciliation of these non-GAAP financial performance measures to the most comparable measures reported in accordance with GAAP and for a discussion of the presentation, comparability, and use of such financial performance measures.

Forward-Looking Statements

Certain statements and other information included in this release constitute forward-looking statements under applicable securities laws. Words such as "may", "will", "could", "should", "would", "plan", "potential", "intend", "anticipate", "believe", "estimate", "future", "opportunity", "will likely result", or "expect" and other words, terms, and phrases of similar meaning are often intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks, and uncertainties, as well as other statements referring to or including forward-looking information included in this release.

Forward-looking statements are subject to various risks and uncertainties, which could cause actual results to differ materially from the anticipated results or expectations expressed in this release. As a result, although BlackSky's management believes that the expectations and assumptions on which such forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because BlackSky can give no assurance that they will prove to be correct. The risks that could cause actual results to differ materially from current expectations include, but are not limited to, the risk factors and other disclosures about BlackSky and its business included in BlackSky's disclosure materials filed from time to time with the U.S. Securities and Exchange Commission ("SEC"), which are available on the SEC's website at www.sec.gov or on BlackSky's Investor Relations website at ir.blacksky.com.

The forward-looking statements contained in this release are expressly qualified in their entirety by the foregoing cautionary statements. All such forward-looking statements are based upon data available as of the date of this release or other specified date and speak only as of such date. BlackSky disclaims any intention or obligation to update or revise any forward-looking statements in this release as a result of new information or future events, except as may be required under applicable securities law.

BLACKSKY TECHNOLOGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS

(unaudited)

(in thousands)

 

 

Three Months Ended March 31,

 

 

2022

 

 

 

2021

 

Revenue

 

 

 

Imagery & software analytical services

$

9,772

 

 

$

5,998

 

Engineering & systems integration

 

4,124

 

 

 

1,296

 

Total revenue

 

13,896

 

 

 

7,294

 

Costs and expenses

 

 

 

Imagery & software analytical service costs, excluding depreciation and amortization

 

5,907

 

 

 

4,379

 

Engineering & systems integration costs, excluding depreciation and amortization

 

5,048

 

 

 

1,130

 

Selling, general and administrative

 

22,536

 

 

 

8,478

 

Research and development

 

146

 

 

 

28

 

Depreciation and amortization

 

7,391

 

 

 

2,764

 

Operating loss

 

(27,132

)

 

 

(9,485

)

Gain (loss) on derivatives

 

8,140

 

 

 

(14,008

)

Income on equity method investment

 

257

 

 

 

196

 

Interest expense

 

(1,255

)

 

 

(1,168

)

Other income (expense), net

 

2

 

 

 

(144,091

)

Loss before income taxes

 

(19,988

)

 

 

(168,556

)

Income tax (expense) benefit

 

 

 

 

 

Net loss

 

(19,988

)

 

 

(168,556

)

Other comprehensive income

 

 

 

 

1,389

 

Total comprehensive loss

$

(19,988

)

 

$

(167,167

)

 

 

 

 

Basic and diluted loss per share of common stock:

 

 

 

Net loss per share of common stock

$

(0.17

)

 

$

(0.70

)

 

 

 

 

Weighted average common shares outstanding - basic and diluted

 

115,479

 

 

 

242,289

 

BLACKSKY TECHNOLOGY INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in thousands, except par value)

 

 

March 31,

 

December 31,

 

 

2022

 

 

 

2021

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

135,886

 

 

$

165,586

 

Restricted cash

 

2,518

 

 

 

2,518

 

Accounts receivable, net of allowance of $8 and $39, respectively

 

5,491

 

 

 

2,629

 

Prepaid expenses and other current assets

 

5,044

 

 

 

6,264

 

Contract assets

 

2,865

 

 

 

1,678

 

Total current assets

 

151,804

 

 

 

178,675

 

Property and equipment - net

 

67,102

 

 

 

70,551

 

Goodwill

 

9,393

 

 

 

9,393

 

Investment in equity method investees

 

4,259

 

 

 

4,002

 

Intangible assets - net

 

2,339

 

 

 

2,480

 

Satellite procurement work in process

 

51,846

 

 

 

40,102

 

Other assets

 

565

 

 

 

560

 

Total assets

$

287,308

 

 

$

305,763

 

Liabilities and stockholders’ equity

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued liabilities

$

15,530

 

 

$

10,837

 

Amounts payable to equity method investees

 

3,951

 

 

 

5,613

 

Contract liabilities - current

 

9,528

 

 

 

11,266

 

Other current liabilities

 

2,619

 

 

 

2,819

 

Total current liabilities

 

31,628

 

 

 

30,535

 

Liability for estimated contract losses

 

3,626

 

 

 

6,054

 

Long-term contract liabilities

 

3,000

 

 

 

568

 

Derivative liabilities

 

8,786

 

 

 

16,925

 

Long-term debt - net of current portion

 

71,909

 

 

 

71,408

 

Other liabilities

 

1,463

 

 

 

653

 

Total liabilities

 

120,412

 

 

 

126,143

 

Commitments and contingencies (Note 16)

 

 

 

Stockholders’ equity:

 

 

 

Class A common stock, $0.0001 par value-authorized, 300,000 shares; issued, 120,506 and 117,160 shares; outstanding, 117,927 shares and 114,452 shares as of March 31, 2022 and December 31, 2021, respectively.

 

12

 

 

 

11

 

Additional paid-in capital

 

657,781

 

 

 

650,518

 

Accumulated deficit

 

(490,897

)

 

 

(470,909

)

Total stockholders’ equity

 

166,896

 

 

 

179,620

 

Total liabilities and stockholders’ equity

$

287,308

 

 

$

305,763

 

BLACKSKY TECHNOLOGY INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

 

 

Three Months Ended March 31,

 

 

2022

 

 

 

2021

 

Cash flows from operating activities:

 

 

 

Net loss

$

(19,988

)

 

$

(168,556

)

Depreciation and amortization expense

 

7,391

 

 

 

2,764

 

Bad debt expense

 

6

 

 

 

 

Stock-based compensation expense

 

10,240

 

 

 

508

 

Loss on issuance of Bridge Notes

 

 

 

 

96,476

 

Issuance costs for derivative liabilities and debt carried at fair value

 

 

 

 

47,623

 

Amortization of debt discount and issuance costs

 

502

 

 

 

348

 

Gain on equity method investment

 

(257

)

 

 

(196

)

Loss on disposal of property and equipment

 

 

 

 

24

 

(Gain) loss on derivatives

 

(8,140

)

 

 

14,008

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

(2,868

)

 

 

(1,651

)

Contract assets

 

(1,187

)

 

 

(66

)

Prepaid expenses and other current assets

 

1,220

 

 

 

(158

)

Other assets

 

(5

)

 

 

96

 

Accounts payable and accrued liabilities

 

1,533

 

 

 

(3,753

)

Other current liabilities

 

(200

)

 

 

(11

)

Contract liabilities - current and long-term

 

694

 

 

 

1,258

 

Liability for estimated contract losses

 

(2,428

)

 

 

(171

)

Other liabilities

 

811

 

 

 

874

 

Net cash used in operating activities

 

(12,676

)

 

 

(10,583

)

Cash flows from investing activities:

 

 

 

Purchase of property and equipment

 

(1,926

)

 

 

(17

)

Satellite procurement work in process

 

(11,499

)

 

 

(7,502

)

Net cash used in investing activities

 

(13,425

)

 

 

(7,519

)

Cash flows from financing activities:

 

 

 

Proceeds from issuance of debt

 

 

 

 

58,082

 

Proceeds from options exercised

 

17

 

 

 

1

 

Proceeds from warrants exercised

 

 

 

 

120

 

Payments for deferred offering costs

 

 

 

 

(321

)

Payments for debt issuance costs

 

 

 

 

(91

)

Withholding tax payment on vesting of restricted stock awards

 

(3,616

)

 

 

 

Net cash (used in) provided by financing activities

 

(3,599

)

 

 

57,791

 

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

 

(29,700

)

 

 

39,689

 

Cash, cash equivalents, and restricted cash – beginning of year

 

168,104

 

 

 

10,573

 

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

$

138,404

 

 

$

50,262

 

BLACKSKY TECHNOLOGY INC.

RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA

(unaudited)

(in thousands)

 

 

Three Months Ended March 31,

 

 

2022

 

 

 

2021

 

Net loss

$

(19,988

)

 

$

(168,556

)

Loss on issuance of Bridge Notes, including debt issuance costs expensed for debt carried at fair value

 

 

 

 

144,099

 

Stock-based compensation expense

 

10,240

 

 

 

508

 

(Gain) loss on derivatives

 

(8,140

)

 

 

14,008

 

Depreciation and amortization

 

7,391

 

 

 

2,764

 

Interest expense

 

1,255

 

 

 

1,168

 

Income on equity method investment

 

(257

)

 

 

(196

)

Adjusted EBITDA

$

(9,499

)

 

$

(6,205

)


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