Tempo Automation Holdings, Inc. (NASDAQ: TMPO, “Tempo Automation”
or “Tempo”), a leading software-accelerated electronics
manufacturer, announced today its financial results for the first
quarter of 2023.
“We continued to see strong customer engagement
for our software-accelerated platform across multiple industries,”
said Joy Weiss, CEO of Tempo Automation. “We look forward to
closing the Optimum transaction and further extending our
engagement opportunity across the entire new product design and
manufacturing process.”
Financial Highlights:
- Total revenue was $2.8 million in the first quarter of 2023,
compared to $3.9 million in the first quarter of 2022.
- Net loss in the first quarter of 2023 was $7.4 million,
compared to net loss of $12.5 million in the first quarter of
2022.
- Adjusted EBITDA in the first quarter of 2023 was $(4.1)
million, compared to Adjusted EBITDA of $(7.7) million in the first
quarter of 2022.
Business Highlights
- Announced the proposed acquisitions
of each of Optimum Design Associates, Inc. and Optimum Design
Associates Pty. Ltd. (together “Optimum” and such acquisition, the
“Optimum Acquisition”), fast-growing electronic design services
companies that add a high-quality, profitable revenue base.
Management believes that the Optimum Acquisition provides a
significant step toward Tempo’s vision of transforming the speed
and quality of electronics prototyping. The Optimum
Acquisition is anticipated to close in the late second quarter or
early third quarter of 2023. Closing of the Optimum Acquisition is
subject to the satisfaction or waiver of customary closing
conditions, including Tempo obtaining financing sufficient to fund
the cash consideration in the Optimum Acquisition, the receipt of
certain regulatory approvals and approval by Nasdaq to list the
securities to be issued as consideration in the Optimum
Acquisition.
- Upon completion of the Optimum
Acquisition, we will have added valuable resources to an already
strong team of experienced engineers. Given the synergies between
Optimum’s expertise in developing complex designs and the
capability of Tempo’s platform to rapidly manufacture them, we
expect to increase the pace at which we can help our customers get
their products to market quickly.
- Tempo will launch trials of its new
customer portal this month, which enhances the customer experience
and streamlines internal operations. Features include real-time
feedback on price estimates for printed circuit board assemblies
(PCBA), with visibility to supply chain availability and
constraints.
- In addition to providing an improved customer experience, the
portal also automates numerous manual steps in relaying complex
customer specifications to the production line, streamlining
operations and eliminating costly and time-consuming errors.
Financial Outlook
Due in part to recent market volatility, we have
observed a heightened level of caution among our customers and
vendors. This, along with the delay in launching the new customer
portal, has resulted in slower than expected sales growth.
Additionally, we have experienced delays in securing the necessary
financing for the Optimum Acquisition, impacting the anticipated
closing timeline. As such, we are adjusting our previously
announced financial outlook for the full year 2023 as follows:
- On a standalone basis, Tempo now expects full year revenue to
be in the range of $11.0 million to $13.0 million and Adjusted
EBITDA to be in the range of $(12.5) million to $(10.5)
million.
- Assuming that the Optimum Acquisition closes by June 30, 2023,
Tempo expects full year revenue (including Optimum) to be in the
range of $15.6 million to $19.6 million and Adjusted EBITDA to be
in the range of $(11.0) million to $(8.0) million. On a full-year
pro forma basis, giving effect to the closing of the Optimum
Acquisition as of January 1, 2023, Tempo expects full year revenue
to be in the range of $21.3 million to $25.3 million and Adjusted
EBITDA to be in the range of $(9.0) million to $(6.0) and
million.
About Tempo Automation
Tempo is a leading software-accelerated
electronics manufacturer, transforming the way top companies
innovate and bring new products to market. Tempo Automation’s
unique automated manufacturing platform optimizes the complex
process of printed circuit board manufacturing to deliver unmatched
quality, speed and agility. The platform’s all-digital process
automation, data-driven intelligence, and connected smart factory
create a distinctive competitive advantage for customers—to deliver
tomorrow’s products today. From rockets to robots, autonomous cars
to drones, many of the fastest-moving companies in industrial tech,
medical technology, space, and other industries partner with Tempo
Automation to accelerate innovation and set a new tempo for
progress. Learn more at tempoautomation.com.
Use of Forward-Looking
Statements
This press release contains certain
forward-looking statements within the meaning of the federal
securities laws with respect to Tempo’s business, including
statements regarding the services offered by Tempo and the markets
in which it operates, and the Optimum Acquisition, including
statements regarding the benefits of the proposed acquisition and
the anticipated timing of the Optimum Acquisition. These
forward-looking statements generally are identified by the words
“believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,”
“strategy,” “future,” “opportunity,” “plan,” “may,” “should,”
“will,” “would,” “will be,” “will continue,” “will likely result,”
and similar expressions. Forward-looking statements are
predictions, projections and other statements about future events
that are based on current expectations and assumptions and, as a
result, are subject to risks and uncertainties that could cause the
actual results to differ materially from the expected results. Many
factors could cause actual future events to differ materially from
the forward-looking statements in this document, including but not
limited to: (i) the risk that the Optimum Acquisition may not be
completed in a timely manner or at all, which may adversely affect
the price of Tempo’s securities; (ii) the failure to satisfy the
conditions to the consummation of the Optimum Acquisition; (iii)
the occurrence of any event, change or other circumstance that
could give rise to the termination of the definitive agreement
relating to the Optimum Acquisition; (iv) the effect of the
announcement or pendency of the Optimum Acquisition on Tempo’s or
Optimum’s business relationships, performance, and business
generally; (v) risks that the Optimum Acquisition disrupts current
plans of Tempo or Optimum and potential difficulties in Tempo or
Optimum employee retention as a result of the Optimum Acquisition;
(vi) the ability to implement business plans, forecasts, and other
expectations after the completion of the Optimum Acquisition, and
identify and realize additional opportunities; (vii) the risk of
downturns in the highly competitive industry in which Tempo and
Optimum operate; (viii) the enforceability of Optimum’s
intellectual property, including its patents, and the potential
infringement on the intellectual property rights of others, cyber
security risks or potential breaches of data security; (ix) the
ability of Optimum to protect the intellectual property and
confidential information of its customers; (x) risks relating to
Tempo’s ability to obtain requisite capital and maintain adequate
liquidity to fund the Optimum Acquisition and support business
growth; and (xi) other risks and uncertainties described in Tempo’s
filings with the SEC, including its past and future periodic
reports and other filings. Such factors and risks as outlined above
and in such filings do not constitute all factors and risks that
could cause actual results of Tempo to be materially different from
Tempo’s forward-looking statements. Accordingly, investors are
cautioned not to place undue reliance on any forward-looking
statements. These forward-looking statements are made as of today,
and Tempo does not intend, and has no obligation, to update or
revise any forward-looking statements in order to reflect events or
circumstances that may arise after the date of this press release,
except as required by law.
Non-GAAP Financial Measures
We report our financial results in accordance
with generally accepted accounting standards in the United States
(“GAAP”). However, management believes certain non-GAAP financial
measures, including Adjusted EBITDA, provide investors with
additional useful information in evaluating our operating
performance.
Tempo defines Adjusted EBITDA as net income
(loss), adjusted to exclude the effects of stock-based compensation
expense, total other income (expense) including the change in fair
value of warrants, change in fair value of derivatives and debt,
change in fair value of earnout liabilities, forgiveness of loans
under the Paycheck Protection Program, provision for income taxes,
depreciation and amortization, merger related integration costs
associated with the recent business combination between Tempo and
Tempo Automation, Inc., restructuring charges and redundant costs
which includes cost for personnel whose position have been
eliminated as part of a restructuring, and impairment charges
related to abandonment of certain section of our operation lease
and other one-time or non-recurring charges.
The non-GAAP financial measures contained herein
should not be considered in isolation from, or as a substitute for,
financial information presented in compliance with GAAP, and may
not be comparable to similarly titled measures used by other
companies.
Tempo believes that a quantitative
reconciliation of the forward-looking non-GAAP financial measures
contained herein to comparable GAAP measures cannot be made
available without unreasonable effort due to the forward-looking
nature of the estimates contained herein and the nature and
complexity of such reconciliation. The forward-looking estimates
contained herein are not prepared in accordance with generally
accepted accounting standards. Consequently, no reconciliations of
the forward-looking non-GAAP financial measures contained herein to
the most directly comparable GAAP measures are included.
Specifically, the following GAAP adjustments, among others, have
not been included in the estimates contained herein: revenue
accounting, including identifying the relevant performance
obligations, allocating the value of the arrangement to the
performance obligations and determining the timing of recognition
of the relative fair value assigned to the performance obligations.
It is probable that these factors would have a significant impact
on Tempo’s projected financial position and results of operations
as reported under GAAP.
Contact:Investor RelationsLori
Barker, Blueshirt Grouplori@blueshirtgroup.com
|
TEMPO AUTOMATION
HOLDINGS, INC.CONSOLIDATED STATEMENTS OF
OPERATIONS(in thousands, except
share and per share amounts) |
|
|
|
|
|
THREE MONTHS ENDED |
|
|
March 31, |
|
March 31, |
|
|
2023 |
|
2022 |
Revenue |
$ |
2,773 |
|
|
$ |
3,897 |
|
Cost of
revenue |
|
2,700 |
|
|
|
3,652 |
|
Gross
profit |
|
73 |
|
|
|
245 |
|
Operating
expenses |
|
|
|
|
|
|
Research and development |
|
1,937 |
|
|
|
3,329 |
|
|
Sales and marketing |
|
1,245 |
|
|
|
3,219 |
|
|
General and
administrative |
|
5,618 |
|
|
|
4,303 |
|
Total operating
expenses |
|
8,800 |
|
|
|
10,851 |
|
Loss from
operations |
|
(8,727 |
) |
|
|
(10,606 |
) |
Other
income (expense), net |
|
|
|
|
|
|
Interest expense |
|
(119 |
) |
|
|
(2,019 |
) |
|
Interest income |
|
77 |
|
|
|
- |
|
|
Other income (expense) |
|
930 |
|
|
|
(4 |
) |
|
Change in fair value of
warrants |
|
(272 |
) |
|
|
128 |
|
|
Change in fair value of
debt |
|
2,116 |
|
|
|
- |
|
|
Change in fair value of
earnout liabilities |
|
(1,392 |
) |
|
|
- |
|
Total other income
(expense), net |
|
1,340 |
|
|
|
(1,895 |
) |
Loss
before income taxes |
|
(7,387 |
) |
|
|
(12,501 |
) |
|
Income tax provision |
|
- |
|
|
|
- |
|
Net
loss |
$ |
(7,387 |
) |
|
$ |
(12,501 |
) |
|
|
|
|
|
|
|
|
Weighted-average
shares used to compute net loss attributable per share to common
stockholders, basic and diluted |
|
26,331,475 |
|
|
|
6,748,520 |
|
Net loss
attributable per share to common stockholders, basic and
diluted |
|
(0.28 |
) |
|
|
(1.85 |
) |
|
|
|
|
|
|
|
|
|
TEMPO AUTOMATION
HOLDINGS, INC.RECONCILIATION OF NET LOSS TO
ADJUSTED EBITDA(in
thousands) |
|
|
|
|
|
THREE MONTHS ENDED |
|
|
March 31, |
|
|
March 31, |
|
|
2023 |
|
|
2022 |
Net Loss |
$ |
(7,387 |
) |
|
$ |
(12,501 |
) |
Interest expense |
|
119 |
|
|
|
2,019 |
|
Interest income |
|
(77 |
) |
|
|
- |
|
Change in fair value of warrants |
|
272 |
|
|
|
(128 |
) |
Change in fair value of debt |
|
(2,116 |
) |
|
|
- |
|
Change in fair value of earnout liabilities |
|
1,392 |
|
|
|
- |
|
Other income (expense) |
|
(930 |
) |
|
|
4 |
|
Loss from Operations |
|
(8,727 |
) |
|
|
(10,606 |
) |
Depreciation and Amortization (COGS) |
|
127 |
|
|
|
131 |
|
Depreciation and Amortization (OPEX) |
|
381 |
|
|
|
455 |
|
Stock-based compensation (COGS) |
|
85 |
|
|
|
167 |
|
Stock-based compensation (OPEX) |
|
1,626 |
|
|
|
698 |
|
Merger and acquisition costs (OPEX) |
|
2,417 |
|
|
|
1,321 |
|
Redundant costs (COGS) |
|
4 |
|
|
|
- |
|
Redundant costs (OPEX) |
|
- |
|
|
|
100 |
|
Adjusted EBITDA |
$ |
(4,087 |
) |
|
$ |
(7,734 |
) |
|
|
|
|
|
|
|
|
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