Astra Space, Inc. (“Astra”) (NASDAQ: ASTR) today announced a
strategic reallocation of its workforce from its Launch Services
organization to its Astra Spacecraft Engines™ business to support
its growing customer base and order backlog of its spacecraft
engines.
Astra last announced 278 cumulative committed orders of the
Astra Spacecraft Engine™ through March 30, 2023, representing
approximately $77 million of contract value. A substantial majority
of these orders are expected to be delivered through the end of
2024.
In support of the Astra Spacecraft Engine™ business, Astra has
reallocated approximately 50 engineering and manufacturing
personnel from Launch Services to Space Products. This reallocation
includes a combination of permanent reassignments and temporary
assignments to support customer programs and increasing production
and test capacity through the end of the year.
“We are intensely focused on delivering on our commitments to
our customers, which includes ensuring we have sufficient resources
and an adequate financial runway to execute on our near-term
opportunities,” said Chris Kemp, Founder, Chairman and CEO.
In addition to this reallocation, Astra has also reduced its
overall workforce by approximately 25% since the beginning of the
quarter, including a reduction of approximately 70 employees that
was announced on August 4, 2023. The affected employees primarily
supported the Company’s launch, SG&A, and shared services
functions.
“I am grateful for the sacrifices that the employees impacted by
this decision have made, and we are deeply committed to treating
all impacted employees with the utmost care and respect during this
transition,” continued Kemp.
Astra’s Launch Services organization remains focused on
completing milestones for several launch customer contracts while
continuing development of Rocket 4 and Launch System 2.0. The
reduction and reallocation of Launch Services resources is expected
to delay the timing of the Company’s test launches and paid
commercial launches.
As discussed on our previous earnings call, Astra continues to
make significant reductions to its operating expenses. Cumulative
reductions in workforce are expected to result in over $4m of
quarterly cost savings beginning in Q4 2023, which when combined
with ongoing reductions in Capex and Opex, are expected to result
in substantial reductions to cash burn over the next few
quarters.
The Company remains focused on thoughtfully pursuing
opportunities to raise additional capital. Given the strength of
our Astra Spacecraft Engine™ business, the Company has engaged PJT
Partners, a global, advisory-focused investment bank, to act as the
Company’s financial advisor in connection with future financing
activities and to explore potential strategic investments in the
Astra Spacecraft Engine™ business to strengthen Astra’s balance
sheet.
Business Update
As part of this announcement, Astra is also providing the
following preliminary estimates of certain unaudited financial
results for the three months ended June 30, 2023, in order to
support our continuing discussions with lenders and other potential
financing sources. The data presented below has been prepared by
and is the responsibility of the Company management. It is
preliminary and unaudited, based on our estimates, and subject to
further internal review by its management and compilation of actual
results. The Company’s independent registered public accounting
firm has not audited, reviewed, compiled, or performed any
procedures with respect to the preliminary financial data presented
below. Accordingly, the Company’s independent registered public
accounting firm does not express an opinion or any other form of
assurance with respect to this preliminary financial data. Ranges
have been provided, rather than specific amounts, for the
preliminary data because financial closing procedures for the three
months ended June 30, 2023 are not yet complete.
For the three months ended June 30, 2023, we expect:
- Revenues to be between $0.5 million to $1.0 million,
- GAAP net loss to be between $13.0 million and $15.0
million,
- adjusted EBITDA loss* to be between $32.1 million and $34.1
million,
- basic shares outstanding to be between 271 million and 273
million shares,
- capital expenditures to be between $2.9 million and $3.9
million, and
- cash, cash equivalents and marketable securities to be between
$26.0 million and $26.5 million.
The preliminary estimates provided for adjusted EBITDA loss,
basic shares outstanding, and capital expenditures are in line with
the original guidance provided at the Q1 2023 earnings call on May
15, 2023.
The preliminary estimate of cash, cash equivalents and
marketable securities guidance is lower than the range initially
provided at the Q1 2023 earnings call on May 15, 2023 primarily due
to delays in collecting on government receivables of approximately
$2.9 million and a delay in the Company’s receipt of cash proceeds
from the employee retention tax credit of approximately $2.1
million. Had these two items been collected in Q2 2023, we believe,
based on our current views, that Astra’s cash, cash equivalents and
marketable securities would have been within the guidance provided
on that earnings call.
Adjusted EBITDA loss is a non-GAAP financial measure. Please see
our current report on Form 8-K filed August 4, 2023, with the SEC
for more information on our use of Adjusted EBITDA loss and for a
reconciliation of our preliminary estimated range of Adjusted
EBITDA loss for the three months ended June 30, 2023 to its most
comparable GAAP measure.
Litigation Update
The Company also announced a development in its securities
litigation. On August 2, 2023, the Company received an order
granting its motion to dismiss in the action before the U.S.
federal district court for the Northern District of California,
captioned: In Re Astra Space Inc. f/k/a Holicity Inc. Securities
Litigation. The plaintiffs’ complaint alleged that the Company and
several of its current and former officers and directors violated
provisions of the Securities Exchange Act of 1934, as amended, with
respect to certain statements concerning the Company’s projected
launch cadence and payload capacity goals. The complaint sought
unspecified damages on behalf of a purported class of purchasers of
the Company’s securities between February 2, 2021 and December 29,
2021. The plaintiffs in this action have a period of 21 days to
file an amended complaint.
About Astra
Astra’s mission is to improve life on Earth from space® by
creating a healthier and more connected planet. Today, Astra offers
one of the lowest cost-per-launch dedicated orbital launch services
of any operational launch provider in the world. Astra delivered
its first commercial launch to low Earth orbit in 2021, making it
the fastest company in history to reach this milestone, just five
years after it was founded in 2016. Astra (NASDAQ: ASTR) was the
first space launch company to be publicly traded on Nasdaq.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of U.S federal securities laws. Forward-looking
statements herein relate to, among other things, the offering
described herein. These statements involve a number of known and
unknown risks, which may cause actual results to differ materially
from expectations expressed or implied in the forward-looking
statements. These risks include risks relating to the matters
discussed in the Risk Factors section of Astra’s Annual Report on
Form 10-K for the period ended December 31, 2022, filed with the
Securities and Exchange Commission on March 30, 2023. Most of these
factors are outside Astra’s control and are difficult to predict.
The forward-looking statements included in this press release speak
only as of the date they are made. Readers are cautioned not to put
undue reliance on forward-looking statements, and Astra assumes no
obligation, and does not intend, to update these forward-looking
statements as a result of future events or developments.
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Investor Contact: investors@astra.com
Media Contact: press@astra.com
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