Archer Announces Second Quarter 2023 Financial
and Operating Results
- Archer secures $215 million investment, which includes
Stellantis, Boeing, United Airlines, and ARK Investment Management
LLC (“ARK Invest”), increasing Archer’s total funding to date to
over $1.1 billion, bolstering Archer’s path to FAA certification
and commercial operations in 2025
- Midnight receives FAA Special Airworthiness Certificate,
expected to begin flight test and become the first eVTOL aircraft
to be delivered to a customer as part of Archer’s contracts with
the Department of Defense (DoD)
- Long-term strategic partner, Stellantis, leads investment round
by accelerating investment under existing strategic funding
agreement
- Boeing, Archer, and Wisk reach agreement to enter into
autonomous flight collaboration and settle litigation
- Updates earnings conference call time to 6:00 p.m. Eastern Time
today, August 10, 2023
Archer Aviation Inc. (NYSE: ACHR), a leader in electric vertical
takeoff and landing (eVTOL) aircraft, today announced operating and
financial results for the second quarter ended June 30, 2023. In
tandem with earnings, Archer made a series of announcements that
reinforce its path to FAA certification and commercial operations
in 2025. Archer has landed a $215 million equity investment from
industry leaders Stellantis, Boeing and United Airlines, as well as
other financial institutions, including ARK Invest, increasing the
company’s total funding to over $1.1 billion to date, received FAA
approval to begin flying its Midnight eVTOL aircraft, and reached
an agreement with Boeing and Wisk to enter into an autonomous
flight collaboration and settle litigation between the companies.
Additionally, Archer announced that it is on track to complete what
it believes will be the first ever eVTOL aircraft delivery to a
customer as part of its recently announced contracts with the
Department of Defense (DoD). These announcements come on the heels
of the FAA Administrator leaving to join Archer and the DoD
awarding Archer the largest total contract value of any eVTOL
company.
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Midnight receives FAA Special
Airworthiness Certificate, expected to begin flight test and become
the first eVTOL aircraft to be delivered to a customer as part of
Archer’s contracts with the Department of Defense (DoD) (Photo:
Business Wire)
Archer today issued a shareholder letter providing additional
details on these updates along with its second quarter operating
and financial results and third quarter 2023 estimates. The
shareholder letter is available on its investor relations website
here. Archer has updated its earnings conference call time to 3:00
p.m. Pacific Time (6:00 p.m. Eastern Time) today. Attendees can
access a live webcast on our investor relations website at
investors.archer.com or the conference call by dialing 844-200-6205
(domestic) or +1 929-526-1599 (international) and entering the
access code 938837.
“Over the last quarter, we’ve seen the U.S. government make an
unwavering commitment that America will lead the way in
commercializing eVTOL aircraft, the FAA validated the timeline for
eVTOL aircraft to begin operations in the U.S. in 2025, and leaders
in the mobility industry, Stellantis, United Airlines and Boeing,
have come together to invest in Archer’s future,” said Adam
Goldstein, Archer’s Founder and CEO. “The pace at which our
industry is advancing is unprecedented. Our team’s hard work and
dedication have brought us to this exciting moment, and we can't
wait to see Midnight soar,” added Goldstein.
Archer Aviation Secures $215M
Investment
Led by Stellantis, Archer’s long-term strategic partner, Archer
today announced it has further strengthened its liquidity position
with a $215 million equity investment round. This investment round
includes an acceleration of $70 million from Stellantis under the
strategic funding agreement entered into in January 2023, with $55
million remaining available under that facility. The commitment
from Stellantis has been unrivaled, from its foresight to provide
the manufacturing expertise and capital needed to accelerate
Archer’s business objectives, to the strategic vision and steadfast
support from CEO Carlos Tavares and Chief Engineering and
Technology Officer Ned Curic.
The roster of investors from this latest funding round also
includes United Airlines and industry giant Boeing, as well as
other financial institutions, including ARK Invest. The funds from
this round are intended to be used for working capital and general
corporate purposes, including Archer’s continued development of its
aircraft and related technology, as well as the build out of its
manufacturing and test facilities.
Boeing, Archer, and Wisk Reach
Agreement to Enter into Autonomous Flight Collaboration and Settle
Litigation
Archer and Wisk, leaders in the advanced air mobility industry,
along with The Boeing Company, announced a collaboration that looks
forward to the growth and development of the AAM industry.
Simultaneously, the parties reached a settlement to resolve the
federal and state court litigation between them. This collaboration
puts Archer in a unique position -- to be able to source autonomy
technology from a leader in the industry. Over the long term,
autonomy is seen as one of the keys to achieving scale across all
AAM applications, from passenger to cargo and beyond.
This strategic relationship will leverage each company’s
respective strengths and competencies with the goal of accelerating
the commercialization of autonomous flight. This approach is a
natural extension of Archer’s overall strategy of focusing its
in-house research and development on the key enabling technologies
that cannot be sourced from the existing aerospace supply base,
thereby helping Archer potentially avoid hundreds of millions of
dollars of spending.
FAA Issues Midnight Aircraft
Certificate to Begin Flying
Archer today announced that its Midnight aircraft received its
Special Airworthiness Certificate from the Federal Aviation
Administration (FAA). This certification signals that Archer’s
Midnight aircraft has successfully met all FAA safety requirements
allowing it to begin flight test operations, which Archer expects
to commence in the coming weeks.
Archer continues to make strong progress on Midnight’s
certification program with the FAA in support of the company’s
planned entry into service in 2025. This is an important step as
Archer readies to begin its piloted "for credit" testing of its
Midnight aircraft with the FAA in early 2024 and bring online the
world’s first high volume eVTOL production facility in Covington,
Georgia in mid-2024 alongside Stellantis.
As part of Archer’s recently announced landmark agreements with
the Department of Defense valued at up to $142 million1, Archer
announced today that it is on track to deliver the Midnight
aircraft to the U.S. Air Force later this year or early next year.
Archer believes this would make Midnight the first ever eVTOL
aircraft delivered to a customer.
________________________
1 Largest "up to" contract awarded by
AFWERX to an eVTOL company as of July 27, 2023. The “up to”
contract value is subject to certain conditions being met as
defined in the contracts.
Second Quarter 2023 Financial
Results
Q2 2023 (GAAP)
Q2 20231 (Non-GAAP)
Total Operating Expenses
$
181.4M
$
77.4M
Net Loss
$
(184.1M)
NA
Adjusted EBITDA
NA
$
(76.3M)
Cash, Cash Equivalents and Short-Term
Investments
$
407.6M
NA
1.
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 2023.”
Third Quarter 2023 Financial
Estimates
Archer’s financial estimates for the third quarter of 2023 are
as follows:
- GAAP total operating expenses of $42 million to $52
million
- Non-GAAP total operating expenses of $75 million to $85 million
- This reflects a total of $26 million expected stock-based
compensation, warrant expense and other non-cash charges, and a
one-time non cash credit of $59 million as a result of the reversal
of an unrealized expense relating to founder equity grants.
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 2023 will have a significant impact
on our future GAAP financial results. Accordingly, a reconciliation
of non-GAAP total operating expenses is not available without
unreasonable effort.
Forward Looking
Statements
This press release contains forward looking statements regarding
our future business plans and expectations, including statements
regarding our estimates for the third quarter of 2023,
certification timelines, our timelines for the development and
delivery of our Midnight aircraft, potential contract value with
the DoD, timing of the closing of the equity investment round and
use of proceeds, and expected collaborations and cost savings
related to autonomy technology. 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 Archer’s filings with the Securities and Exchange
Commission, including its most recent Annual Report on Form 10-K
and Quarterly Report on Form 10-Q, which are 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 2023
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, 2023 is set forth below.
Three Months Ended June 30,
2023
Total operating expenses
$
(181.4)
Adjusted to exclude the following:
FCA (Stellantis) warrant expense (1)
4.5
Stock-based compensation (2)
26.5
Technology and dispute resolution
agreements (3)
73.0
Non-GAAP total operating expenses
$
(77.4)
(1)
Amount includes non-cash warrant costs,
classified as research and development expenses, for the warrants
issued to FCA (Stellantis) in connection with certain services they
are providing to the Company.
(2)
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.
(3)
Amount reflects non-cash charges related
to a series of agreements between Boeing, Wisk and the Company
which provides for certain investments by Boeing into the Company,
an autonomous flight collaboration between the parties, issuance of
certain warrants to Wisk and resolution of litigation between them
(the “Boeing Wisk Agreements”).
Reconciliation of Adjusted EBITDA (in millions; unaudited): A
reconciliation of net loss to Adjusted EBITDA for the three months
ended June 30, 2023 is set forth below.
Three Months Ended June 30,
2023
Net loss
$
(184.1)
Adjusted to exclude the following:
Other expense (income), net (1)
6.6
Interest income, net
(4.1)
Income tax expense
0.2
Depreciation and amortization expense
1.1
FCA (Stellantis) warrant expense (2)
4.5
Stock-based compensation (3)
26.5
Technology and dispute resolution
agreements (4)
73.0
Adjusted EBITDA
$
(76.3)
(1)
Amount includes changes in fair value of
the public and private warrants, which are classified as warrant
liabilities and other warrant costs; gain on share issuance and
accretion and amortization income of short-term investments.
(2)
Amount includes non-cash warrant costs,
classified as research and development expenses, for the warrants
issued to FCA (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.
(4)
Amount reflects non-cash charges related
to the Boeing Wisk Agreements.
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,
2023, 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 United Airlines and FCA US LLC (a subsidiary of
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.
Technology and Dispute Resolution
Agreements: Expense reflects non-cash charges relating to
the Boeing Wisk Agreements.
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.
About Archer
Archer is designing and developing electric vertical takeoff and
landing aircraft for use in urban air mobility networks. Archer’s
mission is to unlock the skies, freeing everyone to reimagine how
they move and spend time. Archer's team is based in Santa Clara,
CA.
To learn more, visit www.archer.com.
Source: Archer Text: ArcherIR
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