10-Q 1 rklb-20230930.htm 10-Q 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

 

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-39560

ROCKET LAB USA, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

 

 

Delaware

98-1550340

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

 

3881 McGowen Street

Long Beach, California

90808

(Address of principal executive offices)

(Zip Code)

 

Registrant’s telephone number, including area code: (714) 465-5737

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

 

RKLB

 

The Nasdaq Stock Market LLC

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

 

 

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

As of November 3, 2023, the registrant had 485,886,993 shares of common stock, $0.0001 par value per share, outstanding.

 

 


Table of Contents

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Quarterly Report on Form 10-Q may constitute “forward-looking statements” for purposes of the federal securities laws. The information included in this Quarterly Report on Form 10-Q has been provided by us and our management, and such forward-looking statements include statements relating to the expectations, hopes, beliefs, intentions or strategies regarding the future of Rocket Lab USA, Inc. (the “Company”) and its management team. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “could,” “expect,” “intends,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on current expectations and beliefs concerning future developments and their potential effects on Rocket Lab. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described below and under the heading “Risk Factors.”

Our ability to effectively manage future growth and achieve operational efficiencies;
any inability of us to operate our Electron Launch Vehicle (“Electron”) at its anticipated launch rate, including due to any government action related to launch failure and our ability to operate, could adversely impact our business, financial condition and results of operations;
our inability to develop our Neutron Launch Vehicle (“Neutron”) could adversely impact our business, financial condition and results of operations;
our inability to utilize our launch pads at our private launch complex in Mahia, New Zealand or at NASA’s Wallops Flight Facility, at Wallops Island, Virginia with sufficient frequency to support our launch cadence and future related revenue growth expectations;
our spacecraft, space systems or space system components failing to operate as intended could have a material adverse effect on our business, financial condition and results of operations;
changes in the competitive and highly regulated industries in which we operate, variations in operating performance across competitors, changes in laws and regulations affecting our business and changes in our capital structure;
changes in governmental policies, priorities, regulations, mandates or funding for programs in which we or our customers participate, which could negatively impact our business;
loss of, or default by, one or more of our key customers or inability of customers to fund contractual commitments, which could result in a decline in future revenues, cancellation of contracted launches or space systems orders or termination or default of existing agreements;
the inability to comply with, and costs associated with complying, any applicable regulations, and specifically, U.S. government contract regulations, which could result in loss of contract opportunities, contract modifications or termination, assessment of penalties and fines, and suspension or debarment from U.S. government contracting or subcontracting;
success in retaining or recruiting, or changes required in, officers, key employees or directors, and our ability to attract and retain key personnel, including Peter Beck, our President, Chief Executive Officer and Chairman;
defects in or failure of our products to operate in the expected manner, including any launch failure, which could result in a loss of revenue, impact our business, prospects and profitability, increase our insurance rates and damage our reputation and ability to obtain future customers;
inability or failure to protect intellectual property;
disruptions in the supply of key raw materials or components used to produce our products or increases in prices of raw materials;
increasing global inflation and rising interest rates;
impacts of the war in Ukraine or Israel;
fluctuations in foreign exchange rates;
the ability to implement our business plans, forecasts and other expectations, including the integration of recently acquired businesses, and to identify and realize additional opportunities;

 


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the risk of downturns in government and commercial launch services and spacecraft industries;
our ability to anticipate changes in the markets for rocket launch services, mission services, spacecraft and spacecraft components;
macroeconomic conditions resulting from the global pandemic related to the novel coronavirus;
the inability to maintain effective internal controls;
the inability or failure to comply with contractual requirements or covenants;
the diversion of management’s attention and consumption of resources as a result of acquisitions of other companies and success in integrating and otherwise achieving the benefits of recent and potential acquisitions;
our inability to effectively integrate or benefit from recently purchased assets or businesses;
failure to maintain adequate operational and financial resources or raise additional capital or generate sufficient cash flows;
any significant disruption in or unauthorized access to our computer systems or those of third parties that we utilize in our operations, including those relating to cybersecurity or arising from cyber-attacks;
the effect of a pandemic on the foregoing, including potential delays in the timing of launches due to government lock-downs, including travel restrictions or other factors impacting travel; and
other factors detailed under the section of this Quarterly Report on Form 10-Q entitled “Risk Factors.”

Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Some of these risks and uncertainties may in the future be amplified by a global crises and/or any response to such a crisis and there may be additional risks that we consider immaterial or which are unknown. It is not possible to predict or identify all such risks. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed with the Securities and Exchange Commission (the “SEC”) as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect. All forward-looking statements are qualified in their entirety by this cautionary statement.

You should also note that we may announce material business and financial information to our investors using our website (including at https://investors.rocketlabusa.com), filings with the SEC, webcasts, press releases, and conference calls. We use these mediums, as well as our official corporate accounts on social media outlets such as Twitter, Facebook, LinkedIn and YouTube, to broadcast our launches and other significant events, and to communicate with the public about our company, our products, and other matters. It is possible that the information that we make available may be deemed to be material information. We therefore encourage investors and others interested in our company to review the information that we make available on our website and through our other official social media channels. The information contained on, or that can be accessed through, our website or our social media channels is not a part of this Quarterly Report on Form 10-Q.

Unless the context requires otherwise, references in this Quarterly Report to “Rocket Lab,” “Company,” “we,” “us” and “our” refer to Rocket Lab USA, Inc. and our subsidiaries.

 


Table of Contents

 

ROCKET LAB U.S.A., INC. AND SUBSIDIARIES

FORM 10-Q

September 30, 2023

Table of Contents

Page

PART I.

FINANCIAL INFORMATION

5

Item 1.

Condensed Consolidated Financial Statements

5

Condensed Consolidated Balance Sheets as of September 30, 2023 (unaudited) and December 31, 2022

5

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) for the Three and Nine Months Ended September 30, 2023 and 2022

6

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) for the Three and Nine Months Ended September 30, 2023 and 2022

7

Condensed Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2023 and 2022

8

Notes to Condensed Consolidated Financial Statements (Unaudited)

9

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

23

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

33

Item 4.

Controls and Procedures

34

PART II.

OTHER INFORMATION

35

Item 1.

Legal Proceedings

35

Item 1A.

Risk Factors

35

Item 2.

Unregistered Sales of Equity Securities

35

Item 3.

Defaults Upon Senior Securities

35

Item 4.

Mine Safety Disclosures

35

Item 5.

Other Information

35

Item 6.

Exhibits

36

Signatures

37

4


Table of Contents

 

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ROCKET LAB U.S.A., INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2023 AND DECEMBER 31, 2022

(in thousands, except share and per share values)

 

 

September 30, 2023

 

 

 

 

 

 

(unaudited)

 

 

December 31, 2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

140,904

 

 

$

242,515

 

Marketable securities, current

 

 

147,513

 

 

 

229,276

 

Accounts receivable, net

 

 

22,787

 

 

 

36,572

 

Contract assets

 

 

13,042

 

 

 

9,451

 

Inventories

 

 

102,394

 

 

 

92,279

 

Prepaids and other current assets

 

 

68,341

 

 

 

52,201

 

Assets held for sale

 

 

11,259

 

 

 

 

Total current assets

 

 

506,240

 

 

 

662,294

 

Non-current assets:

 

 

 

 

 

 

Property, plant and equipment, net

 

 

135,988

 

 

 

101,514

 

Intangible assets, net

 

 

70,404

 

 

 

79,692

 

Goodwill

 

 

71,020

 

 

 

71,020

 

Right-of-use assets - operating leases

 

 

44,900

 

 

 

35,239

 

Right-of-use assets - finance leases

 

 

15,145

 

 

 

15,614

 

Marketable securities, non-current

 

 

81,951

 

 

 

9,193

 

Restricted cash

 

 

3,588

 

 

 

3,356

 

Deferred income tax assets, net

 

 

3,282

 

 

 

3,898

 

Other non-current assets

 

 

17,975

 

 

 

7,303

 

Total assets

 

$

950,493

 

 

$

989,123

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Trade payables

 

$

24,980

 

 

$

12,084

 

Accrued expenses

 

 

5,998

 

 

 

8,723

 

Employee benefits payable

 

 

14,979

 

 

 

8,634

 

Contract liabilities

 

 

133,793

 

 

 

108,344

 

Current installments of long-term borrowings

 

 

105,116

 

 

 

2,906

 

Other current liabilities

 

 

18,885

 

 

 

22,249

 

Total current liabilities

 

 

303,751

 

 

 

162,940

 

Non-current liabilities:

 

 

 

 

 

 

Long-term borrowings, excluding current installments

 

 

 

 

 

100,043

 

Non-current operating lease liabilities

 

 

41,695

 

 

 

34,266

 

Non-current finance lease liabilities

 

 

15,299

 

 

 

15,568

 

Deferred tax liabilities

 

 

308

 

 

 

95

 

Other non-current liabilities

 

 

3,638

 

 

 

3,005

 

Total liabilities

 

 

364,691

 

 

 

315,917

 

COMMITMENTS AND CONTINGENCIES (Note 16)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock, $0.0001 par value; authorized shares: 2,500,000,000; issued and outstanding shares: 485,857,768 and 475,356,517 at September 30, 2023 and December 31, 2022, respectively

 

 

49

 

 

 

48

 

Additional paid-in capital

 

 

1,161,165

 

 

 

1,112,977

 

Accumulated deficit

 

 

(573,029

)

 

 

(440,955

)

Accumulated other comprehensive (loss) income

 

 

(2,383

)

 

 

1,136

 

Total stockholders’ equity

 

 

585,802

 

 

 

673,206

 

Total liabilities and stockholders’ equity

 

$

950,493

 

 

$

989,123

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

5


Table of Contents

 

ROCKET LAB U.S.A., INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(unaudited; in thousands, except share and per share data)

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenues

 

$

67,661

 

 

$

63,057

 

 

$

184,601

 

 

$

159,234

 

Cost of revenues

 

 

52,694

 

 

 

54,590

 

 

 

148,684

 

 

 

142,074

 

Gross profit

 

 

14,967

 

 

 

8,467

 

 

 

35,917

 

 

 

17,160

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development, net

 

 

26,626

 

 

 

17,508

 

 

 

81,566

 

 

 

50,150

 

Selling, general and administrative

 

 

27,200

 

 

 

22,961

 

 

 

84,386

 

 

 

64,991

 

Total operating expenses

 

 

53,826

 

 

 

40,469

 

 

 

165,952

 

 

 

115,141

 

Operating loss

 

 

(38,859

)

 

 

(32,002

)

 

 

(130,035

)

 

 

(97,981

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income (expense), net

 

 

(1,413

)

 

 

(1,486

)

 

 

(2,843

)

 

 

(6,907

)

Loss on foreign exchange

 

 

(120

)

 

 

(51

)

 

 

(76

)

 

 

(3,947

)

Change in fair value of liability classified warrants

 

 

 

 

 

 

 

 

 

 

 

13,482

 

Other income, net

 

 

1,176

 

 

 

622

 

 

 

3,519

 

 

 

625

 

Total other (expense) income, net

 

 

(357

)

 

 

(915

)

 

 

600

 

 

 

3,253

 

Loss before income taxes

 

 

(39,216

)

 

 

(32,917

)

 

 

(129,435

)

 

 

(94,728

)

Provision for income taxes

 

 

(1,352

)

 

 

(1,693

)

 

 

(2,639

)

 

 

(4,008

)

Net loss

 

$

(40,568

)

 

$

(34,610

)

 

$

(132,074

)

 

$

(98,736

)

Other comprehensive loss, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation loss

 

 

(736

)

 

 

(4,655

)

 

 

(3,190

)

 

 

(4,809

)

Unrealized gain (loss) on available-for-sale marketable securities

 

 

117

 

 

 

(855

)

 

 

(329

)

 

 

(855

)

Comprehensive loss

 

$

(41,187

)

 

$

(40,120

)

 

$

(135,593

)

 

$

(104,400

)

Net loss per share attributable to Rocket Lab USA, Inc.:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.08

)

 

$

(0.07

)

 

$

(0.28

)

 

$

(0.21

)

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

484,034,071

 

 

 

469,768,797

 

 

 

480,018,578

 

 

 

463,709,955

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

6


Table of Contents

 

ROCKET LAB U.S.A., INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(unaudited; in thousands, except share and per share data)

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated

 

 

Other
Comprehensive

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income (Loss)

 

 

Total

 

December 31, 2022

 

 

475,356,517

 

 

$

48

 

 

$

1,112,977

 

 

$

(440,955

)

 

$

1,136

 

 

$

673,206

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(45,617

)

 

 

 

 

 

(45,617

)

Issuance of common stock under equity plans

 

 

2,672,625

 

 

 

 

 

 

771

 

 

 

 

 

 

 

 

 

771

 

Stock-based compensation

 

 

 

 

 

 

 

 

12,228

 

 

 

 

 

 

 

 

 

12,228

 

Issuance of common stock for acquisition

 

 

123,933

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(570

)

 

 

(570

)

March 31, 2023

 

 

478,153,075

 

 

 

48

 

 

 

1,125,976

 

 

 

(486,572

)

 

 

566

 

 

 

640,018

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(45,889

)

 

 

 

 

 

(45,889

)

Issuance of common stock under equity plans

 

 

4,326,466

 

 

 

 

 

 

3,561

 

 

 

 

 

 

 

 

 

3,561

 

Stock-based compensation

 

 

 

 

 

 

 

 

15,688

 

 

 

 

 

 

 

 

 

15,688

 

Issuance of common stock for acquisition

 

 

123,933

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,330

)

 

 

(2,330

)

June 30, 2023

 

 

482,603,474

 

 

 

48

 

 

 

1,145,225

 

 

 

(532,461

)

 

 

(1,764

)

 

 

611,048

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(40,568

)

 

 

 

 

 

(40,568

)

Issuance of common stock under equity plans

 

 

2,816,037

 

 

 

1

 

 

 

485

 

 

 

 

 

 

 

 

 

486

 

Stock-based compensation

 

 

 

 

 

 

 

 

13,368

 

 

 

 

 

 

 

 

 

13,368

 

Issuance of common stock for acquisition

 

 

438,257

 

 

 

 

 

 

2,087

 

 

 

 

 

 

 

 

 

2,087

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(619

)

 

 

(619

)

September 30, 2023

 

 

485,857,768

 

 

$

49

 

 

$

1,161,165

 

 

$

(573,029

)

 

$

(2,383

)

 

$

585,802

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated

 

 

Other
Comprehensive

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income (Loss)

 

 

Total

 

December 31, 2021

 

 

450,180,479

 

 

$

45

 

 

$

1,002,106

 

 

$

(305,011

)

 

$

1,308

 

 

$

698,448

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(26,709

)

 

 

 

 

 

(26,709

)

Issuance of common stock under equity plans

 

 

7,883,569

 

 

 

1

 

 

 

1,019

 

 

 

 

 

 

 

 

 

1,020

 

Stock-based compensation

 

 

 

 

 

 

 

 

14,116

 

 

 

 

 

 

 

 

 

14,116

 

Common stock issued upon exercise of Public and Private Warrants

 

 

4,554,830

 

 

 

 

 

 

44,844

 

 

 

 

 

 

 

 

 

44,844

 

Issuance of common stock for acquisition

 

 

123,934

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

876

 

 

 

876

 

March 31, 2022

 

 

462,742,812

 

 

 

46

 

 

 

1,062,085

 

 

 

(331,720

)

 

 

2,184

 

 

 

732,595

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(37,417

)

 

 

 

 

 

(37,417

)

Issuance of common stock under equity plans

 

 

3,594,963

 

 

 

1

 

 

 

3,725

 

 

 

 

 

 

 

 

 

3,726

 

Stock-based compensation

 

 

 

 

 

 

 

 

15,580

 

 

 

 

 

 

 

 

 

15,580

 

Issuance of common stock for acquisitions

 

 

2,039,290

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,030

)

 

 

(1,030

)

June 30, 2022

 

 

468,377,065

 

 

 

47

 

 

 

1,081,390

 

 

 

(369,137

)

 

 

1,154

 

 

 

713,454

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(34,610

)

 

 

 

 

 

(34,610

)

Issuance of common stock under equity plans

 

 

4,245,851

 

 

 

 

 

 

666

 

 

 

 

 

 

 

 

 

666

 

Stock-based compensation

 

 

 

 

 

 

 

 

16,836

 

 

 

 

 

 

 

 

 

16,836

 

Issuance of common stock for acquisition

 

 

123,934

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,510

)

 

 

(5,510

)

September 30, 2022

 

 

472,746,850

 

 

$

47

 

 

$

1,098,892

 

 

$

(403,747

)

 

$

(4,356

)

 

$

690,836

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

7


Table of Contents

 

ROCKET LAB U.S.A., INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(unaudited; in thousands)

 

For the Nine Months Ended September 30,

 

 

2023

 

 

2022

 

CASH FLOWS FROM OPERATING ACTIVITIES: