Tempo Automation Holdings, Inc. (Nasdaq: TMPO, “Tempo”, or the
“Company”), a leading software-accelerated electronics
manufacturer, is providing commentary on its previously issued
financial results for the three and nine-month periods ended
September 30, 2022 and 2021 and is updating its guidance for
anticipated annual 2022 and 2023 results.
Third Quarter 2022 and Recent Operational
Highlights
|
• |
The Company (formerly known as ACE Convergence Acquisition Corp.)
completed its business combination with Tempo Automation, Inc.,
resulting in Tempo becoming a publicly traded company. The combined
company now operates under the name “Tempo Automation Holdings,
Inc.” and its common stock and warrants are listed on the Nasdaq
Stock Market under the ticker symbols “TMPO” and “TMPOW”,
respectively. |
|
• |
The Company continues to make progress on the next major release of
its customer portal, which is designed to enhance the self-service
experience for customers and drive operational efficiencies by
providing further automation and utility from data. This release
will augment the Company’s highly scalable, cloud-native platform,
enabling future growth, including the ability to readily integrate
future strategic acquisitions. The release is currently scheduled
to launch during the first quarter of 2023. |
Management Commentary
“We are thrilled to announce the successful
completion of our business combination and public listing, which
allows us to fully focus on executing our strategic plans and
achieving our growth objectives. As a company that specializes in
helping other businesses design new products, we are excited to
bring technology to help industry participants better cope with
supply chain disruptions and shortages,” said Joy Weiss Chief
Executive Officer.
“As such, we are excited to reveal our upcoming
customer-facing portal software upgrades, which will bring
much-needed innovations in areas such as inventory management. The
portal upgrade is scheduled to launch in Q1 2023 and will help us
better engage with our customers. In support of this launch, we
plan to slightly increase our marketing expenditures in 2023 to
promote the new platform and associated services. Overall, we are
confident in our ability to continue delivering value to our
customers and shareholders as we move forward with our plans.”
Financial Results for the Three Months Ended September
30, 2022Results compare the three months ended September
30, 2022 to the three months ended September 30, 2021, unless
otherwise indicated.
|
• |
Revenue decreased 56% to $2.4 million from $5.4 million in the
third quarter of 2021. The decrease in revenue was primarily due to
ongoing semiconductor industry supply chain shortages, along with
the termination of the new product introduction (“NPI”) portion of
the product development lifecycle of a significant customer
program. |
|
• |
Net loss increased to $76.5 million from a $10.3 million net loss
in the third quarter of 2021. The increase in net loss was
primarily due to other financing costs of $30.8 million and the
loss on debt extinguishment of $38.9 million, both as a result of
the Company’s financing activities during the third quarter of
2022. |
|
• |
Adjusted EBITDA improved to a $3.8 million loss from a $7.5 million
loss in the third quarter of 2021. The improvement in Adjusted
EBITDA loss was driven by successful cost-cutting initiatives,
including workforce reductions in response to delays and changes in
consummating the Company’s business combination. |
Financial Results for the Nine Months Ended September
30, 2022Results compare the nine months ended September
30, 2022 to the nine months ended September 30, 2021, unless
otherwise indicated.
|
• |
Revenue decreased 32% to $9.1 million from $13.4 million for the
nine months ended September 30, 2021. The decrease in revenue was
primarily due to semiconductor supply chain shortages, along with
the end of the new product introduction (“NPI”) portion of the
product development lifecycle of a significant customer program and
workforce reductions and furloughs in response to delays and
changes in the SPAC merger process. |
|
• |
Net loss increased to $96.5 million from a $24.4 million net loss
in the third quarter of 2021. The increase in net loss was
primarily due to other financing costs of $30.8 million and the
loss on debt extinguishment of $38.9 million, both as a result of
the Company’s financing activities during the third quarter of
2022. |
|
• |
Adjusted EBITDA increased to a $17.8 million loss from a $16.5
million loss for the nine months ended September 30, 2021. The
increase in Adjusted EBITDA loss was primarily due to the decrease
in year-over-year revenue, along with costs incurred in connection
to delays in consummating the Company’s business combination. |
Financial Outlook
Management anticipates that the completion of
the Company’s business combination and public listing of the
combined company’s securities will have a positive impact on the
Company’s financial performance in the fourth quarter and
throughout 2023. With the business combination completed, the
Company expects that management will be able to focus on growth
opportunities, both through organic means and possibly strategic
acquisitions. Additionally, the Company expects to be able to
increase its investments in key areas such as marketing, sales, and
the further development of its software platform.
The Company is providing the following financial outlook for the
fourth quarter and full year 2022:
|
• |
For the quarter ending December 31, 2022, revenue is expected to be
between $2.3 million and $2.9 million. For the full year 2022,
revenue is anticipated to be between $11.4 million and $12.0
million. The Company expects that customer shipments for the
quarter will be in line with its internal expectations. These
revenue figures may be impacted by various other factors, including
the volume and progress of partially completed customer orders as
of the end of the year. |
|
• |
For the quarter ending December 31, 2022, Adjusted EBITDA is
expected to be between a $2.8 million loss and a $3.8 million loss.
For the full year of 2022 Adjusted EBITDA is expected to be between
a $20.6 million loss and a $21.6 million loss. |
In addition, the Company is providing the following financial
outlook for the full year 2023:
|
• |
For the full year ending December 31, 2023, revenue is anticipated
to be between $14.0 million and $17.0 million. This growth is
expected to be fueled by continued investments in organic growth
initiatives while still recognizing challenges associated with
bringing back furloughed workforce members as well as recent
softness in demand from key customer programs. These revenue
figures may be impacted by volume and progress of partially
completed customer orders as of the end of the year. |
|
• |
For the full year ending December 31, 2023, Adjusted EBITDA is
expected to be between a $6.5 million loss and a $8.5 million loss,
representing an improvement from the forecasted range for the full
year ending December 31, 2022. This improvement is expected to be
driven by higher revenue and a lower cost structure partly as a
result of the deployment of the software releases described above.
However, these estimates are also adjusted to account for the
negative impacts mentioned above. |
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.
Forward Looking Statements
This document contains certain forward-looking
statements within the meaning of the federal securities laws. 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 ability of Tempo’s to implement business plans,
forecasts, and other expectations and identify and realize
additional opportunities; (ii) the impact of the global COVID-19
pandemic; (iii) the enforceability of Tempo’s intellectual
property, including its patents, and the potential infringement on
the intellectual property rights of others; (iv) cyber security
risks or potential breaches of data security; (v) the ability of
Tempo to protect the intellectual property and confidential
information of its customers; and (vi) the risk of downturns in the
highly competitive electronics manufacturing industry. These
forward-looking statements are provided for illustrative purposes
only and are not intended to serve as, and must not be relied on by
investors as, a guarantee, an assurance, a prediction or a
definitive statement of fact or probability. You should carefully
consider the foregoing factors and the other risks and
uncertainties described in the “Risk Factors” section of the
definitive proxy statement/prospectus filed by Tempo with the U.S.
Securities and Exchange Commission (the “SEC”) on November 1, 2022,
and the other documents filed by Tempo from time to time with the
SEC. These filings identify and address other important risks and
uncertainties that could cause actual events and results to differ
materially from those contained in the forward-looking statements.
Forward-looking statements speak only as of the date they are made.
Readers are cautioned not to put undue reliance on forward-looking
statements, and Tempo assumes no obligation and does not intend to
update or revise these forward-looking statements, whether as a
result of new information, future events, or otherwise, except as
required by securities and other applicable laws. Tempo Automation
does not give any assurance that it will achieve its
expectations.
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 (the “Non-GAAP Measures”),
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, derivatives and debt, 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 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 Measures should not be considered
in isolation from, or as a substitute for, financial information
presented in compliance with U.S. 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 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 Measures 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:
Marketing |
Investor
Relations |
Matt Lukens, Tempo
Automation |
Lori Barker, Blueshirt Group |
mlukens@tempoautomation.com |
lori@blueshirtgroup.com |
Tempo Automation Holdings,
Inc.CONDENSED STATEMENTS OF
OPERATIONS(in thousands)
|
|
THREE MONTHS ENDED |
|
|
NINE MONTHS ENDED |
|
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Revenue |
|
$ |
2,393 |
|
|
$ |
5,437 |
|
|
$ |
9,146 |
|
|
$ |
13,354 |
|
Cost of revenue |
|
|
2,109 |
|
|
|
5,145 |
|
|
|
8,141 |
|
|
|
10,696 |
|
Gross
profit |
|
|
284 |
|
|
|
292 |
|
|
|
1,005 |
|
|
|
2,658 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
1,898 |
|
|
|
2,560 |
|
|
|
8,317 |
|
|
|
6,538 |
|
Sales and marketing |
|
|
1,498 |
|
|
|
2,666 |
|
|
|
7,363 |
|
|
|
6,504 |
|
General and administrative |
|
|
2,006 |
|
|
|
4,492 |
|
|
|
9,992 |
|
|
|
12,098 |
|
Impairment loss |
|
|
297 |
|
|
|
— |
|
|
|
297 |
|
|
|
— |
|
Total operating expenses |
|
|
5,699 |
|
|
|
9,718 |
|
|
|
25,969 |
|
|
|
25,140 |
|
Loss from
operations |
|
|
(5,415 |
) |
|
|
(9,426 |
) |
|
|
(24,964 |
) |
|
|
(22,482 |
) |
Other income
(expense), net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(2,356 |
) |
|
|
(1,222 |
) |
|
|
(6,902 |
) |
|
|
(2,069 |
) |
Other financing cost |
|
|
(30,793 |
) |
|
|
— |
|
|
|
(30,793 |
) |
|
|
— |
|
Interest income |
|
|
4 |
|
|
|
2 |
|
|
|
7 |
|
|
|
3 |
|
Loss on debt extinguishment |
|
|
(38,939 |
) |
|
|
— |
|
|
|
(38,939 |
) |
|
|
— |
|
Other income (expense) |
|
|
— |
|
|
|
2,500 |
|
|
|
(4 |
) |
|
|
2,500 |
|
Change in fair value of warrant and derivatives |
|
|
1,585 |
|
|
|
(2,196 |
) |
|
|
5,674 |
|
|
|
(2,340 |
) |
Change in fair value of debt |
|
|
(597 |
) |
|
|
— |
|
|
|
(597 |
) |
|
|
— |
|
Total other income (expense),
net |
|
|
(71,096 |
) |
|
|
(916 |
) |
|
|
(71,554 |
) |
|
|
(1,906 |
) |
Loss before income
taxes |
|
|
(76,511 |
) |
|
|
(10,342 |
) |
|
|
(96,518 |
) |
|
|
(24,388 |
) |
Income tax provision |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net loss |
|
$ |
(76,511 |
) |
|
$ |
(10,342 |
) |
|
$ |
(96,518 |
) |
|
$ |
(24,388 |
) |
Net loss attributable per
share to common stockholders, basic and diluted |
|
|
10,085,354 |
|
|
|
9,889,476 |
|
|
|
10,072,318 |
|
|
|
9,815,806 |
|
Weighted-average shares used
to compute net loss attributable per share to common stockholders,
basic and diluted |
|
|
(7.59 |
) |
|
|
(1.05 |
) |
|
|
(9.58 |
) |
|
|
(2.48 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tempo Automation Holdings,
Inc.RECONCILIATION
OF NON-GAAP MEASURES(in
thousands)
|
|
THREE MONTHS ENDED |
|
|
NINE MONTHS ENDED |
|
|
|
September 30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Net loss |
|
$ |
(76,511 |
) |
|
$ |
(10,342 |
) |
|
$ |
(96,518 |
) |
|
$ |
(24,388 |
) |
Interest expense |
|
|
2,356 |
|
|
|
1,222 |
|
|
|
6,902 |
|
|
|
2,069 |
|
Interest income |
|
|
(4 |
) |
|
|
(2 |
) |
|
|
(7 |
) |
|
|
(3 |
) |
Change in fair value of warrants, derivatives and debt |
|
|
(988 |
) |
|
|
2,196 |
|
|
|
(5,077 |
) |
|
|
2,340 |
|
Other financing cost |
|
|
30,793 |
|
|
|
- |
|
|
|
30,793 |
|
|
|
- |
|
Loss on debt extinguishment |
|
|
38,939 |
|
|
|
- |
|
|
|
38,939 |
|
|
|
- |
|
Gain on PPP loan forgiveness |
|
|
|
|
|
|
(2,500 |
) |
|
|
|
|
|
|
(2,500 |
) |
Other income, net |
|
|
- |
|
|
|
- |
|
|
|
4 |
|
|
|
- |
|
Loss from operations |
|
|
(5,415 |
) |
|
|
(9,426 |
) |
|
|
(24,964 |
) |
|
|
(22,482 |
) |
Depreciation and amortization (Operating expenses) |
|
|
544 |
|
|
|
582 |
|
|
|
1,713 |
|
|
|
1,760 |
|
Stock-based compensation (Cost of revenues) |
|
|
129 |
|
|
|
53 |
|
|
|
441 |
|
|
|
119 |
|
Stock-based compensation (Operating expenses) |
|
|
503 |
|
|
|
549 |
|
|
|
1,882 |
|
|
|
1,565 |
|
Merger and acquisition costs (Operating expenses) |
|
|
(336 |
) |
|
|
778 |
|
|
|
2,075 |
|
|
|
2,590 |
|
Restructuring charges (Cost of revenues) |
|
|
90 |
|
|
|
- |
|
|
|
104 |
|
|
|
- |
|
Restructuring charges (Operating expenses) |
|
|
669 |
|
|
|
- |
|
|
|
967 |
|
|
|
- |
|
Adjusted EBITDA |
|
$ |
(3,816 |
) |
|
$ |
(7,464 |
) |
|
$ |
(17,782 |
) |
|
$ |
(16,448 |
) |
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