Rapidly Advanced Commercialization Strategy
and Enhanced Already Strong Financial Position As Midnight Takes
Flight
Archer Aviation Inc. (“Archer” or the “Company”) (NYSE: ACHR)
today announced operating and financial results for the third
quarter ended September 30, 2023.
Archer will be conducting its earnings conference call at 2:00
p.m. Pacific Time (5:00 p.m. Eastern Time) today. You can access a
live webcast on our investor relations website at
investors.archer.com or the conference call by dialing 833-470-1428
(domestic) or +1 929-526-1599 (international) and entering the
access code 629739.
A replay of the webcast will be available on the Archer investor
relations website. In addition, a telephonic replay of the
conference call will be accessible for one week following the call
by dialing 866-813-9403 (domestic) or +44 204-525-0658
(international), and entering the access code: 193921.
The Company has issued a shareholder letter discussing its third
quarter 2023 operating and financial results, as well as its fourth
quarter 2023 estimates. The shareholder letter may be accessed on
the Company’s investor relations website here.
The Company’s recent key operating highlights include:
- Midnight Takes Flight. On track to rapidly advance from
hover to full wing-borne flight over the coming months paving the
way for the Company to begin “for credit” testing with the FAA next
year.
- Further Solidified Go to Market Plans. Announced plans
and key partners with whom the Company plans to launch air taxi
services in the UAE and India; gained access to BETA’s leading
electric aviation charging system and network through a recently
announced collaboration on interoperable charging; and received
first payment from the U.S. Air Force on Company’s recently
announced contracts valued at up to $142M1.
- Enhanced Already Strong Financial Position. Nearly $600M
of liquidity consisting of our cash and cash equivalents of $461M
as of September 30th (which includes $145 million from the PIPE
closed in August), coupled with the $70M we received from
Stellantis’ investment on October 16th and the remaining $55M under
the forward equity purchase agreement with Stellantis; and
finalized debt facility of up to $65M that will cover substantial
majority of cost to build our high-volume manufacturing facility in
Georgia.
Commenting on third quarter results, Adam Goldstein, Archer’s
CEO said:
“This has been a quarter of major milestones for Archer. From
Midnight taking flight to new, exciting international partners, we
are rapidly advancing on the path to our planned commercial launch
in 2025,” said Adam Goldstein, Archer’s Founder and CEO. “Archer
will continue to relentlessly push our industry forward towards
realizing the promise of urban air mobility.”
____________________
1 The “up to” contract value is subject to
certain conditions being met as defined in the contracts.
Third Quarter 2023 Financial Results
Q3 2023 (GAAP)
Q3 20231 (Non-GAAP)
Total Operating Expenses
$
46.2M
$
66.9M
Net Loss
$
(51.6M)
NA
Adjusted EBITDA
NA
$
(64.8M)
Cash, Cash Equivalents and Short-Term
Investments
$
461.4M
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 Q3 2023.”
Fourth Quarter 2023 Financial Estimates
Archer’s financial estimates for the fourth quarter of 2023 are
as follows:
- GAAP total operating expenses of $100 million to $110
million
- Non-GAAP total operating expenses of $75 million to $85 million
- This reflects expected stock-based compensation, warrant
expense and other one-time expenses of approximately $25
million
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.
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
Forward-Looking Statements
This press release contains forward-looking statements regarding
our future business plans and expectations, including statements
regarding our estimates for the fourth quarter of 2023,
certification timelines and our timelines for the development of
our Midnight aircraft, expansion of Archer’s business
internationally and total expected value of Archer’s contracts with
the U.S. Air Force. 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 subsequent Quarterly Reports 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 Q3
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
September 30, 2023 is set forth below.
Three Months Ended September 30,
2023
Total operating expenses
$
(46.2)
Adjusted to exclude the following:
FCA (Stellantis) warrant expense (1)
4.4
Stock-based compensation (2)
(27.4)
Technology agreement and dispute
resolution expense (3)
2.3
Non-GAAP total operating expenses
$
(66.9)
(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 and the
one-time credit for the founders grant forfeiture.
(3)
Amount reflects the change in fair value
of the accrued technology and dispute resolution agreements
liability.
Reconciliation of Adjusted EBITDA (in millions; unaudited): A
reconciliation of net loss to Adjusted EBITDA for the three months
ended September 30, 2023 is set forth below.
Three Months Ended September 30,
2023
Net loss
$
(51.6)
Adjusted to exclude the following:
Other expense (income), net (1)
10.4
Interest income, net
(5.1)
Income tax expense
0.1
Depreciation and amortization expense
2.1
FCA (Stellantis) warrant expense (2)
4.4
Stock-based compensation (3)
(27.4)
Technology agreement and dispute
resolution expense (4)
2.3
Adjusted EBITDA
$
(64.8)
(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 and the
one-time credit for the founders grant forfeiture.
(4)
Amount reflects the change in fair value
of the accrued technology and dispute resolution agreements
liability.
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 September 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 change in fair value of the accrued technology and dispute
resolution agreements liability.
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.
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