Welcome to the Sidus Space Second Quarter 2022 Results. All participants will be in listen-only mode. Please note this event is being recorded. I would now like to turn the conference over to Carol Craig, Chief Executive Officer of Sidus Space. Please go ahead..
Wire harness fabrication, fluid systems design and support electronic cabinet design and build, crew and service module hardware manufacturing, design, build, fabrication and testing event purge and hazardous gas, quick disconnects and flight wire harnesses for the core stage of the SLS.
And finally we manufactured frangible bolts and ground support equipment for the Solid Rocket Boosters. And as you can see on Slide 10, our offering is broad based.
There’s a significant opportunity ahead of us and our comprehensive vertically integrated offerings position as well to capture a significant portion of the overall total addressable market of the space ecosystem.
Our Space-as-a-Service solutions are made up of multiple revenue streams, the varying profit margins customers and length of contract timeline. Our goal is to continue to share significant contracts and milestones with as much detail as our customers will allow we do. Although achieving profitability can be challenging for any emerging growth company.
We believe that diversity of our customers, offering, experience and geography continues to position us for successful scalability, stability, and profitability. We are confident we are on the right track and taking the necessary steps on our path towards profitability while driving our mission of bringing space down to earth forward.
And with that, I will turn the call over to Teresa Burchfield, CFO, who will briefly cover our quarterly results..
Thanks, Carol. We continue to be pleased with the trajectory of our business and the progress towards launching our satellites, which we expect to result in increased revenues and margins over time, despite the challenging supply chain and cost backdrop of today’s landscape.
Looking at our results, as of the end of June, on Slide 12, you can see our second quarter sales at approximately $1,850,000 were in line with Q1 and up almost 700% versus second quarter 2021.
Sales continue to be primarily driven through the space hardware manufacturing side of the business, along with the slightly lower amount of satellite-related revenue this quarter versus in the first quarter., Gross margin for the quarter at 19% is up 43 percentage points versus last year’s second quarter.
Our margins will continue to evolve as revenue continues to grow. Our gross margins will remain choppy when looking at them quarter-to-quarter, depending on the mix of revenue, but will smooth out when looked at over a longer period of time. Our operating expense for the quarter was $2.3 million higher than last year.
This increase is primarily to support the growth of our business through the expansion of our staff and facilities, as well as increased insurance, investor relations, legal accounting fees that are all associated with being a publicly traded company.
For additional details, please reference our second quarter 10-Q, which was filed with the SEC this morning. We ended the quarter with a net loss of $2.5 million as compared to a loss of approximately $500,000 in Q2 2021.
This was expected due to the increased operating expenses associated with being a public company and our expanded sales and engineering operations. Looking at year-to-date numbers, on Slide 13, revenue at $3.6 million is up almost 850% versus last year.
And it’s driven by variation in types and links of contracts, the diversity of revenue streams, as well as previous sales and business development efforts. Current revenue continues to be driven largely by our space hardware manufacturing side of the business, as well as satellite related revenue to a slightly lesser degree.
As I mentioned earlier, gross margin will continue to be choppy as we build out our various revenue streams. Our year-to-date gross margin at 36%, 85 percentage points higher than year-to-date last year. Our gross margin is mixed driven and it’s more accurate when looked at over a longer period of time.
Our operating expenses year-to-date were almost $6 million.
They included a one-time non-cash related charge of $1.2 million in stock-based consulting fees for investor relations incurred in the first quarter, as well as increased investment in infrastructure to support company growth and incremental cost associated with being a public company, such as increased insurance, legal, accounting, and investor relations expense.
Now looking at the balance sheet, on Slide 14, you can see, we ended the quarter with a cash balance of $6.8 million.
The use of cash continues to support the growth and expansion of the business and revenue streams through increased general operating expense, such as increased staffing to build out the management team as well as personnel to support satellite development and the expansion of our facilities to support the manufacturer of our satellite.
As we navigate the supply chain challenges in the market, we are also encountering more vendors that are requiring prepayments in order to secure components and materials.
Additionally, we strategically chose to purchase multiple sets of subsystems, which results in cost savings and mitigation of the risk of supply chain delays, impacting production and launch schedules of our satellites.
You will also note an increase in our property equipment as we continue to ramp up purchases related to our satellite side of the business. Moving on to Slide 15, looking at our liabilities and shareholder equity, most notably, we show a decrease in both our notes payable related party current and notes payable related party non-current balances.
This is the result of the debt forgiveness agreement we entered into with Craig Technical Consulting, our majority shareholder. Whereby Craig Technical Consulting agreed to forgive the entire unpaid principal of our notes payable and accrued interest as of June 3, 2022.
Sidus Space is seeing strong market demand for our product and services across our various revenue streams. We have invested and are continuing to invest heavily in public company infrastructure, business development, and R&D to drive growth and position us to drive operational efficiencies and leverage profitability as our revenue continues to grow.
We are in the process of executing actions that we are confident will ensure the company has sufficient resources to execute on our initiatives and fuel ongoing growth. As Carol mentioned, the company entered into a common stock purchase agreement and registration rights agreement with B.
Riley subject to the satisfaction of conditions set forth in the purchase agreement that provides the company the opportunity to sell the B. Riley up to $30 million in newly issued Class A common stock from time to time to fuel the growth. With that, I’ll turn it back over to Carol for closing remarks..
Thank you, Teresa, and thank you everyone for joining us on this call and for being an important partner in our mission of bringing space down to earth.
We are excited about what lies ahead for Sidus and the space ecosystem as we continue to expand our hardware manufacturing relationships and take key steps towards serving more customers through our vertically integrated satellite production as we prepare to launch Lizzie Sat.
We are confident we are taking the necessary steps on our path toward profitability and look forward to keeping you updated as we make additional progress. Thank you very much..
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The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect..