BigBear.ai(US:BBAI)2023-08-09 16:00Financial Performance - Revenues for the three months ended June 30, 2023, were $38,459,000, a 2.2% increase from $37,613,000 in the same period of 2022, driven by new contract awards and increased volume with Army customers [164]. - Revenues for the six months ended June 30, 2023, increased by $6,610 to $80,613, representing an 8.9% growth compared to the same period in 2022 [179]. - For the three months ended June 30, 2023, the company reported a net loss of $16.895 million, compared to a net loss of $56.844 million for the same period in 2022 [196]. - The net loss for the six months ended June 30, 2023, was $43,109,000, compared to a net loss of $75,669,000 for the same period in 2022 [164]. - Adjusted EBITDA for the six months ended June 30, 2023, was $(7.027) million, an improvement from $(10.634) million in the same period of 2022 [196]. Costs and Expenses - Cost of revenues increased to $29,496,000 for the three months ended June 30, 2023, representing a 5.3% increase from $28,023,000 in 2022, with cost of revenues as a percentage of total revenues rising to 77% from 75% [166]. - Cost of revenues rose by $6,891 to $61,437, with the cost as a percentage of revenues increasing to 76% from 74% year-over-year [180]. - SG&A expenses decreased significantly to $16,930,000 in Q2 2023, down 37.2% from $26,952,000 in Q2 2022, primarily due to reduced personnel costs and elimination of non-recurring costs [168]. - SG&A expenses decreased by $11,680 to $37,292, with SG&A as a percentage of revenues dropping to 46% from 66% [182]. - Research and development expenses decreased by 12.2% to $2,225,000 in Q2 2023 from $2,535,000 in Q2 2022, attributed to decreased headcount and project timing [169]. - Research and development expenses fell by $2,056 to $3,353, a decrease of 38.0% compared to the prior year [183]. - The company incurred restructuring charges of $780,000 during the six months ended June 30, 2023 [196]. - Restructuring charges for the six months ended June 30, 2023, amounted to $780, a 100% increase from zero in the same period of 2022 [184]. Cash Flow and Financing - The company completed a registered direct offering on June 13, 2023, raising approximately $25 million before expenses, intended for general corporate purposes [144]. - A private placement on January 19, 2023, generated approximately $25 million, also aimed at general corporate purposes including working capital [146]. - Net cash used in operating activities for the six months ended June 30, 2023, was $24,813 million, compared to $31,996 million for the same period in 2022 [225][226]. - Net cash provided by financing activities for the six months ended June 30, 2023, was $42,106 million, mainly from the issuance of shares totaling $50,000 million [229]. - The company had available cash and cash equivalents of $29.923 million as of June 30, 2023, compared to $12.632 million at the end of 2022 [210]. - The company believes it may fail to meet the minimum Adjusted EBITDA requirements in future periods, impacting its ability to draw on the Senior Revolver [221]. - The Company anticipates that cash from operating activities will be adequate for the next 12 months to meet its anticipated uses of cash flow [221]. Backlog and Contracts - As of June 30, 2023, the total backlog was $205.557 million, down from $218.473 million as of December 31, 2022 [204]. - Funded backlog increased to $61.073 million as of June 30, 2023, from $57.234 million at the end of 2022 [204]. - The company is closely monitoring the impact of the Russian invasion of Ukraine, which has slowed contract awards for government customers but is expected to drive long-term adoption of AI tools [150]. Debt and Compliance - The company has an outstanding balance of $200 million related to convertible notes, with a maturity date of December 15, 2026 [213]. - The company was in compliance with all covenants related to the convertible notes as of June 30, 2023 [213]. - The Bank of America Senior Revolver, which provides a $25 million credit facility, was not drawn upon as of June 30, 2023 [214]. - As of June 30, 2023, the outstanding principal amount of the Company's debt was $200.5 million, excluding unamortized discounts and issuance costs of $6.7 million [235]. - The Second Amendment to the Bank of America Credit Agreement removed the requirement for the Company to demonstrate compliance with the minimum Fixed Charge Coverage ratio [220]. Tax and Other Financial Metrics - The effective tax rate for the six months ended June 30, 2023, was (0.1)%, down from 2.3% in the same period of 2022 [190]. - The company incurred no transaction expenses in the six months ended June 30, 2023, compared to $1,585 in 2022 [185]. - The net increase in fair value of derivatives for the six months ended June 30, 2023, was $13,688, a significant increase compared to a net decrease of $1,462 in 2022 [187]. - Interest expense for the six months ended June 30, 2023, was $7,116, a slight increase of 0.1% from $7,109 in 2022 [189]. - The unfavorable change in net working capital for the six months ended June 30, 2023, was $10,077 million, primarily due to a decrease in accounts payable of $8,124 million [226].