Owlet(US:OWLT)2022-11-14 21:26Revenue Performance - Revenues for the three months ended September 30, 2022, decreased by $14.1 million, or 44.9%, to $17.4 million from $31.5 million in the same period of 2021[130]. - Revenues for the nine months ended September 30, 2022, decreased by $21.1 million, or 26.9%, to $57.2 million from $78.4 million in the same period of 2021[131]. Profitability Metrics - Gross profit for the three months ended September 30, 2022, was $4.6 million, a decrease of $10.3 million, or 69.0%, compared to $14.9 million in the same period of 2021[132]. - Gross margin for the three months ended September 30, 2022, decreased to 26.6% from 47.2% in the same period of 2021[132]. - Operating loss for the three months ended September 30, 2022, was $(21.8) million, compared to $(13.8) million in the same period of 2021[129]. Operating Expenses - Total operating expenses for the three months ended September 30, 2022, were $26.4 million, compared to $28.6 million in the same period of 2021[129]. - General and administrative expenses increased by $0.4 million, or 4.6%, from $9.3 million in Q3 2021 to $9.7 million in Q3 2022[134]. - For the nine months ended September 30, 2022, general and administrative expenses rose by $6.9 million, or 30.8%, from $22.5 million in 2021 to $29.4 million in 2022[135]. - Sales and marketing expenses decreased by $3.4 million, or 25.8%, from $13.1 million in Q3 2021 to $9.7 million in Q3 2022[136]. - For the nine months ended September 30, 2022, sales and marketing expenses increased by $4.3 million, or 16.0%, from $26.8 million in 2021 to $31.0 million in 2022[137]. - Research and development expenses increased by $0.7 million, or 11.8%, from $6.3 million in Q3 2021 to $7.1 million in Q3 2022[139]. - For the nine months ended September 30, 2022, research and development expenses rose by $9.1 million, or 63.9%, from $14.3 million in 2021 to $23.4 million in 2022[140]. Cash Flow and Liquidity - As of September 30, 2022, the company had cash and cash equivalents of $23.2 million[145]. - The company experienced negative cash flows from operations of $71.6 million for the nine months ended September 30, 2022[148]. - For the nine months ended September 30, 2022, net cash used in operating activities was $71.6 million, compared to $34.7 million in the prior year[168]. - Net cash provided by financing activities decreased to $1.1 million for the nine months ended September 30, 2022, from $134.2 million in the prior year[170]. - Net cash used in investing activities decreased to $1.4 million for the nine months ended September 30, 2022, from $1.6 million in the prior year[169]. Debt and Financing - The company had outstanding borrowings of $5.0 million under the SVB Revolver, with an interest rate of 7.50%[158]. - The Term Note had an aggregate principal balance of $9.5 million as of September 30, 2022, with a minimum interest rate of 5.75%[159]. - A refund liability of $6.8 million was accrued as of September 30, 2022, which was reduced by $6.2 million during Q3 2022[152]. - The company recognized $1.2 million of restructuring charges related to its July 2022 restructuring, primarily for severance and related employee benefits[152]. - The company is actively engaged with SVB to restructure financing arrangements, but there are no assurances of reaching an agreement[164]. - A waiver agreement with SVB lowered the minimum liquidity covenant from $30.0 million to $22.5 million[162]. Compliance and Adjustments - The company was in violation of its minimum net revenue requirement for the three months ended September 30, 2022, and does not expect compliance for the third and fourth quarters of 2022[162][163]. - The company recorded out-of-period adjustments totaling a net income impact of $1.3 million during the three months ended September 30, 2022[118]. - The company expects to reduce run-rate operating costs to approximately $15 million to $19 million per quarter exiting the fourth quarter of 2022[117].