LMT - Terran Orbital's Financial Juggling: Rivada Agreement Cash Balance And Covenant Compliance
2024-04-03 21:35:56 ET
Summary
- Terran Orbital Corporation has seen significant revenue growth but struggles to produce satellites profitably.
- Lockheed has made an offer to purchase LLAP for $500 million, but management's refusal to participate in an earnings call raises concerns.
- LLAP's reliance on the Rivada contract, its high share-based compensation, and its high debt burden pose significant challenges for the company's future.
Introduction
This will be a continuation of my coverage from August of last year. Terran Orbital Corporation ( LLAP ) is a manufacturing company focused on the production of satellites for civilian and defense applications. Over the last few years LLAP has seen a large increase in revenue from $40.9 Million in 2021 to $94.2 Million in 2022 and now up to $136 Million in 2023. This growth has not come profitably though, LLAP has struggled to produce satellites profitably with negative gross profit in 2022 and a barely positive gross in 2023. This signifies that they are unable to control costs at the manufacturing level and/or they incorrectly priced their products when selling them....
Terran Orbital's Financial Juggling: Rivada Agreement, Cash Balance, And Covenant Compliance