VLDRW - Velodyne Lidar Announces Inaugural Public-Company Third Quarter 2020 Results

November, 05 2020 04:05 PM Velodyne Lidar Inc. Warrant

Completed business combination with Graf Industrial Corp. on September 29, 2020, and started trading on Nasdaq
Grew revenue 137% year-over-year to $32.1 million
Signed six (6) multi-year agreements during the quarter and now count 24 total contracts
Initiated commercial shipments of Velarrays – our next-generation, compact lidar product with best-in-class range and resolution
Finished the quarter with $298 million of cash
Continued to build upon #1 position in lidar as evidenced by our shipment of 47,500 sensors to date for cumulative revenue of over $650 million

Velodyne Lidar (NASDAQ: VLDR, VLDRW), the global leader in lidar technology, today announced financial results for its third quarter ended September 30, 2020.

Dr. Anand Gopalan commented, “We are pleased to present our third quarter results for the first time as a public company. We are also excited about the continued strength we see in the overall lidar markets. Despite the continued impacts of COVID-19, we see growing interest in lidar applications across multiple industries, as evidenced by our accelerating commercial success across all of our focused markets. In this environment, Velodyne continues to demonstrate its leadership as the only at-scale lidar player, through strong technical and business execution.”

Third Quarter 2020 Financial Highlights

Revenue: Total revenue of $32.1 million represents a 137% increase year-over-year. Product revenue was $26.1 million in the quarter versus $11.7 million in Q3 2019, and License and Services revenue was $6.0 million, up from $1.8 million in Q3 2019.
Units and ASPs: We shipped 2,235 sensor units with a weighted average selling price (ASP) of approximately $5,600. We continue to build out our portfolio of sensor products at different price points that meet many industries’ needs, including those with lower-price application entry points.
Agreements: Total active multi-year agreements increased to 24 during the quarter.
Pipeline Strength: At the end of the quarter, we are tracking 175 pipeline projects across 25+ industries, representing a 34% increase over 131 projects at the end of 2019.
Gross Profit: GAAP and non-GAAP gross profit totaled $15.0 million compared to a third quarter 2019 gross profit of $1.1 million. Previous public guidance reflected a third quarter benefit from a one-time $11 million stocking fee, which positively impacted gross profit.
Net Loss and EPS: GAAP net loss was $5.3 million and non-GAAP net loss was $9.1 million. Accordingly, GAAP loss per share was $0.04 and non-GAAP loss per share was $0.06.
Shares Outstanding: EPS for the third quarter is calculated using weighted average shares outstanding of 140.5 million. As of September 30, actual shares outstanding were 168.7 million.
Liquidity: Cash of $298 million was on the balance sheet at the end of the third quarter.

A reconciliation between historical GAAP and non-GAAP information is provided in the tables below.

Third Quarter 2020 Business Highlights

Consummated business combination with Graf Industrial Corp. and began trading on Nasdaq under the tickers VLDR (common stock) and VLDRW (public warrants) on September 30, 2020
Awarded six new agreements with diverse applications among each of our three focused market segments – moving people, moving goods, security and smart cities
Ongoing activities with our 300+ customers, which include nearly all the leading global automotive manufacturers and technology companies
Successfully defended patents with Hesai and RoboSense by entering into recurring global licensing payment agreements
Announced a three-year sales agreement with Baidu for our Alpha Prime lidar sensors

Financial Outlook

Velodyne is pleased to reiterate the guidance shared in early September as part of our business combination with Graf Industrial Corp.

For the full year 2020, we expect total revenue of approximately $101 million, as previously forecasted.
We expect the full year GAAP gross margin, including approximately $7.5 million of stock-based compensation, in the range of 22.6% to 25.6% and the non-GAAP gross margin to be approximately 30% to 33%.
For the full year, GAAP operating loss is expected to total between $208 million and $205 million. Non-GAAP operating loss is expected in the range of $67 million to $64 million for the full year of 2020. The primary difference between GAAP and Non-GAAP operating loss is the amortization of stock-based compensation equaling approximately $142 million. Stock-based compensation is calculated using the closing common share price for VLDR on October 30, 2020, which was $12.20. The charge for each employee equity incentive is based on the actual day that the incentives vest.
Given our business combination, we estimate fourth quarter actual and fiscal year weighted average shares outstanding of approximately 175.4 million and 148.5 million, respectively.

Conference Call Information

Velodyne will host a conference call and live webcast for analysts and investors at 4:30 p.m. Eastern Time on November 5, 2020. Parties in the United States and Canada can access the call by dialing (800) 289-0462, using conference code 805709. The webcast will be accessible on Velodyne’s investor relations website at https://investors.velodynelidar.com/ . A telephonic replay of the conference call will be available through November 12, 2020. To access the replay, parties in the United States and Canada should call (888) 203-1112 and enter conference code 7086125.

About Velodyne Lidar

Velodyne Lidar (NASDAQ: VLDR, VLDRW) ushered in a new era of autonomous technology with the invention of real-time surround view lidar sensors. Velodyne is the first public pure-play lidar company and is known worldwide for its broad portfolio of breakthrough lidar technologies. Velodyne’s revolutionary sensor and software solutions provide flexibility, quality and performance to meet the needs of a wide range of industries, including autonomous vehicles, advanced driver assistance systems (ADAS), robotics, unmanned aerial vehicles (UAV), smart cities, and security. Through continuous innovation, Velodyne strives to transform lives and communities by advancing safer mobility for all. For more information, please visit https://velodynelidar.com/ and follow us on Twitter: @VelodyneLidar.

VELODYNE LIDAR, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data)

September 30, 2020

December 31, 2019

(Unaudited)


Assets



Current assets:

Cash and cash equivalents
$
297,853


$
60,004

Short-term investments
—


2,199

Accounts receivable, net
19,405


11,863

Inventories, net
16,422


14,987

Prepaid and other current assets
10,906


12,918

Total current assets
344,586


101,971

Property, plant and equipment, net
17,808


26,278

Goodwill
1,189


1,189

Intangible assets, net
723


982

Contract assets
5,626


—

Other assets
632


5,755

Total assets
$
370,564


$
136,175

Liabilities and Stockholders’ Equity



Current liabilities:



Accounts payable
$
10,447


$
6,923

Accrued expense and other current liabilities
41,134


31,160

Contract liabilities
6,574


18,261

Total current liabilities
58,155


56,344

Long-term tax liabilities
605


1,360

Other long-term liabilities
26,302


2,225

Total liabilities
85,062


59,929

Commitments and contingencies



Stockholders’ equity (as adjusted for December 31, 2019):



Preferred stock
—


—

Common stock
17


14

Additional paid-in capital
489,920


240,464

Accumulated other comprehensive loss
(211)


(216)

Accumulated deficit
(204,224)


(164,016)

Total stockholders' equity
285,502


76,246

Total liabilities and stockholders' equity
$
370,564


$
136,175

VELODYNE LIDAR, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share data) (Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2020

2019

2020

2019
Revenue:







Product
$
26,099


$
11,698


$
53,948


$
63,234

License and services
6,000


1,819


23,568


19,192

Total revenue
32,099


13,517


77,516


82,426

Cost of revenue:







Product
16,482


14,430


46,027


51,384

License and services
648


180


1,032


1,498

Total cost of revenue
17,130


14,610


47,059


52,882

Gross profit
14,969


(1,093)


30,457


29,544

Operating expenses:







Research and development
10,535


16,521


39,653


42,211

Sales and marketing
4,126


5,126


12,798


15,945

General and administrative
10,579


4,148


26,942


10,637

Gain on sale of assets held-for-sale
(7,529)


—


(7,529)


—

Restructuring
—


—


1,043


—

Total operating expenses
17,711


25,795


72,907


68,793

Operating loss
(2,742)


(26,888)


(42,450)


(39,249)

Interest income
2


191


119


946

Interest expense
(31)


(18)


(69)


(45)

Other income (expense), net
38


(42)


(105)


(15)

Loss before income taxes
(2,733)


(26,757)


(42,505)


(38,363)

Provision for (benefit from) income taxes
2,562


70


(4,098)


122

Net loss
$
(5,295)


$
(26,827)


$
(38,407)


$
(38,485)

Net loss per share:







Basic and diluted
$
(0.04)


$
(0.20)


$
(0.28)


$
(0.29)

Weighted-average shares used in computing net loss per share:







Basic and diluted
140,490,370


133,033,927


139,425,745


133,033,927

VELODYNE LIDAR, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2020

2019

2020

2019
Cash flows from operating activities:







Net loss
$
(5,295)


$
(26,827)


$
(38,407)


$
(38,485)

Adjustments to reconcile net loss to cash used in operating activities:







Depreciation and amortization
2,091


2,109


6,342


5,804

Stock-based compensation
85


25


241


111

Write-off of deferred IPO costs
3,548


—


3,548


—

Gain on sale of assets held-for-sale
(7,529)


—


(7,529)


—

Provision for doubtful accounts
16


74


525


418

Other
4


(82)


74


(418)

Changes in operating assets and liabilities:







Accounts receivable, net
15,847


3,958


(8,067)


7,769

Inventories, net
1,134


(2,460)


3,329


(2,074)

Prepaid and other current assets
621


(4,732)


2,510


(5,164)

Contract assets
—


—


(8,439)


38

Other assets
94


249


358


703

Accounts payable
2,543


3,254


3,188


4,631

Accrued expenses and other liabilities
(1,357)


7,994


(9,812)


7,932

Contract liabilities
(8,885)


(1,335)


2,512


(1,275)

Net cash provided by (used in) operating activities
2,917


(17,773)


(49,627)


(20,010)

Cash flows from investing activities:







Purchase of property, plant and equipment
(474)


(1,634)


(2,197)


(4,805)

Proceeds from sale of assets held-for-sale
12,275


—


12,275


—

Proceeds from sales of short-term investments
—


7,403


—


8,903

Proceeds from maturities of short-term investments
—


17,100


2,200


48,250

Purchase of short-term investments
—


(5,387)


—


(28,823)

Considerations paid for acquisition
—


(2,473)


—


(2,473)

Net cash provided by investing activities
11,801


15,009


12,278


21,052

Cash flows from financing activities:







Proceeds from issuance of preferred stock, net of issuance costs
—


—


19,919


—

Proceeds from Business Combination and PIPE offering, net of transaction costs
248,355


—


248,303


—

Repurchase of common stock
(1,801)


—


(1,801)


—

Cash paid for IPO costs
—


—


(1,144)


—

Proceeds from notes payable
—


—


10,000


—

Net cash provided by (used in) financing activities
246,554


—


275,277


—

Effect of exchange rate fluctuations on cash and cash equivalent
(49)


(8)


(79)


(67)

Net increase (decrease) in cash and cash equivalents
261,223


(2,772)


237,849


975

Beginning cash and cash equivalents
36,630


27,651


60,004


23,904

Ending cash and cash equivalents
$
297,853


$
24,879


$
297,853


$
24,879

VELODYNE LIDAR, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (In thousands, except share and per share data) (Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2020

2019

2020

2019
Gross profit (loss) on GAAP basis
$
14,969


$
(1,093)


$
30,457


$
29,544

*Gross margin on GAAP basis*

47%



(8%)



39%



36%

Stock-based compensation
2


—


2


—

Gross profit (loss) on non-GAAP basis
$
14,971


$
(1,093)


$
30,459


$
29,544

*Gross margin on non-GAAP basis*

47%



(8%)



39%



36%









Operation loss on GAAP basis
$
(2,742)


$
(26,888)


$
(42,450)


$
(39,249)

Stock-based compensation
85


25


241


111

Legal settlements
—


—


2,479


—

Gain on Sale of assets held-for-sale
(7,529)


—


(7,529)


—

Write-off of deferred IPO costs
3,548




3,548



Amortization of acquisition-related intangible assets
96


92


288


92

Restructuring charges
—


—


1,043


—

Operation loss on non-GAAP basis
$
(6,542)


$
(26,771)


$
(42,380)


$
(39,046)









Provision for (benefit from) income taxes on GAAP basis
$
2,562


$
70


$
(4,098)


$
122

Non-GAAP tax reconciling adjustments
—


—


6,679


—

Provision for income taxes on non-GAAP basis
$
2,562


$
70


$
2,581


$
122









Net loss on GAAP basis
$
(5,295)


$
(26,827)


$
(38,407)


$
(38,485)

Stock-based compensation
85


25


241


111

Legal settlements
—


—


2,479


—

Gain on Sale of assets held-for-sale
(7,529)


—


(7,529)


—

Write-off of deferred IPO costs
3,548




3,548



Amortization of acquisition-related intangible assets
96


92


288


92

Restructuring charges
—


—


1,043


—

Non-GAAP tax reconciling adjustments
—


—


(6,679)


—

Net loss on non-GAAP basis
$
(9,095)


$
(26,710)


$
(45,016)


$
(38,282)









Net loss per share on GAAP basis







Basic and diluted
$
(0.04)


$
(0.20)


$
(0.28)


$
(0.29)

Weighted-average shares on GAAP basis







Basic and diluted
140,490,370


133,033,927


139,425,745


133,033,927









Net loss per share on non-GAAP basis







Basic and diluted
$
(0.06)


$
(0.20)


$
(0.32)


$
(0.29)

Weighted-average shares on non-GAAP basis







Basic and diluted
140,490,370


133,033,927


139,425,745


133,033,927

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our financial outlook and market positioning. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "anticipate", "estimate", "expect", "project", "plan", "intend", "believe", "may", "will", "should", "can have", "likely" and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including: the impact on our operations and financial condition from the effects of the current COVID-19 pandemic both on Velodyne’s business and those of its customers and suppliers; Velodyne’s ability to execute its business plan; the timing of revenue from existing customers, including uncertainties related to the ability of Velodyne’s customers to commercialize their products and the ultimate market acceptance of these products; uncertainties related to Velodyne’s estimates of the size of the markets for its products and future revenue opportunities; the rate and degree of market acceptance of Velodyne’s products; the success of other competing lidar and sensor-related products and services that exist or may become available; Velodyne’s ability to identify and integrate acquisitions; rising costs adversely affecting Velodyne’s profitability; uncertainties related to Velodyne’s current litigation and potential litigation involving GRAF or Velodyne or the validity or enforceability of Velodyne’s intellectual property; Velodyne’s ability to partner with and rely on third party manufacturers; general economic and market conditions impacting demand for Velodyne’s products and services; and changes in applicable laws or regulations. Given these factors, as well as other variables that may affect Velodyne’s operating results, you should not rely on forward-looking statements, assume that past financial performance will be a reliable indicator of future performance, or use historical trends to anticipate results or trends in future periods. The forward-looking statements included in this press release and on the related teleconference call relate only to events as of the date hereof. Velodyne undertakes no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

Non-GAAP Financial Measures

In addition to our results determined in accordance with generally accepted accounting principles in the United States (“GAAP”), we believe the non?GAAP measures of non-GAAP gross profit (loss), non-GAAP gross margin, Non?GAAP operating loss, non-GAAP net loss, and non?GAAP net loss per share are useful in evaluating our operating performance. Certain of these non-GAAP measures exclude stock-based compensation, litigation settlements, gain from asset sales, one-time IPO-related costs, amortization of acquisition-related intangibles assets, and discrete tax items. We believe that non?GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non?GAAP information to supplement their GAAP results. The non?GAAP financial information is presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly?titled non?GAAP measures used by other companies. Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures are used in this press release. The impact of these items in future periods is uncertain and, depends on various factors. Accordingly, a reconciliation for forward-looking non-GAAP operating income is not available without unreasonable effort.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201105006104/en/

Investor Contact:
Drew Hamer
Chief Financial Officer
InvestorRelations@velodyne.com

Media Contact:
Sean Dowdall
Sean@landispr.com

Company Name:	Velodyne Lidar Inc. Warrant
Stock Symbol:	VLDRW
Market:	NASDAQ
Website:	velodynelidar.com