Terran Orbital (NYSE:LLAP) is on a roll.
The manufacturer of satellite products primarily serving the aerospace and defense industries continues to win new contracts, helping to improve its cash position, as it targets a positive cash flow and EBITDA (underlying earnings) position in fiscal 2024.
The company is also in active engagement on 80 opportunities related to more than 2,800 satellite buses for 40 different customers, valued at more an $2.7 billion.
It also continues to expect more than $180 million in payments from Rivada Space Networks after winning a $2.4 billion contract to build 300 satellites in February 2023.
In its first live shareholder town hall meeting, CEO Marc Bell provided a financial, operational, and strategic update on the company.
In an exclusive interview with Proactive's Steve Darling, Bell delved into Terran Orbital (NYSE:LLAP)'s current position and what lies ahead for 2024.
Proactive: You recently held a town hall meeting where you addressed a lot of things that are happening with a company. One of the key ones was that the company had been chosen by Lockheed Martin (NYSE:LMT) to build satellite buses. So let's start there first.
Marc Bell: We had three contracts come out last week, totaling $160 million. We are selected by Lockheed Martin (NYSE:LMT) to do the Transport Layer Tranche 2 for Beta. So we're very excited about that. We also announced that we had about $70 million of cash on hand, which is also a big deal — much more than we had a June 30. So we're seeing our cash position improve, which is very important, and we're winning new contracts. So it's great.
Yes, you mentioned that the cash on hand is important because you've got a lot of things that are happening and contracts to fulfil, but that will enable you to get to a key place in 2024, and that's cash flow positive. So maybe you can talk about the direction you've had this year and where you're headed in 2024.
We're still trying to get to EBITDA positive in 2024. This is without Rivada networks. We are looking forward to Rivada networks kicking off, but right now we have 80 opportunities for over 2,800 satellite buses, with 40 different customers valued at over $27 billion. And that's just the start.
So we have a lot of great opportunities out there with a lot of new customers and our components and modules business that we'll be launching shortly. We're already bidding on things that are valued well over a billion dollars. So things are booming here. It’s very exciting.
Can you explain for people who may not understand why that components part is going to be so big?
We can only assemble so many things at once and we're just seeing demand globally for satellites. Think of it this way, the US alone has over 60,000 applications for new satellites with the FCC (Federal Communications Commission). And that's just the US. There are over 100 countries in the ITU (International Telecommunications Union), each one of them with their own long laundry list of satellites they want to get into orbit. The demand is just soaring. And as things like Gaza and the conflict in Israel show, the demand for intelligence, reconnaissance and surveillance from space is blossoming extremely well.
Mark, what's your focus now heading towards the end of this year? What should people understand about where you want the company to be starting next year?
We just opened up a new facility; we're focusing on getting Tranche 1 out for the Transport Layer. We'll start delivering that at the end of this year, and through the beginning of next year. So we're very excited about that. And we continue to expand, we have a new facility that will be opening up in the middle of next year. That'll do all of our assembly, not just for buses, but for full satellites as well. So we'll be able to expand into much larger constellations and much larger opportunities.
That one's in California, correct?
It is.
Well, it sounds like it's going to be a busy one for you. And you mentioned all the new contracts that you have. It's an exciting time for you and Terran Orbital (NYSE:LLAP), isn’t it?
We are thrilled. It's an exciting time. We're disappointed that the stock price doesn't reflect the performance of the company, but hopefully it will in the not too distant future.
This interview was edited for style and clarity