SAN JUAN, Puerto Rico, Dec. 15, 2023 (GLOBE NEWSWIRE) — Red Cat Holdings, Inc. (Nasdaq: RCAT) (“Red Cat” or “Company”), a drone technology company integrating robotic hardware and software for military, government, and commercial operations, reports its financial results for the second quarter ended October 31, 2023 and provides a business update.
Operating Highlights:
Selected by U.S. Army as a finalist for its Short Range Reconnaissance (SRR) Tranche 2 Drone ProgramReceived orders for 344 drones with a total value of approximately $5.2 million from a U.S. federal government agencySecured contract with U.S. Customs and Border protection for 106 Teal 2 Drone systemsPartnered with aerospace engineering firm ES Aero to facilitate rapid completion of customer specific projectsRemote ID certification received from the Federal Aviation Administration (FAA)Teal 2 sUAS now available for purchase through federal government’s GSA AdvantageContinued global expansion with entry into Latin America
Financial Highlights:
Record revenues of almost $4 million for fiscal second quarter ending October 31, 2023, representing growth of more than 400% compared to the prior-year period and 125% on a sequential basisGross margin tripled sequentially to more than 30% in the second quarter of fiscal 2024 compared to 10% in the first quarter of fiscal 2024, driven by continued improvements in the manufacturing process, an increase in units shipped, and higher margins on the SRR prototype contractBacklog grew to $4.5 million at October 31, 2023 and $7.4 million in early December 2023Raised $9.2 million in gross proceeds from an equity offering
“Our Q2 results exceeded our guidance by 30% and was the highest quarterly revenue in Company history due to our launch of the Teal 2 drone in April 2023,” commented Jeff Thompson, Chief Executive Officer. “This brand new system is now fully integrated with artificial intelligence and computer vision capabilities, including Athena AI, AeroVironment’s Tomahawk Kinesis, Reveal Technologies’s Farsight, and ATAK by PAR Government. This technology stack gives the frontline warfighter a feature-rich capability never seen on a rucksack portable drone.
“We are extremely honored to be downselected by the U.S. Army as a finalist for the Short Range Reconnaissance (SRR) program of record. With the ongoing shift to small tactical drones in warfare, we are very optimistic that our Teal sUAS will be needed globally as the premier ISR system for the warfighter. Given our record performance, growing backlog, and recent U.S. Army downselection, we reiterate our Q3 revenue guidance of $5 million, which would be another successful quarter of record revenue,” concluded Thompson.
“We are reporting record revenues, gross margin, and backlog for the second quarter of fiscal 2024, each of which represents clear indicators that the Teal 2 is resonating in the marketplace,” stated Joseph Hernon, Chief Financial Officer. “With our state-of-the-art manufacturing facility in Salt Lake City continuing to scale production capacity and refine the manufacturing process, we are confident in our ability to fulfill our backlog with increasing product gross margins.”
Earnings Conference Call
CEO Jeff Thompson and CFO Joseph Hernon will host an earnings conference call at 4:30 p.m. ET on Friday, December 15, 2023 to review financial results and provide an update on corporate developments. Following management’s formal remarks, there will be a question-and-answer session.
Interested parties can listen to the conference call by dialing 1-844-413-3977 (within the U.S.) or 1-412-317-1803 (international). Callers should dial in approximately ten minutes prior to the start time and ask to be connected to the Red Cat conference call. Participants can also pre-register for the call using the following link: https://dpregister.com/sreg/10184976/fb36c42d00
The conference call will also be available through a live webcast that can be accessed at:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=4p3YUvHy
A replay of the webcast will be available until December 15, 2024 and can be accessed through the above link or at www.redcatholdings.com. A telephonic replay will be available until December 29, 2023 by calling 1-877-344-7529 (domestic) or 1-412-317-0088 (international) and using access code 8771219.
About Red Cat Holdings, Inc.
Red Cat (Nasdaq: RCAT) is a military technology company that integrates robotic hardware and software to provide critical situational awareness and actionable intelligence to on-the- ground warfighters and battlefield commanders. Its mission is to enhance the effectiveness and safety of military operations domestically and globally – and to “Dominate the Night.” Red Cat’s suite of solutions includes Teal Drones, developer of the Golden Eagle, a small unmanned system with the highest resolution imaging for nighttime operations, and Skypersonic, a leading provider of unmanned aircraft for interior spaces and other dangerous environments. Learn more at https://www.redcatholdings.com/.
Forward Looking Statements
This press release contains “forward-looking statements” that are subject to substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this press release are forward-looking statements. Forward-looking statements contained in this press release may be identified by the use of words such as “anticipate,” “believe,” “contemplate,” “could,” “estimate,” “expect,” “intend,” “seek,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “target,” “aim,” “should,” “will” “would,” or the negative of these words or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements are based on Red Cat Holdings, Inc.’s current expectations and are subject to inherent uncertainties, risks and assumptions that are difficult to predict. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. These and other risks and uncertainties are described more fully in the section titled “Risk Factors” in the final prospectus related to the public offering filed with the Securities and Exchange Commission. Forward-looking statements contained in this announcement are made as of this date, and Red Cat Holdings, Inc. undertakes no duty to update such information except as required under applicable law.
Contacts:
INVESTORS:
CORE IR
Phone: (516) 222-2560
E-mail: Investors@redcat.red
NEWS MEDIA:
CORE IR
Phone: (516) 222-2560
Email: media@redcat.red
RED CAT HOLDINGSCondensed Consolidated Balance Sheets October 31, April 30, 2023 2023 ASSETS Cash and marketable securities $4,024,266 $15,987,687 Intangible assets including goodwill, net 23,901,101 24,335,836 Inventory, including deposits 10,871,809 9,280,073 Accounts receivable, net 2,989,054 719,862 Other 4,580,519 4,478,080 Assets of discontinued operations 4,239,895 5,391,552 TOTAL ASSETS $50,606,644 $60,193,090 LIABILITIES AND STOCKHOLDERS’ EQUITY Accounts payable and accrued expenses $2,323,380 $1,957,975 Debt obligations 1,044,581 1,323,707 Warrant derivative liability 399,203 588,205 Other 525,612 661,263 Liabilities of discontinued operations 438,993 1,052,315 Total liabilities 4,731,769 5,583,465 Stockholders’ capital 112,158,387 110,057,535 Accumulated deficit/comprehensive loss (66,283,512) (55,447,910)Total stockholders’ equity 45,874,875 54,609,625 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $50,606,644 $60,193,090 Condensed Consolidated Statements of Operations
Three months ended October 31, Six months ended October 31, 2023 2022 2023 2022Revenues $3,930,868 $747,612 $5,678,997 $1,874,163 Cost of goods sold 2,730,286 623,761 4,303,750 1,668,192 Gross Margin 1,200,582 123,851 1,375,247 205,971 Operating Expenses Operations 440,445 1,581,818 1,148,348 2,468,121 Research and development 1,987,890 1,266,956 3,126,017 1,716,920 Sales and marketing 675,490 563,756 1,662,398 970,709 General and administrative 1,460,073 1,815,314 2,903,229 2,877,718 Stock based compensation 1,196,325 1,246,796 2,107,931 2,002,267 Total operating expenses 5,760,223 6,474,640 10,947,923 10,035,735 Operating loss (4,559,641) (6,350,789) (9,572,676) (9,829,764) Other (income) expense 522,176 (519,807) 1,076,916 (406,580) Net loss from continuing operations $(5,081,817) $(5,830,982) $(10,649,592) $(9,423,184) Loss from discontinued operations (599,511) (413,495) (842,084) (632,892)Net loss $(5,681,328) $(6,244,477) $(11,491,676) $(10,056,076) Loss per share – basic and diluted $(0.10) $(0.12) $(0.21) $(0.19) Weighted average shares outstanding – basic and diluted 55,606,336 54,078,111 55,270,838 53,928,133 Condensed Consolidated Statements of Cash Flows
Six months ended October 31, 2023 2022 Cash Flows from Operating Activities Net loss from continuing operations $(10,649,592) $(9,423,184)Non-cash expenses 3,222,395 1,748,455 Changes in operating assets and liabilities (3,813,162) (1,852,743)Net cash used in operating activities (11,240,359) (9,527,472) Cash Flows from Investing Activities Proceeds from sale of marketable securities 10,205,501 13,241,836 Purchases of property and equipment (139,860) (1,280,935)Net cash provided by investing activities 10,065,641 11,960,901 Cash Flows from Financing Activities Payments of debt obligations, net (279,126) (367,419)Payments related to employee equity transactions (16,292) (561,407)Proceeds from issuance of common stock through ATM facilities, net 9,212 — Net cash used in financing activity (286,206) (928,826) Net cash used in discontinued operations (384,094) (4,006,667) Net decrease in Cash (1,845,018) (2,502,064)Cash, beginning of period 3,260,305 4,084,815 Cash, end of period 1,415,287 1,582,751 Less: Cash of discontinued operations (6,310) (90,810)Cash of continuing operations, end of period 1,408,977 1,491,941 Marketable securities 2,615,289 31,302,888 Cash of continuing operations and marketable securities $4,024,266 $32,794,829