BigBear.ai Holdings, Inc. (NYSE: BBAI)
(“
BigBear.ai”, “
BBAI”, or the
“
Company”), a leader in AI-powered decision
intelligence solutions, today announced financial results for the
third quarter of 2023 and issued an investor letter that has been
posted to the Investor Relations section of the Company’s website.
BigBear.ai CEO Mandy Long said, “Our recent 3Q results bear
witness to the transformative journey that we are on. As planned at
the beginning of the year, we stayed focused on operational
efficiency. It shows, as this is our first quarter of positive cash
from operations, net income, and positive adjusted EBITDA. Our
announcement of signing a definitive merger agreement to acquire
Pangiam sets the stage to establish one of the industry’s most
comprehensive Vision AI portfolios, which we believe will make us a
breakout leader in one of the fastest growing categories for the
application of AI. We believe BigBear.ai’s future is bright.”
Financial Highlights
- Revenue declined 16.4% to $34.0 million
for the third quarter of 2023, compared to $40.7 million for the
third quarter of 2022. The decrease was primarily due to the
planned wind-down of certain Air Force programs in mid-July.
Additionally, our results for the third quarter of 2023 do not
include any revenues for Virgin Orbit due to their bankruptcy
announcement earlier this year.
- Gross margin of 24.7% in the third
quarter of 2023, a decrease from 28.9% in the third quarter of
2022, primarily driven by the elimination of revenue and gross
margin from Virgin Orbit as a result of their bankruptcy
announcement in the second quarter of 2023.
- Selling general and administrative
expenses were $15.5 million in the third quarter of 2023, which
represents an 8% decline quarter-over-quarter and a 23% reduction
compared to the third quarter of 2022 at $20.2 million. Excluding
non-recurring strategic initiatives, transaction expenses,
stock-based compensation, and non-cash software capitalization,
operating expenses are 21% lower in the third quarter of 2023
compared to the third quarter of 2022.
- Net income of $4.0 million for the
third quarter of 2023, compared to net loss of $16.1 million for
the third quarter of 2022. The increase was primarily the result of
$15.7 million of non-cash income related to the change in fair
value of warrants that were issued in 2023.
- Cash provided by operating activities
was $6.6 million in the third quarter. The Company’s cash balance
as of September 30, 2023 was $32.2 million, an increase of $2.3
million as compared to the quarter ended June 30, 2023.
Key Business Highlights:
- On November 6, 2023, announced a definitive merger agreement to
acquire Pangiam, a leader in Vision AI for the global trade,
travel, and digital identity industries. The purchase consideration
is approximately $70 million on a cash-free, debt-free basis in an
all-stock transaction.
- The combined company will establish one of the industry’s most
comprehensive Vision AI portfolios, uniting Pangiam’s facial
recognition and advanced biometrics
capabilities with BigBear.ai’s computer vision capabilities,
positioning the company as a foundational leader in one of the
fastest growing categories for the application of AI.
- The proposed acquisition is expected to close in the first
quarter of 2024, subject to customary closing conditions, including
approval by the holders of a majority of BigBear.ai’s outstanding
common shares and receipt of regulatory approval.
- More information about Pangiam and the transaction will be
included with the proxy statement that we will file with the SEC in
the coming weeks.
- Air Force Research Laboratory (AFRL) extended and expanded our
work on Project AURORA to continue our collaboration to accelerate
military planning, as BigBear.ai aims to condense the conventional
two-year planning timeframe, presenting comprehensive,
resource-backed operational plans in under a month.
- Expanded partnership with Thomas
Jefferson University Hospital to enable operational improvements
through the use of our FutureFlow RX® Predictive AI platform
allowing their hospitals to create ‘digital twin’ scenarios to plan
and execute more efficiently and effectively.
- Continued to provide thought leadership
in how our country will develop and implement new regulatory and
legislative frameworks for AI. BigBear.ai continues to be actively
engaged in these conversations, and we have submitted public
comment letters to the Executive Office of the President, Office of
Science and Technology Policy (OSTP), the US Department of
Commerce, National Telecommunications and Information
Administration (NTIA), and the Library of Congress, Copyright
Office.
Financial Outlook
The following information and other sections of this release
contain forward-looking statements, which are based on the
Company’s current expectations. Actual results may differ
materially from those projected. It is the Company’s practice not
to incorporate adjustments into its financial outlook for proposed
acquisitions, divestitures, changes in law, or new accounting
standards until such items have been consummated, enacted, or
adopted. For additional factors that may impact the Company’s
actual results, refer to the “Forward-Looking Statements” section
in this release.
For the year-ended December 31, 2023, the Company continues to
project:
- Revenue between $155 million and $170
million
- Single Digit Negative Adjusted EBITDA*,
in millions
Summary of Results for the
Third Quarter and Year to Date Periods
EndedSeptember 30, 2023
and September 30,
2022(Unaudited) |
$ thousands(expect per share amounts and shares outstanding) |
Three Months Ended September 30, |
|
Nine Months EndedSeptember
30, |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenues |
$ |
33,988 |
|
|
$ |
40,651 |
|
|
$ |
114,601 |
|
|
$ |
114,654 |
|
Cost of revenues |
|
25,579 |
|
|
|
28,900 |
|
|
|
87,016 |
|
|
|
83,446 |
|
Gross margin |
|
8,409 |
|
|
|
11,751 |
|
|
|
27,585 |
|
|
|
31,208 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Selling, general and administrative |
|
15,533 |
|
|
|
20,233 |
|
|
|
52,825 |
|
|
|
69,205 |
|
Research and development |
|
(349 |
) |
|
|
1,785 |
|
|
|
3,004 |
|
|
|
7,194 |
|
Restructuring charges |
|
— |
|
|
|
1,562 |
|
|
|
780 |
|
|
|
1,562 |
|
Transaction expenses |
|
1,437 |
|
|
|
566 |
|
|
|
1,437 |
|
|
|
2,151 |
|
Goodwill impairment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
35,252 |
|
Operating loss |
|
(8,212 |
) |
|
|
(12,395 |
) |
|
|
(30,461 |
) |
|
|
(84,156 |
) |
Interest expense |
|
3,540 |
|
|
|
3,557 |
|
|
|
10,656 |
|
|
|
10,666 |
|
Net decrease in fair value of derivatives |
|
(15,659 |
) |
|
|
(102 |
) |
|
|
(1,971 |
) |
|
|
(1,564 |
) |
Other (income) expense |
|
(87 |
) |
|
|
8 |
|
|
|
(87 |
) |
|
|
12 |
|
Income (loss) before taxes |
|
3,994 |
|
|
|
(15,858 |
) |
|
|
(39,059 |
) |
|
|
(93,270 |
) |
Income tax (benefit) expense |
|
(5 |
) |
|
|
252 |
|
|
|
51 |
|
|
|
(1,491 |
) |
Net income (loss) |
$ |
3,999 |
|
|
$ |
(16,110 |
) |
|
$ |
(39,110 |
) |
|
$ |
(91,779 |
) |
|
|
|
|
|
|
|
|
Basic and diluted net loss per share |
$ |
0.03 |
|
|
$ |
(0.13 |
) |
|
$ |
(0.27 |
) |
|
$ |
(0.72 |
) |
|
|
|
|
|
|
|
|
Weighted and average shares outstanding |
|
|
|
|
|
|
|
Basic |
|
155,830,775 |
|
|
|
126,270,282 |
|
|
|
146,679,444 |
|
|
|
128,103,625 |
|
Diluted |
|
157,894,001 |
|
|
|
126,270,282 |
|
|
|
146,679,444 |
|
|
|
128,103,625 |
|
EBITDA* and Adjusted EBITDA* for the
Third Quarter and Year to Date Periods
EndedSeptember 30, 2023
and September 30,
2022(Unaudited) |
|
Three Months Ended September 30, |
|
Nine Months EndedSeptember
30, |
$ thousands |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income (loss) |
$ |
3,999 |
|
|
$ |
(16,110 |
) |
|
$ |
(39,110 |
) |
|
$ |
(91,779 |
) |
Interest
expense |
|
3,540 |
|
|
|
3,557 |
|
|
|
10,656 |
|
|
|
10,666 |
|
Interest
income |
|
(86 |
) |
|
|
— |
|
|
|
(86 |
) |
|
|
— |
|
Income
tax (benefit) expense |
|
(5 |
) |
|
|
252 |
|
|
|
51 |
|
|
|
(1,491 |
) |
Depreciation and amortization |
|
1,971 |
|
|
|
2,038 |
|
|
|
5,936 |
|
|
|
5,764 |
|
EBITDA |
|
9,419 |
|
|
|
(10,263 |
) |
|
|
(22,553 |
) |
|
|
(76,840 |
) |
Adjustments: |
|
|
|
|
|
|
|
Equity-based compensation |
|
4,793 |
|
|
|
2,222 |
|
|
|
12,592 |
|
|
|
11,160 |
|
Employer payroll taxes related to equity-based compensation(1) |
|
8 |
|
|
|
— |
|
|
|
365 |
|
|
|
— |
|
Net decrease in fair value of derivatives(2) |
|
(15,659 |
) |
|
|
(102 |
) |
|
|
(1,971 |
) |
|
|
(1,564 |
) |
Restructuring charges(3) |
|
— |
|
|
|
1,562 |
|
|
|
780 |
|
|
|
1,562 |
|
Non-recurring strategic initiatives(4) |
|
159 |
|
|
|
— |
|
|
|
2,480 |
|
|
|
— |
|
Non-recurring integration costs(5) |
|
— |
|
|
|
2,075 |
|
|
|
— |
|
|
|
6,474 |
|
Capital market advisory fees(6) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
741 |
|
Commercial start-up costs(7) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6,490 |
|
Transaction expenses(8) |
|
1,437 |
|
|
|
566 |
|
|
|
1,437 |
|
|
|
2,151 |
|
Goodwill impairment(9) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
35,252 |
|
Adjusted EBITDA |
$ |
157 |
|
|
$ |
(3,940 |
) |
|
$ |
(6,870 |
) |
|
$ |
(14,574 |
) |
(1) |
Includes employer payroll taxes due upon the vesting of restricted
stock units granted to employees. |
(2) |
The decrease in fair value of
derivatives during the three and nine months ended September 30,
2023 primarily relates to changes in the fair value of PIPE and RDO
warrants issued during the first and second quarters of 2023,
respectively. The decrease in fair value of derivatives during the
three and nine months ended September 30, 2022 primarily relates to
the Forward Share Purchase Agreements that were entered into prior
to the closing of our business combination on December 7, 2021 (the
“Business Combination”) and were fully settled during the first
quarter of 2022, as well as the change in the fair value of private
warrants. |
(3) |
In the first quarter of 2023, the
Company incurred employee separation costs associated with a
strategic review of the Company’s capacity and future projections
to better align the organization and cost structure and improve the
affordability of its products and services. |
(4) |
Non-recurring professional fees
related to the execution of certain strategic initiatives of the
Company. |
(5) |
Non-recurring internal
integration costs related to the Business Combination. |
(6) |
The Company incurred capital
market and advisory fees related to advisors assisting with the
Business Combination. |
(7) |
Commercial start-up costs include
certain non-recurring expenses associated with tailoring the
Company’s products for commercial customers and use cases. |
(8) |
Transaction expenses primarily consists of legal, accounting, and
other advisor fees in connection with merger and acquisition
activities. |
(9) |
During the second quarter of
2022, the Company recognized a non-cash goodwill impairment charge
related to the previously reported Cyber & Engineering business
segment. During the first quarter of 2023, the Company reevaluated
its operating and reportable segments following an organizational
and legal entity restructuring, which allowed the Company to align
its operations with how the business will be managed. As a result
of this reevaluation, effective for the first quarter of fiscal
year 2023, the Company determined it that it manages its operations
as a single operating and reportable segment. |
Consolidated Balance Sheets as of
September 30, 2023 and
December 31,
2022(Unaudited) |
$ in thousands |
September 30,2023 |
|
December 31, 2022 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
32,184 |
|
|
$ |
12,632 |
|
Restricted cash |
|
— |
|
|
|
— |
|
Accounts receivable, less allowance for doubtful accounts |
|
29,030 |
|
|
|
30,091 |
|
Contract assets |
|
452 |
|
|
|
1,312 |
|
Prepaid expenses and other current assets |
|
4,104 |
|
|
|
10,300 |
|
Total current assets |
|
65,770 |
|
|
|
54,335 |
|
Non-current assets: |
|
|
|
Property and equipment, net |
|
1,095 |
|
|
|
1,433 |
|
Goodwill |
|
48,683 |
|
|
|
48,683 |
|
Intangible assets, net |
|
82,823 |
|
|
|
85,685 |
|
Deferred tax assets |
|
— |
|
|
|
51 |
|
Right-of-use assets |
|
4,188 |
|
|
|
4,638 |
|
Other non-current assets |
|
452 |
|
|
|
483 |
|
Total assets |
$ |
203,011 |
|
|
$ |
195,308 |
|
|
|
|
|
Liabilities and stockholders deficit |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
9,076 |
|
|
$ |
15,422 |
|
Short-term debt, including current portion of long-term debt |
|
— |
|
|
|
2,059 |
|
Accrued liabilities |
|
15,460 |
|
|
|
13,366 |
|
Contract liabilities |
|
2,320 |
|
|
|
2,022 |
|
Current portion of long-term lease liability |
|
803 |
|
|
|
806 |
|
Derivative liabilities |
|
28,467 |
|
|
|
— |
|
Other current liabilities |
|
871 |
|
|
|
2,085 |
|
Total current liabilities |
|
56,997 |
|
|
|
35,760 |
|
Non-current liabilities: |
|
|
|
Long-term debt, net |
|
193,784 |
|
|
|
192,318 |
|
Long-term lease liability |
|
4,517 |
|
|
|
5,092 |
|
Deferred tax liabilities |
|
2 |
|
|
|
— |
|
Other non-current liabilities |
|
— |
|
|
|
10 |
|
Total liabilities |
|
255,300 |
|
|
|
233,180 |
|
|
|
|
|
Stockholders’ deficit: |
|
|
|
Common stock |
|
17 |
|
|
|
14 |
|
Additional paid-in capital |
|
297,218 |
|
|
|
272,528 |
|
Treasury stock, at cost 9,952,803 shares at September 30, 2023
and December 31, 2022 |
|
(57,350 |
) |
|
|
(57,350 |
) |
Accumulated deficit |
|
(292,174 |
) |
|
|
(253,064 |
) |
Total stockholders’ deficit |
|
(52,289 |
) |
|
|
(37,872 |
) |
Total liabilities and stockholders’ deficit |
$ |
203,011 |
|
|
$ |
195,308 |
|
Consolidated Statements of Cash Flows for
the Three and Nine Months EndedSeptember 30,
2023 and September 30,
2022(Unaudited) |
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
$ in thousands |
|
2023 |
|
|
|
2022 |
|
|
2023 |
|
|
|
2022 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
Net
income (loss) |
$ |
3,999 |
|
|
$ |
(16,110 |
) |
$ |
(39,110 |
) |
|
$ |
(91,779 |
) |
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities: |
|
|
|
|
|
|
Depreciation and amortization expense |
|
1,971 |
|
|
|
2,038 |
|
|
5,936 |
|
|
|
5,764 |
|
Amortization of debt issuance costs |
|
506 |
|
|
|
523 |
|
|
1,512 |
|
|
|
1,570 |
|
Equity-based compensation expense |
|
4,793 |
|
|
|
2,222 |
|
|
12,592 |
|
|
|
11,160 |
|
Goodwill impairment |
|
— |
|
|
|
— |
|
|
— |
|
|
|
35,252 |
|
Non-cash lease expense |
|
153 |
|
|
|
— |
|
|
450 |
|
|
|
— |
|
Provision for doubtful accounts |
|
50 |
|
|
|
11 |
|
|
1,607 |
|
|
|
55 |
|
Deferred income tax (benefit) expense |
|
— |
|
|
|
144 |
|
|
53 |
|
|
|
(1,450 |
) |
Net decrease in fair value of derivatives |
|
(15,659 |
) |
|
|
(102 |
) |
|
(1,971 |
) |
|
|
(1,564 |
) |
Loss (gain) on sale of property and equipment |
|
2 |
|
|
|
— |
|
|
10 |
|
|
|
— |
|
Changes
in assets and liabilities: |
|
|
|
|
|
|
Decrease (increase) in accounts receivable |
|
7,189 |
|
|
|
(3,117 |
) |
|
(546 |
) |
|
|
(2,359 |
) |
(Increase) decrease in contract assets |
|
(106 |
) |
|
|
(71 |
) |
|
860 |
|
|
|
(297 |
) |
Decrease in prepaid expenses and other assets |
|
937 |
|
|
|
3,014 |
|
|
6,181 |
|
|
|
3,549 |
|
Increase (decrease) in accounts payable |
|
1,778 |
|
|
|
1,072 |
|
|
(6,346 |
) |
|
|
1,946 |
|
Increase (decrease) in accrued liabilities |
|
1,375 |
|
|
|
1,516 |
|
|
2,035 |
|
|
|
(993 |
) |
Increase (decrease) in contract liabilities |
|
320 |
|
|
|
1,044 |
|
|
298 |
|
|
|
(1,004 |
) |
(Decrease) increase in other liabilities |
|
(728 |
) |
|
|
1,422 |
|
|
(1,794 |
) |
|
|
1,760 |
|
Net cash provided by (used in) operating
activities |
|
6,580 |
|
|
|
(6,394 |
) |
|
(18,233 |
) |
|
|
(38,390 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
Acquisition of businesses, net of cash acquired |
|
— |
|
|
|
(89 |
) |
|
— |
|
|
|
(4,465 |
) |
Purchases of property and equipment |
|
— |
|
|
|
(228 |
) |
|
(2 |
) |
|
|
(736 |
) |
Capitalized software development costs |
|
(2,744 |
) |
|
|
— |
|
|
(2,744 |
) |
|
|
— |
|
Net cash used in investing activities |
|
(2,744 |
) |
|
|
(317 |
) |
|
(2,746 |
) |
|
|
(5,201 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
Proceeds from issuance of Private Placement shares and Registered
Direct Offering shares |
|
— |
|
|
|
— |
|
|
50,000 |
|
|
|
— |
|
Payment of Private Placement and Registered Direct Offering
transaction costs |
|
(499 |
) |
|
|
— |
|
|
(5,724 |
) |
|
|
— |
|
Repurchase of shares as a result of forward purchase
agreements |
|
— |
|
|
|
— |
|
|
— |
|
|
|
(100,896 |
) |
Repayment of short-term borrowings |
|
(522 |
) |
|
|
(1,152 |
) |
|
(2,059 |
) |
|
|
(3,464 |
) |
Issuance of common stock upon ESPP purchase |
|
531 |
|
|
|
— |
|
|
531 |
|
|
|
— |
|
Payments for taxes related to net share settlement of equity
awards |
|
(1,085 |
) |
|
|
(11 |
) |
|
(2,217 |
) |
|
|
(15 |
) |
Net cash provided by (used in) financing
activities |
|
(1,575 |
) |
|
|
(1,163 |
) |
|
40,531 |
|
|
|
(104,375 |
) |
Net increase (decrease) in cash and cash equivalents and restricted
cash |
|
2,261 |
|
|
|
(7,874 |
) |
|
19,552 |
|
|
|
(147,966 |
) |
Cash and cash equivalents and restricted cash at beginning of
period |
|
29,923 |
|
|
|
29,829 |
|
|
12,632 |
|
|
|
169,921 |
|
Cash and cash equivalents and restricted cash at end of
period |
$ |
32,184 |
|
|
$ |
21,955 |
|
$ |
32,184 |
|
|
$ |
21,955 |
|
Forward-Looking Statements
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act, and Section 21E of
the Exchange Act. Forward-looking statements generally are
accompanied by words such as “believe,” “may,” “will,” “estimate,”
“continue,” “anticipate,” “intend,” “expect,” “should,” “would,”
“plan,” “predict,” “potential,” “seem,” “seek,” “future,”
“outlook,” and similar expressions that predict or indicate future
events or trends or that are not statements of historical matters.
These forward-looking statements include, but are not limited to,
statements regarding BigBear.ai’s industry, future events, and
other statements that are not historical facts. These statements
are based on various assumptions, whether or not identified herein,
and on the current expectations of BigBear.ai’s management and are
not predictions of actual performance. These forward-looking
statements are provided for illustrative purposes only and are not
intended to serve as, and must not be relied on by you or any other
investor as, a guarantee, an assurance, a prediction or a
definitive statement of fact or probability. Actual events and
circumstances are difficult or impossible to predict and will
differ from assumptions. Many actual events and circumstances are
beyond our control. These forward-looking statements are subject to
a number of risks and uncertainties, including those relating to:
changes in domestic and foreign business, market, financial,
political, and legal conditions; the uncertainty of projected
financial information; delays caused by factors outside of our
control, including changes in fiscal or contracting policies or
decreases in available government funding; changes in government
programs or applicable requirements; budgetary constraints,
including automatic reductions as a result of “sequestration” or
similar measures and constraints imposed by any lapses in
appropriations for the federal government or certain of its
departments and agencies; influence by, or competition from, third
parties with respect to pending, new, or existing contracts with
government customers; changes in our ability to successfully
compete for and receive task orders and generate revenue under
Indefinite Delivery/Indefinite Quantity contracts; our ability to
pursue opportunities through mergers and acquisitions; our ability
to realize the benefits of the strategic partnerships; failure to
consummate the proposed transactions; failure to make or take any
filing or other action required to consummate the proposed
transactions in a timely matter or at all; failure to obtain
applicable regulatory or shareholder approvals in a timely manner
or otherwise; failure to satisfy other closing conditions to the
proposed transactions; the potential impact of announcement or
consummation of the proposed transactions on relationships with
third parties, including clients, employees and competitors; risks
that the new businesses will not be integrated successfully or that
the combined companies will not realize estimated cost savings;
failure to realize anticipated benefits of the combined operations;
potential litigation relating to the proposed transactions and
disruptions from the proposed transactions that could harm
BigBear.ai’s or Pangiam’s respective businesses; potential delays
or changes in the government appropriations or procurement
processes, including as a result of events such as war, incidents
of terrorism, natural disasters, and public health concerns or
epidemics, such as the coronavirus outbreak; the identified
material weakness in our internal controls over financial reporting
(including the timeline to remediate the material weakness);
increased or unexpected costs or unanticipated delays caused by
other factors outside of our control, such as performance failures
of our subcontractors; the rollout of the business and the timing
of expected business milestones; the effects of competition on our
future business; our ability to obtain and access financing in the
future; and those factors discussed in the Company’s reports and
other documents filed with the SEC, including under the heading
“Risk Factors.” If any of these risks materialize or our
assumptions prove incorrect, actual results could differ materially
from the results implied by these forward-looking statements. There
may be additional risks that BigBear.ai presently does not know or
that BigBear.ai currently believes are immaterial which could also
cause actual results to differ from those contained in the
forward-looking statements. In addition, forward-looking statements
reflect BigBear.ai’s expectations, plans or forecasts of future
events and views as of the date of this release. BigBear.ai
anticipates that subsequent events and developments will cause
BigBear.ai’s assessments to change. However, while BigBear.ai may
elect to update these forward-looking statements at some point in
the future, BigBear.ai specifically disclaims any obligation to do
so. Accordingly, undue reliance should not be placed upon the
forward-looking statements.
Additional Information and Where to Find It
Important Additional Information Will be Filed with the SEC
BigBear.ai Holdings, Inc. (“BBAI”) will file with the United
States Securities and Exchange Commission (the “SEC”) a proxy
statement of BBAI relating to a special meeting of BBAI’s
stockholders (the “proxy statement”). STOCKHOLDERS ARE URGED TO
CAREFULLY READ THE PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS TO
BE FILED WITH THE SEC IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT BBAI, PANGIAM
INTERMEDIATE HOLDINGS, LLC (“PANGIAM”), THE PROPOSED TRANSACTIONS
AND RELATED MATTERS. Stockholders will be able to obtain free
copies of the proxy statement and other documents filed with the
SEC by the parties through the website maintained by the SEC at
www.sec.gov. In addition, investors and stockholders will be able
to obtain free copies of the proxy statement and other documents
filed with the SEC by the parties on BBAI’s website at
https://ir.bigbear.ai.
Participants in the Solicitation
BBAI and Pangiam and their respective directors and executive
officers may be deemed to be participants in the solicitation of
proxies from the stockholders of BBAI in respect of the proposed
transactions contemplated by the proxy statement. Information
regarding the persons who are, under the rules of the SEC,
participants in the solicitation of the stockholders of BBAI,
respectively, in connection with the proposed transactions,
including a description of their direct or indirect interests, by
security holdings or otherwise, will be set forth in the proxy
statement when it is filed with the SEC. Information regarding
BBAI’s directors and executive officers is contained in BBAI’s
Annual Report on Form 10-K for the year ended December 31, 2022 and
its Proxy Statement on Schedule 14A, dated May 24, 2023, which are
filed with the SEC.
No Offer or Solicitation
This communication is not intended to and does not constitute an
offer to sell or the solicitation of an offer to subscribe for or
buy or an invitation to purchase or subscribe for any securities or
the solicitation of any vote in any jurisdiction pursuant to the
proposed transactions or otherwise, nor shall there be any sale,
issuance or transfer of securities in any jurisdiction in
contravention of applicable law.
Non-GAAP Financial Measures
The financial information and data contained in this press
release is unaudited. Some of the financial information and data
contained in this press release, such as EBITDA and Adjusted
EBITDA, have not been prepared in accordance with United States
generally accepted accounting principles (“GAAP”).
To supplement our unaudited condensed consolidated financial
statements, which are prepared and presented in accordance with
GAAP in our press release, we also report certain non-GAAP
financial measures. A “non-GAAP financial measure” refers to a
numerical measure of a company’s historical or future financial
performance, financial position, or cash flows that excludes (or
includes) amounts that are included in (or excluded from) the most
directly comparable measure calculated and presented in accordance
with GAAP in such company’s financial statements. Non-GAAP
financial measures should not be considered in isolation or as a
substitute for the relevant GAAP measures and should be read in
conjunction with information presented on a GAAP basis. Because not
all companies use identical calculations, our presentation of
non-GAAP measures may not be comparable to other similarly titled
measures of other companies.
The presentation of these financial measures is not intended to
be considered in isolation or as a substitute for, or superior to,
financial information prepared and presented in accordance with
GAAP and should not be considered measures of BigBear.ai’s
liquidity. Investors are cautioned that there are material
limitations associated with the use of non-GAAP financial measures
as an analytical tool. In particular, many of the adjustments to
our GAAP financial measures reflect the exclusion of certain items,
as defined in our non-GAAP definitions below, which are recurring
and will be reflected in our financial results for the foreseeable
future. In addition, these measures may be different from non-GAAP
financial measures used by other companies, even where similarly
titled, limiting their usefulness for comparison purposes and
therefore should not be used to compare BigBear.ai’s performance to
that of other companies. We endeavor to compensate for the
limitation of the non-GAAP financial measures presented by also
providing the most directly comparable GAAP measures and
descriptions of the reconciling items and adjustments to derive the
non-GAAP financial measures.
We believe these non-GAAP financial measures provide investors
and analysts with useful supplemental information about the
financial performance of our business, enable comparison of
financial results between periods where certain items may vary
independent of business performance, and allow for greater
transparency with respect to key measures used by management to
operate and analyze our business over different periods of
time.
EBITDA is defined as net income (loss) before interest expense,
interest income, income tax (benefit) expense, depreciation and
amortization. Adjusted EBITDA is defined as EBITDA further adjusted
for equity-based compensation, employer payroll taxes related to
equity-based compensation, net decrease in fair value of
derivatives, restructuring charges, non-recurring strategic
initiatives, non-recurring integration costs, capital market
advisory fees, commercial start-up costs, transaction expenses, and
goodwill impairment. Similar excluded expenses may be incurred in
future periods when calculating these measures. BigBear.ai believes
these non-GAAP measures of financial results provide useful
information to management and investors regarding certain financial
and business trends relating to the Company’s financial condition
and results of operations. BigBear.ai believes that the use of
these non-GAAP financial measures provides an additional tool for
investors to use in evaluating projected operating results and
trends and in comparing BigBear.ai’s financial measures with other
similar companies, many of which present similar non-GAAP financial
measures to investors.
Management does not consider these non-GAAP measures in
isolation or as an alternative to financial measures determined in
accordance with GAAP. The principal limitation of these non-GAAP
financial measures is that they exclude significant expenses and
income that are required by GAAP to be recorded in the Company’s
financial statements. In addition, they are subject to inherent
limitations as they reflect the exercise of judgment by management
about which expense and income items are excluded or included in
determining these non-GAAP financial measures.
Management uses EBITDA and Adjusted EBITDA as a non-GAAP
performance measure which is defined in the accompanying tables and
is reconciled to net (loss), the most directly comparable GAAP
measure, in the tables above. The Company does not reconcile
forward-looking non-GAAP financial measures to the most directly
comparable GAAP financial measure (or otherwise describe such
forward-looking GAAP measure) because it is not able to forecast
the most directly comparable measure calculated and presented in
accordance with GAAP without unreasonable effort. Certain elements
of the composition of the GAAP amounts are not predictable, making
it impracticable for the Company to forecast. As a result, no
guidance for the Company’s net (loss) income or reconciliation of
the Company’s Adjusted EBITDA guidance is provided. For the same
reasons, the Company is unable to assess the probable significance
of the unavailable information, which could have a potentially
significant impact on its future net (loss) income.
We present reconciliations of these non-GAAP financial measures
to the most directly comparable GAAP measures in the tables
above.
About BigBear.ai
BigBear.ai’s mission is to deliver clarity for the world’s most
complex decisions. BigBear.ai’s AI-powered decision intelligence
solutions are leveraged in three core markets, including global
supply chains & logistics, autonomous systems and cyber.
BigBear.ai’s customers, which include the US Intelligence
Community, Department of Defense, the US Federal Government, as
well as complex manufacturing, distribution, and healthcare, rely
on BigBear.ai’s solutions to empower leaders to decide on the best
possible scenario by creating order from complex data, identifying
blind spots, and building predictive outcomes. Headquartered in
Columbia, Maryland, BigBear.ai is a global, public company traded
on the NYSE under the symbol BBAI. For more information, please
visit: http://bigbear.ai/ and follow BigBear.ai on X:
@BigBearai.
Contacts
BigBear.aiInvestor Contactinvestors@bigbear.ai
Media ContactRyan Stengermedia@bigbear.ai
BigBear ai (NYSE:BBAI)
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