Archer Aviation Releases Q2 Results, Explains “Key Terms of Contract Manufacturing Relationship with Stellantis”

Archer Avi­a­tion recent­ly announced its oper­at­ing and finan­cial results for Q2 end­ing June 30th, 2024, reports a press release. With­in this report, the com­pa­ny explains the key terms of its con­tract man­u­fac­tur­ing rela­tion­ship with Stel­lan­tis.

In addi­tion to the near­ly USD300 mil­lion, the car com­pa­ny has pre­vi­ous­ly invest­ed to date, includ­ing USD55 mil­lion in July, Stel­lan­tis is plan­ning to fund the fol­low­ing to help ensure Archer achieves its man­u­fac­tur­ing goals.

: Man­u­fac­tur­ing Costs - It is to fund up to USD370 mil­lion of the antic­i­pat­ed man­u­fac­tur­ing labour costs nec­es­sary to sup­port Archer’s planned ramp up to 650 air­craft annu­al­ly. In exchange, the com­pa­ny is to receive Archer shares on a rolling quar­ter­ly basis, based on the total labour costs incurred in a par­tic­u­lar quar­ter along­side the then cur­rent future stock price.

: Man­u­fac­tur­ing CapEx — Addi­tion­al­ly, Stel­lan­tis will con­tribute the iden­ti­fied ini­tial incre­men­tal man­u­fac­tur­ing cap­i­tal expen­di­tures for the ini­tial ramp of Mid­night pro­duc­tion, esti­mat­ed to be up to USD20 mil­lion.

Archer’s goal with this rela­tion­ship is to incen­tivise the car com­pa­ny to help achieve the planned pro­duc­tion ramp and unit cost tar­gets. There­fore, Archer intends to issue Stel­lan­tis USD30 mil­lion of per­for­mance war­rants based on the achieve­ment of cer­tain per­for­mance mile­stones under the con­tract man­u­fac­tur­ing rela­tion­ship. Archer’s issuance of any equi­ty to Stel­lan­tis pur­suant to this con­tract man­u­fac­tur­ing rela­tion­ship is expect­ed to be sub­ject to approval by stock­hold­ers.

Recent Pho­to of Archer’s Con­struc­tion of Man­u­fac­tur­ing Facil­i­ty in Cov­ing­ton, Geor­gia (Cred­it: Busi­ness Wire)

Mean­while, Archer also states in its Q2 results, the com­pa­ny has:-

: Secured USD230 mil­lion in addi­tion­al equi­ty cap­i­tal since the end of Q2. This new equi­ty cap­i­tal comes from strate­gic and insti­tu­tion­al investors, includ­ing Stel­lan­tis and Unit­ed Air­lines.

: Unveiled plans for Los Ange­les air taxi net­work ahead of major world­wide sport­ing events. Archer’s planned net­work includes ver­ti­ports at Los Ange­les Inter­na­tion­al Air­port, USC, Orange Coun­ty, San­ta Mon­i­ca, Hol­ly­wood Bur­bank, Long Beach and Van Nuys. Archer is also work­ing with the LA Rams and Hol­ly­wood Park, the 300-acre dis­trict cen­tred around SoFi Sta­di­um, for a planned exclu­sive ver­ti­port in the area.

: Deliv­ered first Mid­night air­craft to the USAF as part of the AFWERX Agili­ty Prime con­tract val­ued at up to USD142 mil­lion.

: Announced plans for Future Flight Glob­al to pur­chase up to 116 air­craft worth up to USD580 mil­lion, bring­ing Archer’s indica­tive order book to near­ly USD6 bil­lion. Planned pur­chas­es will sup­port the com­pa­nies’ joint goal of launch­ing eVTOL oper­a­tions in key glob­al mar­kets in Europe and Asia.

Adam Gold­stein, CEO of Archer, com­ment­ed, “This has been one of our most pro­duc­tive quar­ters yet. From Midnight’s first tran­si­tion flight, to the progress we’ve made on the build out of high-vol­ume man­u­fac­tur­ing facil­i­ties along­side Stel­lan­tis, to the com­mer­cial progress we’re mak­ing with South­west, Unit­ed, and more, we are work­ing to enable com­mer­cial oper­a­tions all over the world.”

He con­tin­ued, “Our indica­tive order book now sits at near­ly USD6 bil­lion. With the addi­tion­al fund­ing and planned LA net­work we have just announced, Archer is well posi­tioned to meet its goal of com­mer­cial­i­sa­tion as ear­ly as next year.”

Adam Gold­stein (Cred­it: Archer/Business Wire)

Share­hold­er Let­ter

https://s202.q4cdn.com/174276461/files/doc_financials/2024/q2/Archer-Shareholder-Letter-Q224-FINAL.pdf

A record­ing of Archer’s Con­fer­ence Call dis­cussing its Q2 results, can be found on the company’s Investor Rela­tions Web­site.

https://investors.archer.com/overview/default.aspx

For more infor­ma­tion

https://www.archer.com

(Images: Archer Aviation/Business Wire)

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