Elizabeth Grenfell: Okay. All right. What about CapEx associated with these facility expansions? And how should we think about that? And at what point is it a little bit of putting the cart before the horse in the –?
Marc Bell: We always — in our business, you always have to put the cart before the horse because if the horse shows up and is no place to go, then we’re in deep trouble. So, because you’re always building — everybody has an 18th to 24 month horizon, right? And we know what programs we believe we’re going to be winning, and we have pretty good insight in our P1 rate of what we think we’re going to get. And so we’re not building for the sake of building. We knew, for example, we were going to be winning. We knew we had not — we know — we had a high of confidence, we were going to win T1. So, we went ahead and we started building an addition onto our exist 60,000 square feet, because we knew our existing facility wasn’t big enough to do T1.
And we’ve won T1 and now we have enough space to build T1. We now have — we had a good feeling that we were going to be winning something like Rivada. So we went ahead and we leased — we signed a lease earlier this year to go begin building another facility that gives us a space to build Rivada. Now, so I — if you look at us as we sign more leases for more space and assembly space, manufacturing space, that should be a good indicator to the market that we expect to be getting more customers in house.
Elizabeth Grenfell: Okay. Thank you very much.
Marc Bell: Yeah. And one other thing I’d like to add is, in building these facilities, there’s a very long lead time for — a lot of specialized equipment that goes into these things. So, we have — so, some of the stuff takes as much as 48 weeks to get. And so — but when we get a program, they want it delivered on time. And we can’t say we got to wait 48 weeks to get equipment. So, it is — we’re not a capital intensive business. We’re a technology intensive business, but we’ve made massive strides forward. I mean, we’ll be opening — we just opened up a 3D printing facility. We are opening up in about a month our printed circuit board assembly facility. We have now — we will be opening also in about a month our own testing facility with our own TVAC chambers that could fit entire sat — it could fit an entire satellite and our own shaker tables.
So, we are taking a lot of the stuff we used to send outside, bringing it inside, going back to — if you control your supply chain, you control your destiny. And we are vertically integrating. So, we control our supply chain, so we don’t have supply chain issues down the road, like a lot of other people are having. And this is one of the keys to our success.
Operator: Okay. And next we have a question from Greg Konrad from Jefferies. Greg, please go ahead.
Greg Konrad: Hey, good morning. Maybe
Marc Bell: Good morning.
Greg Konrad: to start, I appreciate that you’re not giving guidance, but you called out, you delivered 19 satellites in 2022, and it seems like maybe majority of Tranche 2 or sorry, Tranche 1 delivered in 2023. How many satellites do you plan to deliver in 2023?
Marc Bell: Gary, you want to answer that? Gary?
Gary Hobart: Sure. In our — Greg, this may help at least guide you a little bit. The backlog at the end of the year is about $171 million. And in that backlog, there are a little over 60 satellites that are in various stages of construction. And generally speaking, our backlog converts inside of two years from the date of order. So, while we’re not guiding precisely to when that backlog will be converted or those satellites are delivered, it’s going to be closer to inside of two years. And so, you could probably start modeling around using those as at least a reference point. And then Marc mentioned earlier that the 42 satellites for Tranche 1 are due before the end of the first quarter of 2024. So hopefully that gives you a little more color.
Greg Konrad: And then just on the $14 billion pipeline, I mean, you called out the Rivada award. If you think about just the breakdown, how much of that is these larger, chunky awards versus maybe smaller awards? Just thinking about catalyst as some of that pipeline converts.
Marc Bell: Well, the biggest chunk of the pipeline is the $6 billion NASA Rapid Rewards contract for. So that is where NASA can call us up and order satellites off that contract. We haven’t — we just met with NASA the other day. We haven’t seen a lot of that, but Rivada really demonstrates the size of the things that we are spending our time going after. We are whale hunting, and it is working. We’re trying to — we’re spending a lot less time with people who are trying to build one satellite than we do that. But we are spending our bulk of the time with people who want to build hundreds of satellites. And what Rivada did it for us as a business is it gave us a — gave us credibility in the marketplace that we can build a large satellite.
So, we spent the past week meeting with multiple constellation opportunities, the size of Rivada, some smaller, some larger, but it was an incredibly — people are viewing us now very differently, very credibly, both around — both within the DOD and in the commercial marketplace. And we’re seeing a lot of interest now from foreign companies and foreign governments that we didn’t see before. It’s really been a huge transformation. I mean, we have — if you look at our pipeline, you have 125 different — positive different opportunities with over 3,700 satellites kicking around in there. And with the new facility we just announced today, that gives us a huge advantage. And with all the automation we’re doing, and we — and keep in mind, we make 85% of our components in house, most of our competitors buy components from lots of other manufacturers.
And we all know when you buy components from 20 different manufacturers and put them all together, they work perfectly every time. It doesn’t work. So, it doesn’t work like that. And that’s one of the reasons, all of our stuff is plug and play. They’re all designed to work with each other. So — and most of our stuff is flight pro — flight proven at this point, which gives us all also a huge advantage. So — and you have a lot of foreign entries coming into the United States. People like Airbus, people like Leostella, a lot of foreigners coming in, but the DOD is getting — and then Congress is getting to a point that they want to create jobs here in the U.S. and we shouldn’t be suspending taxpayer dollars on defense programs built by foreigners.
And that is becoming a bigger, bigger topic up on the hill. And we expect that over the next year to have some real impact on our business as we are made in the USA.