Redwire Corporation (NYSE: RDW), a global leader in space
infrastructure that provides the foundational building blocks that
are enabling the most complex space missions, today announced
results for its second quarter ended June 30, 2023. Unless
otherwise referred to as Comparable Revenues, financial information
presented herein includes the results of Space NV for periods
including and subsequent to the acquisition date of October 31,
2022.
Redwire will live stream a presentation with slides. Please use
the link below to follow along with the live stream:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=sT4Capee
Second Quarter 2023 Highlights
- Revenues for the second quarter of 2023 increased 63.6% to
$60.1 million, as compared to $36.7 million for the second quarter
of 2022. Revenues also grew sequentially by 4.3%, as compared to
the first quarter of 2023.
- Comparable Revenues1 for the second quarter of 2023 increased
24.9% to $45.9 million, as compared to $36.7 million for the second
quarter of 2022. Comparable Revenues also grew sequentially by
1.1%, as compared to the first quarter of 2023.
- Net Loss for the second quarter of 2023 improved 92.9% to
$(5.5) million, as compared to $(77.0) million for the second
quarter of 2022. Net Loss also improved sequentially by $1.8
million or 24.7%, as compared to the first quarter of 2023.
- Adjusted EBITDA1 for the second quarter of 2023 increased by
$8.4 million to $4.4 million as compared to $(4.1) million for the
second quarter of 2022. Adjusted EBITDA increased sequentially by a
nominal amount as compared to the first quarter of 2023.
- Contracted Backlog2 increased 68.3% year-over-year to $272.8
million as of June 30, 2023, as compared to $162.1 million as of
June 30, 2022.
- For the full year ended December 31, 2023, Redwire affirms that
it expects revenues to be in a range of $220.0 million to $250.0
million.
“In Q2, we continued a trend of strong revenue growth and
positive Adjusted EBITDA1,” stated Peter Cannito, Chairman and
Chief Executive Officer of Redwire. “This is a result of resilient
demand for our differentiated space solutions across a diversified
customer set and the operational excellence of our extraordinary
Redwire professionals worldwide.”
______________________________
1 Comparable Revenues and Adjusted EBITDA
are not measures of results under generally accepted accounting
principles in the United States. Please refer to “Non-GAAP
Financial Information” and the reconciliation tables included in
this press release for details regarding these Non-GAAP
measures.
2 Contracted Backlog is a key business
measure. Please refer to “Key Performance Indicators” and the
tables included in this press release for additional
information.
Additional Financial
Highlights:
- Book-to-Bill3 ratio for the second quarter of 2023 was 0.76 as
compared to 1.68 as of the second quarter of 2022. On a last twelve
month (LTM) basis, Book-to-Bill was 1.49 as of the second quarter
of 2023, as compared to 1.15 as of the second quarter of 2022.
- Net cash provided by (used in) operating activities for the
second quarter of 2023 increased by $7.0 million to $2.8 million,
as compared to $(4.1) million for the second quarter of 2022. Free
Cash Flow4 for the second quarter of 2023 was $1.1 million, as
compared to $(5.2) million for the second quarter of 2022.
- Total available liquidity was $36.2 million as of June 30,
2023, comprised of $11.2 million in cash and cash equivalents and
$25.0 million in available borrowings from our existing credit
facilities.
“Our outstanding commercial and operational improvement
continued in the second quarter of 2023, leading to record
financial performance on both a sequential and year-over-year
basis. During the quarter, we recognized record revenues of $60.1
million and achieved record positive Adjusted EBITDA4 of $4.4
million. Importantly, our team’s execution of second quarter 2023
profitable growth led to marked year-over-year improvement in cash
provided by operations of $7.0 million and positive Free Cash Flow
of $1.1 million,” said Jonathan Baliff, Chief Financial Officer of
Redwire. “Our positive Free Cash Flow and LTM Book-to-Bill3 ratio
of 1.49 are demonstrating strong momentum as we enter the second
half of the year.”
Webcast and Investor
Call
Management will conduct a conference call starting at 9:00 a.m.
ET on Tuesday, August 8, 2023 to review financial results for the
second quarter ended June 30, 2023. This release and the most
recent investor slide presentation are available in the investor
relations area of our website at redwirespace.com.
Redwire will live stream a presentation with slides during the
call. Please use the following link to follow along with the live
stream:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=sT4Capee.
The dial-in number for the live call is 877-485-3108 (toll free) or
201-689-8264 (toll), and the conference ID is 13740506.
A telephone replay of the call will be available for two weeks
following the event by dialing 877-660-6853 (toll-free) or
201-612-7415 (toll) and entering the access code 13740506. The
accompanying investor presentation will be available on August 8,
2023 on the investor section of Redwire’s website at
redwirespace.com.
Any replay, rebroadcast, transcript or other reproduction of
this conference call, other than the replay accessible by calling
the number and website above, has not been authorized by Redwire
Corporation and is strictly prohibited. Investors should be aware
that any unauthorized reproduction of this conference call may not
be an accurate reflection of its contents.
About Redwire
Corporation
Redwire Corporation (NYSE: RDW) is a global leader in mission
critical space solutions and high reliability components for the
next generation space economy, with valuable intellectual property
for solar power generation, in-space 3D printing and manufacturing,
avionics, critical components, sensors, digital engineering and
space-based biotechnology. We combine decades of flight heritage
with an agile and innovative culture. Our “Heritage plus
Innovation” strategy enables us to combine proven performance with
new, innovative capabilities to provide our customers with the
building blocks for the present and future of space infrastructure.
For more information, please visit www.redwirespace.com.
______________________________
3 Book-to-Bill is a key business measure.
Please refer to “Key Performance Indicators” and the tables
included in this press release for additional information.
4 Free Cash Flow and Adjusted EBITDA are
not measures of results under generally accepted accounting
principles in the United States. Please refer to “Non-GAAP
Financial Information” and the reconciliation tables included in
this press release for details regarding these Non-GAAP
measures.
Cautionary Statement Regarding
Forward-Looking Statements
Readers are cautioned that the statements contained in this
press release regarding expectations of our performance or other
matters that may affect our business, results of operations, or
financial condition are “forward-looking statements” as defined by
the “safe harbor” provisions in the Private Securities Litigation
Reform Act of 1995. Such statements are made in reliance on the
safe harbor provisions of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934. All
statements, other than statements of historical fact, included or
incorporated in this press release, including statements regarding
our strategy, financial position, guidance, funding for continued
operations, cash reserves, liquidity, projected costs, plans,
projects, awards and contracts, and objectives of management, among
others, are forward-looking statements. Words such as “expect,”
“anticipate,” “should,” “believe,” “hope,” “target,” “continued,”
“project,” “plan,” “goals,” “opportunity,” “appeal,” “estimate,”
“potential,” “predict,” “demonstrates,” “may,” “will,” “might,”
“could,” “intend,” “shall,” “possible,” “would,” “approximately,”
“likely,” “outlook,” “schedule,” “on track,” and variations of
these terms or the negative of these terms and similar expressions
are intended to identify these forward-looking statements, but the
absence of these words does not mean that a statement is not
forward-looking. These forward-looking statements are not
guarantees of future performance, conditions or results.
Forward-looking statements are subject to a number of risks and
uncertainties, many of which involve factors or circumstances that
are beyond our control.
These factors and circumstances include, but are not limited to:
(1) risks associated with the continued economic uncertainty,
including high inflation, supply chain challenges, labor shortages,
high interest rates, foreign currency exchange volatility, concerns
of economic slowdown or recession and reduced spending or
suspension of investment in new or enhanced projects; (2) the
failure of financial institutions or transactional counterparties;
(3) the Company’s limited operating history; (4) the inability to
successfully integrate recently completed and future acquisitions;
(5) the development and continued refinement of many of the
Company’s proprietary technologies, products and service offerings;
(6) competition with new or existing companies; (7) the possibility
that the Company’s assumptions relating to future results may prove
incorrect; (8) adverse publicity stemming from any incident
involving Redwire or our competitors; (9) unsatisfactory
performance of our products; (10) the emerging nature of the market
for in-space infrastructure services; (11) inability to realize
benefits from new offerings or the application of our technologies;
(12) the inability to convert orders in backlog into revenue; (13)
our dependence on U.S. government contracts, which are only
partially funded and subject to immediate termination; (14) the
fact that we are subject to stringent U.S. economic sanctions, and
trade control laws and regulations; (15) the need for substantial
additional funding to finance our operations, which may not be
available when we need it, on acceptable terms or at all; (16) the
fact that the issuance and sale of shares of our Series A
Convertible Preferred Stock has reduced the relative voting power
of holders of our common stock and diluted the ownership of holders
of our capital stock; (17) AE Industrial Partners and Bain Capital
have significant influence over us, which could limit your ability
to influence the outcome of key transactions; (18) provisions in
our Certificate of Designation with respect to our Series A
Convertible Preferred Stock may delay or prevent our acquisition by
a third party, which could also reduce the market price of our
capital stock; (19) our Series A Convertible Preferred Stock has
rights, preferences and privileges that are not held by, and are
preferential to, the rights of holders of our other outstanding
capital stock; (20) there may be sales of a substantial amount of
our common stock by our current stockholders, and these sales could
cause the price of our common stock and warrants to fall; (21) the
impact of the issuance of the Series A Convertible Preferred Stock
on the price and market for our common stock; (22) the trading
price of our common stock and warrants is and may continue to be
volatile; (23) risk related to short sellers of our common stock;
(24) our management team’s limited experience operating a public
company; (25) inability to report our financial condition or
results of operations accurately or timely as a result of
identified material weaknesses and (26) other risks and
uncertainties described in our most recent Annual Report on Form
10-K and Quarterly Reports on Form 10-Q and those indicated from
time to time in other documents filed or to be filed with the SEC
by the Company.
The forward-looking statements contained in this press release
are based on our current expectations and beliefs concerning future
developments and their potential effects on us. If underlying
assumptions to forward-looking statements prove inaccurate, or if
known or unknown risks or uncertainties materialize, actual results
could vary materially from those anticipated, estimated, or
projected. The forward-looking statements contained in this press
release are made as of the date of this press release, and the
Company disclaims any intention or obligation, other than imposed
by law, to update or revise any forward-looking statements, whether
as a result of new information, future events, or otherwise.
Persons reading this press release are cautioned not to place undue
reliance on forward-looking statements.
Non-GAAP Financial
Information
This press release contains financial measures that have not
been prepared in accordance with United States Generally Accepted
Accounting Principles (“U.S. GAAP”). These financial measures
include Adjusted EBITDA, Pro Forma Adjusted EBITDA, Free Cash Flow,
and Comparable Revenues.
Non-GAAP financial measures are used to supplement the financial
information presented on a U.S. GAAP basis and should not be
considered in isolation or as a substitute for the relevant U.S.
GAAP measures and should be read in conjunction with information
presented on a U.S. 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.
Adjusted EBITDA is defined as net income (loss) adjusted
for interest expense, net, income tax expense (benefit),
depreciation and amortization, impairment expense, acquisition deal
costs, acquisition integration costs, acquisition earnout costs,
purchase accounting fair value adjustment related to deferred
revenue, severance costs, capital market and advisory fees,
litigation-related expenses, write-off of long-lived assets,
equity-based compensation, committed equity facility transaction
costs, debt financing costs, and warrant liability fair value
adjustments. Pro Forma Adjusted EBITDA is defined as
Adjusted EBITDA further adjusted for the incremental Adjusted
EBITDA that acquired businesses would have contributed for the
periods presented if such acquisitions had occurred on January 1 of
the year in which they occurred. Accordingly, historical financial
information for the businesses acquired includes pro forma
adjustments calculated in a manner consistent with the concepts of
Article 8 of Regulation S-X, which are ultimately added back in the
calculation of Adjusted EBITDA. Free Cash Flow is computed
as net cash provided by (used in) operating activities less capital
expenditures. Comparable Revenues is calculated as revenues
less acquisition-related revenues. Revenues are considered
acquisition-related for the first four full quarters since the
entities’ acquisition date. After the completion of four fiscal
quarters, revenues from acquired entities are presented as
comparable in the current period with prior periods conformed to
current presentation.
We use Adjusted EBITDA and Pro Forma Adjusted EBITDA to evaluate
our operating performance, generate future operating plans, and
make strategic decisions, including those relating to operating
expenses and the allocation of internal resources. We use Free Cash
Flow as a useful indicator of liquidity to evaluate our
period-over-period operating cash generation that will be used to
service our debt, and can be used to invest in future growth
through new business development activities and/or acquisitions,
among other uses. Free Cash Flow does not represent the total
increase or decrease in our cash balance, and it should not be
inferred that the entire amount of Free Cash Flow is available for
discretionary expenditures, since we have mandatory debt service
requirements and other non-discretionary expenditures that are not
deducted from this measure. Comparable Revenues is used to compare
revenues over various periods, excluding the impact of acquisitions
whose results are not reflected in all periods presented. We
believe Pro Forma Adjusted EBITDA and Comparable Revenues provide
meaningful insights into the impact of strategic acquisitions as
well as an indicative run rate of the Company’s future operating
performance.
Key Performance
Indicators
Management uses Key Performance Indicators (“KPIs”) to assess
the financial performance of the Company, monitor relevant trends
and support financial, operational and strategic decision-making.
Management frequently monitors and evaluates KPIs against internal
targets, core business objectives as well as industry peers and
may, on occasion, change the mix or calculation of KPIs to better
align with the business, its operating environment and standard
industry metrics. If the Company changes the method by which it
calculates or presents a KPI, prior period disclosures are recast
to conform to current presentation.
During the first quarter of 2023, we made the following changes
with respect to our KPIs:
- Changed the book-to-bill calculation to present this metric on
an LTM (“Last Twelve Months”) basis, whereas prior period
disclosures were presented on a year-to-date basis. Book-to-bill
LTM is calculated by aggregation of quarterly revenues and
contracts awarded for the last four quarters.
- Changed the backlog calculation to present only contracted
backlog, whereas prior period disclosures also presented
uncontracted backlog. There was no change in the calculation of
contracted backlog.
Management believes these presentation changes will provide
meaningful insights into contract award trends and increase
comparability of the Company’s performance metrics with those of
industry peers.
REDWIRE CORPORATION
CONDENSED CONSOLIDATED
BALANCE SHEETS
Unaudited
(In thousands of U.S. dollars,
except share data)
June 30, 2023
December 31, 2022
Assets
Current assets:
Cash and cash equivalents
$
11,231
$
28,316
Accounts receivable, net
25,492
26,726
Contract assets
43,290
31,041
Inventory
1,281
1,469
Income tax receivable
688
688
Prepaid insurance
636
2,240
Prepaid expenses and other current
assets
6,545
5,687
Total current assets
89,163
96,167
Property, plant and equipment, net of
accumulated depreciation of $4,605 and $3,032, respectively
13,874
12,761
Right-of-use assets
14,892
13,103
Intangible assets, net of accumulated
amortization of $14,786 and $11,247, respectively
64,409
66,871
Goodwill
64,994
64,618
Equity method investments
3,495
3,269
Other non-current assets
570
909
Total assets
$
251,397
$
257,698
Liabilities, Convertible Preferred
Stock and Equity (Deficit)
Current liabilities:
Accounts payable
$
16,890
$
17,584
Notes payable to sellers
—
1,000
Short-term debt, including current portion
of long-term debt
780
2,578
Short-term operating lease liabilities
3,614
3,214
Short-term finance lease liabilities
382
299
Accrued expenses
34,307
36,581
Deferred revenue
33,905
29,817
Other current liabilities
3,344
3,666
Total current liabilities
93,222
94,739
Long-term debt
75,046
74,745
Long-term operating lease liabilities
14,049
12,670
Long-term finance lease liabilities
806
579
Warrant liabilities
3,325
1,314
Deferred tax liabilities
2,985
3,255
Other non-current liabilities
375
506
Total liabilities
$
189,808
$
187,808
REDWIRE CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
Unaudited
(In thousands of U.S. dollars,
except share data)
June 30, 2023
December 31, 2022
Convertible preferred stock, $0.0001 par
value, 88,000.00 shares authorized; 87,289.66 and 81,250.00 issued
and outstanding as of June 30, 2023 and December 31, 2022,
respectively. Liquidation preference of $176,476 and $162,500 as of
June 30, 2023 and December 31, 2022, respectively.
$
85,395
$
76,365
Shareholders’ Equity (Deficit):
Preferred stock, $0.0001 par value,
99,912,000 shares authorized; none issued and outstanding as of
June 30, 2023 and December 31, 2022, respectively
—
—
Common stock, $0.0001 par value,
500,000,000 shares authorized; 64,445,106 and 64,280,631 issued and
outstanding as of June 30, 2023 and December 31, 2022,
respectively
6
6
Treasury stock, 141,811 and 141,811
shares, at cost, as of June 30, 2023 and December 31, 2022,
respectively
(381
)
(381
)
Additional paid-in capital
192,962
198,126
Accumulated deficit
(219,250
)
(206,528
)
Accumulated other comprehensive income
(loss)
2,629
2,076
Total shareholders’ equity
(deficit)
(24,034
)
(6,701
)
Noncontrolling interests
228
226
Total equity (deficit)
(23,806
)
(6,475
)
Total liabilities, convertible
preferred stock and equity (deficit)
$
251,397
$
257,698
REDWIRE CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
Unaudited
(In thousands of U.S. dollars,
except share and per share data)
Three Months Ended
Six Months Ended
June 30, 2023
June 30, 2022
June 30, 2023
June 30, 2022
Revenues
$
60,098
$
36,728
$
117,703
$
69,595
Cost of sales
44,194
29,746
87,582
57,442
Gross margin
15,904
6,982
30,121
12,153
Operating expenses:
Selling, general and administrative
expenses
17,686
17,562
33,724
38,513
Transaction expenses
4
48
13
94
Impairment expense
—
80,462
—
80,462
Research and development
2,070
1,708
2,458
3,432
Operating income (loss)
(3,856
)
(92,798
)
(6,074
)
(110,348
)
Interest expense, net
2,664
1,670
5,308
3,122
Other (income) expense, net
(970
)
(15,515
)
1,457
(14,335
)
Income (loss) before income
taxes
(5,550
)
(78,953
)
(12,839
)
(99,135
)
Income tax expense (benefit)
(85
)
(1,925
)
(116
)
(4,814
)
Net income (loss)
(5,465
)
(77,028
)
(12,723
)
(94,321
)
Net income (loss) attributable to
noncontrolling interests
(1
)
—
(1
)
—
Net income (loss) attributable to
Redwire Corporation
(5,464
)
(77,028
)
(12,722
)
(94,321
)
Less: dividends on Convertible Preferred
Stock
4,800
—
9,166
—
Net income (loss) available to common
shareholders
$
(10,264
)
$
(77,028
)
$
(21,888
)
$
(94,321
)
Net income (loss) per common
share:
Basic and diluted
$
(0.16
)
$
(1.22
)
$
(0.34
)
$
(1.50
)
Weighted-average shares outstanding:
Basic and diluted
64,345,698
62,992,454
64,313,344
62,842,495
Comprehensive income (loss):
Net income (loss) attributable to Redwire
Corporation
$
(5,464
)
$
(77,028
)
$
(12,722
)
$
(94,321
)
Foreign currency translation gain (loss),
net of tax
138
(358
)
556
(486
)
Total other comprehensive income (loss),
net of tax
138
(358
)
556
(486
)
Total comprehensive income
(loss)
$
(5,326
)
$
(77,386
)
$
(12,166
)
$
(94,807
)
REDWIRE CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands of U.S.
dollars)
Six Months Ended
June 30, 2023
June 30, 2022
Cash flows from operating
activities:
Net income (loss) attributable to
Redwire Corporation
$
(12,722
)
$
(94,321
)
Net income (loss) attributable to
noncontrolling interests
(1
)
—
Net income (loss)
(12,723
)
(94,321
)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization expense
5,084
7,060
Amortization of debt issuance costs and
discount
173
207
Equity-based compensation expense
3,866
6,154
(Gain) loss on change in fair value of
committed equity facility
(66
)
38
(Gain) loss on change in fair value of
warrants
2,011
(15,155
)
Deferred provision (benefit) for income
taxes
(333
)
(4,828
)
Impairment expense
—
80,462
Non-cash lease expense
103
187
Non-cash interest expense
525
—
Other
(128
)
31
Changes in assets and liabilities:
(Increase) decrease in accounts
receivable
1,376
3,546
(Increase) decrease in contract assets
(11,898
)
(3,009
)
(Increase) decrease in inventory
188
(1,003
)
(Increase) decrease in prepaid
insurance
1,604
2,127
(Increase) decrease in prepaid expenses
and other assets
(592
)
(827
)
Increase (decrease) in accounts payable
and accrued expenses
(3,262
)
3,514
Increase (decrease) in deferred
revenue
4,025
101
Increase (decrease) in operating lease
liabilities
(160
)
—
Increase (decrease) in other
liabilities
(440
)
132
Increase (decrease) in notes payable to
sellers
(557
)
—
Net cash provided by (used in) by
operating activities
(11,204
)
(15,584
)
Cash flows from investing
activities:
Purchases of property, plant and
equipment, net
(2,223
)
(1,898
)
Purchase of intangible assets
(325
)
(175
)
Net cash provided by (used in) investing
activities
(2,548
)
(2,073
)
Cash flows from financing
activities:
Proceeds received from debt
11,500
10,000
Repayments of debt
(13,695
)
(2,294
)
Payment of debt issuance fees to
third parties
—
(770
)
Repayment of finance leases
(175
)
—
Proceeds from issuance of common
stock
—
1,222
Payment of committed equity
facility transaction costs
(571
)
(81
)
Payments of issuance costs
related to convertible preferred stock
(52
)
—
Payment of contingent earnout
(443
)
—
Net cash provided by (used in) financing
activities
(3,436
)
8,077
Effect of foreign currency rate changes on
cash and cash equivalents
103
(64
)
Net increase (decrease) in cash and cash
equivalents
(17,085
)
(9,644
)
Cash and cash equivalents at beginning of
period
28,316
20,523
Cash and cash equivalents at end of
period
$
11,231
$
10,879
REDWIRE CORPORATION
Supplemental Non-GAAP
Information
Unaudited
Adjusted EBITDA and Pro Forma Adjusted EBITDA
The following table presents the reconciliations of Adjusted
EBITDA and Pro Forma Adjusted EBITDA to net income (loss), computed
in accordance with U.S. GAAP.
Three Months Ended
Six Months Ended
(in thousands)
June 30, 2023
June 30, 2022
June 30, 2023
June 30, 2022
Net income (loss)
$
(5,465
)
$
(77,028
)
$
(12,723
)
$
(94,321
)
Interest expense, net
2,664
1,669
5,308
3,121
Income tax expense (benefit)
(85
)
(1,925
)
(116
)
(4,814
)
Depreciation and amortization
2,618
3,402
5,084
7,060
Impairment expense
—
80,462
—
80,462
Acquisition deal costs (i)
4
48
13
94
Acquisition integration costs (i)
240
954
546
1,402
Purchase accounting fair value adjustment
related to deferred revenue (ii)
—
40
15
66
Severance costs (iii)
176
453
320
463
Capital market and advisory fees (iv)
2,967
1,450
4,355
3,408
Litigation-related expenses (v)
43
302
68
2,568
Equity-based compensation (vi)
1,908
1,743
3,866
6,154
Committed equity facility transaction
costs (vii)
40
770
(66
)
770
Debt financing costs (viii)
17
—
17
—
Warrant liability change in fair value
adjustment (ix)
(773
)
(16,393
)
2,011
(15,155
)
Adjusted EBITDA
4,354
(4,053
)
8,698
(8,722
)
Pro forma impact on Adjusted EBITDA
(x)
—
1,515
—
2,509
Pro Forma Adjusted EBITDA
$
4,354
$
(2,538
)
$
8,698
$
(6,213
)
i.
Redwire incurred acquisition
costs including due diligence, integration costs and additional
expenses related to pre-acquisition activity.
ii.
Redwire recorded adjustments
related to the impact of recognizing deferred revenue at fair value
as part of the purchase accounting for previous acquisitions.
iii.
Redwire incurred severance costs
related to separation agreements entered into with former
employees.
iv.
Redwire incurred capital market
and advisory fees related to advisors assisting with transitional
costs associated with becoming a public company and the
internalization of corporate services.
v.
Redwire incurred expenses related
to the 2021 Audit Committee investigation and resulting securities
litigation.
vi.
Redwire incurred expenses related
to equity-based compensation under Redwire’s equity-based
compensation plan.
vii.
Redwire incurred expenses related
to the committed equity facility with B. Riley, which includes
consideration paid to enter into the Purchase Agreement as well as
changes in fair value recognized as a gain or loss during the
respective periods.
viii.
Redwire incurred expenses related
to debt financing agreements, including amendment related fees paid
to third parties that are expensed in accordance with U.S.
GAAP.
ix.
Redwire adjusted the fair value
of the private warrant liability with changes in fair value
recognized as a gain or loss during the respective periods.
x. Pro forma impact is computed in a manner consistent with the
concepts of Article 8 of Regulation S-X and represents the
incremental results of a full period of operations assuming the
entities acquired during the periods presented were acquired from
January 1 of the year in which they occurred. For the periods
presented, the pro forma impact included the results of Space NV.
Free Cash Flow
The following table presents the reconciliation of Free Cash
Flow to Net cash provided by (used in) operating activities,
computed in accordance with U.S. GAAP.
Three Months Ended
Six Months Ended
(in thousands)
June 30, 2023
June 30, 2022
June 30, 2023
June 30, 2022
Net cash provided by (used in)
operating activities
$
2,844
$
(4,138
)
$
(11,204
)
$
(15,584
)
Less: Capital expenditures
(1,749
)
(1,059
)
(2,548
)
(2,073
)
Free Cash Flow
$
1,095
$
(5,197
)
$
(13,752
)
$
(17,657
)
Comparable Revenues
The following table presents the reconciliation of Comparable
Revenues to Revenues, computed in accordance with U.S. GAAP.
Three Months Ended
Six Months Ended
(in thousands)
June 30, 2023
June 30, 2022
June 30, 2023
June 30, 2022
Revenues
$
60,098
$
36,728
$
117,703
$
69,595
Acquisition-related revenues:
Space NV
(14,242
)
—
(26,510
)
—
Comparable Revenues
$
45,856
$
36,728
$
91,193
$
69,595
REDWIRE CORPORATION
KEY PERFORMANCE
INDICATORS
Unaudited
Book-to-Bill
Our book-to-bill ratio was as follows for the periods
presented:
Three Months Ended
Last Twelve Months
(in thousands, except ratio)
June 30, 2023
June 30, 2022
June 30, 2023
June 30, 2022
Contracts awarded
$
45,646
$
61,563
$
310,356
$
165,342
Revenues
60,098
36,728
208,657
143,350
Book-to-bill ratio
0.76
1.68
1.49
1.15
Book-to-bill is the ratio of total contract awarded to revenues
recorded in the same period. The contracts awarded balance includes
firm contract orders including time and material contracts which
were awarded during the period and does not include unexercised
contract options or potential orders under indefinite
delivery/indefinite quantity contracts. Although the contracts
awarded balance reflects firm contract orders, terminations,
amendments, or contract cancellations may occur which could result
in a reduction to the contracts awarded balance.
We view book-to-bill as an indicator of future revenue growth
potential. To drive future revenue growth, our goal is for the
level of contracts awarded in a given period to exceed the revenue
recorded, thus yielding a book-to-bill ratio greater than 1.0.
Our book-to-bill ratio was 0.76 for the three months ended June
30, 2023, as compared to 1.68 for the three months ended June 30,
2022. For both the three months ended June 30, 2023 and 2022, none
of the contracts awarded balance relates to acquired contract
value.
Our book-to-bill ratio was 1.49 for the LTM ended June 30, 2023,
as compared to 1.15 for the LTM ended June 30, 2022. For the LTM
ended June 30, 2023, contracts awarded includes acquired contract
value from the Space NV acquisition, which was completed in the
fourth quarter of 2022. For the LTM ended June 30, 2022, contracts
awarded includes acquired contract value from the Techshot
acquisition, which was completed in the fourth quarter of 2021.
Backlog
The following table presents our contracted backlog as of June
30, 2023 and December 31, 2022, and related activity for the three
months ended June 30, 2023 as compared to the year ended December
31, 2022.
(in thousands)
June 30, 2023
December 31,
2022
Organic backlog, beginning balance
$
184,912
$
139,742
Organic additions during the period
61,081
194,539
Organic revenue recognized during the
period
(91,193
)
(148,891
)
Foreign currency translation
14
(478
)
Organic backlog, ending balance
154,814
184,912
Acquisition-related contract value,
beginning balance
128,145
—
Acquisition-related contract value
acquired during the period
—
109,765
Acquisition-related additions during the
period
14,229
22,731
Acquisition-related revenue recognized
during the period
(26,510
)
(11,658
)
Foreign currency translation
2,153
7,307
Acquisition-related backlog, ending
balance
118,017
128,145
Contracted backlog, ending balance
$
272,831
$
313,057
We view growth in backlog as a key measure of our business
growth. Contracted backlog represents the estimated dollar value of
firm funded executed contracts for which work has not been
performed (also known as the remaining performance obligations on a
contract). Our contracted backlog includes $19.7 million and $37.4
million in remaining contract value from time and materials
contracts as of June 30, 2023 and as of December 31, 2022,
respectively.
Organic contracted backlog change excludes backlog activity from
acquisitions for the first four full quarters since the entities’
acquisition date. Contracted backlog activity for the first four
full quarters since the entities’ acquisition date is included in
acquisition-related contracted backlog change. After the completion
of four fiscal quarters, acquired entities are treated as organic
for current and comparable historical periods.
Organic contract value includes the remaining contract value as
of January 1 not yet recognized as revenue and additional orders
awarded during the period for those entities treated as organic.
Acquisition-related contract value includes remaining contract
value as of the acquisition date not yet recognized as revenue and
additional orders awarded during the period for entities not
treated as organic. The acquisition-related contract backlog
activity presented in the table above includes only the contracted
backlog of Space NV. Similarly, organic revenue includes revenue
earned during the period presented for those entities treated as
organic, while acquisition-related revenue includes the same for
all other entities, excluding any pre-acquisition revenue earned
during the period.
Although contracted backlog reflects business associated with
contracts that are considered to be firm, terminations, amendments
or contract cancellations may occur, which could result in a
reduction in our total backlog. In addition, some of our multi-year
contracts are subject to annual funding. Management expects all
amounts reflected in contracted backlog to ultimately be fully
funded. Contracted backlog from foreign operations in Luxembourg
and Belgium was $121.0 million and $129.9 million as of June 30,
2023 and December 31, 2022, respectively. These amounts are subject
to foreign exchange rate translations from euros to U.S. dollars
that could cause the remaining backlog balance to fluctuate with
the foreign exchange rate at the time of measurement.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230807292863/en/
Investor Relations Contact:
investorrelations@redwirespace.com
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