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 third quarter ended September 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 on November
7, 2023 at 9:00 a.m. ET. Please use the link below to follow along
with the live stream:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=7sq0B6S0
Third Quarter 2023 Highlights
- Revenues for the third quarter of 2023 increased 68.1% to $62.6
million, as compared to $37.2 million for the third quarter of
2022. Revenues also grew sequentially by 4.2%, as compared to the
second quarter of 2023.
- Comparable Revenues1 for the third quarter of 2023 increased
31.8% to $49.1 million, as compared to $37.2 million for the third
quarter of 2022. Comparable Revenues also grew sequentially by
7.1%, as compared to the second quarter of 2023.
- Net Loss for the third quarter of 2023 improved 39.3% to $(6.3)
million, as compared to $(10.4) million for the third quarter of
2022. Net Loss increased sequentially by $0.9 million or 15.7%, as
compared to the second quarter of 2023.
- Adjusted EBITDA1 for the third quarter of 2023 increased by
$6.4 million to $4.9 million as compared to $(1.5) million for the
third quarter of 2022. Adjusted EBITDA increased sequentially by
$0.6 million as compared to the second quarter of 2023.
- Contracted Backlog2 increased 59.5% year-over-year to $253.4
million as of September 30, 2023, as compared to $158.9 million as
of September 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.
“Q3 was our third consecutive quarter of strong revenue growth
and positive Adjusted EBITDA1,” stated Peter Cannito, Chairman and
Chief Executive Officer of Redwire. “We continue to be disciplined
in our technical execution, balancing growth with performance. This
results in Redwire’s team of talented space professionals
delivering real value for our customers in the present that
positions us well for future success.”
________________________________ 1Comparable 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. 2Contracted 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 third quarter of 2023 was 0.74 as
compared to 0.91 as of the third quarter of 2022. On a last twelve
month (LTM) basis, book-to-bill was 1.38 as of the third quarter of
2023, as compared to 1.25 as of the third quarter of 2022.
- Net cash provided by (used in) operating activities for the
third quarter of 2023 improved by $8.0 million to $(3.3) million,
as compared to $(11.2) million for the third quarter of 2022. Free
Cash Flow4 for the third quarter of 2023 was $(5.9) million, as
compared to $(12.6) million for the third quarter of 2022.
- Total available liquidity was $30.9 million as of September 30,
2023, comprised of $10.9 million in cash and cash equivalents and
$20.0 million in available borrowings from our existing credit
facilities.
“Our strong financial and operational momentum continued through
the third quarter of 2023; during the quarter, we once again
recognized record revenues of $62.6 million and achieved record
positive Adjusted EBITDA of $4.9 million. Our profitability
improved due to sequential and year-over-year increase in Gross
Margin with a change in contract mix and improved on-time delivery.
Our continued management of G&A and other operating expenses
also drove improved financial and operating performance,” said
Jonathan Baliff, Chief Financial Officer of Redwire. “Operating and
free cash flow improved year-over-year. Given our investments in
the business year-to-date and our LTM book-to-bill ratio of 1.38,
Redwire is poised for a strong finish to 2023.”
Webcast and Investor
Call
Management will conduct a conference call starting at 9:00 a.m.
ET on Tuesday, November 7, 2023 to review financial results for the
third quarter ended September 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=7sq0B6S0.
The dial-in number for the live call is 877-485-3108 (toll free) or
201-689-8264 (toll), and the conference ID is 13742212.
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 13742212. The
accompanying investor presentation will be available on November 7,
2023 on the investor section of Redwire’s website at
redwirespace.com.
Any replay, rebroadcast, transcript or other reproduction or
transmission 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 expectations and 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) risks 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, standard
industry metrics or other considerations. 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)
September 30, 2023
December 31, 2022
Assets
Current assets:
Cash and cash equivalents
$
10,859
$
28,316
Accounts receivable, net
24,641
26,726
Contract assets
39,779
31,041
Inventory
1,687
1,469
Income tax receivable
688
688
Prepaid insurance
1,304
2,240
Prepaid expenses and other current
assets
5,464
5,687
Total current assets
84,422
96,167
Property, plant and equipment, net of
accumulated depreciation of $5,526 and $3,032, respectively
14,631
12,761
Right-of-use assets
14,041
13,103
Intangible assets, net of accumulated
amortization of $16,612 and $11,247, respectively
62,969
66,871
Goodwill
64,413
64,618
Equity method investments
3,241
3,269
Other non-current assets
509
909
Total assets
$
244,226
$
257,698
Liabilities, Convertible Preferred
Stock and Equity (Deficit)
Current liabilities:
Accounts payable
$
14,185
$
17,584
Notes payable to sellers
—
1,000
Short-term debt, including current portion
of long-term debt
1,976
2,578
Short-term operating lease liabilities
3,677
3,214
Short-term finance lease liabilities
364
299
Accrued expenses
37,678
36,581
Deferred revenue
27,059
29,817
Other current liabilities
2,310
3,666
Total current liabilities
87,249
94,739
Long-term debt, net
79,943
74,745
Long-term operating lease liabilities
13,118
12,670
Long-term finance lease liabilities
883
579
Warrant liabilities
3,789
1,314
Deferred tax liabilities
2,195
3,255
Other non-current liabilities
355
506
Total liabilities
$
187,532
$
187,808
REDWIRE CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
Unaudited
(In thousands of U.S. dollars,
except share data)
September 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 September 30, 2023 and December 31, 2022,
respectively. Liquidation preference of $179,349 and $162,500 as of
September 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
September 30, 2023 and December 31, 2022, respectively
—
—
Common stock, $0.0001 par value,
500,000,000 shares authorized; 64,799,841 and 64,280,631 issued and
outstanding as of September 30, 2023 and December 31, 2022,
respectively
6
6
Treasury stock, 236,012 and 141,811
shares, at cost, as of September 30, 2023 and December 31, 2022,
respectively
(629
)
(381
)
Additional paid-in capital
195,500
198,126
Accumulated deficit
(225,503
)
(206,528
)
Accumulated other comprehensive income
(loss)
1,775
2,076
Total shareholders’ equity
(deficit)
(28,851
)
(6,701
)
Noncontrolling interests
150
226
Total equity (deficit)
(28,701
)
(6,475
)
Total liabilities, convertible
preferred stock and equity (deficit)
$
244,226
$
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
Nine Months Ended
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Revenues
$
62,612
$
37,249
$
180,315
$
106,844
Cost of sales
45,495
29,300
133,077
86,742
Gross margin
17,117
7,949
47,238
20,102
Operating expenses:
Selling, general and administrative
expenses
18,302
15,312
52,026
53,825
Transaction expenses
—
1,819
13
1,913
Impairment expense
—
—
—
80,462
Research and development
1,532
1,133
3,990
4,565
Operating income (loss)
(2,717
)
(10,315
)
(8,791
)
(120,663
)
Interest expense, net
2,629
2,401
7,937
5,523
Other (income) expense, net
1,232
(158
)
2,689
(14,493
)
Income (loss) before income
taxes
(6,578
)
(12,558
)
(19,417
)
(111,693
)
Income tax expense (benefit)
(253
)
(2,135
)
(369
)
(6,949
)
Net income (loss)
(6,325
)
(10,423
)
(19,048
)
(104,744
)
Net income (loss) attributable to
noncontrolling interests
(72
)
—
(73
)
—
Net income (loss) attributable to
Redwire Corporation
(6,253
)
(10,423
)
(18,975
)
(104,744
)
Less: dividends on Convertible Preferred
Stock
2,874
—
12,040
—
Net income (loss) available to common
shareholders
$
(9,127
)
$
(10,423
)
$
(31,015
)
$
(104,744
)
Net income (loss) per common
share:
Basic and diluted
$
(0.14
)
$
(0.16
)
$
(0.48
)
$
(1.66
)
Weighted-average shares outstanding:
Basic and diluted
64,795,985
63,460,527
64,475,390
63,050,769
Comprehensive income (loss):
Net income (loss) attributable to Redwire
Corporation
$
(6,253
)
$
(10,423
)
$
(18,975
)
$
(104,744
)
Foreign currency translation gain (loss),
net of tax
(860
)
(177
)
(304
)
(663
)
Total other comprehensive income (loss),
net of tax
(860
)
(177
)
(304
)
(663
)
Total comprehensive income
(loss)
$
(7,113
)
$
(10,600
)
$
(19,279
)
$
(105,407
)
REDWIRE CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands of U.S.
dollars)
Nine Months Ended
September 30, 2023
September 30, 2022
Cash flows from operating
activities:
Net income (loss) attributable to
Redwire Corporation
$
(18,975
)
$
(104,744
)
Net income (loss) attributable to
noncontrolling interests
(73
)
—
Net income (loss)
(19,048
)
(104,744
)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization expense
7,971
8,836
Amortization of debt issuance costs and
discount
448
345
Equity-based compensation expense
6,317
8,672
(Gain) loss on change in fair value of
committed equity facility
179
231
(Gain) loss on change in fair value of
warrants
2,475
(16,005
)
Deferred provision (benefit) for income
taxes
(1,012
)
(6,964
)
Impairment expense
—
80,462
Non-cash lease expense
248
229
Non-cash interest expense
525
270
Other
157
143
Changes in assets and liabilities:
(Increase) decrease in accounts
receivable
2,031
(283
)
(Increase) decrease in contract assets
(9,008
)
(4,590
)
(Increase) decrease in inventory
(221
)
(1,362
)
(Increase) decrease in prepaid
insurance
936
(227
)
(Increase) decrease in prepaid expenses
and other assets
255
(803
)
Increase (decrease) in accounts payable
and accrued expenses
(2,202
)
6,793
Increase (decrease) in deferred
revenue
(2,734
)
1,714
Increase (decrease) in operating lease
liabilities
(241
)
—
Increase (decrease) in other
liabilities
(979
)
454
Increase (decrease) in notes payable to
sellers
(557
)
—
Net cash provided by (used in) operating
activities
(14,460
)
(26,829
)
Cash flows from investing
activities:
Purchases of property, plant and
equipment, net
(3,524
)
(2,793
)
Purchase of intangible assets
(1,690
)
(639
)
Net cash provided by (used in) investing
activities
(5,214
)
(3,432
)
Cash flows from financing
activities:
Proceeds received from debt
23,696
19,696
Repayments of debt
(19,890
)
(4,489
)
Payment of debt issuance fees to third
parties
—
(1,147
)
Repayment of finance leases
(282
)
—
Proceeds from issuance of common stock
84
2,956
Payment of committed equity facility
transaction costs
(571
)
(161
)
Payments of issuance costs related to
convertible preferred stock
(52
)
—
Shares repurchased for settlement of
employee tax withholdings on share-based awards
(248
)
—
Payment of contingent earnout
(443
)
—
Net cash provided by (used in) financing
activities
2,294
16,855
Effect of foreign currency rate changes on
cash and cash equivalents
(77
)
(86
)
Net increase (decrease) in cash and cash
equivalents
(17,457
)
(13,492
)
Cash and cash equivalents at beginning of
period
28,316
20,523
Cash and cash equivalents at end of
period
$
10,859
$
7,031
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
Nine Months Ended
(in thousands)
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Net income (loss)
$
(6,325
)
$
(10,423
)
$
(19,048
)
$
(104,744
)
Interest expense, net
2,629
2,402
7,937
5,523
Income tax expense (benefit)
(253
)
(2,135
)
(369
)
(6,949
)
Depreciation and amortization
2,887
1,776
7,971
8,836
Impairment expense
—
—
—
80,462
Acquisition deal costs (i)
—
1,819
13
1,913
Acquisition integration costs (i)
—
1,417
546
2,819
Purchase accounting fair value adjustment
related to deferred revenue (ii)
—
40
15
106
Severance costs (iii)
62
5
382
468
Capital market and advisory fees (iv)
2,536
1,407
6,891
4,815
Litigation-related expenses (v)
249
256
317
2,824
Equity-based compensation (vi)
2,451
2,518
6,317
8,672
Committed equity facility transaction
costs (vii)
245
194
179
964
Debt financing costs (viii)
—
102
17
102
Warrant liability change in fair value
adjustment (ix)
464
(850
)
2,475
(16,005
)
Adjusted EBITDA
4,945
(1,472
)
13,643
(10,194
)
Pro forma impact on Adjusted EBITDA
(x)
—
1,103
—
3,612
Pro Forma Adjusted EBITDA
$
4,945
$
(369
)
$
13,643
$
(6,582
)
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
activities 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 private warrant
liability to reflect 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
Nine Months Ended
(in thousands)
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Net cash provided by (used in)
operating activities
$
(3,256
)
$
(11,245
)
$
(14,460
)
$
(26,829
)
Less: Capital expenditures
(2,666
)
(1,359
)
(5,214
)
(3,432
)
Free Cash Flow
$
(5,922
)
$
(12,604
)
$
(19,674
)
$
(30,261
)
Comparable Revenues
The following table presents the reconciliation of Comparable
Revenues to Revenues, computed in accordance with U.S. GAAP.
Three Months Ended
Nine Months Ended
(in thousands)
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Revenues
$
62,612
$
37,249
$
180,315
$
106,844
Acquisition-related revenues:
Space NV
(13,515
)
—
(40,025
)
—
Comparable Revenues
$
49,097
$
37,249
$
140,290
$
106,844
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)
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Contracts awarded
$
46,523
$
34,042
$
322,837
$
185,480
Revenues
62,612
37,249
234,020
147,919
Book-to-bill ratio
0.74
0.91
1.38
1.25
Book-to-bill is the ratio of total contracts awarded to revenues
recorded in the same period. The contracts awarded balance includes
firm contract orders, including time and material contracts,
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 0.74 for the three months ended
September 30, 2023, as compared to 0.91 for the three months ended
September 30, 2022. For both the three months ended September 30,
2023 and 2022, none of the contracts awarded balance relates to
acquired contract value.
Our book-to-bill ratio was 1.38 for the LTM ended September 30,
2023, as compared to 1.25 for the LTM ended September 30, 2022. For
the LTM ended September 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
September 30, 2022, contracts awarded includes acquired contract
value from the Techshot, Inc. acquisition, which was completed in
the fourth quarter of 2021.
Backlog
The following table presents our contracted backlog as of
September 30, 2023 and December 31, 2022, and related activity for
the three months ended September 30, 2023 as compared to the year
ended December 31, 2022.
(in thousands)
September 30,
2023
December 31,
2022
Organic backlog, beginning balance
$
184,912
$
139,742
Organic additions during the period
97,252
194,539
Organic revenue recognized during the
period
(140,291
)
(148,891
)
Foreign currency translation
(46
)
(478
)
Organic backlog, ending balance
141,827
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
24,581
22,731
Acquisition-related revenue recognized
during the period
(40,025
)
(11,658
)
Foreign currency translation
(1,098
)
7,307
Acquisition-related backlog, ending
balance
111,603
128,145
Contracted backlog, ending balance
$
253,430
$
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 $30.1 million and $37.4
million in remaining contract value from time and materials
contracts as of September 30, 2023 and as of December 31, 2022,
respectively.
Organic 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 $113.7 million and $129.9 million as of September
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/20231106601660/en/
Investor Relations Contact:
investorrelations@redwirespace.com
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