Group 1 - Kuehn Law, PLLC is investigating potential claims related to proposed mergers involving several companies, focusing on whether the Boards acted to maximize shareholder value and disclosed material information [1][2][3] - Redwire Corporation is set to acquire Edge Autonomy for a total purchase price of $150 million in cash and $775 million in Redwire common stock [1] - H&E Equipment Services, Inc. will be acquired by United Rentals, Inc., with H&E shareholders receiving $92.00 per share in cash [2] - Amplify Energy Corp. has a definitive agreement with Juniper Capital, where Amplify will issue approximately 26.7 million shares, resulting in Amplify shareholders holding around 61% of the equity post-transaction [2] - 180 Degree Capital Corp. is merging with Mount Logan Capital Inc., with 180 Degree shareholders expected to own approximately 40% of the combined company [3]

Industry Overview - The space sector has seen significant investor interest in 2024, with SpaceX reaching a valuation of $350 billion [1] - The industry is expected to benefit from a new White House administration and a new NASA leader in 2025 [2] - 26% of poll respondents did not select any space stocks, potentially indicating declining interest or high valuations after strong performance in 2024 [2] Company Performance and Milestones - Rocket Lab USA (RKLB) won the poll with 33% of the vote, had 16 Electron rocket launches in 2024, and has future NASA missions to the Moon and Mars [1][5] - Intuitive Machines (LUNR) received 24% of the vote, achieved the first private sector soft landing on the Moon in 2024, and has lunar missions planned for 2024 [1][4] - AST SpaceMobile (ASTS) received 15% of the vote, deployed its first five BlueBird satellites, and signed commercial agreements with AT&T and Vodafone in 2024 [1][5] - Redwire Corporation (RDW) received 3% of the vote, highlighted bioprinting human heart tissue on the ISS, a study of the sun, and the acquisition of Hera Systems in 2024 [3] Stock Performance - Rocket Lab USA (RKLB) saw a 382% gain in 2024 [8] - Intuitive Machines (LUNR) saw a 690% gain in 2024 [8] - AST SpaceMobile (ASTS) saw a 334% gain in 2024 [8] - Redwire Corporation (RDW) saw a 490% gain in 2024 [8] ETFs and Holdings - Ark Space Exploration & Innovation ETF (ARKX) holds Rocket Lab as its top holding at 10.2% of assets but does not hold the other three space stocks [9] - Procure Space ETF (UFO) holds all four space stocks, with Intuitive Machines (LUNR) as the top holding at 8.4%, Rocket Lab (RKLB) at 5.7%, AST SpaceMobile (ASTS) at 4.6%, and Redwire Corporation (RDW) at 2.7% [9][10]

Financial Data and Key Metrics Changes - Revenues in Q3 2024 grew 9.6% year-over-year to $68.6 million, with year-to-date revenue reaching $234.5 million, a 30.1% increase over the same period in 2023 [57][61] - Adjusted EBITDA for Q3 2024 was $2.4 million, a sequential increase of 50.2% from Q2 2024 [63] - Contracted backlog increased 30.2% year-over-year to $330.1 million, with contract awards during Q3 2024 totaling $44.5 million [50][51] Business Line Data and Key Metrics Changes - National security revenue grew 47.5% year-to-date, while commercial revenue saw an 83.6% year-to-date growth [61] - The company reported a 170% increase in contracted ROSA wings compared to September 2023, with 25 wings contracted as of September 2024 [36] Market Data and Key Metrics Changes - The company has identified $6.9 billion in opportunities, with approximately $2.9 billion in proposals submitted year-to-date as of September 30, 2024, representing a 306.2% increase over the previous year [51][52] - The average size of individual bids has increased, with the company regularly bidding on programs valued at over $100 million [53] Company Strategy and Development Direction - The growth strategy for 2024 focuses on four key principles: protecting the core, scaling production, moving up the value chain, and venture optionality [7][9] - The acquisition of Hera Systems is aimed at enhancing the company's capabilities in national security space solutions and moving up the value chain as an integrated spacecraft platform provider [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued investment in space infrastructure regardless of political administration changes, citing historical precedents for space investment [77][78] - The company affirmed its full-year revenue guidance of $310 million for 2024, representing a 27% year-over-year growth rate, with 76% of the target achieved year-to-date [72] Other Important Information - The company has made significant investments in capital expenditures, totaling $6.9 million year-to-date, with $2.8 million in Q3 alone [67][68] - The company is focused on improving program management to reduce EAC volatility and enhance operating leverage and cost efficiency [73] Q&A Session Summary Question: Impact of election results on space spending - Management believes that space infrastructure investment will continue regardless of administration changes, citing past investments during the previous Trump administration [77][78] Question: Competitive landscape for larger bids - Management noted that competition varies by area, with fewer competitors in emerging capabilities, and emphasized their differentiation strategy [79][80] Question: Development of in-house IP for PIL-BOX - The company has in-house scientists and partnerships to identify high-value compounds for experimentation, indicating a strong capability in this area [82][83] Question: Sales cycle for proposals - The sales cycle varies, with smaller commercial orders being quicker and larger government procurements taking longer, typically measured in months [102][106] Question: Future gross margin expectations - Management is focused on improving margins and expects to see increases as the company scales, although it may not be linear [110][112]

Q3 2024 Investor Presentation November 7, 2024 | BUILD ABOVE | 255 0 0 54 54 54 47 85 151 180 199 231 204 251 254 191 191 191 22 Disclaimers Industry and market data used in this Presentation have been obtained from third-party industry publications and sources as well as from research reports prepared for other purposes. Redwire has not independently verified the data obtained from these sources and cannot assure you of the data's accuracy or completeness. This data is subject to change. Recipients of this ...

Revenue and Profitability - Revenues increased by 10% to $68.6 million for the three months ended September 30, 2024, compared to $62.6 million for the same period in 2023[161] - Revenues increased by $54.2 million, or 30%, for the nine months ended September 30, 2024, compared to the same period in 2023, primarily due to larger contract sizes and increased production volume[174] - Gross profit decreased by $5.1 million, or 30%, with a gross margin of 18% for the three months ended September 30, 2024, down from 27% in the same period in 2023[164] - Gross profit decreased by $7.4 million, or 16%, with a gross margin of 17% for the nine months ended September 30, 2024, down from 26% in the same period in 2023[176] - Net loss attributable to Redwire Corporation was $20.96 million for the three months ended September 30, 2024, compared to a loss of $6.25 million in the same period in 2023, representing a 235% increase in loss[160] - Net income (loss) attributable to Redwire Corporation was $(47.1) million for the nine months ended September 30, 2024, compared to $(19.0) million in the same period in 2023, representing a 148% increase in loss[188] - Adjusted EBITDA was $2.4 million for the nine months ended September 30, 2024, down from $4.9 million in the same period in 2023[188] Costs and Expenses - Cost of sales rose by $11.1 million, or 24%, for the three months ended September 30, 2024, driven by increased labor, materials, and subcontractor costs[163] - Cost of sales rose by $61.6 million, or 46%, for the nine months ended September 30, 2024, driven by increased labor and subcontractor costs associated with larger contracts in power generation[175] - Selling, general and administrative expenses decreased by $0.8 million, or 4%, resulting in SG&A as a percentage of revenue dropping to 26% from 29% year-over-year[165] - SG&A expenses increased by $0.9 million, or 2%, for the nine months ended September 30, 2024, with SG&A as a percentage of revenues decreasing to 23% from 29%[177] - Research and development expenses increased by $0.4 million, or 24%, reflecting investments in avionics, sensors, and power generation technologies[167] - Research and development expenses increased by $0.7 million, or 17%, for the nine months ended September 30, 2024, reflecting strategic investments in avionics, sensors, and power generation technologies[179] - Interest expense, net rose by $1.0 million, or 37%, due to unfavorable changes in variable interest rates and increased borrowings[168] - Interest expense, net increased by $1.6 million, or 20%, for the nine months ended September 30, 2024, primarily due to unfavorable changes in variable interest rates and increased borrowings[180] - Other (income) expense, net increased by $4.1 million, primarily due to an $8.0 million loss contingency recognized for litigation[169] - Other (income) expense, net increased by $12.0 million for the nine months ended September 30, 2024, mainly due to a loss from the increase in the fair value of the Company's private warrant liability[181] Backlog and Contracts - The book-to-bill ratio decreased to 0.65 for the three months ended September 30, 2024, down from 0.74 for the same period in 2023[156] - The book-to-bill ratio for the three months ended September 30, 2024, was 0.65, down from 0.74 for the same period in 2023[193] - Contracts awarded for the three months ended September 30, 2024, included $21.9 million from the Hera Systems acquisition, while none were related to acquired contract value in the same period of 2023[193] - The company's organic backlog as of September 30, 2024, was $309.965 million, a decrease from $372.790 million as of December 31, 2023[195] - The contracted backlog as of September 30, 2024, was $330.061 million, down from $372.790 million as of December 31, 2023[195] - The company expects all amounts reflected in contracted backlog to ultimately be fully funded despite potential terminations or cancellations[198] Cash Flow and Liquidity - Total cash and cash equivalents as of September 30, 2024, were $43.094 million, an increase from $30.278 million at the beginning of the year[206] - Net cash used in operating activities for the nine months ended September 30, 2024, was $(24.412) million, compared to $(14.460) million for the same period in 2023[206] - Net cash provided by financing activities increased by $38.0 million during the nine months ended September 30, 2024, primarily due to increased debt proceeds of $34.8 million[209] - The company had $27.8 million in cash and cash equivalents and $18.0 million in available borrowings from existing credit facilities as of September 30, 2024[199] Taxation - The effective tax rate for the nine months ended September 30, 2024, was 0.7%, compared to 1.9% for the same period in 2023, primarily due to the mix of earnings between U.S. and foreign jurisdictions[183]

Core Insights - Redwire Corporation reported a quarterly loss of $0.21 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.15, marking a 40% earnings surprise [1] - The company generated revenues of $68.64 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 1.46%, but showing an increase from $62.61 million year-over-year [2] - Redwire Corporation's stock has increased approximately 180.7% year-to-date, significantly outperforming the S&P 500's gain of 21.2% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.14 on revenues of $74.74 million, and for the current fiscal year, it is -$0.87 on revenues of $310.33 million [7] - The estimate revisions trend for Redwire Corporation is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Aerospace - Defense industry, to which Redwire Corporation belongs, is currently ranked in the bottom 46% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Redwire's stock performance [5]

Financial Performance - Revenues for Q3 2024 increased by 9.6% year-over-year to $68.6 million, compared to $62.6 million in Q3 2023[1] - Net Loss for Q3 2024 was $(21.0) million, an increase of $14.6 million from $(6.3) million in Q3 2023[2] - Adjusted EBITDA for Q3 2024 decreased by $2.5 million to $2.4 million, down from $4.9 million in Q3 2023[5] - Gross profit for the nine months ended September 30, 2024, was $39,832,000, compared to $47,238,000 for the same period in 2023, indicating a decline of 15.6%[29] - Operating loss for the three months ended September 30, 2024, was $(12,512,000), compared to $(2,717,000) for the same period in 2023, reflecting a significant increase in losses[29] - Net loss attributable to Redwire Corporation for the nine months ended September 30, 2024, was $(47,146,000), compared to $(18,975,000) for the same period in 2023, showing an increase in losses of 148.5%[29] - For the nine months ended September 30, 2024, Redwire Corporation reported a net loss of $47,142 thousand, compared to a net loss of $19,048 thousand for the same period in 2023[30] - Redwire's adjusted EBITDA for the nine months ended September 30, 2024, was $8,346 thousand, down from $13,643 thousand for the same period in 2023[32] Liquidity and Cash Flow - Total liquidity as of September 30, 2024, was $61.1 million, representing a 98.0% increase from the previous year[1] - Net cash used in operating activities for Q3 2024 increased by $14.4 million to $(17.7) million, compared to $(3.3) million in Q3 2023[5] - Free Cash Flow for Q3 2024 decreased by $14.5 million to $(20.5) million, down from $(5.9) million in Q3 2023[5] - The company experienced a net cash used in operating activities of $24,412 thousand for the nine months ended September 30, 2024, compared to $14,460 thousand for the same period in 2023[30] - The net cash provided by financing activities was $40,280 thousand for the nine months ended September 30, 2024, compared to $2,294 thousand for the same period in 2023[30] - Redwire's cash, cash equivalents, and restricted cash at the end of the period totaled $43,094 thousand, up from $10,859 thousand at the end of the same period in 2023[30] Backlog and Contracts - Contracted Backlog rose by 30.2% year-over-year to $330.1 million as of September 30, 2024, up from $253.4 million a year earlier[1] - Book-to-Bill ratio was 1.25 for the last twelve months as of Q3 2024, compared to 1.38 in Q3 2023[5] - Organic backlog as of September 30, 2024, is $309,965,000, down from $372,790,000 as of December 31, 2023, reflecting a decrease of approximately 16.8%[41] - Total contracted backlog as of September 30, 2024, is $330,061,000, down from $372,790,000 as of December 31, 2023, representing a decrease of approximately 11.5%[41] - Contracts awarded for the three months ended September 30, 2024, totaled $44,503 thousand, while revenues for the same period were $68,638 thousand[37] - Remaining contract value from time and materials contracts is $16,900,000 as of September 30, 2024, down from $19,300,000 as of December 31, 2023[43] - Management expects all amounts reflected in contracted backlog to ultimately be fully funded despite potential terminations or amendments[46] Assets and Liabilities - Total current assets as of September 30, 2024, were $126,536,000, an increase from $109,313,000 as of December 31, 2023, representing a growth of 15.8%[26] - Total liabilities increased to $277,669,000 as of September 30, 2024, compared to $218,444,000 as of December 31, 2023, marking a rise of 27%[26] - Total assets as of September 30, 2024, were $289,945,000, compared to $271,269,000 as of December 31, 2023, indicating an increase of 6.9%[27] - Convertible preferred stock had a liquidation preference of $239,860,000 as of September 30, 2024, up from $187,780,000 as of December 31, 2023[27] Research and Development - Research and development expenses for the three months ended September 30, 2024, were $1,893,000, compared to $1,532,000 for the same period in 2023, reflecting an increase of 23.6%[29] Acquisitions - The acquisition of Hera Systems enhances Redwire's spacecraft portfolio, supporting larger missions in the national security segment[2] - The acquisition-related backlog activity is linked to the Hera Systems acquisition completed in the third quarter of 2024[45] - Acquisition-related contract value acquired during the period amounted to $21,940,000, with an ending balance of $20,096,000 in acquisition-related backlog[41] - The company incurred acquisition deal costs of $5,399 thousand for the nine months ended September 30, 2024[32]

Core Viewpoint - The article emphasizes the importance of identifying and sustaining trends in short-term investing, highlighting that sound fundamentals and positive earnings estimates are crucial for maintaining stock momentum [1]. Group 1: Stock Performance - Redwire Corporation (RDW) has shown a solid price increase of 7% over the past 12 weeks, indicating investor confidence in its potential upside [3]. - Over the last four weeks, RDW's price has increased by 18.2%, suggesting that the upward trend is still intact [4]. - RDW is currently trading at 88% of its 52-week high-low range, indicating a potential breakout opportunity [4]. Group 2: Fundamental Strength - RDW holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [5]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [6]. Group 3: Investment Strategy - The article suggests that investors can utilize the "Recent Price Strength" screen to identify stocks like RDW that are on an uptrend with strong fundamentals [2]. - There are over 45 Zacks Premium Screens available for investors to find winning stock picks based on their personal investing styles [7].

Core Viewpoint - Redwire is acquiring Hera Systems, a profitable spacecraft developer, at a bargain price, which is expected to enhance its future growth and profitability despite recent financial challenges [4][5][7]. Financial Performance - In Q2, Redwire's revenue grew by 30% year over year, exceeding analyst estimates by nearly $10 million [2] - However, the company reported a loss of $0.42 per share, which was four times greater than Wall Street's expectations, and free cash flow turned negative at $11.2 million [2][5]. Acquisition Details - Redwire will acquire Hera Systems for an undisclosed amount, with expectations that Hera could contribute up to $10 million to Redwire's 2024 revenue [4][6]. - The acquisition price implies a price-to-sales ratio of just 0.5, which is considered a bargain for a profitable space company [7][8]. Strategic Implications - The acquisition positions Redwire to enter the emerging market for spacecraft that can service other spacecraft in orbit, known as "space tugs" [9]. - Hera is contracted to build three satellites for an on-orbit servicing demonstration under a U.S. Space Force contract, indicating strategic alignment with national security missions [9][10]. Future Outlook - Analysts forecast a return to positive free cash flow for Redwire as early as next year, with strong double-digit sales growth expected through 2027 and beyond [11].

Financial Data and Key Metrics Changes - The company achieved revenue of $78.1 million in Q2 2024, representing a 30% increase compared to Q2 2023 [4] - Adjusted EBITDA was positive at $1.6 million, with a last 12 months (LTM) cash from operations of $5.7 million [4][22] - The net loss for the quarter was $18.1 million, impacted by a $9 million loss due to changes in the fair value of warrants [4][19] - Ending liquidity improved to $55.8 million as of June 30, 2024, marking a 54.1% increase year-over-year [25] Business Line Data and Key Metrics Changes - The company reported $114.4 million in contracts awarded during the quarter, with a LTM book-to-bill ratio of 1.28 times [4][16] - Significant growth in backlog was noted, increasing by 29.9% year-over-year to a total of $354.3 million [16] - The company delivered over 50 flight antennas and has more than 180 additional antennas in development for various government missions [9] Market Data and Key Metrics Changes - The company has a healthy pipeline with an estimated $5.7 billion in identified opportunities, including approximately $1.9 billion in proposals submitted year-to-date as of June 30, 2024, representing a 288.5% increase year-over-year [17] - More than 91% of revenue is derived from government programs or global marquee customers [21] Company Strategy and Development Direction - The growth strategy is centered around four key principles: protecting the core, scaling production, moving up the value chain, and venture optionality [5] - The company is focusing on developing capabilities in Very Low Earth Orbit (VLEO) to enhance defense and intelligence operations, with significant contracts awarded from DARPA [11][12] Management's Comments on Operating Environment and Future Outlook - Management reaffirmed full-year revenue guidance of $300 million, indicating a 23% year-over-year growth rate [26] - The company is focused on balancing revenue growth with profitability and investments for future growth while maintaining liquidity [31][60] Other Important Information - The company is investing in a new 30,000 square foot microgravity payload development and space operations facility [18] - The company has made significant investments in capital expenditures and internal research and development to support growth [24] Q&A Session Summary Question: Guidance and Outlook for the Second Half - Management explained that the guidance reflects a strategic balance and that the first quarter had lumpiness due to material buys [30][31] Question: EAC Adjustments - EAC adjustments were small and spread over multiple contracts, with no significant impact on cash flow [33][34] Question: Implications of U.S. Presidential Election - Management believes space funding is a bipartisan imperative and highlighted the company's revenue diversification [36] Question: Submitted Bids and Opportunities - The company is seeing scalable opportunities across various market segments, with a focus on larger quantity orders and full spacecraft prime contracts [38] Question: Venture Optionality and PIL-BOX Missions - Management expressed optimism about the venture optionality segment, noting a shift from experimentation to regular production-like activity [40][52] Question: Capacity to Deliver on Increased Bids - The company has detailed planning processes to ensure capacity aligns with bid submissions, allowing for simultaneous scaling [42][44] Question: Free Cash Flow Outlook - Management refrained from providing specific guidance but emphasized the positive trends in cash from operations on an LTM basis [59][60]