Redwire Corporation (NYSE:RDW) Q4 2024 Earnings Conference Call March 11, 2025 9:00 AM ET Company Participants Jeffrey Zeunik - Senior Vice President, Financial Planning Analysis, Investor Relations Peter Cannito - Chairman, Chief Executive Officer Jonathan Baliff - Chief Financial Officer Conference Call Participants Greg Konrad - Jefferies Scott Buck - H.C. Wainwright & Co. Brian Kinstlinger - Alliance Global Partners Griffin Boss - B. Riley Securities Suji DeSilva - Roth Capital Partners Jeff Zunick Let ...

Q4 2024 Investor Presentation March 11, 2025 Additional Information and Where to Find It Redwire will file with the SEC a proxy statement relating to a special meeting of Redwire's stockholders (the "proxy statement"). STOCKHOLDERS ARE URGED TO CAREFULLY READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT REDWIRE, EDGE AUTONOMY, THE TRANSACTION AND RELATED MATTERS. Stockholders w ...

Core Points - A proposed class action settlement has been approved by the United States District Court for the Middle District of Florida, benefiting purchasers of securities of Redwire Corporation, formerly known as Genesis Park Acquisition Corp [1][2]. Group 1: Settlement Details - The proposed settlement amount is $8,000,000 in cash, which is subject to court approval for being fair, reasonable, and adequate [2]. - A hearing is scheduled for July 31, 2025, to determine the approval of the settlement and the plan for allocation of the settlement proceeds [2][3]. - Members of the Settlement Class include those who purchased or acquired Redwire Corporation common stock, Genesis Park Acquisition Corp common stock, warrants, call options, or sold put options during the period from March 25, 2021, to March 31, 2022 [1][4]. Group 2: Participation and Exclusion - Settlement Class members must submit a Claim Form by June 24, 2025, to be eligible for a share of the settlement proceeds [6]. - Members wishing to exclude themselves from the Settlement Class must submit a request for exclusion by July 10, 2025, to avoid being bound by the court's judgment [7]. - Any objections to the proposed settlement or related motions must be filed with the court by July 10, 2025 [8].

Core Viewpoint - The article emphasizes the importance of confirming the sustainability of a trend in short-term investing, highlighting that successful entry timing is crucial for capitalizing on price movements [1][2]. Group 1: Trend Analysis - The trend can reverse before exiting a trade, leading to potential short-term capital losses for investors, thus confirming sound fundamentals and positive earnings estimates is essential for maintaining stock momentum [2]. - A unique short-term trading strategy, the "Recent Price Strength" screen, helps identify stocks with sufficient fundamental strength to sustain their recent uptrends [3]. Group 2: Company Spotlight - Redwire Corporation (RDW) - Redwire Corporation has shown a significant price increase of 126.8% over the past 12 weeks, indicating strong investor interest in its potential upside [4]. - Over the last four weeks, RDW's price increased by 72.7%, suggesting that the upward trend is still intact [5]. - RDW is currently trading at 93% of its 52-week high-low range, indicating a potential breakout opportunity [5]. Group 3: 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, which are critical for near-term price movements [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term performance [7]. - The Zacks Rank system has a strong historical performance, with Rank 1 stocks averaging a +25% annual return since 1988, underscoring the reliability of the ranking system [7]. Group 4: Investment Strategy - In addition to RDW, there are several other stocks that meet the criteria of the "Recent Price Strength" screen, suggesting potential investment opportunities [8]. - The article encourages investors to explore over 45 Zacks Premium Screens tailored to different investing styles to identify winning stock picks [8].

Core Viewpoint - The article emphasizes the importance of confirming the sustainability of a trend in short-term investing, highlighting that successful entry timing is crucial for profitability [1][2]. Group 1: Trend Analysis - The trend can reverse before exiting a trade, potentially leading to short-term capital losses for investors [2]. - A stock's recent price strength is a key indicator of its potential to maintain upward momentum, with a focus on sound fundamentals and positive earnings estimate revisions [2][3]. Group 2: Redwire Corporation (RDW) - Redwire Corporation has shown a significant price increase of 185.1% over the past 12 weeks, indicating strong investor interest [4]. - The stock has also increased by 23.6% over the last four weeks, suggesting that the upward trend is still intact [5]. - RDW is currently trading at 87.6% of its 52-week high-low range, indicating a potential breakout [5]. Group 3: 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 [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [7]. - The Zacks Rank system has a strong historical performance, with Zacks Rank 1 stocks averaging a +25% annual return since 1988 [7]. Group 4: Investment Strategy - In addition to RDW, there are other stocks that meet the criteria of the "Recent Price Strength" screen, which can help identify potential investment opportunities [8]. - The article suggests utilizing various Zacks Premium Screens tailored to different investing styles to find winning stock picks [8].

Group 1: Company Overview - Redwire is transitioning into a defense stock by acquiring Edge Autonomy, which specializes in autonomous systems and advanced optics for military applications [2][3] - The acquisition aims to diversify Redwire's portfolio by integrating combat-proven autonomous airborne platforms alongside its existing space technology [5][6] Group 2: Acquisition Details - Redwire will purchase Edge Autonomy for a total of $925 million, consisting of $150 million in cash and $775 million in Redwire stock [8] - The company currently has about $43 million in cash and will need to borrow to finance the acquisition, increasing its debt from $138 million to a net debt of $245 million [8][9] Group 3: Financial Projections - The combined business is expected to generate between $535 million and $605 million in sales this year, potentially doubling Redwire's previous revenue of $298 million [10] - Analysts predict that the combined entity will produce positive free cash flow this year, with expectations of reaching $171 million in free cash flow by 2027, indicating significant growth potential [10][12] Group 4: Market Sentiment - Following the acquisition announcement, Redwire's stock experienced a boost, reflecting positive market sentiment towards space and defense stocks [2][10] - Analysts have mixed views on Redwire's valuation, with a current price-to-free cash flow ratio of 54, but potential for this to drop to less than 9x by 2025 if growth projections hold [11][12]

Acquisition Details - Redwire is acquiring Edge Autonomy for $925 million, with $150 million in cash and $775 million in stock[10] - The acquisition is expected to close in Q2 2025 and will be immediately accretive to revenue, Adjusted EBITDA, and free cash flow[12][13] - The transaction consideration for Edge Autonomy is $925 million, with $150 million in cash and $775 million in Redwire common stock[52] - The $775 million equity transaction for Edge Autonomy is fixed at $15.07 per share, with the option to issue additional shares in the future[101] - The transaction is subject to regulatory approvals and will be detailed in a proxy statement filed with the SEC[108] Financial Performance and Projections - Edge Autonomy's last twelve months revenue as of Q3 2024 was $222 million, representing a 46.3% growth from FY 2023[42] - Combined Q3 2024 last twelve months revenue for Redwire and Edge Autonomy is $520 million, a 74.6% increase from Redwire's standalone revenue of $298 million[42] - Edge Autonomy's Q3 2024 last twelve months Adjusted EBITDA is $72 million, with a margin of 32.2%[43] - Combined Adjusted EBITDA for Redwire and Edge Autonomy is $82 million, a 700% increase from Redwire's standalone $10 million, with a combined margin of 15.7%[43] - Redwire's 2025 combined revenue guidance is projected to be between $535 million and $605 million, representing a 52.9% CAGR from FY23 to FY25[49] - Redwire expects combined Adjusted EBITDA for 2025 to range from $70 million to $105 million, with a 138.8% CAGR from FY23 to FY25[50] - Redwire anticipates being free cash flow positive in 2025, despite planned integration investments and expenses[51] - The financial projections and estimates are forward-looking statements with significant uncertainty and are not audited or assured by Redwire or Edge Autonomy's independent auditors[116] - The inclusion of financial projections and estimates should not be regarded as a reliable prediction of future events[116] - The assumptions underlying the financial projections are subject to significant business, economic, and competitive risks[116] Operational Synergies and Growth - The acquisition expands Redwire's total addressable market and supports organic growth in the defense tech sector[12] - Edge Autonomy operates in 80 countries with over 600 employees across six locations in the US, Canada, and Europe[14] - Edge Autonomy's VXE30 Stalker UAS can stay aloft for 8+ hours, while the Penguin series can remain airborne for over 20 hours[16] - Edge Autonomy's 2023 backlog increased to $408 million from $330 million, reflecting significant growth in program of record revenue[45] - Redwire's pipeline, currently at $7 billion, will significantly increase with the addition of Edge Autonomy's pipeline[82] - Edge Autonomy operates in 80 countries, with combat-proven systems operational in Ukraine, contributing to global demand[85] - Edge Autonomy's manufacturing footprint includes over 265,000 square feet, with capacity for growth and potential synergies with Redwire's operations[87][89] - Redwire and Edge Autonomy's combined operational opportunities include shared manufacturing, CapEx synergies, and leveraging long-term development contracts[97] - The combined company will focus on integrating Edge Autonomy's mature product business model with Redwire's long-term development contracts[97][98] - Redwire's acquisition of Edge Autonomy is expected to enhance technological, financial, and operational synergies, driving future growth[96][97] Customer and Market Diversification - The acquisition of Edge Autonomy diversifies Redwire's customer base, adding international defense as a fourth category alongside national security, civil, and commercial[46] - Edge Autonomy's Group 2 UASs are differentiated by their range and endurance, supported by proprietary battery technology[73] Business Model and Revenue Confidence - Edge Autonomy's backlog is smaller than Redwire's, but the company is confident in achieving its revenue goals due to a complementary business model and operational synergies[96][97][98][99] - Edge Autonomy's business model involves fleet management with new orders and replacements, differing from Redwire's multi-year contract structure[98] - The company has conducted extensive diligence on backlog levels and revenue yield, ensuring confidence in Edge Autonomy's revenue goals[99] Financial Position and Flexibility - Redwire's financial position includes access to existing cash, credit facilities, and committed debt facilities, providing flexibility for future transactions[101] - Redwire's acquisition strategy remains unchanged, with a focus on highly differentiated technology and accretive multiples, broadening the scope of potential acquisitions post-Edge Autonomy deal[100] Non-GAAP Financial Measures - The communication includes Non-GAAP financial measures such as forecasted Adjusted EBITDA and Free Cash Flow for Redwire assuming the acquisition of Edge Autonomy[117] - Non-GAAP financial measures should not be considered in isolation or as a substitute for U.S. GAAP measures and should be read in conjunction with U.S. GAAP information[118] - Adjusted EBITDA is defined as net income adjusted for various expenses including interest, taxes, depreciation, amortization, and other specific costs[119] - Free Cash Flow is computed as net cash from operating activities less capital expenditures and is used to evaluate liquidity and future growth investments[119][121] - Adjusted EBITDA is used to evaluate operating performance, generate future operating plans, and make strategic decisions[120] - Free Cash Flow is an indicator of operating cash generation used to service debt and invest in future growth[121] - Non-GAAP measures may not be comparable to similarly titled measures of other companies due to differing calculations[118] Transaction Support and Shareholder Approval - The transaction is supported by entities representing approximately 73% of Redwire's aggregate outstanding voting pool[13]

Redwire's Acquisition of Edge Autonomy - Redwire announced the acquisition of AI and drone-tech specialist Edge Autonomy for $925 million, paid in cash and stock [2][5] - The acquisition is expected to transform Redwire into a global leader in multi-domain autonomous technology, broadening its portfolio to include combat-proven autonomous airborne platforms [6] - Redwire estimates the combined companies could generate $535 million to $605 million in sales this year, potentially doubling Redwire's previous annual revenue of $298 million [7] - The acquisition is expected to turn Redwire free-cash-flow positive this year, despite burning $14.9 million in negative free cash flow over the last year [7][8] Market Reaction and Valuation - Redwire's stock surged 44.5% following the acquisition announcement [2] - The acquisition implies a price-to-sales (P/S) ratio of 3.1 to 3.9 times for Edge Autonomy, compared to Redwire's own P/S ratio of 3.2 times [9] - The deal is considered a good but not great deal, potentially justifying a small premium for a business that could double Redwire's size and scale of production [9][10] Impact on Competitors - Redwire's acquisition had a positive impact on competitors in the defense industry, with RTX Corporation up 3.4% and AeroVironment up 4.5% [3] - AeroVironment, a pure play on drone technology, is seen as a modest positive beneficiary of Redwire's interest in Edge Autonomy [11] - RTX, with a P/S ratio of 2.1 times, is considered the cheapest among the three defense stocks moving on Redwire's news, though it is not a major player in drones [11] Financial Implications - Redwire will need to borrow money and increase its debt load to complete the acquisition, as it only had $43 million in cash and $138 million in debt at last report [6] - The acquisition is expected to immediately grow Redwire's revenues and free cash flow, though the exact amount of free cash flow generated was not specified [7][8]

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]