#Pública | --- | --- | --- | --- | --- | --- | --- | |----------------------------|--------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Earnings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | For further | info | | | | | | | point your for MD&A 2Q24 | mobile | | | | | | - - - - - - - - - - - - - - #Pública Adjusted Net Income 1H24 R$ 18.8 Targeted strategy and growing results billion 1H24 / 1H23 + ...

Revenue Performance - Revenues increased 30% to $78.1 million for the three months ended June 30, 2024, compared to $60.1 million for the same period in 2023[131]. - Revenues increased by $48.2 million, or 41%, for the six months ended June 30, 2024, compared to the same period in 2023, primarily due to larger contract sizes and increased production volume[145]. - Contracts awarded during the three months ended June 30, 2024, totaled $114.4 million, compared to $45.6 million in the same period of 2023, reflecting a year-over-year increase of 150%[162]. Cost and Expenses - Cost of sales increased by $20.9 million, or 47%, for the three months ended June 30, 2024, driven by increased labor, materials, and subcontractor costs[132]. - Cost of sales rose by $50.5 million, or 58%, for the six months ended June 30, 2024, driven by higher labor and subcontractor costs associated with larger contracts in power generation[146]. - Selling, general and administrative expenses as a percentage of revenues decreased to 23% for the three months ended June 30, 2024, from 29% during the same period in 2023[135]. - Selling, general and administrative (SG&A) expenses increased by $1.7 million, or 5%, but as a percentage of revenues, SG&A decreased from 29% in 2023 to 21% in 2024, reflecting improved cost discipline[148]. - Research and development expenses decreased by $0.3 million, or 16%, for the three months ended June 30, 2024, compared to the same period in 2023[137]. - Research and development expenses increased by $0.3 million, or 13%, due to strategic investments in microgravity payloads, radio frequency, and power generation technologies[150]. - Interest expense, net increased by $0.3 million, or 13%, for the three months ended June 30, 2024, due to unfavorable changes in variable interest rates[138]. - Interest expense, net increased by $0.6 million, or 12%, primarily due to higher costs of capital and increased borrowings on the revolving credit facility[151]. Profitability and Loss - Gross margin decreased by $2.9 million, or 18%, with a gross margin percentage of 17% for the three months ended June 30, 2024, down from 26% in the same period of 2023[133]. - Gross margin decreased by $2.3 million, or 8%, with gross margin as a percentage of revenues falling from 26% in 2023 to 17% in 2024, influenced by a shift in contract mix and negative net EAC adjustments[147]. - Net loss increased to $18.1 million for the three months ended June 30, 2024, compared to a net loss of $5.5 million for the same period in 2023, representing a 231% increase[130]. - Net income (loss) attributable to Redwire Corporation was $(26.2) million for the six months ended June 30, 2024, compared to $(12.7) million in the same period of 2023, representing a 106% increase in loss[144]. - Adjusted EBITDA for the six months ended June 30, 2024, was $5.9 million, down from $8.7 million in the same period of 2023[157]. Tax and Other Financial Metrics - Effective tax rate decreased to (0.1)% for the three months ended June 30, 2024, compared to 1.5% for the same period in 2023[140]. - The effective tax rate for the six months ended June 30, 2024, was (0.5)%, compared to 0.9% in the same period of 2023, primarily due to changes in the valuation allowance[153]. - Other (income) expense, net decreased from net other income to net other expense by $8.9 million for the three months ended June 30, 2024, primarily due to changes in the fair value of the private warrant liability[139]. - Other (income) expense, net increased by $8.0 million, or 547%, largely due to a $10.1 million loss from the increase in the fair value of the Company's private warrant liability[152]. Cash Flow and Liquidity - Net cash used in operating activities improved to $6.7 million for the six months ended June 30, 2024, compared to $11.2 million for the same period in 2023, showing better cash flow management[175]. - Net cash provided by investing activities was $0.5 million for the six months ended June 30, 2024, a turnaround from net cash used of $2.5 million in the same period of 2023[176]. - Net cash provided by financing activities increased to $6.9 million for the six months ended June 30, 2024, compared to net cash used of $3.4 million in the same period of 2023, indicating improved financing conditions[177]. - As of June 30, 2024, the company had $30.8 million in cash and cash equivalents and $25.0 million in available borrowings from existing credit facilities, providing a solid liquidity position[168]. Backlog and Future Outlook - The organic backlog as of June 30, 2024, was $354.3 million, down from $372.8 million as of December 31, 2023, indicating a decrease in contracted backlog[164][167]. - The contracted backlog includes $19.0 million in remaining contract value from time-and-material contracts as of June 30, 2024[164]. - The company expects all amounts reflected in contracted backlog to ultimately be fully funded, despite potential fluctuations due to foreign exchange rates[167].

Financial Performance - Revenues for Q2 2024 increased by 30.0% year-over-year to $78.1 million, compared to $60.1 million in Q2 2023[1] - Net Loss for Q2 2024 was $(18.1) million, an increase of $12.6 million from $(5.5) million in Q2 2023[2] - Adjusted EBITDA for Q2 2024 decreased by $2.7 million to $1.6 million, down from $4.4 million in Q2 2023[4] - Free Cash Flow for Q2 2024 decreased by $12.3 million to $(11.2) million, compared to $1.1 million in Q2 2023[4] - Total comprehensive loss for Q2 2024 was $(18,170,000), compared to $(5,326,000) in Q2 2023[24] - Net income for the six months ended June 30, 2024, was a loss of $26,183 thousand, compared to a loss of $12,723 thousand for the same period in 2023[25] - The adjusted EBITDA for the six months ended June 30, 2024, was $5,906 thousand, down from $8,698 thousand for the same period in 2023[27] - Cash flows from operating activities for the six months ended June 30, 2024, resulted in a net cash used of $6,742 thousand, an improvement from $11,204 thousand used in the same period in 2023[25] - Free cash flow for the six months ended June 30, 2024, was $(10,796) thousand, compared to $(13,752) thousand for the same period in 2023[29] Liquidity and Assets - Total available liquidity as of June 30, 2024, was $55.8 million, a 54.1% increase from June 30, 2023[2] - Total current assets decreased to $105,313,000 as of June 30, 2024, down from $109,313,000 at the end of 2023[20] - Cash and cash equivalents increased slightly to $30,832,000 as of June 30, 2024, from $30,278,000 at the end of 2023[20] - The cash and cash equivalents at the end of the period on June 30, 2024, were $30,832 thousand, compared to $11,231 thousand at the end of the same period in 2023[25] Backlog and Contracts - Contracted Backlog increased by 29.9% year-over-year to $354 million as of June 30, 2024, compared to $273 million on June 30, 2023[1] - Book-to-Bill ratio was 1.28 on a last twelve month (LTM) basis as of Q2 2024, compared to 1.49 in Q2 2023[4] - The book-to-bill ratio for the three months ended June 30, 2024, was 1.47, significantly higher than 0.76 for the same period in 2023[31] - Total contracts awarded for the three months ended June 30, 2024, amounted to $114,437 thousand, compared to $45,646 thousand for the same period in 2023[31] - Organic backlog increased to $372,790 thousand as of June 30, 2024, compared to $313,057 thousand as of December 31, 2023, reflecting a growth of 19.1%[33] - Contracted backlog at the end of the period was $354,344 thousand, down from $372,790 thousand as of December 31, 2023, representing a decline of 4.5%[33] - The company expects all amounts reflected in contracted backlog to ultimately be fully funded despite potential terminations or amendments[37] Expenses and Liabilities - Operating loss for Q2 2024 was $(7,130,000), worsening from $(3,856,000) in Q2 2023[24] - Total liabilities increased to $229,844,000 as of June 30, 2024, compared to $218,444,000 at the end of 2023[20] - Convertible preferred stock had a liquidation preference of $242,381,000 as of June 30, 2024, up from $187,780,000 at the end of 2023[22] - Research and development expenses for Q2 2024 were $1,748,000, down from $2,070,000 in Q2 2023[24] - The company incurred acquisition costs related to due diligence and integration expenses, impacting financial performance[26] Growth and Innovation - The company submitted approximately $1.9 billion in bids year-to-date in 2024, indicating strong growth momentum[5] - The company was awarded a prime contract for the SabreSat VLEO platform under DARPA's Otter program, highlighting its innovation and market expansion efforts[1] - Organic additions during the period were $149,538 thousand, down from $300,042 thousand in the previous period, indicating a decrease of 50%[33] - Organic revenue recognized during the period was $(165,903) thousand, an improvement from $(243,800) thousand in the prior period[33] - Foreign currency translation impacts on backlog were $(2,081) thousand for the current period, compared to $3,491 thousand in the previous period[33]

Core Insights - Phase Four and Redwire Space have entered a strategic cooperation agreement to develop Hall Effect Thrusters (HETs) for government and commercial markets, enhancing their capabilities and product offerings [9] - The Valkyrie System, based on NASA's H71M Hall Effect Thruster, will provide a range of propulsion systems with features such as post-launch re-programmability and extensive telemetry for satellite life extension [1][2] Company Overview - Phase Four is a provider of next-generation in-space electric propulsion solutions, founded in 2015, focusing on satellite constellation demands and advancing radio-frequency thruster technology [5] - Redwire Corporation is a global space infrastructure and innovation company, offering a wide range of capabilities including avionics, sensors, and microgravity payloads, with approximately 700 employees across 14 facilities [3] Market Outlook - Both companies believe the market for Hall Effect Thrusters will remain robust, combining Phase Four's propulsion expertise with Redwire's space system market knowledge to create a reliable domestic supplier [2][10] - The addition of Hall Effect Thrusters to Phase Four's product line is a strategic move to expand its in-space propulsion offerings, which already include various propulsion systems and services [6]

Company Overview - Redwire Corporation recently appointed Aaron Futch as its Executive Vice President, General Counsel and Secretary, contributing to a 9.3% increase in its share price to $6.58 [1][4] - The stock has shown a significant 20.9% gain over the past four weeks, indicating strong market interest [4] Earnings Expectations - Redwire is expected to report a quarterly loss of $0.12 per share, reflecting a year-over-year improvement of 25% [5] - Revenue projections for the upcoming quarter stand at $66.86 million, which is an 11.3% increase compared to the same quarter last year [5] Stock Performance and Trends - The consensus EPS estimate for Redwire has remained unchanged over the last 30 days, suggesting stability in earnings expectations [6] - The stock currently holds a Zacks Rank of 3 (Hold), indicating a neutral outlook [3][6] Industry Context - Redwire operates within the Zacks Aerospace - Defense industry, which includes other companies like Virgin Galactic [7] - Virgin Galactic's stock has experienced a decline of 14.3% recently and a total return of -19.6% over the past month, contrasting with Redwire's positive performance [7]

Revenue and Contracts - Revenues increased by $30.2 million, or 52%, for the three months ended March 31, 2024, compared to the same period in 2023, reaching $87.8 million[145] - Total contracts awarded for the three months ended March 31, 2024, were $35.1 million, compared to $29.7 million for the same period in 2023[163] - Revenues for the three months ended March 31, 2024, were $87.8 million, an increase from $57.6 million in the same period in 2023[163] - Redwire's book-to-bill ratio was 0.40 for the three months ended March 31, 2024, down from 0.51 for the same period in 2023[165] - The contracted backlog as of March 31, 2024, was $317.9 million, a decrease from $372.8 million as of December 31, 2023[168] Costs and Expenses - Cost of sales rose by $29.6 million, or 68%, for the three months ended March 31, 2024, totaling $73.0 million[148] - Gross margin increased by $0.6 million, or 4%, for the three months ended March 31, 2024, with a gross margin percentage of 17% compared to 25% in the same period of 2023[149] - Selling, general and administrative expenses increased by $1.3 million, or 8%, for the three months ended March 31, 2024, but as a percentage of revenues, decreased to 20% from 28%[150] - Research and development expenses increased significantly, driven by investments in microgravity payloads, radio frequency, and power generation technologies[152] Cash Flow and Financial Position - Net cash provided by operating activities was $2.8 million during the three months ended March 31, 2024, compared to a net cash used of $14.0 million in the same period of 2023[145] - Cash and cash equivalents at the end of the period on March 31, 2024, were $32.6 million, up from $11.3 million at the end of March 31, 2023[184] - The company had $32.6 million in cash and cash equivalents and $15.0 million in available borrowings from existing credit facilities as of March 31, 2024[173] - Net cash used in investing activities increased to $2.4 million for the three months ended March 31, 2024, from $0.8 million in the same period in 2023[186] - The company did not sell shares to B. Riley during the three months ended March 31, 2024, and had 7,592,939 registered shares available for purchase under the committed equity facility[180] Loss and Taxation - Net loss increased by 12% for the three months ended March 31, 2024, amounting to $8.1 million compared to $7.3 million in the same period of 2023[146] - Interest expense, net increased by $0.3 million, or 10%, for the three months ended March 31, 2024, primarily due to unfavorable changes in variable interest rates[153] - Other (income) expense, net decreased by $0.9 million, or 39%, for the three months ended March 31, 2024, primarily due to changes in the fair value of the Company's private warrant liability[154] - The effective tax rate for the three months ended March 31, 2024 was (1.4)%, compared to 0.4% for the same period in 2023, primarily due to changes in the valuation allowance[155] Future Expectations - The company expects all amounts reflected in contracted backlog to ultimately be fully funded despite potential fluctuations due to foreign exchange rates[172]

Financial Data and Key Metrics Changes - In Q1 2024, Redwire achieved revenue of $87.8 million, representing a 52.4% increase compared to Q1 2023 and a 38.3% increase sequentially [4][12] - The company reported positive adjusted EBITDA of $4.3 million, with a net loss of $8.1 million [4][11] - Free cash flow improved to positive $0.4 million, a year-over-year increase of $15.2 million, while cash from operations was positive $2.8 million, up $16.8 million year-over-year [4][37] - The last 12 months book-to-bill ratio was 1.11 times during the quarter [4][34] Business Line Data and Key Metrics Changes - More than 90% of revenue in Q1 2024 came from funded government programs or global marquee customers, focusing on national security and satellite proliferation [12] - The company secured a $142 million contract for power solutions to an undisclosed satellite manufacturer, indicating strong demand in its power generation offerings [6] Market Data and Key Metrics Changes - Redwire's contracted backlog increased by 10.9% year-over-year to $318 million, with a healthy pipeline of $6.3 billion in identified opportunities [34] - The company reported a significant increase in proposals submitted year-to-date, totaling approximately $610 million, a 177.3% increase compared to the same period in 2023 [34] Company Strategy and Development Direction - Redwire's growth strategy focuses on four key principles: protecting the core, scaling production, moving up the value chain, and venture optionality [28] - The company is actively pursuing advancements in very low Earth orbit (VLEO) technology, with platforms like SabreSat and Phantom being developed for various missions [7][30] - Redwire aims to leverage its microgravity technology for pharmaceutical development, targeting a significant market opportunity in drug discovery [9][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year revenue guidance of $300 million, representing a 23% year-over-year growth rate [14] - The company emphasized the importance of operational excellence and cost efficiency to improve profitability while managing the dynamics of contract awards and revenue recognition [19][81] - Management acknowledged the challenges of the space industry but highlighted the strong demand for their core offerings and the potential for future growth [85] Other Important Information - Redwire's capital expenditures in Q1 2024 were $2.4 million, the highest for a first quarter since going public, alongside $1.0 million in internal research and development investments [13] - The company is focused on maintaining a balance between top-line growth and bottom-line profitability, with SG&A expenses now below 20% of revenue [36][81] Q&A Session Summary Question: Can you discuss the dynamics around win rates and backlog? - Management indicated that win rates are variable due to market dynamics and bid sizes, but they believe their backlog and submitted bids are sufficient to sustain their current year forecast [16][19] Question: What are the lessons learned from EAC adjustments? - Management noted that EAC adjustments highlight the importance of operational excellence and the need for disciplined bidding practices, emphasizing that space projects can be complex and challenging [53][54] Question: How does the company view the venture optionality in the drug discovery market? - Management expressed optimism about the growing interest in microgravity research and the potential for significant market opportunities, indicating that they are transitioning from research to production-level capabilities [45][49] Question: Will proposal submissions remain at elevated levels? - Management confirmed that they are bidding more as a prime contractor and aim to maintain the current level of submissions, although timing can affect quarterly results [73][74]

Financial Performance - Revenues for Q1 2024 increased by 52.4% year-over-year to $87.8 million, compared to $57.6 million in Q1 2023[5] - Net Loss for Q1 2024 was $(8.1) million, an increase of $0.8 million from $(7.3) million in Q1 2023[5] - Adjusted EBITDA for Q1 2024 remained flat at $4.3 million, consistent with Q1 2023[5] - Revenues for Q1 2024 were $87,792,000, a 52.4% increase from $57,605,000 in Q1 2023[28] - Gross margin for Q1 2024 was $14,825,000, compared to $14,217,000 in Q1 2023, reflecting a slight improvement[28] - Net loss for Q1 2024 was $8,096,000, compared to a net loss of $7,258,000 in Q1 2023[28] Cash Flow and Liquidity - Net cash provided by operating activities improved by $16.8 million to $2.8 million in Q1 2024, compared to $(14.0) million in Q1 2023[5] - Free Cash Flow for Q1 2024 improved by $15.2 million to $0.4 million, compared to $(14.8) million in Q1 2023[6] - Cash and cash equivalents increased to $32,569,000 as of March 31, 2024, from $30,278,000 at the end of 2023[24] - Total current assets decreased to $99,915,000 as of March 31, 2024, down from $109,313,000 at the end of 2023[24] - Total liabilities decreased to $213,006,000 as of March 31, 2024, from $218,444,000 at the end of 2023[24] - Free cash flow for Q1 2024 was $397,000, a significant improvement from a negative $14,847,000 in Q1 2023[38] Backlog and Contracts - The Book-to-Bill ratio was 1.11 for the last twelve months as of Q1 2024, down from 1.76 in Q1 2023[5] - Book-to-bill ratio for Q1 2024 was 0.40, down from 0.51 in Q1 2023, indicating a decline in contracts awarded relative to revenues[40] - The organic backlog as of March 31, 2024, was $317.964 million, a decrease from $372.790 million as of December 31, 2023[46] - Contracted backlog as of March 31, 2024, was $317.964 million, reflecting the estimated dollar value of firm funded executed contracts for which work has not been performed[46] - Contracted backlog from foreign operations in Luxembourg and Belgium was $96.6 million and $106.0 million as of March 31, 2024, and December 31, 2023, respectively[50] - The company expects all amounts reflected in contracted backlog to ultimately be fully funded[50] Research and Development - Research and development expenses increased to $1,040,000 in Q1 2024, compared to $388,000 in Q1 2023, indicating a focus on innovation[28] - Redwire achieved positive net cash flow from operations and Free Cash Flow while investing record amounts in R&D and CapEx in Q1 2024[7] Shareholder Equity - Total shareholders' equity (deficit) was $(49,792,000) as of March 31, 2024, compared to $(43,509,000) at the end of 2023, reflecting a worsening equity position[26] Company Outlook - The company forecasts full-year revenues of $300 million for 2024[7] - The pipeline increased to approximately $6.3 billion, with $610.0 million in bids submitted year-to-date through March 31, 2024[2] - The company views growth in backlog as a key measure of business growth[46] - The company reported no acquisition-related backlog activity as all acquired entities have completed four fiscal quarters post-acquisition[49]

Financial Performance - Redwire Corporation reported revenues of $243.8 million for the year ended December 31, 2023, a 51.7% increase from $160.5 million in 2022[381]. - The gross margin for 2023 was $58.0 million, compared to $28.7 million in 2022, reflecting a significant improvement in profitability[381]. - Operating loss narrowed to $15.5 million in 2023 from a loss of $146.4 million in the previous year, indicating better operational efficiency[381]. - Net loss attributable to Redwire Corporation was $27.3 million in 2023, compared to a net loss of $130.6 million in 2022, showing a substantial reduction in losses[381]. - Cash flows from operating activities provided $1.231 million in 2023, a recovery from a cash outflow of $31.657 million in 2022[388]. - Net income for the year ended December 31, 2023, was a loss of $27.264 million, compared to a loss of $130.620 million in 2022, indicating a significant improvement[388]. Assets and Liabilities - Total current assets increased to $109.3 million as of December 31, 2023, up from $96.2 million in 2022, driven by higher cash and accounts receivable[374]. - Total liabilities rose to $218.4 million in 2023, compared to $187.8 million in 2022, primarily due to increased long-term debt[376]. - The company had cash and cash equivalents of $30.3 million as of December 31, 2023, an increase from $28.3 million in 2022[374]. - Redwire Corporation's total assets increased to $271.3 million in 2023 from $257.7 million in 2022, reflecting overall growth in the company's financial position[376]. - Total equity as of December 31, 2023, was $188.323 million, down from $198.126 million in 2022, reflecting a decrease in accumulated deficit[385]. Research and Development - Research and development expenses for the year ended December 31, 2023, were $5.0 million, reflecting the company's commitment to advancing space infrastructure technology[65]. - Redwire's research and development strategy focuses on areas with significant growth and long-term opportunities, aligning with its core space infrastructure offerings[64]. - Research and development expenses remained stable at approximately $5.0 million in both 2023 and 2022, indicating continued investment in innovation[381]. Contracts and Market Position - As of December 31, 2023, the total contracted backlog was $372.8 million, indicating a strong measure of business growth[50]. - The company has formalized contracts and strategic partnerships with numerous customers, aiming to expand its market presence[52]. - Redwire is involved in high-profile contracts, including the Artemis program, where it is contracted to provide one of the largest solar arrays ever built[58]. - The majority of the company's revenues are derived from government contracts, highlighting a concentrated customer base[60]. - The company views the commercial market opportunity as having significant growth potential as launch costs decrease[59]. Employee and Diversity Initiatives - Redwire has approximately 700 employees as of December 31, 2023, emphasizing its human capital in the space industry[73]. - The company is committed to diversity and inclusion, implementing programs to support under-represented communities in the aerospace field[75]. Debt and Financing - Total debt rose to $89,477 million in 2023 from $78,938 million in 2022, with total long-term debt, net increasing to $86,842 million[513]. - Interest expense on debt for the year ended December 31, 2023, was $10.702 million, compared to $8.220 million for the previous year, reflecting an increase of approximately 30.2%[524]. - The Company borrowed $35.5 million and repaid $23.5 million on the revolving credit facility during 2023, with $12.0 million outstanding as of December 31, 2023[514]. Acquisitions - The Company acquired QinetiQ Space NV for $36.9 million (€37 million) in cash on October 31, 2022, enhancing its satellite technologies and global footprint[469]. - The fair value of net identifiable assets acquired from Space NV was $19.3 million, with goodwill recorded at $17.9 million after a non-cash measurement period adjustment[475]. - The total liabilities from the Space NV acquisition were $33.7 million, including accrued expenses of $18.6 million and deferred revenue of $5.5 million[475]. Revenue Recognition and Accounting Policies - The Company recognizes revenue for long-term contracts over time, using the input method based on cost-to-cost measures of progress, which reflects the value transferred to the customer[443]. - The Company’s revenue recognition follows a five-step model, ensuring that performance obligations are identified and transaction prices allocated accordingly[435]. - The Company evaluates equity method investments for impairment whenever events indicate that carrying amounts may be impaired, recording losses if declines are determined to be other than temporary[430].

255 0 0 191 191 191 The 2024 financial outlook, non-GAAP financial information and Key Performance Indicators included in this Presentation is unaudited and, in the case of future periods, is preliminary and subject to completion. Additionally, such information reflects management's current views, and may change as a result of management's review of results and other information, which may not be currently available. The financial outlook, including any related non-GAAP information, is subject to the finali ...