Redwire (RDW) - 2024 Q2 - Quarterly Report

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$114.4 million, compared to $45.6 million in the same period of 2023, reflecting a year-over-year increase of 150$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$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$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$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$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].