Redwire (RDW) - 2024 Q3 - Quarterly Report

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$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$20.96 million for the three months ended September 30, 2024, compared to a loss of $6.25 million in the same period in 2023, representing a 235$(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$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$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$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$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$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]