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Redwire (RDW) - 2021 Q4 - Annual Report
RDWRedwire (RDW)2022-04-08 21:53

Financial Performance - Revenues for the year ended December 31, 2021, were 137.60million,comparedto137.60 million, compared to 40.79 million for the period from February 10, 2020, to December 31, 2020[402]. - The company reported a net loss of 61.54millionfortheyearendedDecember31,2021,comparedtoanetlossof61.54 million for the year ended December 31, 2021, compared to a net loss of 14.37 million for the previous period[402]. - The gross margin for the year ended December 31, 2021, was 29.38million,whichis21.429.38 million, which is 21.4% of total revenues[402]. - Operating expenses for the year ended December 31, 2021, totaled 99.56 million, significantly higher than 13.10millionforthepreviousperiod[402].−ProformarevenuesfortheyearendedDecember31,2021,were13.10 million for the previous period[402]. - Pro forma revenues for the year ended December 31, 2021, were 149,295 thousand, representing an increase from 126,999thousandin2020,whilenetlossincreasedto126,999 thousand in 2020, while net loss increased to 57,766 thousand from 7,902thousand[529].AssetsandLiabilities−TotalassetsasofDecember31,2021,were7,902 thousand[529]. Assets and Liabilities - Total assets as of December 31, 2021, were 261.76 million, up from 156.77millionasofDecember31,2020,representinga67156.77 million as of December 31, 2020, representing a 67% increase[400]. - The company’s total current liabilities increased to 51.24 million as of December 31, 2021, from 33.56millionasofDecember31,2020[400].−AsofDecember31,2021,totalshareholders′equitywasreportedat33.56 million as of December 31, 2020[400]. - As of December 31, 2021, total shareholders' equity was reported at 107.22 million, with accumulated deficit amounting to 75.91million[405].−Cashandcashequivalentsattheendoftheperiodwere75.91 million[405]. - Cash and cash equivalents at the end of the period were 20.52 million, a decrease from 22.08millionatthebeginningoftheperiod[407].−Totalaccountsreceivable,netincreasedto22.08 million at the beginning of the period[407]. - Total accounts receivable, net increased to 16,262 thousand as of December 31, 2021, up from 6,057thousandin2020,withbilledreceivablesat6,057 thousand in 2020, with billed receivables at 14,820 thousand and unbilled receivables at 1,442thousand[537].−InventorybalanceasofDecember31,2021,was1,442 thousand[537]. - Inventory balance as of December 31, 2021, was 688 thousand, compared to 330thousandin2020,withrawmaterialsat330 thousand in 2020, with raw materials at 414 thousand, work in process at 117thousand,andfinishedgoodsat117 thousand, and finished goods at 157 thousand[538]. Research and Development - Research and development expenses for the year ended December 31, 2021, were 4.5million,focusingonadvancingspaceinfrastructuretechnologies[77].−Researchanddevelopmentcostsareprimarilymadeupoflaborcharges,prototypematerial,anddevelopmentexpenses,whichareexpensedintheperiodincurred[452].AcquisitionsandGrowthStrategy−ThecompanycompletedeightacquisitionssinceMarch2020,enhancingitstechnologyandproductofferings,includingnotableacquisitionslikeAdcoleSpace,LLCandDeepSpaceSystems,Inc.[410].−ThemergerwithGenesisParkAcquisitionCorp.onSeptember2,2021,resultedingrossproceedsof4.5 million, focusing on advancing space infrastructure technologies[77]. - Research and development costs are primarily made up of labor charges, prototype material, and development expenses, which are expensed in the period incurred[452]. Acquisitions and Growth Strategy - The company completed eight acquisitions since March 2020, enhancing its technology and product offerings, including notable acquisitions like Adcole Space, LLC and Deep Space Systems, Inc.[410]. - The merger with Genesis Park Acquisition Corp. on September 2, 2021, resulted in gross proceeds of 110.6 million, which were partially used to repay 41.6millionofoutstandingloans[411].−Thecompanyisstrategicallyfocusedonexpandingitsmarketpresencethroughacquisitionsandinnovativetechnologydevelopmentinthespacesector[410].−ThecompanyaimstocapitalizeonthecommercializationofLowEarthOrbit(LEO)andon−orbitservicing,assembly,andmanufacturingaskeygrowthopportunities[70].WorkforceandTalentAcquisition−Thecompanyplanstoincreaseitsworkforcebyapproximately3341.6 million of outstanding loans[411]. - The company is strategically focused on expanding its market presence through acquisitions and innovative technology development in the space sector[410]. - The company aims to capitalize on the commercialization of Low Earth Orbit (LEO) and on-orbit servicing, assembly, and manufacturing as key growth opportunities[70]. Workforce and Talent Acquisition - The company plans to increase its workforce by approximately 33% to support contracted work, with 34% of current employees hired in the past twelve months[87]. - The company has established a talent acquisition team to enhance recruitment efforts in a competitive labor market[88]. - The company offers competitive compensation packages, including short- and long-term incentive programs, to attract and retain talent[90]. - The company is committed to diversity and inclusion, supporting various organizations in the aerospace field[89]. Market and Industry Insights - The global space economy generated approximately 420 billion in total revenue in 2019 and is projected to grow to an estimated 2trillionby2040[65].−Theannualnumberofsmallsatellites(Smallsats)launchedhasincreasedalmosteightfoldsince2012,with942 trillion by 2040[65]. - The annual number of small satellites (Smallsats) launched has increased almost eightfold since 2012, with 94% of all launches in 2021 including a smallsat[68]. - The emergence of large reusable rockets has reduced launch costs by approximately 95% over the past decade, with costs as low as 2,700 per kilogram for launching satellites to LEO[67]. - Approximately 253billionofequityinvestmenthasbeenmadeacross1,694spacecompaniesoverthelast10years,indicatingsignificantgrowthinthespacemarket[63].−NASAisamajorcustomer,withtheArchinautOneprogrambeingthelargestrevenue−generatingcontract,focusingonsatelliteconstructioninorbit[57].FinancialReportingandAccounting−Thecompanyrecognizesrevenueovertimeforlong−termcontracts,reflectingthenatureoftheservicesprovided,whichincludedesignandmanufacturingofspacecraftcomponents[429].−Thecompanyutilizestheacquisitionmethodofaccountingforbusinesscombinations,recognizingthefairvalueofallassetsacquiredandliabilitiesassumed[420].−Thecompanyrecognizesanticipatedcontractlossesassoonastheybecomeknownandestimableforlong−termcontracts[430].−Thecompanyrecognizestaxbenefitsonlyifitismorelikelythannotthatthetaxpositionwillbesustaineduponexaminationbytaxingauthorities[451].−ThecompanyadoptedASUNo.2021−08,whichrequiresrecognizingcontractassetsandliabilitiesinaccordancewithASC606forbusinesscombinations[465].GoodwillandIntangibleAssets−Goodwillisassessedforimpairmentatleastannually,withthecompanyperformingqualitativeandquantitativeanalysesasnecessary[442].−ThefairvalueoftheacquiredcustomerrelationshipsfromDSSwasestimatedusingtheexcessearningsmethod,contributingtotheoverallgoodwill[474].−ThetotalintangibleassetsacquiredfromtheMISacquisitionwerevaluedat253 billion of equity investment has been made across 1,694 space companies over the last 10 years, indicating significant growth in the space market[63]. - NASA is a major customer, with the Archinaut One program being the largest revenue-generating contract, focusing on satellite construction in orbit[57]. Financial Reporting and Accounting - The company recognizes revenue over time for long-term contracts, reflecting the nature of the services provided, which include design and manufacturing of spacecraft components[429]. - The company utilizes the acquisition method of accounting for business combinations, recognizing the fair value of all assets acquired and liabilities assumed[420]. - The company recognizes anticipated contract losses as soon as they become known and estimable for long-term contracts[430]. - The company recognizes tax benefits only if it is more likely than not that the tax position will be sustained upon examination by taxing authorities[451]. - The company adopted ASU No. 2021-08, which requires recognizing contract assets and liabilities in accordance with ASC 606 for business combinations[465]. Goodwill and Intangible Assets - Goodwill is assessed for impairment at least annually, with the company performing qualitative and quantitative analyses as necessary[442]. - The fair value of the acquired customer relationships from DSS was estimated using the excess earnings method, contributing to the overall goodwill[474]. - The total intangible assets acquired from the MIS acquisition were valued at 35,000,000, with a weighted average useful life of 10 years for technology[482]. - Goodwill from the Adcole acquisition was recorded at 21,525,000,reflectingpotentialsynergiesandmarketexpansion[469].−ThefairvalueofthecontingentearnoutforMISwasestimatedat21,525,000, reflecting potential synergies and market expansion[469]. - The fair value of the contingent earnout for MIS was estimated at 11,500,000, settled as of December 31, 2021[479]. Challenges and Risks - The company has experienced supply chain disruptions and labor shortages due to the COVID-19 pandemic, impacting its operating environment[415]. - Significant changes in unobservable inputs for contingent consideration could lead to substantial adjustments in fair value measurements, emphasizing the inherent risks in valuation[534].