Redwire (RDW) - 2022 Q1 - Quarterly Report

Financial Performance - Revenues for the three months ended March 31, 2022, increased by $1.2 million, or 4$32.867 million compared to $31.698 million for the same period in 2021[197]. - Cost of sales rose by$3.5 million, or 14%, for the three months ended March 31, 2022, totaling $27.696 million, primarily due to$3.7 million from 2021 acquisitions and increased production costs[199]. - Gross margin decreased by $2.3 million, or 31$5.171 million, representing 16% of revenues for the three months ended March 31, 2022, down from 24% in the prior year[200]. - Selling, General and Administrative (SG&A) expenses surged by $9.7 million, or 86$20.951 million, driven by equity-based compensation and litigation-related expenses[201]. - Research and development expenses increased by $0.7 million, or 73$1.724 million, reflecting a strategic investment in future technologies despite macroeconomic challenges[204]. - Net loss for the three months ended March 31, 2022, was $17.293 million, compared to a net loss of$7.674 million for the same period in 2021, marking a 125% increase in losses[197]. - Adjusted EBITDA for the three months ended March 31, 2022, was $(4.669) million, a decrease from$0.977 million for the same period in 2021[210]. Operational Highlights - The company completed multiple launches and successfully operated payloads on the International Space Station, demonstrating its commitment to supporting current space missions[187]. - The company is focused on expanding its infrastructure solutions to support the growth of the space economy, which is seen as being at an inflection point due to reduced launch costs[186]. - The company is investing in in-space manufacturing and assembly technologies, with a critical design review for OSAM-2 completed in Q4 2021[188]. - The company anticipates continued investment in technologies throughout 2022, despite the impact of COVID-19 and macroeconomic factors on its operations[189]. Financial Position - Available liquidity as of March 31, 2022, totaled $30.9 million, consisting of$5.9 million in cash and $25.0 million in available borrowings[225]. - Total debt as of March 31, 2022, was$77.867 million, a decrease from $79.204 million as of December 31, 2021[226]. - The company has identified a plan for cost reduction actions, including workforce rationalizations and business unit optimization initiatives[224]. - The consolidated total net leverage ratio was amended to not exceed 6.50:1.00 as of the last day of any quarter[229]. - The revolving credit facility commitment was increased from$5.0 million to $25.0 million on March 25, 2022[231]. - As of March 31, 2022, the company was in compliance with its debt covenants under the Adams Street Credit Agreement[233]. - The company entered into an$80 million common stock purchase agreement to support growth strategies, including acquisitions and working capital[239]. Cash Flow and Investments - For the three months ended March 31, 2022, net cash used in operating activities was $11.4 million, compared to$12.5 million for the same period in 2021[242][244]. - Net cash used in investing activities for the three months ended March 31, 2022, was $1.0 million, significantly lower than$34.1 million in the same period of 2021[245][246]. - For the three months ended March 31, 2022, net cash used in financing activities was $2.1 million, compared to a net cash inflow of$40.9 million in the same period of 2021[247]. - The company had total contractual obligations of $93.0 million as of March 31, 2022, including long-term debt maturities and future minimum lease payments[240]. - The company repaid the full outstanding principal and interest of$41.6 million on the SVB Loan on September 2, 2021[236]. - The D&O Financing Loan of $3.0 million has an interest rate of 1.74$30.426 million compared to revenues of $32.867 million[213]. - Contracted backlog at the end of March 31, 2022, was$137.301 million, slightly down from $139.742 million at the end of December 31, 2021[218]. - Total backlog, including both contracted and uncontracted backlog, was$273.9 million as of March 31, 2022, with uncontracted backlog at $136.6 million[220].