Redwire (RDW) - 2022 Q2 - Quarterly Report

Financial Performance - Revenues increased 14% to $36.7 million for the three months ended June 30, 2022, compared to$32.1 million for the same period in 2021, driven by $1.7 million from the Techshot Acquisition[228]. - Operating loss for the three months ended June 30, 2022, was$92.8 million, compared to a loss of $15.6 million for the same period in 2021, reflecting a significant increase in expenses[227]. - Net loss for the three months ended June 30, 2022, was$77.0 million, a 384% increase compared to a net loss of $15.9 million in the prior year[227]. - Revenues increased by$5.7 million, or 9%, for the six months ended June 30, 2022, primarily due to contributed revenue from 2021 acquisitions[244]. - Net income (loss) for the six months ended June 30, 2022 was $(94.3) million, a 300$(23.6) million in the prior year[243]. Cost and Expenses - Cost of sales rose by $6.2 million, or 26$1.3 million from the Techshot Acquisition and increased production costs[229]. - SG&A expenses increased by $5.4 million, or 45$750,000, or 78%, for the three months ended June 30, 2022, reflecting the company's commitment to future technologies[227]. - Cost of sales increased by $9.7 million, or 20$1.6 million, or 19%, for the three months ended June 30, 2022, with gross margin percentages at 19% compared to 27% in the prior year[232]. - Gross margin decreased by $3.9 million, or 24$80.5 million, or 100%, for the three months ended June 30, 2022, with charges related to property and equipment, intangible assets, and goodwill[236]. - Other (income) expense, net increased by $14.3 million, or 62,226$46 thousand, or 2300%, for the three months ended June 30, 2022, primarily related to the acquisition of Techshot[235]. - Contingent earnout expenses decreased by $11.1 million, or 100$80.0 million common stock purchase agreement to support growth strategies, including acquisitions and working capital[225]. - The company continues to invest in technologies and infrastructure to increase production capacity and operating leverage through 2022[216]. - The company expects to continue making significant investments in business expansion and technology development[271]. Debt and Liquidity - Liquidity as of June 30, 2022, totaled $25.9 million, consisting of$10.9 million in cash and cash equivalents and $15.0 million in available borrowings[274]. - Total debt as of June 30, 2022, was$86,910 thousand, up from $79,204 thousand as of December 31, 2021[275]. - The revolving credit facility commitment was increased from$5.0 million to $25.0 million under the Third Amendment[278]. - As of June 30, 2022, the company was in compliance with its debt covenants under the Adams Street Credit Agreement[284]. Backlog and Future Outlook - The book-to-bill ratio was 1.68 for the three months ended June 30, 2022, significantly up from 0.45 for the same period in 2021[261]. - Total contracted backlog as of June 30, 2022, was$162,137 thousand, an increase from $139,742 thousand as of December 31, 2021[266]. - Organic backlog at the end of the period was$150,624 thousand, up from $133,115 thousand at the beginning of the period[266]. - The company recognized organic revenue of$(66,793) thousand during the period ended June 30, 2022[266]. Risk Factors and Accounting Policies - The company is experiencing macroeconomic challenges, including inflation and supply chain pressures, impacting cost estimates and production costs[228][229]. - The Company faces risks including failure to meet internal forecasts, adverse technological events, and volatility in equity and debt markets[311]. - No material changes to critical accounting policies occurred during the reporting periods covered[311].