Redwire (RDW)2022-05-14 17:24Financial Data and Key Metrics Changes - GAAP revenue for Q1 2022 was 1.2 million or 4% from the prior year, driven by 5.2 million or 14% due to the absence of large subcontract activities from Q1 2021 and macroeconomic challenges [55] - Gross margin declined by 5.2 million in Q1 2022, influenced by cost impacts and increases in program estimates [57] - GAAP net loss for Q1 2022 was 4.7 million compared to a gain of 274 million, consistent with the previous quarter, with contracted backlog at 137 million [53][54] - Significant investments were made in business development, R&D, and capital expenditures, with spending increased over 70% in each category to support growth [25] Market Data and Key Metrics Changes - The national security sector is experiencing strong demand, driven by a 26% growth in the Space Force budget [15] - The approved NASA budget has grown by 8%, with increased investment in the Artemis program [16] - The emerging commercial space segment is expected to have tremendous growth potential over the next 5 to 10 years, despite near-term volatility [18][19] Company Strategy and Development Direction - The company aims to deliver foundational technologies for space infrastructure, focusing on improving and scaling products for customers [8] - Investments are being made to build a strong foundation for near-term growth and profitability, despite the associated cost impacts [13] - The company is uniquely positioned as a first mover in In-Space Servicing, Assembly, and Manufacturing (ISAM), with a national strategy supporting this area [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the 2022 forecast, expecting sales to be more heavily weighted towards the latter half of the year [14][31] - The company anticipates that the combination of existing backlog and a strong near-term pipeline will lead to increasing revenue profiles [60] - Management acknowledged potential rocky roads ahead for the economy but emphasized strong demand signals across all market segments [28][31] Other Important Information - The company ended Q1 2022 with 30.9 million in available liquidity, including 25 million in available borrowings [63] - A Committed Equity Facility was established, allowing the company to sell up to 80 million in equity for future growth [65] Q&A Session Summary Question: Near-term headwinds and revenue guidance - Management discussed the impact of backlog and bid execution on the second half of the year, with 547 million in bids submitted [69] Question: Expense side and inflation impact - Management highlighted the importance of maintaining good relationships with subcontractors to manage inflationary pressures [72] Question: Emerging commercial space opportunities - Management noted the difficulty in predicting timing but emphasized strong demand signals in the commercial space sector [74] Question: Solar array deliveries and revenue implications - Management confirmed expectations for solar array deliveries to triple in 2022, indicating strong customer interest and potential revenue growth [76] Question: National security opportunities and growth trajectory - Management acknowledged the growth in national security budgets and the company's capacity to execute on these opportunities [84] Question: Historical win rate on bids - Management indicated that historical data is limited, making it difficult to predict win rates for the current bids [92] Question: Long-term revenue trajectory - Management expressed confidence in the demand signals for space and the potential for growth, despite some uncertainty in timing [94]