Home Business Wire Redwire Corporation Reports Second Quarter 2022 Financial Results

Redwire Corporation Reports Second Quarter 2022 Financial Results

JACKSONVILLE, Fla.–(BUSINESS WIRE)–$RDW–Redwire Corporation (NYSE: RDW), a new leader in mission critical space solutions and high reliability components for the next generation space economy, today announced results for its second quarter ended June 30, 2022.

Redwire will live stream a presentation with slides. Please use the link below to follow along with the live stream: https://event.choruscall.com/mediaframe/webcast.html?webcastid=f52OeAqX

Q2 2022 Highlights

  • Revenue increased $4.6 million, or 14.2%, to $36.7 million for the three months ended June 30, 2022, from $32.1 million for the three months ended June 30, 2021.
  • Successful delivery of proven and differentiated products and services for multiple National Security Space (“NSS”) and commercial customers, including for multi-year, multi-shipset missions.
  • Operational successes have led to additional work and cross-selling of higher gross margin products and services with improved on-time deliveries, including for large solar array programs and navigation component projects.
  • Investments continue to expand production capacity and increase scale and execution efficiency; opened new facility in Luxembourg to specialize in design and development of robotic arms for orbital, free-flying and lunar missions.
  • Our significantly higher 1.68 book-to-bill ratio1, combined with increased gross margins, provides for an improved financial outlook for the second half of 2022 and 2023.

“We continued to execute on our long-term strategy during the second quarter, building on our diversified portfolio of proven products, demonstrated flight heritage and long-term customer relationships across the government civil, national security and commercial segments,” stated Peter Cannito, Chairman and Chief Executive Officer of Redwire. “With approximately seventy percent of our revenue from government contracts in the expanding civil space and national security segments that have been cultivated over decades, Redwire has a solid foundation to capitalize on the extraordinary potential of the rapidly growing commercial space segment as that segment emerges over time. We are well-positioned for the long term, regardless of the broader macro-economic environment.”

Additional Q2 2022 Financial Highlights:

  • Net loss and Pro Forma Adjusted EBITDA1 were $(77.0) million and $(4.1) million, respectively, for the three months ended June 30, 2022 compared to net loss and Pro Forma Adjusted EBITDA of $(15.9) million and $2.1 million, respectively, for the three months ended June 30, 2021. The net loss in the second quarter of 2022 included an $80.5 million non-cash goodwill, intangible and long-lived asset impairment charge.
  • The three months ended June 30, 2022 delivered better financial performance compared to the three months ended March 31, 2022 with improved revenues of 11.7%, gross margin of 3.3%, Adjusted EBITDA1 of 13.2%, and Free Cash Flow1 of $(0.5) million compared to $(6.4) million for the three months ended June 30, 2022 and March 31, 2022, respectively.
  • Redwire expects to achieve positive Adjusted EBITDA in the second half of 2022 driven by increased revenue and changes in contract mix with higher gross margins. For the fiscal year ended December 31, 2022, Redwire is updating its previously provided guidance and now expects revenues to be in a range of approximately $165 million to $175 million and Pro Forma Adjusted EBITDA2 to be in a range between $(2.0) million and $3.0 million.

“Q2 revenues grew year-over-year and sequentially,” said Jonathan Baliff, Chief Financial Officer of Redwire. “Our flight heritage and investments we have made in the first half of 2022 create the scale to compete and win more and larger opportunities, as demonstrated by our second quarter 2022 book-to-bill ratio of 1.68. When combined with new contract awards with increased gross margin, Redwire has a much-improved financial outlook for the second half of 2022 and 2023 compared to the first half of 2022.”

1 Total book-to-bill, a key business measure, and Pro Forma Adjusted EBITDA are not a measure of results under generally accepted accounting principles in the United States. See “Non-GAAP Financial Information” and the reconciliation tables included in this press release for details regarding the calculation of book-to-bill, Adjusted EBITDA and Pro forma Adjusted EBITDA.

Capitalization and Liquidity

On August 8, 2022, the Company entered into the Fourth Amendment to the Adams Street Capital Credit Agreement. The Fourth Amendment, among other things, suspends the requirement to comply with the consolidated total net leverage ratio, commencing with the quarter ended June 30, 2022 through June 30, 2023. The Company is required to maintain a minimum liquidity covenant of $5 million measured on the last day of each fiscal month commencing with month ending September 30, 2022 through September 30, 2023. In addition, the Fourth Amendment increased the per annum interest rate with respect to the initial term loans, delayed draw term loans and revolving loans by 2.00%, which interest shall accrue and be paid in kind, until the Company is in compliance with the consolidated total net leverage ratio.

In connection with the execution of the Fourth Amendment, AE Industrial Partners Fund II, LP and certain of its affiliates (the “AEI Guarantors”), provided a limited guarantee for the payment of outstanding term loans up to $7.5 million in the aggregate. In the event that the AEI Guarantors are required to make payments to the lenders under the Adams Street Capital Credit Agreement pursuant to the terms of the limited guarantee, each AEI Guarantor would be subrogated to the rights of the lenders. In connection with the limited guarantee, the Lead Borrower agreed to pay to the AEI Guarantors, a fee equal to 2% of any amount actually paid by such guarantors under the limited guarantee. The fee is waivable by the AEI Guarantors in their discretion.

Financial Results Investor Call

Management will conduct a conference call starting at 9:00 a.m. ET on Wednesday, August 10, 2022 to review financial results for the second quarter ended June 30, 2022. This release and the most recent investor slide presentation are available in the investor relations area of our website at redwirespace.com.

Redwire will live stream a presentation with slides during the call. Please use the following link to follow along with the live stream: https://event.choruscall.com/mediaframe/webcast.html?webcastid=f52OeAqX. The dial-in number for the live call is 877-485-3108 (toll free) or 201-689-8264 (toll), and the conference ID is 13732244.

A telephone replay of the call will be available for two weeks following the event by dialing 877-660-6853 (toll-free) or 201-612-7415 (toll) and entering the access code 13732244. The accompanying investor presentation will be available on August 10, 2022 on the investor section of Redwire’s website at ir.redwirespace.com.

Any replay, rebroadcast, transcript or other reproduction of this conference call, other than the replay accessible by calling the number and website above, has not been authorized by Redwire Corporation and is strictly prohibited. Investors should be aware that any unauthorized reproduction of this conference call may not be an accurate reflection of its contents.

1 Free Cash Flow and Adjusted EBITDA are not measures of results under generally accepted accounting principles in the United States. See “Non-GAAP Financial Information” and the reconciliation tables included in this press release for details regarding the calculation of Free Cash Flow, Adjusted EBITDA and pro forma Adjusted EBITDA.

2 Pro forma Adjusted EBITDA is not a measure of results under generally accepted accounting principles in the United States. We are unable to provide guidance for net income (loss) or reconciliations to forward looking net income (loss) because we are unable to provide a meaningful or accurate calculation or estimation of certain reconciling items without unreasonable effort. This is due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. Thus, we are unable to present a quantitative reconciliation of the aforementioned forward looking non-GAAP financial measures to the most closely comparable forward looking U.S. GAAP financial measure because such information is not available. See Appendix for more information regarding Pro Forma Adjusted EBITDA.

About Redwire Corporation

Redwire Corporation (NYSE: RDW) is a new leader in space infrastructure for the next generation space economy, with valuable intellectual property for solar power generation and in-space 3D printing and manufacturing. With decades of flight heritage combined with the agile and innovative culture of a commercial space platform, Redwire is uniquely positioned to assist its customers in solving the complex challenges of future space missions. For more information, please visit www.redwirespace.com.

Cautionary Statement Regarding Forward-Looking Statements

Readers are cautioned that the statements contained in this press release regarding expectations of our performance or other matters that may affect our business, results of operations, or financial condition are “forward looking statements” as defined by the “safe harbor” provisions in the Private Securities Litigation Reform Act of 1995. Such statements are made in reliance on the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, included or incorporated in this press release, including statements regarding our strategy, financial position, guidance, funding for continued operations, cash reserves, liquidity, projected costs, plans, projects, awards and contracts, and objectives of management, are forward looking statements. Words such as “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “continued,” “project,” “plan,” “goals,” “opportunity,” “appeal,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” “shall,” “possible,” “would,” “approximately,” “likely,” “schedule,” and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements, but the absence of these words does not mean that a statement is not forward looking. These forward-looking statements are not guarantees of future performance, conditions or results. Forward looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control.

These factors and circumstances include, but are not limited to: (1) the company’s limited operating history; (2) the development and continued refinement of many of the company’s proprietary technologies, produces and service offerings; (3) the possibility that the company’s assumptions relating to future results may prove incorrect; (4) the inability to successfully integrate recently completed and future acquisitions; (5) the possibility that the company may be adversely affected by other macroeconomic, business, and/or competitive factors; (6) the impacts of COVID-19 on the company’s business; (7) unsatisfactory performance of our products; (8) the emerging nature of the market for in-space infrastructure services; (9) inability to realize benefits from new offerings or the application of our technologies; (10) the inability to convert orders in backlog into revenue; (11) data breaches or incidents involving the company’s technology; (12) the company’s dependence on senior management and other highly skilled personnel; (13) incurrence of significant expenses and capital expenditures to execute our business plan; (14) the ability to recognize the anticipated benefits of the business combination Genesis Park Acquisition Corp., which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees; (15) costs related to the business combination with Genesis Park Acquisition Corp.; (16) early termination, audits, investigations, sanctions and penalties with respect to government contracts; (17) inability to report our financial condition or results of operations accurately or timely as a result of identified material weaknesses; (18) inability to meet or maintain stock exchange listing standards; (19) the need for substantial additional funding to finance our operations, which may not be available when we need it, on acceptable terms or at all; (20) significant fluctuation of our operating results; (21) adverse publicity stemming from any incident involving the Company or its competitors; (22) changes in applicable laws or regulations; ; and (23) other risks and uncertainties described in our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and those indicated from time to time in other documents filed or to be filed with the SEC by the Company.

The forward-looking statements contained in this press release are based on our current expectations and beliefs concerning future developments and their potential effects on us. If underlying assumptions to forward looking statements prove inaccurate, or if known or unknown risks or uncertainties materialize, actual results could vary materially from those anticipated, estimated, or projected. The forward-looking statements contained in this press release are made as of the date of this press release, and the Company disclaims any intention or obligation, other than imposed by law, to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Persons reading this press release are cautioned not to place undue reliance on forward looking statements.

Non-GAAP Financial Information

This press release contains financial measures that have not been prepared in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”). These financial measures include Total backlog, book-to-bill, Adjusted EBITDA, Pro Forma Adjusted EBITDA and Free Cash Flow.

We use certain financial measures to evaluate our operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources which are not calculated in accordance with U.S. GAAP and are considered to be Non-GAAP financial performance measures. These Non-GAAP financial performance measures are used to supplement the financial information presented on a U.S. GAAP basis and should not be considered in isolation or as a substitute for the relevant U.S. GAAP measures and should be read in conjunction with information presented on a U.S. GAAP basis. Because not all companies use identical calculations, our presentation of Non-GAAP measures may not be comparable to other similarly titled measures of other companies.

Adjusted EBITDA, Pro Forma Adjusted EBITDA, and Free Cash Flow are three such Non-GAAP financial measures that we use. Adjusted EBITDA is defined as net income (loss) adjusted for interest expense (income), net, income tax (benefit) expense, depreciation and amortization, impairment expense, acquisition deal costs, acquisition integration costs, acquisition earnout costs, purchase accounting fair value adjustment related to deferred revenue, severance costs, capital market and advisory fees, write-off of long-lived assets, equity-based compensation, committed equity facility transaction costs, and warrant liability fair value adjustments. Pro Forma Adjusted EBITDA is computed in accordance with Article 8 of Regulation S-X and is computed to give effect to the business combinations as if they occurred on January 1 of the year in which they occurred. Free Cash Flow is computed as Adjusted EBITDA less capital expenditures and changes in net working capital.

 

REDWIRE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands of U.S. dollars, except share data)

 

June 30, 2022

 

December 31, 2021

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

10,879

 

 

$

20,523

 

Accounts receivable, net

 

12,702

 

 

 

16,262

 

Contract assets

 

14,747

 

 

 

11,748

 

Inventory

 

1,681

 

 

 

688

 

Income tax receivable

 

688

 

 

 

688

 

Prepaid insurance

 

692

 

 

 

2,819

 

Prepaid expenses and other current assets

 

4,073

 

 

 

2,488

 

Total current assets

 

45,462

 

 

 

55,216

 

Property, plant and equipment, net

 

5,824

 

 

 

19,384

 

Right-of-use assets

 

12,080

 

 

 

 

Intangible assets, net

 

57,724

 

 

 

90,842

 

Goodwill

 

56,752

 

 

 

96,314

 

Other non-current assets

 

756

 

 

 

 

Total assets

$

178,598

 

 

$

261,756

 

Liabilities and Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

18,408

 

 

$

13,131

 

Notes payable to sellers

 

1,000

 

 

 

1,000

 

Short-term debt, including current portion of long-term debt

 

780

 

 

 

2,684

 

Short-term lease liabilities

 

2,904

 

 

 

 

Accrued expenses

 

14,588

 

 

 

17,118

 

Deferred revenue

 

15,823

 

 

 

15,734

 

Other current liabilities

 

1,829

 

 

 

1,571

 

Total current liabilities

 

55,332

 

 

 

51,238

 

Long-term debt

 

84,625

 

 

 

74,867

 

Long-term lease liabilities

 

9,503

 

 

 

 

Warrant liabilities

 

3,943

 

 

 

19,098

 

Deferred tax liabilities

 

3,772

 

 

 

8,601

 

Other non-current liabilities

 

325

 

 

 

730

 

Total liabilities

 

157,500

 

 

 

154,534

 

Shareholders’ Equity:

 

 

 

Preferred stock, $0.0001 par value, 100,000,000 shares authorized; none issued and outstanding as of June 30, 2022 and December 31, 2021

 

 

 

 

 

Common stock, $0.0001 par value, 500,000,000 shares authorized; 63,253,836 and 62,690,869 issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

 

6

 

 

 

6

 

Additional paid-in capital

 

191,707

 

 

 

183,024

 

Accumulated deficit

 

(170,232

)

 

 

(75,911

)

Accumulated other comprehensive income (loss)

 

(383

)

 

 

103

 

Shareholders’ equity

 

21,098

 

 

 

107,222

 

Total liabilities and shareholders’ equity

$

178,598

 

 

$

261,756

 

 

REDWIRE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(In thousands of U.S. dollars, except share and per share data)

Three Months Ended

 

Six Months Ended

 

June 30, 2022

 

June 30, 2021

 

June 30, 2022

 

June 30, 2021

Revenues

$

36,728

 

 

$

32,148

 

 

$

69,595

 

 

$

63,846

 

Cost of sales

 

29,746

 

 

 

23,534

 

 

 

57,442

 

 

 

47,755

 

Gross margin

 

6,982

 

 

 

8,614

 

 

 

12,153

 

 

 

16,091

 

Operating expenses:

 

 

 

 

 

 

 

Selling, general and administrative expenses

 

17,562

 

 

 

12,143

 

 

 

38,513

 

 

 

23,399

 

Contingent earnout expense

 

 

 

 

11,114

 

 

 

 

 

 

11,114

 

Transaction expenses

 

48

 

 

 

2

 

 

 

94

 

 

 

2,419

 

Impairment expense

 

80,462

 

 

 

 

 

 

80,462

 

 

 

 

Research and development

 

1,708

 

 

 

958

 

 

 

3,432

 

 

 

1,954

 

Operating income (loss)

 

(92,798

)

 

 

(15,603

)

 

 

(110,348

)

 

 

(22,795

)

Interest expense, net

 

1,670

 

 

 

1,770

 

 

 

3,122

 

 

 

3,191

 

Other (income) expense, net

 

(15,515

)

 

 

(110

)

 

 

(14,335

)

 

 

(23

)

Income (loss) before income taxes

 

(78,953

)

 

 

(17,263

)

 

 

(99,135

)

 

 

(25,963

)

Income tax expense (benefit)

 

(1,925

)

 

 

(1,362

)

 

 

(4,814

)

 

 

(2,388

)

Net income (loss)

$

(77,028

)

 

$

(15,901

)

 

$

(94,321

)

 

$

(23,575

)

 

 

 

 

 

 

 

 

Net income (loss) per share, basic and diluted

$

(1.22

)

 

$

(0.43

)

 

$

(1.50

)

 

$

(0.63

)

Weighted-average shares outstanding:

 

 

 

 

 

 

 

Basic and diluted

 

62,992,454

 

 

 

37,200,000

 

 

 

62,842,495

 

 

 

37,200,000

 

 

 

 

 

 

 

 

 

Comprehensive income (loss):

 

 

 

 

 

 

 

Net income (loss)

$

(77,028

)

 

$

(15,901

)

 

$

(94,321

)

 

$

(23,575

)

Foreign currency translation gain (loss), net of tax

 

(358

)

 

 

52

 

 

 

(486

)

 

 

(179

)

Total other comprehensive income (loss), net of tax

 

(358

)

 

 

52

 

 

 

(486

)

 

 

(179

)

Total comprehensive income (loss)

$

(77,386

)

 

$

(15,849

)

 

$

(94,807

)

 

$

(23,754

)

 

 

 

 

 

 

 

 

REDWIRE CORPORATION

RECONCILIATION OF ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION

(“ADJUSTED EBITDA”)(1)

(Unaudited)

 

The table below presents a reconciliation of Adjusted EBITDA, Pro Forma Adjusted EBITDA, and Free Cash Flow to net income (loss), computed in accordance with U.S. GAAP for the following periods:

 

 

Three Months Ended

 

Six Months Ended

(in thousands)

June 30, 2022

 

June 30, 2021

 

June 30, 2022

 

June 30, 2021

Net income (loss)

$

(77,028

)

 

$

(15,901

)

 

$

(94,321

)

 

$

(23,575

)

Interest expense

 

1,669

 

 

 

1,770

 

 

 

3,121

 

 

 

3,192

 

Income tax expense (benefit)

 

(1,925

)

 

 

(1,362

)

 

 

(4,814

)

 

 

(2,388

)

Depreciation and amortization

 

3,402

 

 

 

2,618

 

 

 

7,060

 

 

 

4,889

 

Impairment expense

 

80,462

 

 

 

 

 

 

80,462

 

 

 

 

Acquisition deal costs (i)

 

48

 

 

 

2

 

 

 

94

 

 

 

2,419

 

Acquisition integration costs (i)

 

954

 

 

 

491

 

 

 

1,402

 

 

 

805

 

Acquisition earnout costs (ii)

 

 

 

 

11,114

 

 

 

 

 

 

11,114

 

Purchase accounting fair value adjustment related to deferred revenue (ii)

 

40

 

 

 

94

 

 

 

66

 

 

 

167

 

Severance costs (iii)

 

453

 

 

 

 

 

 

463

 

 

 

 

Capital market and advisory fees (iv)

 

1,450

 

 

 

2,824

 

 

 

3,408

 

 

 

6,004

 

Litigation-related expenses (v)

 

302

 

 

 

 

 

 

2,568

 

 

 

 

Equity-based compensation (vi)

 

1,743

 

 

 

 

 

 

6,154

 

 

 

 

Committed equity facility transaction costs (vii)

 

770

 

 

 

 

 

 

770

 

 

 

 

Warrant liability change in fair value adjustment (viii)

 

(16,393

)

 

 

 

 

 

(15,155

)

 

 

 

Adjusted EBITDA

$

(4,053

)

 

$

1,650

 

 

 

(8,722

)

 

 

2,627

 

Pro forma impact on EBITDA (ix)

 

 

 

 

429

 

 

 

 

 

 

1,527

 

Pro forma adjusted EBITDA

$

(4,053

)

 

$

2,079

 

 

$

(8,722

)

 

$

4,154

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

(4,053

)

 

$

1,650

 

 

$

(8,722

)

 

$

2,627

 

Less: Capital expenditures

 

(1,059

)

 

 

(748

)

 

 

(2,073

)

 

 

(1,324

)

Less / plus: Change in net working capital

 

4,586

 

 

 

(4,077

)

 

 

3,825

 

 

 

(10,232

)

Free Cash Flow

$

(526

)

 

$

(3,175

)

 

$

(6,970

)

 

$

(8,929

)

i.

Redwire incurred acquisition costs including due diligence and integration costs.

ii.

Redwire incurred acquisition costs related to the Roccor and MIS contingent earnout payments and purchase accounting fair value adjustments to unwind deferred revenue for MIS and DPSS.

iii.

Redwire incurred severance costs related to separation agreements entered into with former employees, including, but not limited to, the Company’s former CFO.

iv.

Redwire incurred capital market and advisory fees related to advisors assisting with preparation for the Merger and transitional costs associated with becoming a public company.

v.

Redwire incurred expenses related to the Audit Committee investigation and securities litigation.

vi.

Redwire incurred expenses related to equity-based compensation under Redwire’s equity-based compensation plan.

vii.

Redwire incurred expenses related to the committed equity facility with B. Riley, which includes consideration paid to enter into the Purchase Agreement as well as changes in the fair value of the committed equity facility derivative asset.

viii.

Redwire adjusted the fair value of the private warrant liability with changes in fair value recognized as a gain or loss during the respective periods.

ix.

Pro forma impact represents the incremental results of a full period of operations assuming the entities acquired during the periods presented were acquired from January 1 of the year in which they occurred. For the three months ended June 30, 2021, the pro forma impact included the results of Techshot, while the six months ended June 30, 2021 included the results of Oakman, DPSS and Techshot.

(1) Adjusted EBITDA and pro forma Adjusted EBITDA are not measures of results under generally accepted accounting principles in the United States.

Contacts

Investor Relations Contact:

investorrelations@redwirespace.com

Read full story here

Se questo articolo ti è piaciuto e vuoi rimanere sempre informato sulle novità tecnologiche
css.php