JACKSONVILLE, Fla. (Redwire PR) — 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.
