Q4 2023 Redwire Corp Earnings Call

Operator: Greetings and welcome to the Redwire Space fourth quarter and full year 2023 earnings conference call. At this time, all participants are in a listen only mode.

Greetings and welcome to the Red wire space fourth quarter and full year 2023 earnings conference call.

At this time all participants are in a listen only mode.

Operator: A question and answer session will follow the formal presentation. If anyone should require operator assistance during the event, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jeff Zeunik, Senior Vice President, Financial Planning and Analysis and Investor Relations. Thank you. You may begin. Thank you, Jesse.

A question and answer session will follow the formal presentation. If anyone should require operator assistance during the event. Please press star zero on your telephone keypad.

As a reminder, this conference is being recorded it is now my pleasure to introduce your host Jetblue Nic Senior Vice President financial planning and analysis and Investor Relations. Thank you you may begin.

Thank you Jessie and good morning, everyone welcome to Red wire, its fourth quarter and full year 23 earnings call.

Jeff Zeunik: And good morning, everyone. Welcome to Redwire's fourth quarter and full year 2023 earnings call. We hope that you've seen our earnings release, which we issued yesterday afternoon. It has also been posted in the investor relations section of our website at redwirespace.com. Let me remind everyone that during the call, Redwire management may make forward-looking statements that reflect our beliefs, expectations, intentions, or predictions of the future. These forward-looking statements are subject to risks and uncertainties that are described in more detail on slide two. Additionally, to the extent we discuss non-GAAP measures during the call, please see slide three, our earnings release, or the investor presentation on our website for the calculation of these measures and a GAAP reconciliation.

We hope that you see in our earnings release, which we issued yesterday afternoon and is also been posted in the Investor Relations section of our website at Red wire space Dot com.

Let me remind everyone that during the call Red wire management may make forward looking statements that reflect our beliefs expectations intentions or predictions of the future.

Yeah.

Our forward looking statements are subject to risks and uncertainties that are described in more detail on slide 10.

Additionally to the extent, we discuss non-GAAP measures during the call. Please see slide three our earnings release or the Investor presentation on our website for the calculation of these measures any GAAP reconciliations.

Jeff Zeunik: As previously mentioned, I am Jeff Zeunik, Redwire's Senior Vice President of Financial Planning and Analysis and Investor Relations. Joining me on today's call are Peter Cannito, Chairman and Chief Executive Officer, and Jonathan Baliff, Chief Financial Officer. With that, I would like to turn the call over to Peter.

So you mentioned I am Jeff read why our senior Vice President of financial planning and analysis and Investor Relations.

Joining me on today's call are Peter can igo, Chairman and Chief Executive Officer, and Jonathon band Chief Financial Officer with that I would like to turn the call over to Pete <unk>.

Peter Anthony Cannito: Thank you, Jeff. During today's call, I will take you through a discussion of our key accomplishments in the fourth quarter and full year 2023, followed by a discussion of our outlook for 2024, and Jonathan will present the financial highlights for the same fourth quarter and full year 2023 periods, after which we will open the floor for Q&A. Please turn to slide six. The fourth quarter of last year was another excellent quarter for Redwire. During the fourth quarter, we achieved $63.5 million in Q4 revenue, an 18.2% improvement over Q4 2022. We achieved positive adjusted EBITDA of $1.7 million in Q4, a $2.5 million increase on a year-over-year basis from the fourth quarter of 2022 to the fourth quarter of 2023. Additionally, we narrowed our net loss to $8.2 million, a $17.7 million year-over-year improvement from the fourth quarter of 2022.

Thank you Jeff.

Today's call I will take you through a discussion of our key accomplishments in the fourth quarter and full year 2023, followed by a discussion of our outlook for 2024, and Jonathan will present, the financial highlights for the same fourth quarter and full year 2023 period, after which we will open the floor for Q&A.

Please turn to slide six.

The fourth quarter of last year was another excellent quarter for Red White <unk>.

During which we continued our positive momentum we've now delivered four consecutive quarters positive adjusted EBITDA and revenue growth.

During the fourth quarter, we achieved $63 $5 million in Q4 revenue and 18, 2% improvement over Q4 2022.

We achieved positive adjusted EBITDA of one seven.

$7 million in Q4 to $5 million increase on a year over year basis in the fourth quarter of 2020 in Q2, the fourth quarter of 2023.

We narrowed our net loss to $8 $2 million, a $17 $7 million year over year improvement from the fourth quarter 2022.

Peter Anthony Cannito: We achieved free cash flow of positive $12.6 million, a year-over-year improvement of $18.1 million. We also achieved cash from operations of positive $15.7 million, a year-over-year improvement of $20.5 million. And finally, we achieved a book-to-bill ratio of 2.81 times during the quarter. It was a fantastic quarter for books.

We achieved free cash flow.

Positive $12 $6 million, a year over year improvement of $18 $1 million.

We also achieved cash from operations, a positive $15 $7 million a year over year improvement $25 million and finally, we achieved a book to Bill ratio 2.81 times during the quarter. It was a fantastic quarter for bookings.

Peter Anthony Cannito: Please move to slide seven. In addition to a strong fourth quarter, I am very pleased to report that 2023 was a record year for financial performance at Redwire. Our ability to deliver differentiated, high-quality solutions and products to our customers resulted in tangible financial results for our shareholders. During 2023, we achieved record revenues of $243.8 million, which was at the top of our annual guidance range of between $220 million and $250 million. We achieved positive adjusted EBITDA of $15.3 million and positive cash from operations of $1.2 million for the full year. We also received $300 million in contracts awarded during the year and had a full-year book-to-bill ratio of 1.23 times. Our heritage plus innovation strategy is working. Please turn to slide 8.

Please move to slide seven.

In addition to a strong fourth quarter I am very pleased to report that 2023 was a record year for financial performance and Red wine.

Our ability to deliver differentiated high quality solutions and products to our customers resulted in tangible financial results for our shareholders.

During 2023, we achieved record revenues of $243 $8 million, which was at the top of our annual guidance range.

220 million to $250 million.

We achieved positive adjusted EBITDA of $15 $3 million and positive cash from operations of $1 $2 million for the full year.

We also received $300 million in contracts awarded during the year and had a full year book to Bill ratio of one point to three times, our heritage, but innovation strategy is working.

Please turn to slide eight.

Peter Anthony Cannito: By focusing on the fundamental building blocks of space, we are meeting the expanding demand of our customers for Redwire's differentiated core offering. For the full year of 2023, we grew revenue by 51.9% from 2022 to 2023. We narrowed our net loss to $27.3 million, a $103.4 million improvement from 2022 to 2023.

By focusing on the fundamental building blocks of space. We are meeting the expanding demand of our customers for red wires differentiated core offerings.

For the full year of 2023, we grew revenue 51, 9% from 2022 to 2023.

We narrowed our net loss to $27 3 million, a $183 $4 million improvement from 2022 to 2023.

Peter Anthony Cannito: We improved adjusted EBITDA by $26.3 million from 2022 to 2023. Additionally, with disciplined cash management, we improved cash from operations year over year by $32.9 million and improved free cash flow year over year by $28.7 million from 2022 to 2023. It is important to note that we achieve these positive financial results by developing and delivering critical innovation for our customers throughout the year. We are not a maybe someday space company. In 2023, 24 Redwire solutions were deployed on 14 launches.

We improved adjusted EBITDA by $26 $3 million from 'twenty to 'twenty, two 'twenty train three and with disciplined cash management, we improved cash from operations year over year by 32.9.

$9 million and improved free cash flow year over year by $28 $7 million in 2022 to 2020 three.

It is important enough that we achieved these positive financial results by developing and delivering critical innovations for our customers throughout the year.

We are not a maybe someday space company in 'twenty, two 'twenty three 'twenty four red wire solutions were deployed on 14 launches.

Peter Anthony Cannito: Whether deploying antennas for national security, rolling out solar arrays for the International Space Station, or meeting our milestones on full satellite solutions for the European Space Agency, our reliable technical performance for our customers throughout 2023 was the foundation of our positive financial results. These results are directly attributable to the commitment and expertise of our workforce. Thank you to all the employees of Redwire for a great year. Next, we would like to focus forward and discuss our outlook for 2024. Please turn to slide 10.

Whether deploying antennas for national security Rolling out solar arrays for the international space station or meeting our milestones on a Saturday.

Satellite solutions for the European Space Agency are reliable technical performance for our customers throughout 2023, which is the foundation of our positive financial results.

These results are directly attributable to the commitment and expertise of our workforce.

You don't all of the employees spread wide.

For a great year.

Next we would like to focus forward and discuss our outlook for 2024.

Please turn to slide 10.

Peter Anthony Cannito: With a continuing trend in the decreasing cost of launch, deploying space infrastructure is more affordable than ever. As a result, we continue to see signs of a massive expansion in demand for space infrastructure. The image depicted on this slide underscores the breadth of the opportunity. Space Infrastructure Expansion not only includes small satellite constellations in low-Earth orbit but also includes expanding investment in infrastructure for medium-Earth orbit, geostationary Earth orbit, cislunar lunar deep space, and even very low-Earth orbit, or VLEO, to name a few.

With a continuing trend in decreasing cost of launch deploying space infrastructure is more affordable than ever.

As a result, we continue to see signs of a massive expansion in demand for space infrastructure.

The image depicted on this slide underscores the breadth of the opportunity.

Space infrastructure expansion not only include small satellite constellations in low Earth orbit, but also include expanding investment in infrastructure for medium Earth orbit geostationary Earth orbit since lunar lunar each space and even very low earth orbit or Leo Jeanine.

Peter Anthony Cannito: As a provider of the fundamental building blocks and space infrastructure across all these areas, Redwire is participating in the growth of the entire space ecosystem from VLEO to lunar and beyond. From our perspective, the strong demand for space infrastructure is driven by three key developments. First, as we hear and read about routinely in the news, space is increasingly a warfighter domain, with peer and near-peer threats continuing to target U.S. space superiority.

As a provider of the fundamental building blocks of space infrastructure across all of these areas Red wire is participating in the growth of the tire space ecosystem from the Leo to lunar and beyond.

Yeah.

From our perspective, the strong demand for space infrastructure is driven by three key developments.

First as we hear and read about routinely in the news space is increasingly a war fighter domain with peer and near peer threats continuing to target U S. Based superiority major investment is occurring across the entire space to me.

Peter Anthony Cannito: Major investment is occurring across the entire space domain. Secondly, there is a growth in demand for lunar infrastructure. The U.S. is heading back to the moon, and this time, we plan to stay. Whether participating in groundbreaking programs like Artemis or the recent Intuitive Machines commercial lunar landing, where we provided critical components, Redwire will play a significant role. Third is the Rapid Expansion Proliferated Leo Satellite Constellation. Both government and commercial customers see tremendous value in a new proliferated architecture of small satellite constellations for a wide variety of applications, such as communications and Earth observations.

Second is the growth in demand for linear infrastructure. The U S is heading back to the Moon and this time, we plan to stay.

Whether you're participating in groundbreaking programs like argument, where the recent intuitive machines commercial lunar landing, where we provided critical components red wire will play a significant role.

Third is the rapid expansion proliferated Leo satellite constellations those.

Both government and commercial customers see tremendous value in a new proliferated architecture, a small satellite constellations for a wide variety of applications, such as communications and Earth observation.

Peter Anthony Cannito: This is resulting in increased spending for satellite systems, subsystems, and components. These factors and others are positive indicators of continuing demand for Redwire space infrastructure products and solutions for the foreseeable future.

This is resulting in increased spending per satellite systems subsystems and components.

These factors and others are positive indicators of continuing demand for red wire space infrastructure products and solutions for this foreseeable future.

With that please turn to slide 11.

Peter Anthony Cannito: In an effort to focus and optimize our go-to-market strategy for 2024 and clearly emphasize where we are delivering value, Redwire has grouped our products and solutions into six core offerings that we consider the fundamental building blocks of space infrastructure. First, avionics and sensors. These are the spacecraft subsystems and components that are used for navigation, control, and imagery.

In an effort to focus and optimize our go to market strategy for 2024, and clearly emphasize where we are delivering value.

Red wire has grouped our products and solutions and the six core offerings that we considered the fundamental building blocks of space infrastructure.

First is avionics and sensors.

These are the spacecraft subsystems and components that are used for navigation control and emerged imagery collection.

Peter Anthony Cannito: Then, power generation. This includes solar arrays and power distribution systems that generate the necessary power for space systems that operate regardless of size or location. Next, Structures and Mechanisms. These include a variety of space infrastructure that provides critical mechanical functionality for on-orbit operations, from launch release mechanisms and deployable booms to berthing and docking.

Then power generation. This includes solar arrays and power distribution systems that generate the necessary power for space systems to operate regardless of size or location.

Next the structures and mechanisms. These include a variety of space infrastructure that provide critical mess mechanical functionality for on orbit operations from one release mechanism and deployable booms to Berthing and Duffy systems.

Peter Anthony Cannito: Redwire's radio frequency systems are the systems and payloads that enable space to space and space to earth communication. Next, Platforms, Payloads, and Missions; this includes full satellite systems, such as the Redwire PROBA satellite, as well as our proprietary digital engineering and modeling and simulation solutions that enable spacecraft development and operation. And finally, microgravity payloads, which include next-generation biotech and material in space manufacturing payloads that utilize the microgravity environment to manufacture innovative new products that are difficult to manufacture on Earth.

Red wires radio frequency systems are the systems and payloads that enable space to space based Earth communications.

Next platforms payloads emissions. This includes full satellite systems, such as the Red wire Probus satellite as well as our proprietary digital engineering and modeling in simulations solutions that enable spacecraft development and operations.

And finally, microgravity payloads, which includes next generation biotech and material based manufacturing payloads that utilize the microgravity environment to manufacture innovative new products that are difficult to manufacture on earth.

Yes.

Peter Anthony Cannito: These offerings can be thought of as the picks and shovels of space with broad utility to nearly all space markets and many space assets that are being developed by national security space customers, civil space agencies, and commercial companies globally. Please turn to slide 12. With a clear focus on our six core offerings, we are executing an optimized growth strategy for 2024 that is centered around four key principles. Protecting the core.

These offerings can be thought of them as the picks and shovels this space with broad utility to nearly all space market and many space assets that are being developed by the national security space customers Civil space Agency and commercial companies globally.

Please turn to slide 12.

With a clear focus on our six core offerings, we are executing and optimize growth strategy for 2024 that is senator centered around four key principles.

Protecting the core.

Peter Anthony Cannito: Scaling Production. Moving up the value chain, and Venture Optionality. In the next few slides, I'll describe these principles and provide an example of a recent success that best represents these principles in action. Turning to slide 13.

Scaling production.

Moving up the value chain.

And venture Optionality.

And then on the next few slides I will describe these principals who provide an example of a recent success that best represents these principles in action.

Turning to slide 13.

Peter Anthony Cannito: Our first growth principle, protecting the core, means continuing to deliver on our strong foundation of existing products with proven reliability and demonstrated flight heritage. It is about continuing the growth momentum of our success in 2023. As an example, in December 2023, Redwire announced that our L-band Link-16 antenna successfully demonstrated the transmission of Link-16 signals from space.

Our first growth principles protecting the core means continuing to deliver on our strong foundation of existing products with proven reliability and demonstrated flight heritage. It is about continuing the growth momentum of our success in 2023.

Example.

For 2023, Red wire announced that our L band link 16 at tenants successfully demonstrated the transmission link 16 signal from space.

Peter Anthony Cannito: This is a major milestone for the development of warfighter communication, and Redwire has delivered antennas supporting more than 50 spacecraft for a national security constellation being developed. With the opening of our new manufacturing and testing facility in Longmont, Colorado, announced in January, Redwire anticipates being able to triple the amount of hardware throughput in the next few years, building on the successful heritage of our RF system. Please turn to slide 14.

This is a major milestone for the development of Warfighter Communications Red wire is delivered and tennis supporting more than 50 spacecraft for national security constellation being developed.

With the opening of our new manufacturing and testing facility in Longmont, Colorado announced in January Red wire and anticipate being able to triple the amount of hardware throughput in the next few years building on the successful heritage.

RF systems.

Please turn to slide 14.

Peter Anthony Cannito: Our second growth principle, scaling production, means winning and delivering on increasingly larger orders by scaling our production to meet growing demand. As an example, I'm proud to announce that during the fourth quarter of 2023, Redwire won a $142 million contract award for Rosa Power Solutions from an undisclosed satellite manufacturer. This award is a testament to the differentiation, innovation, and on-orbit success of our rollout solar array technology and demonstrates that our heritage is leading to increasingly larger orders. This announcement comes on the heels of another announcement that we were selected as a strategic supplier for Blue Origin's trailblazing Blue Ring Space Mobility Platform, where we were awarded a contract to develop and deliver four RosaWings, as well as multiple Argus cameras and low voltage distribution units

Our second gross principal scaling production means winning and delivering an increasingly larger orders by scaling our production to meet growing demand.

As an example.

I am proud to announce that during the fourth quarter of 2023 Red wire, one a $142 million contract award for Rosa power solutions from an undisclosed satellite manufacturer.

This award is a testament to the differentiation.

Innovation.

And on orbit to success of our rollout solar array technology and demonstrate that our heritage is leading to increasingly larger orders.

This announcement comes on the heels of another announcement that we were selected as a strategic supplier for Blue origin, Trailblazing Blu rays space mobility platform, where we were awarded a contract to develop and deliver four roads the wings as well as multiple artists cameras and low voltage distribution units.

Peter Anthony Cannito: With these two awards, we have begun to scale our production capabilities while continuing to add to the heritage of our power generation offerings, which demonstrates we are being baselined on the growing system. As the systems we are baselined into, such as Blue Ring and a new set of satellites using ROSA, continue to sell and scale, Redwire will grow with our customers.

With these two awards, we have begun to scale, our production capabilities, while continuing to add to the heritage of our power generation offerings, which demonstrates how we are being baseline onto growing systems.

As the systems, we are based on indicators, such as Blue Red and a new set of satellite using Rosa continue to sell and scale red wire will grow with our customers.

Please turn to slide 15.

Peter Anthony Cannito: Our third growth principle, moving up the value chain, means leveraging our proven capabilities in developing and deploying space subsystems and components into future success in developing and deploying next-generation spacecraft and integrated mission papers, as an example. I am also excited to announce that Redwire has invested in the design of a Very Low Earth Orbit, or VLEO, spacecraft known as SaberSat. VLEO is a crucial domain for the future of defense and intelligence operations for the U.S. and its allies. With the SaberSat design, we are offering customers an innovative approach to explore a leap ahead orbital platform that could meet future mission needs for a new breed of vehicles with the performance potential between that of an unmanned aerial system and a standard LEO satellite.

Our third growth principle, moving up the value chain means leveraging our proven capabilities in developing and deploying space subsystems and components into future success, developing and deploying next generation spacecraft and integrated mission payload.

As an example.

I am also excited to announce that Red wire has invested in the design of a very low earth orbit or Leo spacecraft known as Sabre sat.

The Leo is a crucial domain for the future of defense and intelligence operations, but the U S and its allies.

With the same research design, we are offering customers an innovative approach to explore a leap at orbital platform that could meet future mission needs for a new breed of vehicles with the performance potential between that of an unmanned aerial system and a standard Leo satellite.

Peter Anthony Cannito: This is just one example of how we are exploring opportunities to move up the value chain by designing and developing differentiated next-generation spacecraft that will fill identified gaps in the market for future space infrastructure. Please turn to slide 16. Lastly, our fourth principle is to maintain venture optionality by continuing to pursue breakthrough development on high potential technologies that could create new markets with game-changing potential. Earlier this year, Redwire was pleased to announce the second mission of our in-space pharmaceutical development platform, Pillbox. Again, in partnership with Eli Lilly, the second Tobox mission is focused on researching widespread chronic diseases which have massive global demand for treatment. Pillbox 2 follows closely on the heels of the successful inaugural Pillbox 1 mission, which launched in November 2023 and returned to Earth in late December 2023 for delivery to the customer.

This is just one example of how we are exploring opportunities to move up the value chain by designing and developing differentiated next generation spacecraft that will fill identified gaps in the market for future space infrastructure.

Please turn to slide 16.

Lastly, our fourth principle is to maintain venture optionality by continuing to pursue breakthrough development on high potential technologies that could create new markets with game changing potential.

Earlier this year Red wire was pleased to announce the second mission of our ink based pharmaceutical development platform pillbox.

Again in partnership with Eli Lilly.

Second pillbox mission is focused on researching widespread.

Chronic diseases, which have massive global demand for treatment.

Pillbox two followed closely on the heels of the successful inaugural pillbox, one mission, which launched in November 2023, and return to Earth in late December 2023 for delivery to the customer.

Jonathan E. Baliff: Please turn to slide 17. Now turning to our bookings and backlog, our bookings for the fourth quarter of 2023 were $178.2 million. Our book to bill ratio was 2.81 times for the fourth quarter of 2023. We continue to see lumpy bookings growth from quarter to quarter but a consistently positive growth rate on an annual basis. Finally, as you can see on the right-hand side of this slide, our contracted backlog has increased 19.1% since the end of 2022 to a contracted backlog of $372.8 million. The growth in contracted backlog is one of many factors that gives us confidence in our future growth and stability. We continue to have a healthy pipeline with an estimated $4.8 billion of identified opportunities, including approximately $944 million in proposals submitted during the full year of 2023.

Please turn to slide 17.

Now turning to our bookings and backlog or bookings during the fourth quarter of 2023 were $178 $2 million our.

Our book to Bill ratio was 2.81 times for the fourth quarter of 2023.

We continue to see lumpy bookings growth quarter to quarter, but it consistently positive growth rate on an annual basis.

Finally, as you can see on the right hand side of this slide our contracted backlog has increased 19, 1% since the end of 2020 kit to a contracted backlog of $372 $8 million.

The growth in contracted basketball is one of many factors that gives us confidence in our future growth and stability. We continue to have a healthy pipeline with an estimated $4 $8 billion of identified opportunities, including approximately $944 million in proposal submitted during the full year of 2023.

Jonathan E. Baliff: Please turn to slide 18 for a brief discussion of the outlook for 2024 and why Redwire Management believes the performance momentum for 2023 will continue into this year and beyond. Our fourth quarter was a strong finish to 2023 with record revenues and positive adjusted EBIT, positive cash from operations and positive free cash, plus sequential improvement in the liquidity and contracted backlog. As a result, for 2024, we are forecasting full year revenue to be $300 million, which represents a 23% year over year growth. Through our excellence in execution initiatives, we continue to focus on improving operating leverage and cost efficiency, and we expect to continue on our path to profitability in 2024. Please turn to slide 19. With that, I'd now like to turn the call over to Jonathan Baliff, Redwire's Chief Financial Officer. Jonathan.

Please turn to slide 18 for a brief discussion on the outlook for 2024, and why Red why management believes the performance momentum 2023 will continue into this year and beyond.

Our fourth quarter.

<unk> was a strong finish to 2023 with record revenues and positive adjusted EBITDA.

It is cash from operations and positive free cash flow plus sequential improvement in our liquidity and contracted backlog.

As a result for 2024, we are forecasting full year revenue to be $300 million, which represents a 23% year over year growth rate.

Through our excellence in execution initiatives, we continue to focus on improving.

Rating leverage and cost efficiency, and we expect to continue on our path to profitability in 2024.

Please turn to slide 19.

With that I'd now like to turn the call over to Jonathan Balas Red wires, Chief Financial Officer.

Jonathan.

Jonathan E. Baliff: Thank you, Pete. Before I turn to the financial results, I'd like to highlight the photo on slide 19, which is of the RF testing chamber that Pete spoke about at our newly expanded Longmont, Colorado facility. This chamber is just one of the many investments we made during the year in support of future growth to serve the customer demand for Redwire's space infrastructure. Please turn to slide 20.

Thank you Pete before I turn to the financial results I'd like to highlight the photo on this slide 19, which is at the RF testing chamber that Pete spoke about at our newly expanded Longmont, Colorado facility.

But it's just one of the many investments we made during the year and support our future growth to serve the customer demand for red wire space infrastructure.

Please turn to slide 20.

Jonathan E. Baliff: Our fourth quarter 2023 saw continued positive momentum driven by this customer man and Redwire's excellence in execution focus. We achieved record revenue of $63.5 million, while also achieving our fourth consecutive positive adjusted EBITDA quarter since becoming a public company and our second positive pre-task force order as a public company. As you can see on this chart, all of our critical financial metrics saw significant year-over-year improvement on a dollar amount and on a percentage basis; record revenue also led to a 17.7 million euro year narrowing in our net loss to 8.2 million and a 2.5 million dollar improvement and adjusted EBITDA to 1.7 million. This result is also attributable to the disciplined project program management and continued cost control. Fourth quarter 2023 also saw record positive And this is after investing over $4 million in growth capex and research and development during the quarter. Please turn to slide 21.

Our fourth quarter 2023 saw continued positive momentum driven by this customer man and Red wires excellence in execution focus.

Record revenue of $63 5 million, while also achieving our fourth consecutive positive adjusted EBITDA quarter since becoming a public company.

And our second positive free cash flow quarter as a public company.

As you can see on this chart all of our critical financial metrics saw significant year over year improvement on a dollar amount and on a percentage basis.

Revenue also led to a $17 7 million year over year, narrowing and our net loss to $8 2 million and a $2 $5 million improvement in adjusted EBITDA to $1 7 million.

This result is also attributable to the disciplined project program management and continued cost controls.

Fourth quarter 2023 also saw record positive free cash flow of $12 6 million a year over year improvement of $18 1 million and this is after investing over $4 million in growth Capex and research and development during the quarter.

Please turn to slide 21.

Jonathan E. Baliff: As you can see on this page, and similar to page 16, all of our critical financial metrics saw significant year-over-year improvement in the full year 2023 on a dollar amount and a percentage basis. Redwire's excellence in execution yielded revenues of $243.8 million, 51.9% growth, while also achieving four consecutive quarters of positive adjusted EBITDA and our first full year of positive cash flow operations. Record revenue also led to a $103.4 million year-over-year narrowing of our net loss to $27.3 million and a $26.3 million improvement in adjusted EBITDA to $15.3 million. But importantly, Redwire improved cash from operations year over year by $32.9 million, leading to our fiscal year 2023 cash from operations of a positive 1.2 million. Operating cash flow led to a year-over-year improvement in full-year free cash flow of $28.7 million to a use of cash of only $7.1 million. These impressive results are attributable to the capability and commitment of our global team members and were achieved by investing over $13 million in growth capital and research and development for our future business. Please turn to slide 22.

As you can see on this page and similar to page 16, all of our critical financial metrics saw significant year over year improvement in the full year 2023 on the dollar amount and a percentage basis.

Red wires excellent execution yielded revenues of $243 8 million 51, 9% growth, while also achieving four consecutive quarters of positive adjusted EBITDA in our first full year of positive cash from operations.

Record revenue also led to a $103 4 million year over year narrowly and our net loss to $27 3 million and a $26 3 million improvement in adjusted EBITDA to $15 3 million.

But importantly, red why improved cash from operations year over year by over by $32 9 million, leading to our fiscal year 'twenty 'twenty free cash from operations of a positive.

$1 2 million.

Operating cash flow led to year over year improvement in full year free cash flow of $28 $7 million to a use of cash of only $7 one day.

These impressive results are attributable to the capability and commitment of our global team members and were achieved by investing over $13 million in growth Capex and research and development for our future business.

Please turn to slide 22.

Jonathan E. Baliff: Specifically for quarterly revenue, as you can see from the chart on the right, this quarter's record $63.5 million represented an 18.2% increase on a year-over-year basis, an increase of 1.4% on a sequential basis. During the quarter, more than 85% of our revenue derived from funded government programs or from global marquee customers for delivery in the areas of national security, satellite proliferation, and the exploration of space, to name just a few. Excluding the revenue contributed by SpaceMV, our fourth-quarter revenues were $48.6 million, an excellent organic growth of 15.5% on a quarterly year-over-year basis through work on existing contracts and incremental revenues from bookings, a bookings increase that Pete spoke about that resulted in a strong fourth-quarter book-to-bill ratio of 2.81%. Please turn to slide 23.

Specifically for quarterly revenue as you can see from the chart on the right. This quarter's record $63 5 million, representing an 18, 2% increase on a year over year basis, an increase of one 4% on a sequential basis.

During the quarter more than 85% of our revenue derived from funded government programs or from global marquee customers, we're delivering in the areas of National security satellite proliferation in the exploration space to name just a few.

Excluding the revenue contributed by space M D. Our fourth quarter revenues were $48 6 million an excellent organic growth of 15, 5% on a quarterly year over year basis from work on existing contracts and incremental revenues from bookings are bookings increase that Pete spoke about that resulted in a strong fourth quarter.

Book to Bill ratio of two eight times.

Please turn to slide 23.

Jonathan E. Baliff: For the full year 2023, not only did we grow revenues by 51.9% on a US cap basis, and this is excluding revenue by Space MD, but revenue grew organically at 26.9% compared to 2022. Additionally, during 2023, 71% of our revenue by location of the customers was attributable to the US, and 29% was traveled to Europe and other geographic locations. Finally, let's step back and look at Redwire's growth since 2021, a period of significant change for the state sector, significant interest rate increases, and a slowing of the global economy, and a very challenging capital market for small cap companies. During the period from 2021 Please turn to slide 24.

The full year 2023, not only did we grow revenues by 51, 9% on a U S. GAAP basis, and this is excluding revenue by space M. D. But revenue grew organically at 26, 9% compared to 2022.

Additionally, during 2023, 71% of our revenue.

By location of the customers were attributable to the U S and 29% were to go to Europe and other geographic locations.

Finally, let's step back and look at Rev. Rec wise growth since 2021 a period of significant change for the space sector significant interest rate increases and a slowing of the global economy, and a very challenging capital market for small cap companies.

During the period from 2021 2023 the compounded annual growth rate of Red why revenue on a U S. GAAP basis. Some 33, 1% while also achieving positive cash from operations in 2023.

Please turn to slide 24.

Jonathan E. Baliff: We drove an improvement in adjusted EBITDA of 2.5 million year over year from the fourth quarter of 2022 to a positive 1.7 million in the fourth quarter of 2023. Once again, our year over year adjusted EBITDA improvement was primarily driven by our improvement in gross profit, with fourth quarter gross profit growing 1.2 times higher from $8.6 million to $10.7 million on a year over year basis. This gross profit improvement was primarily driven by better contract mix and the maturing of our program manager. The sequential decline in adjusted EBITDA was primarily driven by discrete EAC adjustments on select projects, partially offset by higher revenues during the fourth quarter.

We drove an improvement in adjusted EBITDA of $2 5 million year over year from the fourth quarter of 2022 to a positive $1 7 million in the fourth quarter of 2023.

Once again, our year over year adjusted EBITDA improvement was primarily driven by our improvement in gross profit with fourth quarter gross profit growing one two times higher from $8 6 million to $10 7 million a year over year basis. This gross profit improvement was primarily driven by better contract mix and the maturing of our program management.

The sequential decline in adjusted EBITDA was primarily driven by discrete EAC adjustments on select projects, partially offset by higher revenues during the fourth quarter.

Jonathan E. Baliff: And just to note, on a year-over-year basis, Redwire saw a significant reduction in our net EAC adjustments compared to FY22, while also growing revenue by over 50%. Our adjusted EBITDA improvement was also supported by excellent cost control from Redwire's fourth-quarter XTA revenues, which were 26% of revenue, a notable drop from the 30.8% in the fourth quarter of 2020. On a year-over-year basis, we saw an improvement in adjusted-to-job of $26.3 million. This was primarily driven by an excellent increase in operating leverage year-over-year on both a percentage and an absolute basis. For the full year, SG&A margins decreased from 43.8% in 2022 to 28.1% in 2023, with a reduction in total absolute spend of almost $2 million, from $70.3 million to $68.5 million. Please turn to slide 25.

Just to note on a year over year basis Red wire saw a significant reduction in our net EAC adjustments compared to FY 'twenty two while also growing revenue by over 50%.

Our adjusted EBITDA improvement was also supported by excellent cost control from Red bars fourth quarter FCA revenues that were 626% of revenue.

Notable drop from the 38% in the fourth quarter of 2022.

On a year over year basis, we saw an improvement in adjusted EBITDA of $26 3 million. This was primarily driven by excellent increase in operating leverage year over year on both a percentage and absolute basis.

For the full year SG&A margin decreased from 43, 8% in 2022 to 28, 1% in 2023 with a reduction in total absolute spend of almost $2 million from $70 3 million to $68 five.

Please turn to slide 25.

Jonathan E. Baliff: As we've mentioned several times today, throughout last year, we made significant, prudent strategic investments. For example, during 2023, we made $8.3 million in capital expenditures, which is double 2022's capex of $4.2 million, plus $5 million in investments in research and development, and $3.6 million in a variety of corporate investments in systems and infrastructure that flow through SG&A. Please turn to slide 26. Similar to last quarter, on the left-hand chart, we show free cash flow. As a reminder, free cash flow provides a metric based on our US GAAP cash from operations minus capital expenditures, or CAXA.

As we've mentioned several times that throughout last year, we made significant prudent strategic investments. During 2023, we made $8 3 million in capital expenditures to double 2022, Capex of $4 2 million plus.

Plus $5 million and investments in research and development and $3 6 million and a variety of corporate investments in systems and infrastructure that flow through SG&A.

Toyota we continued to demonstrate our ability to perform and deliver now while also making investments in future growth and profitability, which were beginning to self fund.

Please turn to slide 26.

Similar to last quarter on the left hand chart, we show free cash flow as a reminder, free cash flow provides a metric based on our U S. GAAP U S. GAAP cash from operations minus capital expenditures of cats.

Jonathan E. Baliff: On a year-over-year basis, quarterly free cash flows improved by $18.1 million to a record positive $12.6 million for the fourth quarter. Credit goes to the revenue growth and profitability improvements already discussed. In addition, we had more efficient and effective working capital management over the fourth quarter. This is helped by a diversity of core offerings, customers, and new contracts, which cascades down to our cash flow from operations. Again, we continue to invest a significant amount of capex and research in capex and research and development. We think improvement in year-over-year quarterly cash from operating activities will continue to invest in the business and actually pay other expenses associated with the resiliency of Redwire. These expenses are intended to grow, diversify our revenue, scale the operations, and accelerate our path to profitability. In the right-hand chart, we show our available liquidity as of December 31st, 2023, which totaled $48.3 million, including $30.3 million in cash and cash equivalents.

The year over year basis quarterly free cash flow improved by $18 1 million to a record positive <unk> $12 6 million for the fourth quarter two for $20 5 million improvement in cash from operations.

Credit goes to the revenue growth and profitability improvements already discussed but in addition, we had more efficient and effective working capital management over the fourth quarter and.

And this was helped by a diversity of core offerings customers, new contracts, which cascades down to our cash flow from operations again, we continue to invest a significant amount of Capex and research and Capex and research and development.

We saw improvement in year over year quarterly cash from operating activities, while continuing to invest in the business and actually make other expenses associate with the resiliency of Red wine. These expenditures are intended to grow diversify our revenue scale, the operations and accelerate our path to profitability.

On the right hand chart, we show our available liquidity as of December 31, 2023, which totaled $48 3 million, including $30 3 million in cash and cash equivalents.

Jonathan E. Baliff: This quarter's liquidity is a significant sequential improvement as we continue on our path to profitability. I want to thank all of Redwire's teams for this quarter's excellent results, a total global effort that we will work to continue in 2024 and beyond. Please turn to slide 27. I will now turn over the presentation to Pete to provide brief final remarks.

Liquidity is a significant sequential improvement as we continue on our path to profitability.

I want to thank all of our team for this quarter's excellent results a total global effort and we will work to continue in 2024 and beyond.

Please turn to slide 27.

I will now turn over the presentation to T provide brief final remarks Pete.

Peter Anthony Cannito: Thank you, Jonathan. For perfect clarity, I would like to go back and reemphasize slide 23. That's a 51.9% growth on U.S. gas, was including Space NB, and Redwire grew organically at 26.9% compared to 2022, excluding spaced in. I, too, would also like to thank all the Redwire professionals around the world for their hard work and excellent fourth quarter and full year 2020, and all our customers for trusting Redwire. We will now open the floor for questions. Thank you.

Thank you Jonathan.

For perfect clarity I would like to go back and reemphasize from slide 23.

It's a 51, 9% growth on U S GAAP.

It was including space M D.

Why you grew organically 26, 9%.

2022, excluding stay Sunday.

I too would also like to thank all the red wire professionals around the world for their hard work and excellent fourth quarter and full year 2023.

And all of our customers for trusting read what we will now open the floor for questions.

Thank you ladies and gentlemen at this time, we will be conducting our question and answer session. We ask that you. Please limit yourself to one question and one follow up and then re queue for any additional questions.

Operator: Ladies and gentlemen, at this time, we will be conducting our question and answer session. We ask that you please limit yourself to one question and one follow-up and then re-queue for any additional questions. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.

If you would like to ask a question. Please press star one on your telephone keypad. The confirmation tone will indicate that your line is in the question queue.

You May press Star two if he would like turbo for your question from the queue for.

Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question is coming from the line of Suji DeSilva with Roth MKM. Please proceed with your questions. Good morning, Peter. Good morning, Jonathan.

For participants using speaker equipment and may be necessary to pick up your handset before pressing the star keys. One moment. Please let me poll for questions.

Our first question is coming from the line of Sujit de Silva with Roth M. Can please proceed with your question.

Good morning, Peter Good morning, Jonathan Congratulations on the revenue growth here in the profitability, that's coming with it and really good execution here.

So yeah.

Suji DeSilva: Congratulations on the revenue growth here and the profitability that's coming with it. Really good execution. So, um, yeah, so the 300 million guide for 24, uh, can we just understand some sense of linearity there? Is there any backend loading, or is that fairly linear, first half to second half? And maybe you can talk about the backlog visibility you have into those next 12 months versus the overall backlog. Yeah, so the backlog visibility is really good for both 24 and into 25. The 300, I would say from a how that's going to play out. Like we've been saying, one of the reasons we don't give quarterly guidance is that our revenue tends to come in lumpy. This is because some of our programs have pretty significant material buys.

Yeah, Hey, guys. So the 300 million guide for 'twenty, four or can we just start saying some some sense of linearity there or is there any backend loading or is that fairly linear first half to second half and maybe can talk about the backlog visibility you have into those next 12 months versus the overall backlog.

Yeah. So the backlog visibility is really good for both the 24 and into 'twenty.

The 300, I would say from a how that's going to play out.

We've been saying one of the reasons, we don't give quarterly guidance is that our revenue tends to come in lumpy. This is because some of our programs have pretty significant material buys.

So I would think about it as a.

Distributed.

Annually, but there's the opportunity for certain quarters to be.

Much higher lumpy than others that could be you know when youre looking at a big material buy.

Suji DeSilva: So I would think about it as distributed annually, but there's the opportunity for certain quarters to be a much higher lumpy than others that could be, you know, when you're looking at a big material by in a particular quarter that could skew the number. Does that answer your question? Yes, it does. And then perhaps Jonathan, a question on the gross margin trend. I think the fourth quarter was down a little bit.

In a particular quarter that could skew the numbers.

Does that answer your question, yes. It does absolutely and then perhaps for Jonathan a question on the gross margin trend I think in the fourth quarter was down a little bit just how should we think about gross margin going into 2024, what's the right framework for that.

Yeah. No look you saw at all he said more historical that future because we don't give.

Gross margin of course profit guidance, but look we saw a really nice steady increase in gross margin and gross profit through 2023.

Jonathan E. Baliff: Just how should we think about gross margin going into 2024? What's the right framework? Yeah, no, look, you saw, and I'll answer more historical than future because we don't give gross margin or gross profit guidance. But look, we saw a really nice steady increase in gross margin and gross profit through 2023. Very similar to what Pete said, you know, again, a lot of our revenue comes in, it's a bit lumpy. I would also say that our contract mix is such that you're not going to see the level of increases that we saw in 23 into 24, right?

Very similar to what Pete said, you know again, a lot of our revenue comes in lumpy I would say also that our contract mix is such that you're not going to see the level of increases that we saw in 'twenty three 'twenty four right I think that the nature of the significant increases we've gotten a lot of benefit and will continue to do better on project management and <unk>.

Graham manage but but some of the contract mix, especially as we get larger products.

Again, I, just I want to say that we don't expect that level of increase that that being said our EBITDA margin remember, we're seeing a lot better.

Jonathan E. Baliff: I think that the nature of the significant increases has gotten a lot of benefit, and we'll continue to do better in project management and program management. But some of the contract mix, especially as we get larger products, again, I just, I want to say that we don't expect that level of increase to happen. That being said, our EBITDA margin, remember, we're seeing a lot better SG&A margin decreases as the operating leverage increases. Unknown Attendee, Jonathan Baliff, Gregory Konrad, Adam Biskner, Unknown Attendee, Unknown, I mean, I think it's product mix and the larger the programs, sometimes the lower the gross margins, and it's a mix of materialized and also, but the And then one last question, probably for Peter, just the very topical in the headlines about government funding trends in various space endeavors. You know, there was a specific headline, OSAM-1.

<unk> margin decreases as the operating leverage in the business.

It improves and so EBITDA margin again for US is something we also look at because we're continuing to make investments, which should come on the SG&A line, but we're growing revenue a lot more than SG&A, and therefore, EBITDA, you'll see a lot more of it dropping to the bottom line and so that's how I'd kind of answer that question.

There's a lot of these bigger projects.

Not to be able to see the same level.

Our growth from our contract mix standpoint.

Yeah, that's right I mean, I think it's product mix and the larger the programs, sometimes below where the gross margins.

It's a mix of material buys can also.

But the absolute value of the gross profit over the year Oh, we will continue to be a positive for us.

Understood and then one last question probably for Peter just the very topical in the headlines about government funding trends in various space endeavors.

Yeah, there was a specific headline in OSA I'm, one I'm just curious on the implications for you guys and maybe you talk about National security is a growing opportunity for you and how that maybe there's a mix shift.

Unknown Attendee: I'm just curious about the implications for you guys and maybe talk about national security as a growing opportunity for you and how that maybe is a mix shift. Yeah, no, no, that's a great question. So first and foremost, we had no exposure to OSAM1.

Yeah No no. That's a great question, so first and foremost we have no exposure to the San Juan we weren't involved in that program in any way as a matter of fact, we see are the winding down of our San Juan is freeing up dollars and the NASA budget.

Peter Anthony Cannito: We weren't involved in that program in any way. As a matter of fact, we see the winding down of OSAM1 as freeing up dollars in the NASA budget that we certainly will be throwing our hat in the ring and engaging with the customer to see if that can free up some dollars for programs that we're largely interested in. So, no impact there. National security: I love that question.

We certainly will be.

Be throwing our hat in the rang and engaging with the customer.

To see if that can free up some dollars for programs that were largely interested in so.

No impact there are national security I Love that question, we actually doubled our national security revenue in Q4.

Peter Anthony Cannito: We actually doubled our national security revenue in Q4. So, we're experiencing pretty significant growth in national security. We did put out a press release about our new office in Chantilly that has some pretty sizable secure space associated with it. I think I've mentioned on previous calls that I think Redwire hits above its weight class in terms of our clearances and our insights into national security. I have a high-level security clearance and have worked in national security for my entire career, and we have a number of contracts that have the associated documentation in them to allow us to operate at high levels of classification.

So we're experiencing pretty significant growth in national security, we did put out a press release at about about our new office in Chantilly that have some pretty sizeable secure.

Secure space associated with it I think I've mentioned on previous calls.

Red wire cases above its weight class in terms of.

Our clearances and.

Our insights to National Security I.

Have a high level of security clearance and it worked and national security for my entire career and we had a number of contracts.

That has the associated debt.

Documentation in there to allow us to operate at a high level. The classification. So we're really bullish on that.

Peter Anthony Cannito: So, we're really bullish on the current trends going on in national security and Redwire's ability to participate in that growth. Okay, thanks, Peter. Thanks, Jonathan. That's easy.

The current trends going on in National security and Red wires ability too.

Participate in that growth.

Okay. Thanks, Peter Thanks, Jonathan.

That's easy.

Suji DeSilva: Thank you. Our next question is coming from Griffin Boss with B Riley Securities. Please proceed with your questions. Hi Pete, Jonathan, thanks for taking my questions. So yeah, first off, for me, the growth in pipeline and bids submitted is really impressive, especially given the strong backlog growth we saw in the quarter. Can you just give some more color on the breakdown of that pipeline? Just generally speaking, kind of what areas are you seeing with the most opportunity?

Thank you. Our next question is coming from Griffin boss with B Riley Securities. Please proceed with your question.

Hi, Pete Jonathan Thanks for taking my questions. So first off for me that the growth in pipeline and bid submitted is really impressive, especially given the strong backlog growth. We saw in the quarter can you just give some more color on the breakdown of that pipeline I'm, just generally speaking kind of what areas you're seeing with the most copper.

Attunity and tying it back to the six core offerings that you talked about.

Griffin Boss: And, you know, tying it back to those six core offerings that you talked about? Yeah, we don't really break down the individual opportunities in the pipeline, but I will point you to our four growth principles for 2024, because I think that represents really what's going on in that continued growth in our pipeline and proposals under review. So, again, as we continue to scale and as we continue to demonstrate on-orbit performance, that is leading to us being baselined on larger and larger programs. I think we have, in many of our products, a lot of customer confidence. And so we're bidding on bigger programs, as well as moving up the value chain, as I mentioned, and starting to take some bigger swings on larger subsystems, fully integrated mission payloads, and even... Full Satellite Mission Solutions, as you're probably aware in Europe. We provide whole satellite missions with our ProBus satellite and have done so for many years. We're now starting to look at other opportunities to move into white space, like I mentioned in the Betelgeuse spacecraft as well.

Yeah, we don't really break down the individual opportunities in the pipeline, but I will point you to our four growth principles for 2020.

Or because I think that represents really what's going on in in in that continued growth in our pipeline and the proposals under review.

Again, as we continue to scale and as we continue to demonstrate an orbit performance.

That is leading to us being baseline on a larger and larger programs I think we have.

And many of our products.

A lot of customer confidence and and so we're bidding.

On bigger programs as well as moving up the value chain like I'd mentioned and starting to take some bigger swings on.

Larger sub systems fully integrated mission payloads in Eden.

Full satellite mission solutions, as you're probably aware in Europe.

We provide a.

Full satellite missions with our pro by satellite and have done so for.

For many years, we're now starting to look at other opportunities to move into white space like I mentioned in beta Leo spacecraft.

Peter Anthony Cannito: That will result, I think, in a growing pipeline over time. Got it. Yep. Thanks for thanks for that, Pete. Obviously, there are a lot of exciting developments in space right now. I guess I'll just, turn over to, I mean, you called out the growth of lunar infrastructure, and obviously there's been a lot of press about that with the recent lunar landing from Intuitive, and you guys are ingrained in that. How big of an opportunity do you guys see NASA's CLPS program in general, and are you working with any of the other CLPS awardees beyond Intuitive? So one of the great things about Redwire is that we participate in multiple opportunities in all of the different areas.

As well that will result, I think in a Ah Ah Ah Ah growing pipeline over time.

Got it yep. Thanks for thanks for that Pete obviously, there a lot of exciting developments in the space right now I guess I'll just.

Turnover too I mean, you called out the growth in the lunar infrastructure.

And obviously, there's been a lot of press about that with the recent lunar landing from intuitive and you know you guys aren't great on that how big of an opportunity do you guys see NASA Eclipse program in general and and are you working with any of the other clips awardees beyond intuitive.

So one of the great things about Red wire is we have but we participate.

Across multiple opportunities and all of the different areas.

Peter Anthony Cannito: Off the top of my head, I can't think about what we've announced in this area or not, but we were certainly proud to be part of the intuitive machines bid. And I think that whenever Redwire provides capability that is successful in one mission, we often build the credibility that makes us a highly sought-after partner in other missions as well. But yeah, Lunar Infrastructure was, we're very proud and to be, a partner in that mission was a very successful for us. We talked about, I think, earlier last year, our Mason program that we won, where we're providing the technology and researching with our partners at NASA technology for building landing pads on the moon. I think that if there had been a landing pad on the moon, the probability of a smoother landing for the lunar lander, at least we think, would be higher.

Off the top of my head I can't think about what we've announced in this area or not but we were certainly proud to be part of the intuitive machines.

Bid and I think that you'll find whenever a red wire provides capability that is successful in.

One mission and we're often.

We build the credibility that makes us a highly sought after partner.

And other emissions as well.

But yeah lunar infrastructure was we're very proud.

To be.

Our partner in Oh that mission. It was very successful for US we talked about I think earlier last year. Our basic program that we won where we're providing.

The technology and researching with their partners at an access technology for building landing pads on the man I think that if there was a landing pad on the mat.

The probability.

A smoother Atlanta and Orlando at least we think would.

Would be higher so maybe some of the early.

Peter Anthony Cannito: So maybe some of the early attempts underscore the potential benefit of that technology. But yeah, we're very focused on lunar infrastructure. We talked about our VSAT partnership as well, where we'll be providing some solar arrays for lunar infrastructure in the future as well. So, a nice trend for Redwire.

Underscore the potential benefits of that technology, but yeah, we're very focused on sooner infrastructure, we talked about our Oh also.

Also our VSAT partnership.

Well, we will be providing some solar arrays for lunar infrastructure in future as well so a.

A nice trend for red wire and.

Peter Anthony Cannito: And, you know, that's one of the reasons I chose to put up that slide trying to..., reading emphasize to everybody that space infrastructure just isn't about Leo satellites, although that's a really fast growing, really important part of the market. We're not, ARCAN includes going beyond just satellites to things like the rapid and exciting growth we're seeing in the future of the moon. Yeah, excellent. I really appreciate the detailed response, Pete. And then just one more if I could for Jonathan, just turning back to the EAC adjustments.

One of the reasons I chose to put up that.

Fly trying to.

We emphasize to everybody that space infrastructure, just isn't about Leo satellites, although that's a really fast growing and a really important part of the market. We're not our Tam includes going beyond just satellites to things like the.

The rapid and exciting growth, we're seeing in the future of the minutes.

Yeah excellent and really appreciate the detailed response, Pete and then just one more if I could for Jonathan just turning back to the EAC adjustments. Obviously, you know as you mentioned that came down significantly year over year and I mean, it's becoming somewhat of a moot point given the just the size and scale of your revenue, but can you just give some more color on where those were.

Griffin Boss: Obviously, you know, as you mentioned, they came down significantly year over year. And I mean, it's becoming somewhat of a moot point, given the size and scale of your revenue. But can you just give some more color on where those were coming from in the fourth quarter? Was it one or two specific programs or more widespread on a smaller scale? Jonathan Baliff, It definitely wasn't widespread.

Coming from in the fourth quarter was it one or two specific programs or are more widespread on a smaller scale.

It definitely wasn't widespread well what I would say is like.

Jonathan E. Baliff: What I would say is, you know, like 2022, generally, our EAC adjustments are in our, let's call it, lower TRL. You know, we have very mature projects and a little less mature products. We do, you know, the equivalent of some R&D as we create the next generation of space infrastructure. Generally, those EACs are with that type, that type of infrastructure.

Like 2022 generally our EAC adjustments are in our let's call. It lowered TRL, we have very mature products and a little less mature products that we do the equivalent of some R&D as we create the <unk>.

Next generation space infrastructure generally goes eic's with those type that type of infrastructure, but again I have to emphasize we cut it in half while doubling I'm, sorry, while bringing up our GAAP U S. GAAP revenue by 50% over 50%. So again I think kudos goes to our operations group.

Jonathan E. Baliff: But again, I have to emphasize, we cut it in half while doubling, I'm sorry, while bringing up our gap, U.S. gap revenue by 50%, over 50%. So, you know, again, I think kudos goes to our operations group and our presidents for really making sure this program management is happening on time, because the key to these EAC adjustments and that EAC adjustments is on-time delivery, which we're very focused on as part of our excellence in next. Okay.

And our president for really making sure the program management is happening all the time.

Because the key to these EAC adjustments in net EAC adjustments as to as on time delivery, which we're very focused on as part of our excellence in execution.

Got it okay. Thanks for taking my questions and great to see the progress. Thank.

Griffin Boss: Thanks for taking my questions and great to see the progress. Thank you. Thank you. Our next question is coming from the line of Andre Shepard with Cantor Fitzgerald. Please proceed with your question. Hi, good morning, everyone.

Thank you.

Thank you. Our next question is coming from the line of Andre Shepherd with Cantor Fitzgerald. Please proceed with your question.

Hi, good morning, everyone. Congratulations on the strong financial quarter and thanks for taking our questions.

Andre Shepard: Congratulations on a strong financial quarter. And thanks for taking our question. I guess I was just wondering, considering you reported a positive free cash flow in Q4. I know I realize you're not guiding free cash flow throughout 2024, but just curious if you can maybe give us some color as to how we should continue to think about that for modeling purposes. Should we expect continued growth quarter over quarter? Or what's the best way to think about that?

I guess I was just wondering you know can see.

Considering your reported a positive free cash flow in Q4.

You know I know I realize youre not guiding free cash flow throughout our 'twenty 'twenty four but just curious if you can maybe give us some color as to how we should continue to think about that for modeling purposes should we expect.

We expect a continued growth quarter over quarter.

Or what's the best way to think about that thank you.

Jonathan E. Baliff: Thank you. Well, I'll link, you know, a bit of our cash flow generation in that fourth quarter with a large contract, which we just closed. And so some of the cash comes in, and you see it on the balance sheet.

I'll leave a bit of our cash flow generation in that fourth quarter with a large contract win which we disclosed and so some of the cash comes in and you see it on the on the balance sheet that being said, we you know we said in the past and that's one of the nice things about fourth quarters that we're bidding on projects that are great.

Jonathan E. Baliff: That being said, we, you know, we said in the past, and that's one of the nice things about fourth quarters, that we're bidding on projects that are greater than our annual revenue, right? And those are projects that, obviously, have a multi-year. But the bottom line is, we generally in our projects want a decent amount of cash coming in on the front end for material subcontractors and just generally because we're running a much tighter ship on our working capital. That being said, again, mimicking what Pete said, it can be lumpy.

Greater than our annual revenue right and those are projects that obviously are multi year, but the bottom line is that we generally in our in all our projects one a decent amount of cash coming in on the front end for materials subcontractors and just general because we were running a much.

So much tighter ship on our working capital.

That being said again mimicking what Pete said it can be lumpy.

But I will say, we we believe now we have a very nice liquidity profile of that cash flow from operations.

This is a company that can fund a significant amount of its growth is not just witnessed in the fourth quarter, but also we generated positive operating cash flow and that's in addition to.

Jonathan E. Baliff: But I will say we believe now we have a very nice liquidity profile and, you know, cash flow from operations. This is a company that can fund a significant amount of its growth, as not just witnessed in the fourth quarter, but we also generated a positive operating cash flow. And that's in addition to an IRAD spend that was significantly higher in the fourth quarter and the full year 23 than we did in the previous year.

And I read spend that was significantly higher in the fourth quarter and the full year 'twenty three than we did in Cleveland here. So.

Again, we don't give specific quarterly guidance on that but we continue our path to profitability and.

<unk> focused on making sure that.

We can we can fund a lot of room growth.

Got it that's super helpful and I guess, that's actually a great segue to my next question. So regarding that our recent $142 million contract to produce the the solar arrays. I'm wondering you know how should we be thinking about that translating into revenue you know over what time period might you expect to recognize.

Jonathan E. Baliff: So, again, we don't give specific quarterly guidance on that, but we continue our path to profitability, and we're again focused on making sure that we can fund a lot of our own growth. Got it. That's super helpful.

The majority of this contract.

Yeah, no great question so.

We will be recognizing that over 24, and a little bit of 25.

Andre Shepard: And I guess that's actually a great segue to my next question. So regarding that recent $142 million contract to produce the solar arrays, I'm wondering, you know, how should we be thinking about that translating into revenue? You know, over what time period might you expect to recognize the majority of this contract? Thank you. Yeah, no, great question.

Like any red wire contracts at Oh Wow.

Well I don't want to make a broad characterization, but oh on many of our contracts are two year contracts and it's already kicked off and started so.

Well, we will be seeing the impact of that.

Oh, you know through Q1, all the way through the rest of the year.

Yes.

Got it I say, okay. So then I could assume that that's embedded in the revenue guidance for 2020 for I guess that's correct.

Got it Okay and maybe just one last question if I may one for Jonathan.

Peter Anthony Cannito: So we'll be recognizing that over 24 and a little bit of 25, like many Redwire contracts. Well, I don't want to make a broad characterization, but many of our contracts are two-year contracts. And it's already kicked off and started.

How are you thinking about.

Activity in the M&A market for our 2024, you know I know historically, you have grown inorganically as well as organically. So just curious if they're looking to remain active in this market. Thank you.

The answer is yes, but we're very focused on our return on invested capital cash flow and profitability.

Andre Shepard: So, we'll, we'll, we'll be seeing the impact of that all, you know, through Q1 all the way through the rest of the year. Got it.

I'll hand, it over to Pete, but again from a CFO standpoint, you know we are you know.

Peter Anthony Cannito: I see. Okay, so then I could assume that that's embedded in the revenue guidance for 2024, I guess. And maybe just one last question, if I may, one for Jonathan, you know, how are you thinking about Transcribed by https://otter.ai? I know you've grown organically as well as through acquisition, so just curious if you're looking to remain active in this market. The answer is yes, but we're very focused on our return on investment capital, cash flow, and profitability. I'll hand it over to Pete.

We've obviously shown a oh.

And the ability to do successful M&A, both on a commercial operational and financial basis, we continue to look at it but we're we're pretty disciplined when it comes to M&A.

Well the good news is we know how to do it.

We've done at nine times, so far I believe so.

So that's.

Oh really.

Table tool in our toolkit.

We're constantly scanning the market for the best value out there.

And and yet we if we find something that makes a lot of sense, both strategically and has a.

A really nice financial profile that meets our our overall objectives, we're certainly.

Andre Shepard: But again, from a CFO standpoint, you know, we are, you know, we've obviously shown an ability to do successful M&A both on a commercial, operational, and financial basis. We continue to look at it, but we're pretty disciplined when it comes to M&A. Well, the good news is we know how to do it. We've done it nine times so far, I believe.

Out there and active.

Got it very helpful. Congratulations on the quarter again I'll pass it on thank you.

Thank you.

Thank you as a reminder, ladies and gentlemen, if you would like to ask a question at this time. Please press star one on your telephone keypad, we do ask that you limit yourself to one question and one follow up and then re queue for any additional questions.

Peter Anthony Cannito: So that's a really viable tool in our toolkit. But we're constantly scanning the market for the best value out there. And, and yeah, if we find something that makes a lot of sense, both strategically and has a really nice financial profile that meets our overall objectives, we're certainly out there and active. Got it. Very helpful. Congratulations on the quarter again. I'll pass it on.

Our next question is coming from the line of Brian Kinsinger with Alliance Global Partners. Please proceed with your question.

Great. Thanks, so much solid bookings and things for all of the backlog and pipeline stature as usual.

Submitted more than $944 million in bids in 2023.

Andre Shepard: Thank you. Thank you. Thank you. As a reminder, ladies and gentlemen, if you would like to ask a question at this time, please press star one on your telephone keypad.

Can you quantify the value of bids that have yet to be awarded and then as we look at the $4 8 billion in pipeline how much of that do you expect to bid in 2024 won't be more than 2023.

Operator: We do ask that you limit yourself to one question and one follow-up and then requeue for any additional questions. Our next question is coming from the line of Brian Kinstlinger with Alliance Global Partners. Please proceed with your question. Great, thanks so much.

So I'm not sure I totally understand the question, but if I don't answer it just let me know.

So in terms of characterizing.

The proposals under review.

Brian Kinstlinger: Solid bookings, and thanks for all the backlog and pipeline stats as usual. You submitted more than $944 million in bids in 2023. Can you quantify the value of bids that have yet to be awarded? And then, as we look at the $4.8 billion in the pipeline, how much of that do you expect to award in 2024? Will it be more than 2023? So, I'm not sure I totally understand the question, but if I don't answer it, just let me know.

We don't give any specific.

Data on that but you know I'll say they all vary in size.

So we have a variety of <unk>.

Larger programs as well as a really strong like I like to say protecting the core.

Basis for a.

Repeat orders as well.

So that's our that's how I would characterize what is under our the.

The bids that are understood submission right now if that's what you were asking in terms of the pipeline again I'll I'll I'll.

Peter Anthony Cannito: So, in terms of characterizing the proposals under review, we don't give any specific data on that, but, you know, I'll say they all vary in size. So, we have a variety of larger programs, as well as a really strong, as I like to say, protecting the core basis for repeat orders as well. So, that's how I would characterize what is under the bids that are under submission right now, if that's what you were asking. In terms of the pipeline, again, I'll point everyone back to our four growth principles for 2024. We see the pipeline continuing to expand as we move up the value chain and continue to scale production. I think, obviously, it's really exciting to win a $142 million contract.

Point, everybody back to our four growth principles for 2024.

We see the pipeline continuing to expand as we move up the value chain and continue to scale production I think.

Obviously, it's really exciting to win $842 million a contract.

And so just said you know what the near term at 'twenty 'twenty four impact of that in our financial projections is really exciting but isn't it also underscores our ability to compete for.

And when a larger and larger programs so with.

With that kind of success under our belt.

Peter Anthony Cannito: And so just the near-term and 2024 impact of that in our financial projections is really exciting, but it also underscores our ability to compete for and win larger and larger programs. So with that kind of success under our belts, you know, I would anticipate that the intent is for when it comes to the pipeline, that we're going to continue to include larger swings in that pipeline. Did I answer your question?

You know I would anticipate that the intent is for when it comes to the pipeline that we're going to we're going to continue to include a larger swings in that pipeline.

Did I answer your question.

Okay. I'm curious do you expect to bid on more than 2024, then 2023.

You know what the expectations the pipeline falls out how it got it many times, but yeah, where we're investing in our in our bid and proposal and if we execute on our plan of bidding on larger programs. Then you should see that number go up and you've seen it go up Brian in the last few quarters the pipeline.

Brian Kinstlinger: Okay, if I'm curious, do you expect to bid on more in 2024 than in 2023? The pipeline falls out like it does many times, but yeah, we're investing in our bid and proposal, and if we execute on our plan of bidding on larger programs, then you should see that number go up. And you've seen it go up, Brian, in the last two quarters, both pipeline and bids. And so that trend, again, we've seen two quarters of it increasing. That trend, we expect to again, continue bidding on larger projects. Like we said, we've announced, obviously, a win on that, but there's, again, we don't set expectations based on pipeline, but again, the last two quarters have shown a good result. And that's why I wanted to emphasize what we see as the three demand drivers. So I think that the market could support us.

And bids and so that trend again, we've seen two quarters have been increasing.

That trend, we expect to again to continue bidding on larger projects.

Like we said, we've announced obviously a win on that but there's.

We don't set expectations based on pipeline, but again the last few quarters has shown a good track.

And so that's why I wanted to underscore what we see as the three.

The main drivers.

So I think that market could support us.

Getting more.

And then one follow up.

Visibility question that one of the analysts to ask I'm curious is that most of them do some other contractors.

Jonathan E. Baliff: And then one follow-up on the visibility question that one of the analysts asked. I'm curious, as I've listened to some other contractors discuss guidance, I'm curious, how much of your $300 million in revenue do you expect to come from the current backlog versus how much you need to generate awards or revenue from awards that are yet to be won in 2024 to hit your 2024 goal? So we won't break it down.

Discuss.

Guidance I'm curious.

How much of your $300 million in revenue guidance do you expect to come from the current backlog versus how much do you need to generate an awards or revenue from award there yet to be one and 2024 to hit your 2024 goals.

So we don't break it down but.

Jonathan E. Baliff: But I think if you look at the backlog at the start of 2023 and then how we were, you know, what we ended up with in revenue, I think if the trend continues, you could see that with our current backlog. In comparison, which I don't have the exact number, I believe it's 372.8. This, you know, we're entering the year with 372.8. Last year on an equivalent basis, I have to emphasize that the contracted backlog last year was 313.1 million.

But I think if you look at our backlog at the start of 2023 and then how we read what we ended up from a revenue.

I think if the trend continues you could see that with our current backlog.

In comparison, which I don't have the exact number I believe its three yes. So lastly, yes 372.8 is this this we're entering the year with $372 eight last year on an equivalent basis I have to emphasize that contracted backlog last year was 313 1 million. So you're talking about a very significant increase in <unk>.

Jonathan E. Baliff: So you're talking about a very significant increase in backlog with, remember, we had 200, almost $244 million in revenue. So, you know, we are seeing an increase in the increase in contracted backlog on an apples-to-apples basis. So getting to your question, we don't give that, but if you look at, you know, again, we always say that our contracts are around two years, you know, Redwire 101, we talk about that profile. You can see that we're getting good visibility into 24 and 25 with this level of backlog increase. Yeah, the numbers are 372 to a 300 forecast, which is a reasonable amount of backlog to support our forecast today.

But with remember we had 200 almost $244 million of revenue. So we are you seeing an increase of the increase on contracted backlog on an apples to apples basis slide so getting to your question, we don't give that but if you look at it again, we always say that our contracts are around two years no reservoir water one we talked about.

That profile you can you can see that we're getting good visibility into 24 and 25 of this level of backlog increase yeah. The numbers are 372 to a 300 forecast is a reasonable amount of backlog.

To support our forecast for the year.

Okay. Thank you.

Thank you. Our next question is coming from Greg Konrad with Jefferies. Please proceed with your question.

Good morning.

Brian Kinstlinger: Thank you. Thank you. Our next question is coming from Greg Konrad with Jeffries. Please proceed with your question. Good morning. Hey, Greg. Hey, Greg.

Hi, Greg Hey, Greg.

Maybe just to ask the last question in a different way you carried a range for revenue guidance throughout the year, even into the final quarter and this year, you're guiding to more of a point estimate.

Gregory Arnold Konrad: Maybe just to ask the last question in a different way. You carried a range for revenue guidance throughout the year, even into the final quarter. And this year, you're guiding to more of a point estimate. Has anything changed in terms of how you guide or what you're seeing or risks that cause that variability that makes you more comfortable this year to give a point estimate versus a range? Our forecasting, we believe, you know, is maturing. So we are trying to tighten the range. I think in this particular case, it was just about keeping it simple.

Has anything changed in terms of how you guide or what youre seeing or risks that caused that variability that make you more comfortable this year to give a point estimate versus a range.

Yeah, our forecasting we believe.

Is is maturing so we are trying to tighten the range I think in this particular case it was just about keeping it simple.

Peter Anthony Cannito: A lot of times last year, we found that if we gave a range, people just selected the midpoint. So we thought that it would be more appropriate to just select where we think that things are going to come out and then keep it simple throughout the year. And then maybe just to follow up on drivers, I mean, appreciate laying out the six core offerings, and we probably could slice it that way regionally or even by customer, but at least near term, thinking of those six core offerings, are there one or two areas that drive more growth, and then maybe longer term, you know, areas of those six that are, you know, lead to maybe more upside?

A lot of times.

And last year, we found that if we gave a range people just selected the midpoint.

So oh, we thought that it would be.

More appropriate to just select.

Where we think that things are going to come out and then.

Keep it simple throughout the year.

Okay, and then maybe just to follow up on on drivers I mean appreciate laying out the six core offerings and you probably could slice it that way.

Regionally or even by by customer, but at least near term thinking of those six core offerings are there one or two areas that you know drive more of the growth and then maybe longer term you know areas of those six that are.

Lead to maybe more upside or how you're thinking about growth across those six areas.

Peter Anthony Cannito: Or how are you thinking about growth across those? So I think all of them have significant growth potential. If you were to say currently, and we don't break it down by specific numbers, but the solar array business has been really strong. There's been a really positive reception to our rollout. Solar array technology is highly differentiated. It has a lot of great heritage.

So I think all of them have significant growth potential.

If you were to say currently and we don't break it down by specific numbers, but the solar array business. That's been really strong there's been a really positive reception.

To our rollout solar array technology is highly differentiated it has a lot of great heritage. So I think certainly solar.

Peter Anthony Cannito: So I think certainly solar is a big part of it. Moving up the value chain and looking at more platforms and full payloads, like I said, that segment has a lot of high growth potential as well. I think one of the things that I find most exciting about Redwire is the portfolio effect of our offerings. Again, we don't break it down. It's way, but we have some offerings that I would characterize as having very high volume potential but perhaps lower gross margin. We have other offerings that I would characterize as having, maybe, more limited

<unk> is a big part of it moving up the value chain and looking at more platforms and in full payloads like I said in.

In that segment has a lot of the high growth potential as well I think one of the things that I find most exciting about our red wire is the portfolio effect of our offerings again, we don't break it down this way, but we have some offerings that.

I would characterize as very high volume potential, but perhaps lower gross margin.

We have other offerings that I would characterize as having maybe a more limited.

Gregory Arnold Konrad: I'll leave it at two. Thank you. Thank you very much, Craig. Thanks, Craig. I did, just to follow up, go back into the archives and see that we announced that we were partnered with Firefly on the Blue Ghost lunar lander. Firefly, and we obviously know all the other ones as well, follow-up.

Total addressable market, but tend to have better gross margins. So.

So we can take that portfolio effect and manage our offerings and focus our <unk>.

<unk> dollars in a way that help us balance.

Our revenue and profitability over the long term.

Oh.

I'll leave it at two thank you.

Thank you very much Greg Thanks, Greg.

Again, just a follow up I'll go back into the archives you can see that we had announced that a we are partnered with Firefly on the bluegrass.

Peter Anthony Cannito: Thank you. We have reached the end of our question and answer session, so I'd like to turn the floor back over to management for an additional concluding comment. All right, well, we appreciate the engagement as always. Thank you for participating in today's calls and go Redwire. Thank you. Ladies and gentlemen, this does conclude today's teleconference and webcast. We thank you for your participation, and you may disconnect your lines at this time. www.redwire.org

Lunar lander so.

And just to intuitive machines and.

Firefly and we obviously know all the other ones as well.

It just it.

Follow up on that.

Thank you we have reached the end of our question and answer session. So I'd like to turn the floor back over to management for any additional concluding remarks.

Alright, well, we appreciate the engagement and as always thank you for participating in today's call and go Red wire.

Thank you ladies and gentlemen, this does conclude today's teleconference and webcast. We thank you for your participation and you may disconnect. Your lines at this time.

Hum.

Hum.

[music].

Okay.

[music].

Mhm.

[music].

Hmm mm.

[music].

Mhm.

[music].