Redwire Corporation

And then he will be followed by Jonathan, who will present the financial highlights for the third quarter. After we finish our presentation, we will then open the floor for Q&A. Before I begin, please note all figures in this presentation do not include our recent acquisition of Space NV unless otherwise noted as that acquisition closed in Q4. Next slide, please. Before we begin, as it is traditional with all quarterly presentations, I'd like to point out that the imagery used in this slide deck are of actual missions that use red wire solutions. On this slide, we have the NASA Surface Water and Ocean Topography, or SWAT, satellite mission developed by JPL. SWAT is the first satellite mission that will observe nearly all waters on Earth's surface, measuring the height of water in the planet's lakes, rivers, reservoirs, and the oceans. Redwire is providing critical navigation components called sun sensors to enable this mission and will be scheduled to launch next month on December 5th. Please turn to slide seven. As we talked about in previous calls, we are at the early stages of a multi-decade new global space race, with space agencies in Europe, the U.S., and around the world increasingly focused on space as a competitive domain. This broader geopolitical landscape has driven increased U.S. governmental budgets on national defense with notably larger increases for space. However, despite this strong demand, we have experienced some delays in contracts award here at Redwire. These delays combined with a tight labor market for space talent and subcontractor supply chain disruptions have slowed our ability to ramp up and quickly realize revenue after contract selection and award. But regardless, I am proud to report that Redwire was recently selected for multiple land and expand opportunities that are expected to increase growth momentum for power systems and structures, LEO commercialization, and human spaceflight, as well as navigation, avionics, and digital engineering. These new opportunities resulted in a sequential increase in our total backlog to 304 million as of Q3 2022, which is up from 251.7 million as of Q2 2022. This is a historic backlog level for the company. Redwire continues to deliver on the promise of space in the present today with multiple launches planned in Q4 2022. including the recently successful launch of NG-18 and upcoming planned launches that include Artemis I, SpaceX CRS-26, JPSS-2, and SWAT, which I previously mentioned on an earlier slide. Most recently, in the beginning of the fourth quarter, Redwire completed the acquisition of SpaceMV, which is expected to immediately provide increased scale, broader access to addressable markets, and significant backlog to bolster our growth platform. So what's the bottom line up front? Well, as you will see in our update today, it was a successful third quarter as we saw sequential improvements across the board in revenues, gross margin, adjusted EBITDA, and total backlog. Please turn to slide eight. Specifically, we saw continued revenue momentum in the third quarter, which was up 14% in comparison to 2021 and 1.4% sequentially. We anticipate sequential improvement to continue in Q4 2022. Efforts to streamline operations resulted in gross margin increasing 34.9% on a quarter-to-date basis in comparison to the prior year, and sequentially as a percentage of revenue by 2.3% over Q2 2022. Focus on overhead and SG&A cost efficiencies resulted in a pro forma adjusted EBITDA in Q3 2022 of negative 1.5 million compared to 0.3 million in Q3 2021 and negative 4.1 million in Q2 2022. This is another sequential improvement over the Q2 2022. Redwire will continue to focus on streamlining operations and reducing costs to achieve positive free cash flow in 2023. Additionally, early in the fourth quarter, we strengthened our balance sheet with an investment by Bain Capital and AE Industrial Partners, who together made an investment of $80 million in the form of a Series A convertible preferred stock, which was used to finance the Kinetic Space Envy acquisition, as well as to support Redwire's future growth. The company is building momentum and Redwire expects to achieve improved bookings during the fourth quarter of 2022. continuing to increase total backlog. However, the delays I mentioned in contracts award in a tight labor market for space talent have pushed revenue execution into subsequent quarters. Therefore, Redwire is updating its previously provided 2022 full year guidance to be in a range of approximately 140 million to 150 million in revenue and pro forma adjusted EBITDA to be in a range of negative 13 million and negative six million. This guidance does not include contributions anticipated from the acquisition of SpaceMV. Please turn to slide nine. Now a snapshot of this very exciting acquisition we just completed of SpaceMV from Kinetic. This acquisition is important to Redwire from both an industry and financial standpoint, and it is expected to provide Redwire with broad access to addressable markets significant contracted backlog to support our growth, and increased public platform scale and profitability. Space Envy is a leading pioneer of end-to-end space solutions with a multi-decade position supporting the European Space Agency. Their core product offering includes small satellite technology, berthing and docking equipment, and space instruments, all critical infrastructure for space, which complements Redwire's current offering both in the U.S., and Europe. Their technological and programmatic focus widens Redwire's apertures and provides access to multiple significant global opportunities at a time when space budgets are growing in Europe. Space Envy adds significant flight heritage, much like Redwire, as well as innovation and profitable top-line growth. Please turn to slide 10. Joining Space Envy's business with Redwire enhances our company's scale and innovative capabilities across numerous high-growth space area and provides us expanded total addressable market and increased exposure to the European customer, including the European Space Agency and the Belgian Science Policy Office. The demand for space infrastructure in Europe is growing. The European Space Agency submits a budget request every three years and in their upcoming ministerial meeting, they anticipate to submit a three-year budget with an increase of more than 25% from funding secured in 2019. Since the acquisition, we have renamed Kinetic Space NV to Redwire Space NV, and we will be combining the company with our Luxembourg business to create Redwire Europe. This new international platform positions us to be a global provider of critical space infrastructure with deep customer relationships with the world's premier space agencies. Also, it gives us decades of proven flight heritage expands product offering and a very strong backlog to build on in 2023 and with that i will turn it over to andrew for an update on our third quarter operational highlights thank you pete before we get into the details of our last quarter i'd like to point out this image

What you see here is the Lofted technology demonstrator being inspected in preparation for launch alongside the JPSS-2 satellite later this month. Lofted is set to demonstrate an inflatable heat shield technology useful for both landing on Mars as well as economically recovering rockets. Redwire is proud to have provided both cameras and a deployable data recorder for this demonstration. Please turn to slide 12. Redwire continues to be a trailblazer in space infrastructure for the next generation space economy. As Pete mentioned, driven by continued progress in operational execution and subcontractor performance, we delivered more from both a revenues perspective and a gross margin perspective in Q3 compared to Q2 2022, as well as compared to Q2 of 2021. Redwire continues to demonstrate operational excellence through our on-time and early delivery of products and solutions despite supply chain pressures and macroeconomic headwinds. As many of you may have seen on the news recently, Redwire was a participant in NASA's successful execution of the Planetary Defense Double Asteroid Redirection Test, which most people know as DART. We supplied mission-critical navigation components and rollout solar arrays for that successful demonstration. NG-18 launched a few days ago and docked this morning with the International Space Station, delivering a red-wire-built updated 3D printer called the Biofabrication Facility, or BFF, the Advanced Space Experiment Processor, which we call the ADCEP facility, and a few other facilities, which will investigate new treatments to aid military service members, expand crop production research, and expand materials testing on orbit. Redwire also delivered sun sensor components and advanced optical imaging technologies to NASA, which are anticipated for launch on NASA's historic Artemis I mission to the moon. And SpaceX CRS26 is set to launch later this quarter with a second pair of ROSA wings to augment the power generation capabilities of the International Space Station, carrying that facility into the latter half of this decade. Please turn to slide 13. Our team's operational success and business development efforts have resulted in Redwire being selected for many strategic orders since our last earnings call. I'd like to highlight a few of them on today's call. First, let's turn to spacecraft power systems and structures. We continue to develop and deliver not only traditional rigid panel solar arrays, but also our patented technologically differentiated rollout solar arrays for both small satellites and larger scale spacecraft applications, such as the International Space Station and NASA's Lunar Gateway. We are also seeing more customers turn to ROSA as a solution for power generation on the lunar surface in support of future human and robotic exploration missions to the moon. Solar rays are a significant portion of nearly every spacecraft operating today, but they are not the only part of a spacecraft's power system. Building on our expertise in satellite power systems and space compatible robotics, we have begun offering Solar array drive assemblies, or SATAs. SATAs are used to orient the solar array, making the key piece of any satellite or spacecraft's power system. This product and work we perform in power distribution systems on satellites enables us to expand work share in spacecraft power systems across our organization. With respect to low Earth orbit commercialization and human spaceflight, We have recently been successful in securing multiple multi-phase programs, which are set to expand capability and commercial opportunities on the International Space Station and other human-rated platforms in the future. Our heritage and innovative technology is enabling design, development, and outfitting of future commercial space stations. We have also had success in our navigation, avionics, and engineering solutions. Winds here are providing increased momentum for large multi-year, multi-shift sun sensor and star tracker programs. We are also testing and developing avionics software for commercial constellations with healthy demand for critical thermal analysis, static load testing, and additional design and engineering services support. Please turn to slide 14. Redwire's strong backlog provides confidence in our long-term growth outlook and is further supported by consistent pipeline momentum. Contracted backlog stood at $158.9 million as of the end of Q3 2022, which is relatively consistent with our contracted backlog as of Q2 2022. There was a sequential increase in our total backlog to $304 million as of Q3 2022. That is up from $251.7 million as of the end of Q2 2022. This represents a 20.8% growth and is a historic high for us. Also note that this does not take into account anticipated additions to contracted and total backlog from the acquisition of SpaceNV. 2022 year-to-date book-to-bill of 1.18 provides us with a strong tailwind for execution in quarter four of this year and beyond. Space is a growth market with a tremendous amount of opportunity available, as shown in our pipeline of more than $3.5 billion in opportunities. Year-to-date, we have submitted approximately $950 million in bids. We have approximately 342.6 million in bids that are submitted and expected to be selected in the next six months. I will now turn it over to Jonathan for a summary of our third quarter financial results. Jonathan?

Thank you, Andrew. Similar to last quarter, I will help quantify and expound on a number of the themes that Pete and Andrew just talked about. But before I do, on slide 15 here, let me just highlight our outstanding team members prepping the solar arrays for the DART impactor spacecraft in 2021 for the recently successful mission that Andrew just talked about in which the spacecraft impacted Dimorphos on September 26, 2022. Exciting, but a bit bittersweet for Redwire to see two of our 28-foot solar arrays, our ROSA solar arrays, taking one for the team for planet Earth. All right, let's turn to slide 16 for some key financial takeaways. And just to be direct on these key points, One, Redwire continues to execute on exciting and proven critical infrastructure for our customers. Dart, Artemis, NG18, bioprinting, just a few of these. These are creating the revenue growth year over year in our proven financial performance sequentially. Two, Redwire continues to grow our total backlog. Demand for our infrastructure is leading to growth in our total backlog, and this quarter is at historical high levels. Redwire is back with a financially accretive M&A transaction this fourth quarter with Space NV that will add even more to our total backlog, revenue growth, sequential financial performance, as we continue to streamline the business, get more operating leverage into the business for the rest of fiscal year 2022 and 2023. Four, and finally, Redwire is strengthening its balance sheet and liquidity position with the addition of approximately $80 million in capital, accretive financing for Space NV, with additional capital expected to provide for future growth and stability. I will go over some of the revenue specifics very quickly, but just to reiterate, our third quarter fiscal year 2022 saw higher revenues year over year and sequentially, 37.2 million. And that is after the previously discussed delay in contract awards and supply chain ramp ups due to the factors Pete just spoke about. Revenues increased 14% year over year when you look at it from a third quarter 2021 standpoint. We also continued the trend last quarter where we delivered better financial performance in this third quarter sequentially, with revenue increasing 1.4 percent, gross profit as a percentage of revenues increasing 2.3 percent, and better operating leverage leading to an adjusted EBITDA sequentially improving 63.7 percent. Our total backlog grew 20.8 percent, as Andrew just spoke about, And we saw increased demand for our critical infrastructure, especially in avionics and navigation components, as well as power generation and deployable structure solutions. As we ramped up to serve this total backlog, we employed more working capital. We saw more cash utilized in the third quarter compared to the second quarter of 2022. The addition of SpaceNV, a transaction we announced on October 3rd and closed on October 31st, changed our operating scope and scale and will add meaningfully to our improved sequential quarterly performance and total backlog. But also importantly, the acquisition was financed by proven investors in our space, pardon the pun, Bain Capital, $160 billion leader in multi-asset alternative investment management, is joining with us and joining with our existing shareholder, AE Industrial Partners, a leader in aerospace investing. to provide $80 million in capital to fund the acquisition and provide working capital for the growth demonstrated by our record third quarter total backlog. Finally, our third quarter operating performance has shown improved commercial momentum, as Pete talked about, and better operating leverage. And this is expected for the remainder of 2022. But as we already spoke about, even with demand for space infrastructure remaining strong, we have experienced delay in contract award ramp up These move to the right contract start delays, combined with a tight labor market for space talent and subcontractor supply chain disruptions, have slowed our ability to ramp up and quickly realize revenue after contract selection. But we will recognize this revenue. It's tied to large contract rewards within that $304 million total backlog. And there could be large swings in the revenue recognition in this fourth quarter. Consequently, Manager believes it is prudent to widen and revise the revenue guidance range for the full fiscal year 2022 to $140 million to $155 million. Consistent with this change and also taking into account that we are delivering better gross margins and operating leverage, we are also revising the pro forma adjusted EBITDA ranges to be between a negative $13 million and negative $6 million. This range does not include the meaningful financial contribution anticipated from our Space NV acquisition. Management will update you on those positive impacts for the year on our fiscal year-end 2022 earnings call. Please turn to slide 17. As part of our third quarter call, we want to provide a bit more detail into Redwater's revenue growth by using a year-to-date gap comparison to show on the left and then also on the right the quarter sequentially. This is similar to what we showed in the second quarter. When looking at the chart on the left, and as you'll see, our year-to-date third quarter 2022 revenues of 96.5 million improved 10.7% to 106.8 million for year-to-date third quarter 2022. These increases are attributable to deployable and engineering solutions space gains with meaningful wins with our national security and commercial customer base. These revenue increases on a year-over-year basis were partially offset by a small decline in the civil space customer base attributed to our in-space manufacturing programs and are based mostly in the first half of fiscal year 2022. Customer diversity allows Redwire to absorb these small declines in one customer base and due to improved performance in another customer base. On a sequential quarterly basis, our third quarter 2022 revenues increased 1.4% from the second quarter 2022, with modest increases attributable across our business lines and customers. And this is taking into account the move to the right contract start delays in September, combined with the tight labor market that I already spoke about. We anticipate we will see that delayed revenue in the fourth quarter 2022 will then move revenue into that latter half of 2022 and the first half of 2023. Please turn to slide 18. Similar to last quarter, we want to provide a bit more detail concerning Redwire's adjusted EBITDA profile using a year-to-date third quarter bridge shown on the left and a sequential quarterly basis shown on the right. On the left chart, for the year-over-year bridge comparison, adjusted EBITDA decreased from a positive 1.8 million in year-to-date third quarter of 2021 to an adjusted EBITDA loss of 10.2 million in the year-to-date third quarter 2022. Adjusted EBITDA was positively impacted by the additional revenue growth we've been talking about. We continue to see revenue momentum with a positive $1.9 million contribution on a gross margin neutral basis. And this is attributable to the higher book to bills that we're seeing in the second and third quarter of 2022 compared with the second and third quarter of 2021. Our year-to-date gross margin, which is shown on the next bar, led to a negative $3.9 million. But this is driven by declines in the first half gross margin and masked the fact that the quarterly gross margin improved 34.9%, as Pete talked about, on a quarterly basis. And sequentially, it was up 13.8% over the second quarter of 2022. This excellent result was attributable to margin improvements in our deployable and critical components and engineering solutions programs. Similar to what we showed in the second quarter, as you can see on the next bar, the negative $10 million operating expenses demonstrates the impact we spoke about last quarter. Redwater made investments in business development, R&D, and public company costs in 2022 that have helped expand the size of our contract opportunities and backlog. But it has also impacted our year-to-date EBITDA. Most of this $10 million in operating expenses occurred in the first quarter of the year, and we begin a more deliberate focus on streamlining the business in the second and third quarters, as Pete addressed earlier. And we will continue to do so. We are focused on these costs. As an example, in the third quarter of 2022, we reduced absolute SG&A to $15.3 million, the lowest in five quarters, from $34.3 million in the third quarter of 2021 and $17.6 million in the second quarter of 2022. That's a significant decrease on an absolute basis. And note, this is before bringing on Space NV. On the right chart, the almost 64% sequential quarterly adjusted EBITDA improvement from our second quarter to the third quarter of 2022 demonstrates this operating leverage coming back into the company due to the factors I've just spoken about and a focus on cost. You can see the new contract wins, better contract mix, higher gross margins that we spoke about. Much of it in our deployables and engineering solutions space programs increased gross margin. Second, streamlining the corporate overhead will continue following the investments of the past 15 months to continue to drive down SG&A on an absolute basis and even on a percentage basis. Our third quarter SG&A margin now is at 41.1 percent, but that's down from 105.1 percent a year ago. And we're going to continue to work on that. Please turn to slide 19. Let's discuss free cash flow and liquidity for the third quarter and finish it up with a liquidity and balance sheet improvement update before I turn it over to Pete. As we did on the second quarter call, on the left-hand chart, we show free cash flow. And we've updated the management disclosures concerning free cash flow as we told you we would do in the second quarter call. Free cash flow is now provided from the perspective of operating cash flow minus capex on an unadjusted basis. So cash is cash. And as you can see, the third quarter 2022 free cash flow improved 16.6% to a use of cash of 12.6 million compared to last year's third quarter 2021, 15.1 million use of cash. It was a higher use of cash than the second quarter of 2022, and this sequential use of cash was due to a number of factors. One, free cash did benefit from improved revenue and sequential gross margins. But two, it was impacted by continued operational and capital investments in the Redwire platform. And finally, three, it was impacted by working capital build for contract awards where the cash is expected to be received in the fourth quarter and beyond. We're reinforcing in many ways our supply chain. Redwire management is very focused on accelerating the general improvement that we see here. We want to see better improvement in 2023. As Pete said, we will continue to streamline the business as we continue our revenue momentum. On the right-hand chart, we show our available liquidity as of June 30, 2022, which totaled $17 million, comprising of $7 million in cash and $10 million in available borrowings out of our credit facilities. But this has significantly changed this quarter, which I'll talk about on the next slide. Please turn to slide 20. On October 3, we announced the acquisition of the Kinetic Space NV. now renamed Redwire Space NV. On October 28th, the company entered into an investment agreement with AEI and Bain Capital for combined investment of $80 million on October 31st, we completed the acquisition of Space NV. Here are the three takeaways for this. One, after giving effect to this financing and with zero synergies assumed in the calculation, the transaction is expected to be financially accretive immediately to Redwire's adjusted EBITDA and free cash flow upon closing. Second, Space Envy has experienced very profitable top line growth and features a strong financial profile. As Pete said before, for the year ended March 31st, 2022, Space Envy recorded a 49 million euro of revenue and three million euros of profit after taxes. Three, as of the third quarter 2022, Redwater's total backlog, as we talked about, rose to 304 million. This is a historic high for the company, but since the transaction closed, Redwire expects to directly benefit from Space NV's contracted backlog, which stood at 113 million euros as of March 31st, 2022. The combined investment from Bain Capital and AE Industrial Partners puts Redwire in a much stronger financial position. Look at our liquidity on the right-hand chart. This update shows that after the Space NV purchase and related costs in working capital funding, We have more than tripled liquidity in the early part of this current fourth quarter. Concerning leverage, this financing adds $80 million of equity to our balance sheet, improving the creditworthiness of Redwire in a number of important aspects. On November 1st, 2022, Redwire ended into a fifth agreement with Adams Street Capital Partners. This fifth amendment to the credit agreement, among other things, extended the suspension of the requirement concerning the company's maximum consolidated total net leverage ratio by an additional quarter and favorably amended the ratio that will apply during the first year following the resumption of this requirement. So Adam Street continues to provide support and the critical liquidity, as you can see, we need to grow. This investment in Redwire represented by two proven leaders in the aerospace and space industries are a strong vote of confidence in Redwire's position, both as a leader in the commercialization of space as well as our strategy of providing critical infrastructure to our clients to provide growth and profitability. They bring a strong crack record to the table and have a reputation of building great companies, and we are proud to partner with them. Redwire's strong total backlog and proven track rate of success enable it to have access to capital during a period when many of these financial avenues are closed to others. The quantity of capital raised above the purchase price of SpaceNV allows Redwire to strengthen its balance sheet and fund future growth projects. Please turn to slide 21, and I will turn it over to Pete for final comments. Pete?