Redwire Corporation

Greetings. Welcome to Redwire fourth quarter and full year 2022 earnings conference call. My name is Sherry and I will be your operator today. At this time, all participants are in a listen-only mode. We will take questions at the end of this presentation. If anyone should require operator assistance during the conference, 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 for today's call, Jeff Zunich, Senior Vice President, Financial Planning and Analysis. Mr. Zunich, you may begin your conference call.

Thank you, Shari, and good morning, everyone. Welcome to Redwire's fourth quarter and full year 2022 earnings call. We hope that you've seen our earnings release, which we issued earlier this morning. 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. Our forward-looking statements are subject to risk and uncertainties that are described in more detail on slide 2. Additionally, to the extent we discuss non-GAAP measures during the call, please see slide 3, our earnings release, or the investor presentation on our website for the calculation of these measures and GAAP reconciliations. As previously mentioned, I am Jeff Zunich, Redwire Senior Vice President of Financial Planning and Analysis. Joining me today are Peter Conito, Chairman and Chief Executive Officer, and Jonathan Bailiff, Chief Financial Officer. With that, I would like to turn the call over to Pete. Pete?

Thank you, Jeff. During today's call, we will take you through a discussion of our key accomplishments in the fourth quarter and full year 2022 from me, followed by Jonathan, who will present the financial highlights for the same period. We will also provide some insights into how we're thinking about 2023, after which we will open the floor for Q&A. However, before we get into the details, for those that may be new to the call, I'd like to start with an overview of the space industry today and Redwire's position within it. We are at the early stages of a multi-decade new global space race with space agencies in the US, Europe, and around the world increasingly focusing on space as a competitive domain. Additionally, the broader commercial market is demanding space in the present, not just some future promise. And we believe that Redwire is ideally positioned to capitalize on both of these dynamics. Please turn to slide five. Please turn to slide six. Redwire is a pure play space infrastructure company with mission solutions and payloads for civil, commercial and national security space customers. And our mission is to accelerate humanity's expansion into space by delivering reliable, economical and sustainable infrastructure for future generations. With decades of proven flight heritage combined with innovative products and culture, Redwire is uniquely positioned to assist our customers in solving the complex challenges of future space missions and industries. Redwire has three primary areas of focus that form our business. These include enabling space mission providers such as government agencies and large prime contractors with a broad portfolio of space infrastructure, systems, subsystems, and components. Secondly, providing the infrastructure and technology needed for people to permanently live and work in space. And lastly, assisting international spacefaring allies in the development of organic space capabilities. We demonstrated many successes in our three key focus areas throughout 2022, including having Redwire products on nine launches over the course of 2022, with five of those launches occurring in Q4, 15 payloads currently operational on the International Space Station, and growing to over 700 employees at 11 facilities in both the United States and Europe. Please turn to slide seven. Looking back, the fourth quarter of 2022 was the most successful quarter in Redwire's history. Our revenues of $53.7 million were the highest of any quarter to date. We ended the quarter and the full year with a total backlog of $465.1 million. We closed on our acquisition of Space Envy, our second global acquisition. And our adjusted EBITDA for the fourth quarter of 2022 improved by over 47.5% versus the third quarter of 2022. And we launched 11 products and capabilities on those five Q4 launches I mentioned previously. It was a great quarter. Please turn to slide eight. Starting with backlog. I am very pleased to report that backlog has grown by 71.2% from the end of 2021 to December 31, 2022. As you can see, at the end of 2021, our total backlog was a very respectable 271.6 million. Based on strong demand for our products and services, total backlog grew to 465.1 million at the end of 2022. This was an outstanding achievement on both an absolute and percentage basis and has given us significant momentum heading into 2023. Please turn to slide nine. 2022 was a record year for Redwire. For the full year 2022, we grew Redwire's total revenue by 16.7%. This revenue growth was achieved across a highly diversified base of long-term government contracts and marquee commercial customers with strong financial backing such as Boeing, Lockheed Martin, and many others. This diversity and resiliency gives Redwire a stable foundation for our future growth. Please turn to slide 10. So where did this revenue come from? Here at Redwire, we are a key mission enabler for our customers across their most important missions. For our most recent Q4 2022, the next few slides highlight just a few examples of successes that underscore the importance of our capability. For example, in Q4, two additional Redwire rollout solar arrays, or ROSAs, were installed on the International Space Station. bringing the total to four of our ROSAs providing critical power to that key international capability. And there are more on the way in 2023. That is a great example of how we are providing results now, not just in the future. On the bottom of slide 10, we are highlighting how current flight heritage leads to future opportunities, as we have been chosen to be a trusted provider of power on the lunar surface in the future. As we previously announced in Q4, Redwire was selected by the Astrobotics VSAT program to provide a retractable vertical solar array that will rise to a height of 32 feet. This program is key to enabling critical power infrastructure on the surface of the moon. Please turn to slide 11. On November 16, 2022, the United States once again made space history with the launch of Artemis I. And as one would expect, Redwire was on board as part of this history-making team. Redwire provided the Orion capsule a total of 11 internal and external cameras, which is why we refer to Redwire as the eyes of Orion. And those cameras supported the entire 268,563 mile journey without fail. This was the farthest distance traveled by a spacecraft designed for human transportation to date. And Redwire's cameras clearly demonstrated why we're the trusted optics for the mission. Those amazing images sent back from the Red Wire cameras on Orion will inspire generations to come, and we look forward to being part of the team on future Artemis missions. Please turn to slide 12. As I mentioned at the beginning of this presentation, Red Wire is a leader when it comes to facilitating man's ability to explore, live, and work in space. And in doing so, we are on the cutting edge of microgravity research with the potential to significantly change our lives here on Earth. For example, Redwire has the first bioprinter permanently installed on the ISS. And in Q4, we launched a mission to use our biofabrication facility to print a meniscus, a critical part of the knee, which will spend a total of 14 days being cultured in an advanced science experiment process that was also provided by Redwire. This research is an important step towards understanding how microgravity may be the key to unlocking the future production of biostructures that could revolutionize healthcare, and Redwire is at the forefront. Please turn to slide 13. Successfully bringing agriculture to space will be critical to unlocking humanity's ability to explore, live, and work far away from Earth for long periods of time, and Redwire is working on the key. In Q4, aboard Northrop Grumman CRS-18 commercial resupply to the ISS, 240 seeds were sent to space for our Plant Habitat 03 investigation, which will spend 91 days growing inside the habitat. The information gleaned from this experiment is helping establish the foundations of knowledge necessary to take space agriculture to large-scale production. Understanding agriculture in microgravity is important to building a permanent human presence in space, and I'm confident that as we learn to grow plants in space, we will also collect data that will help grow plants more effectively here on Earth along the way. Please turn to slide 14. Of course, space is an international endeavor, and to underscore the amazing programs and complementary capabilities of our newest members of the Red Wire team, I would like to highlight a Space Envy program that launched in Q4 aboard the SpaceX CRS-26 mission to the International Space Station called T-PALA. T-PALA is an experiment that was designed and built by Redwire Space Envy in Belgium that will try to determine new principles for the control of solid particles in liquids. It leverages the Space Envy selectable optic diagnostic instrument that has investigated over 30 liquids in space over the past 13 years. That is some incredible space heritage. Please turn to slide 15. As you can see, the acquisition of European-based SpaceNV in Q4 2022 has significantly expanded Redwire's global footprint and scope of business. SpaceNV has a deep portfolio of highly synergistic and complementary core space infrastructure offerings and adds significant heritage with over 100 missions for human spaceflight, satellites, and interplanetary exploration and over 35 years of on-orbit experience. Space Envy's 2022 revenue was approximately $58.9 million, adding $11.7 million to our annual revenue between the closing of the acquisition on October 31st and the end of 2022. Please turn to slide 16. As I mentioned, Q4 was a strong finish to a record year at Redwire. setting us up for continued success in 2023. In 2022, we had a book to bill ratio of 2.04 and contracted backlog more than doubled, growing by 124%, leading to a total backlog at the end of 2022 of 465.1 million. This gives us confidence in our future growth and stability. With that, I'd now like to turn the call over to Jonathan Bailiff, Redwire's Chief Financial Officer. And following Jonathan's remarks, I'll provide a few closing thoughts, and then we'll open the call for questions and answers. Jonathan?