Redwire Corporation — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023. This filing reports full-year results; it does not provide a clear standalone fourth-quarter financial summary. Redwire supplies space infrastructure, components, systems and payloads to government and commercial customers, and reports as one space-infrastructure segment.
Key financial metrics
| Metric | FY2023 | FY2022 |
|---|---|---|
| Revenue | $243.8 million | $160.5 million |
| Gross profit / margin | $58.0 million / 24% | $28.7 million / 18% |
| Operating income (loss) | $(15.5) million | $(146.4) million |
| Net income (loss) | $(27.3) million | $(130.6) million |
| Net loss available to common shareholders; loss per share | $(47.3) million; $(0.73) | $(132.4) million; $(2.09) |
| Adjusted EBITDA (non-GAAP) | $15.3 million | $(11.0) million |
| Cash from operations | $1.2 million | $(31.7) million |
| Cash and cash equivalents at year-end | $30.3 million | $28.3 million |
| Total debt outstanding | $89.5 million | $78.9 million |
| Contracted backlog at year-end | $372.8 million | $313.1 million |
Gross margin was approximately 23.8% of revenue; operating and net margins were approximately (6.4)% and (11.2)%, respectively. Current assets were $109.3 million against current liabilities of $112.0 million. Available liquidity was $48.3 million, comprising cash and $18.0 million of undrawn credit capacity.
Material changes versus FY2022
- Revenue rose 52%, including $43.3 million contributed by the Space NV acquisition, alongside higher production volumes in power generation and microgravity payloads.
- Gross margin increased to 24% from 18%. Management cited contract mix, completion of lower-margin contracts and Space NV contributions.
- SG&A declined to $68.5 million from $70.3 million; as a share of revenue it fell to 28% from 44%.
- Net loss narrowed by 79%. FY2022 included a $96.6 million impairment charge; no impairment was recorded in 2023.
- Operating cash flow improved by $32.9 million, from a $31.7 million use to $1.2 million provided. Higher deferred revenue contributed to the improvement.
- Book-to-bill was 1.23 versus 2.04. FY2023 contract awards were $300.0 million, below FY2022’s $327.0 million, which included $109.8 million of acquired contract value.
- Net EAC adjustments remained unfavorable at $3.5 million, improving from $10.0 million unfavorable in FY2022.
Outlook, risks and unusual items
- Management said existing liquidity should meet working-capital needs and debt covenants for at least 12 months from issuance of the financial statements, but warned long-term liquidity may require additional financing. No specific revenue or earnings guidance is provided.
- Management expects approximately 50% of $353.5 million in remaining performance obligations to be recognized as revenue within 12 months. This measure excludes certain time-and-material contracts; contracted backlog is subject to cancellations, amendments and funding conditions.
- Debt carries high stated effective rates: 12.14%–12.27% on Adams Street term loans and 16.71% on the revolving facility. Approximately $87.3 million of debt maturities are shown for 2026. The company reported covenant compliance at year-end.
- Series A preferred stock dividends are 15% when paid in kind (or 13% in cash, subject to terms). Redwire issued $19.7 million of PIK dividends in 2023; preferred shares were convertible into approximately 31.5 million common shares at year-end and had a $187.8 million liquidation preference.
- Material weaknesses in internal control over financial reporting remained, and management concluded disclosure controls and financial-reporting controls were not effective at December 31, 2023. The filing says certain earlier weaknesses were remediated; full remediation of the current weaknesses may extend beyond December 31, 2024. The auditor did not audit or opine on internal-control effectiveness.
- Two customers represented approximately 16% and 14% of FY2023 revenue. Government funding and contract termination risk, fixed-price cost overruns, supply-chain and schedule disruptions, launch dependence, cybersecurity threats, and competition are material risks.
- The SEC closed its investigation concerning the earlier accounting matter in August 2023, and the DOJ closed its civil investigative demand matter in September 2023. A securities class action and related derivative litigation remain pending; Redwire says it cannot reasonably estimate potential losses.
Important facts for investors to verify
- Whether operating cash generation can be sustained and whether working-capital movements, especially deferred revenue and contract assets, explain the improvement.
- Debt terms, covenant headroom, the 2026 maturity concentration, and the cost and availability of refinancing or other funding.
- The preferred stock’s accumulating dividends, conversion dilution, voting influence and liquidation rights.
- Backlog quality, funding and cancellation provisions, expected conversion timing, and the reasons for book-to-bill declining while backlog increased.
- Progress in remediating material weaknesses and any related reporting, audit or compliance developments.
- Updates on the pending litigation, customer concentration, and contract-level cost estimates and schedule risks.