Redwire Corporation (NYSE:RDW) Q4 2022 Earnings Call Transcript

Greg Konrad: And then, I mean, somewhat tied to that, I know you don’t guide to cash, but when you just think about the cost of growth, I mean, you highlighted the strong liquidity coming into this year. How do you maybe think about some of the drivers of cash, whether it’s working capital to support growth CapEx in general, or just how you’re thinking about the moving pieces of cash?

Peter Cannito: I’ll give a quick answer, then I’ll turn it over to Jonathan. I mean, again, we’re very focused on being good stewards of cash, especially in the current environment. And but we do have investments that we’re making as well. So we keep a close eye on it. Fundamentally because of the way Redwire is built up with revenues in the hundreds of millions of dollars with a lot of space heritage with long-term contracts, many of them government contracts, we feel pretty good about our ability to maintain liquidity. And that’s basically the way we look at it going forward. Jonathan, I don’t know if you have anything?

Jonathan Baliff: Yes, I think there’s three things I would talk about. I mean, look at our operational cash flow and the way that we manage that. We paid down actually a lot of AP, we ended up having on a net cash basis a much better balance sheet. And so we’re going to continue to work that our contracts and working our contracts, we want to receive a large amount of the cash upfront as we go and do the manufacturing of the infrastructure and the €“ a number of our different solutions. So, we’re very focused on making sure we get a lot of that cash up front. So, we’re not only converting the backlog to revenue and obviously positive adjusted EBITDA and then free cash flow and then net income. So, we’re very focused on that as we move forward. We demonstrated that in the fourth quarter, and we’re going to continue to drive towards that through the year.

Greg Konrad: And then, sorry for all the questions, but maybe just sneak one last one in the, the $1 billion of submitted bids, that you called out in the presentation, is that what is outstanding? And then, I mean, how do you think about bidding strategy and any color around win rates, or what you’re seeing and then tied to that, any target for book-to-bill for 2023?

Peter Cannito: So the $1 billion refers to the number of bids that were submitted the €“ in various stages. We don’t track exact win rates, but if you look at off of a $1 billion, having a contracted a backlog somewhere between $300 million, $400 million our win rates are roughly hovering between 30% to 40%. And that’s kind of what we would expect from a company like ourselves. We really don’t have a hard target for book-to-bill, a book in order for us to achieve our forecast you can do the math and we want a book-to-bill at least over 1.2.

Greg Konrad: Thank you.

Jonathan Baliff: And that would be on a LTM basis.

Operator: Our next question is from Griffin Boss with B. Riley Securities. Please proceed.

Griffin Boss: Hi, thanks for taking my questions. Maybe just one for me. I think, so taking a step back, can you guys give any color on commercial space station opportunities and whether you’re already in discussions with those who are building out commercial space stations to replace the ISS? Or is it too early to really say?