Redwire warns of volatility in commercial space markets

WASHINGTON — Space technology company Redwire said that while it still sees the commercial sector as its biggest prospect for long-term growth, volatility among its customers could cause delays.

Redwire, which went public through a SPAC merger last year, reported revenue of $32.9 million in its first quarter results release on May 12. The company had a net loss of $17.3 million and an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) loss of $4.7 million in the quarter.

The first quarter fell “slightly below expectations,” Redwire chairman and CEO Peter Cannito said in an earnings call. That shortfall was due in part to contract award delays due to delays in completing the federal government’s fiscal year 2022 credits, as well as supply chain issues with subcontractors.

Another factor, he said, was “some volatility associated with orders for emerging commercial space contracts.” He gave no specific cases of problems, but later said companies faced with financing or regulatory issues could influence the timing of orders.

“With rapidly changing economic conditions, uncertainty has increased,” he said. “If we were to say that something has changed, it’s a bit of uncertainty about the timing, like many commercial aerospace companies in our industry that we’re a supplier to change their forecasts over time.”

“If the commercial space segment doesn’t live up to its predictions in line with forecasts that were ubiquitous around this time last year, that also adds uncertainty to our forecast for the next five years,” he added.

Despite this current uncertainty, Cannito remained optimistic about the long-term growth potential of the commercial sector. Redwire does business with both NASA and the National Security Space, where he said the company saw strong “demand signals” for several of the technologies the company is developing. The company used the call to spotlight work such as building deployable solar panels for the International Space Station and an indefinite supply contract and unlimited supply from the US Air Force worth a maximum of $950 million for the Advanced Battle The service’s management system, leveraging the company’s expertise in digital engineering.

However, the commercial market offered more long-term prospects, he argued. “The emerging commercial space segment has tremendous growth potential over the next 5 to 10 years that could far exceed the other segments in annual growth.”

Redwire confirmed earlier financial projections for 2022, with forecast revenue of $165 million to $195 million and adjusted EBITDA of $8 million to $15 million for the full year. “We expect sales to weigh more heavily in the second half of the year,” said Bill Read, Redwire’s chief financial officer, citing the $273.9 million backlog.

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