Greetings, and welcome to Redwire’s Second Quarter 2022 Earnings Conference Call. My name is Kevin, and I’ll be your operator for today. At this time, all participants are in a listen-only mode. We will take questions at the end of this presentation. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to introduce for today’s call, Nicole Taylor, Vice President, Financial Operations and Investor Relations. Ms. Taylor, you may begin your conference call.

Thank you, Kevin and good morning everyone. Welcome to Redwire’s second quarter 2022 earnings call. I’m Nicole Taylor, Vice President, Financial Operations and Investor Relations and with me on the call are Peter Cannito, Chairman and Chief Executive Officer; Andrew Rush, President and Chief Operating Officer; Jonathan Baliff, Chief Financial Officer; and Chris Edmunds, Senior Vice President and Corporate Controller. We hope that you have seen our earnings release, which we issued this morning, and it is 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 risks and uncertainties that are described in more detail on slide two. Additionally, to the extent we discuss non-GAAP measures during the call, please see slide three, our earnings release, or the investor presentation on our website for the calculation of these measures and GAAP reconciliations. With that, I would like to turn the call over to Pete. Pete?

Thank you, Nicole. Starting with our agenda, you can see we will start with a quarterly update from myself, then I will turn it over to Andrew, who will give some operational highlights for the quarter, and then he will be followed by Jonathan Baliff, our new CFO, who will be giving the financial highlights. After we end our presentation, we will open the floor for Q&A. I also like every opportunity, going back to slide six, to point out Redwire hardware. So, as you can see, this beautiful picture of the International Space Station. On the right-hand side, you will see our rollout solar arrays that were deployed last summer, a remarkable technical achievement with our customer at NASA and our partners at Boeing, and we're very proud of that. Starting with the market overview. So, market demand remains strong despite the broader macroeconomic environment and this is primarily due to geopolitical competition for dominance across all segments of the space industry. There is a space station that is currently being deployed by China. We continue to have geopolitical space races with Russia, and this is driving a lot of demand in the industry. And it can't be underscored enough that this is a decade-long trend. This is not just a trend that is going on this year and will go away overnight, this is a decade-long race for competition in space and that is driving a lot of demand across our industry, across all of the different segments, and we're going to talk about that further on in the brief. On the commercial side, commercial space adoption has proven a little bit slower than expected, but the capability development outlook is still very strong. There are a lot of plans on the drawing board for extraordinary space capability.…

Thanks, Pete. We are always proud to highlight missions that we're a partner and an enabler of. So here on Slide 14, we see the NASA and Johns Hopkins Applied Physics Lab laboratory mission, the double asteroid redirect test, spacecraft. This was launched this year and is powered by our rollout solar arrays and also uses our navigation components and is on its way to demonstrate the ability to kinetically impacted asteroid and change its trajectory, really, really awesome mission that we're proud to be a part of. So turning to Slide 15. I'd like to walk through some of our many operational highlights and project achievements. These will carry over to the next few slides in more detail. First, in quarter two, we continued deliveries of products and services for multiple national security, civil and commercial space customers including for multiyear, multi-ship set missions and satellite constellations. Our operational successes have led to additional projects and expanded workscope via cross-selling of products and services. Our teams increased on-time delivery, including for large solar programs and navigation component projects. These operational successes have led to increased backlog realization and have driven revenue growth and improved gross margins. Sales in the quarters have improved and we will spend more time on this in a moment, but as a preview, as Pete mentioned, our book-to-bill ratio in quarter two was 1.68, which was up from 0.45 this time last year. In order to fulfill our customer needs now and in the future, we are also continuing to make infrastructure investments to expand production capacity and increase execution efficiency. Finally, let me point out the image on this slide. Those are members of the Archinaut One extended structure additive manufacturing team who are presenting a one-third length test print. Light software and flight…

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Looking forward to quarter three, we are on track to complete a new 40,000 square foot facility to provide expanded solar array production capacity for both our Rigid Panel Solar Array lines and our Roll-Out Solar Array products. This we lead California-based facility will give us both increased throughput capacity for all signs and types of arrays as well as enabling the construction and test of even larger solar array. In addition to these physical plant infrastructure investments, we are continuing to improve and unify our processes and workflows to enhance our operational efficiencies. Importantly, these investments support proven technologies and product lines and are informed by customer demand signals, giving us high confidence and strong returns on these investments. They are not build it and they will come type of investments. Our physical and operational infrastructure investments are currently bearing fruit as seen in our increased revenue and gross profit. They will enable us to meet increased demand from our sales momentum in the second half of 2022 and beyond. With that, I'll hand it over to Jonathan to walk through our financial highlights.

Thank you, Andrew. So, let's review the financial specifics of the second quarter and the first half of 2022. I will help quantify and expand on a number of the themes that Pete and Andrew spoke about. Please turn to slide -- well, turn to slide 22 in a second. 21, I'm going to do the same thing that Andrew repeated. These are our excellent team members here with the aforementioned ROSA, the Roll-Out Solar Arrays. So, I just want to mention that. All right. Let's turn to 22 for some key financial takeaways. As Pete spoke about, our second quarter fiscal year 2022 revenues increased 14.2% year-over-year to $36.7 million. Our second quarter net loss was $77 million compared to a net loss of $15.9 million in the second quarter of fiscal year 2021. This net loss included mark-to-market on our warrants, but also an $80.5 million non-cash impairment expense. Let's briefly talk about this non-cash impairment. During the second quarter, there was a decline in the company's market capitalization driven by general economic conditions, including heightened inflation, rising interest rates, and volatility in the capital markets, which triggered a test of our goodwill, tangible and intangible assets. Based on this test, we incurred a pre-tax impairment charge of $80.5 million. These impairments during the second quarter of fiscal year 2022 did not have any impact on Redwire's revenue or supply chain contracts, or liquidity or the company's compliance with our credit agreement with Adams Street Partners. Our adjusted EBITDA loss of $4.1 million in the second quarter of 2022, which adds back this non-cash impairment expense among a number of other non-cash and one-time add-backs are detailed on page 33 of this presentation. One of the themes of the second quarter is improvement over the first quarter in…

Thank you, Jonathan. So in summary, we're building a foundation for near-term improvement and long-term growth. The first quarter and second quarter of the year were lower than expected, but Redwire is the kind of company that you measure in years, if not multi-years, due to the lumpy nature of our revenue and the extraordinary pipeline that we have developed as we continue to make investments. Demand for our products and services is strong, driven primarily by a decades long geopolitical competition for dominance in space. And our proven technology is not dependent on a build it and they will come scenario. We are generating value-added products today. We continue our pace of launches in 2022, and we are supporting slightly hardware now in the present. Redwire, as we mentioned, is continuing to make investments in business development and R&D and that has helped to expand the size of our programs, but this is having an impact on our adjusted EBITDA for the first half of 2022. However, the investments are paying off and our second half revenue growth underpinned by significantly higher 1.68 book-to-bill, and combined with a change in contract mix and higher growth margin provides for an improved outlook for the second half of 2022. As revenue and operating leverage improved sequentially, Redwire expects our financial outlook to improve, we see positive EBITDA for the second half of the year, and great momentum going into 2023. And with that, we will turn it over to the moderator for questions.

Thank you very much, and have a good day.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.