Welcome to the Jefferies Virtual Space Summit. I am Greg Konrad from the Aerospace and Defense Equity Research team at Jefferies. We're very excited to have Redwire with us today, and Peter Cannito, Chairman and CEO of Redwire. Peter, thanks for being here today. Yeah, it's my pleasure. Maybe just to start, can you give a little bit of background on Redwire and its history? Sure, yeah. So, Redwire was formed about four years ago. It started out really as an investment thesis around space from a private equity company called AE Industrial. AE Industrial is one of the premier private equity companies exclusively focused on aerospace and defense. They, I believe, recognized at an early point, quite frankly, in the development of what some call the second golden age of space, that space was gonna be one of the fastest moving swim lanes in the next decade, or potentially more, in terms of aerospace and defense investment from a customer perspective. And there's a number of macro trends that we could talk about, if you like, that I think informed that, things like this global space race we've now entered with China, as well as the emergence of space as a warfighting domain. So anyways, looked at space as somewhere where they wanted to grow a platform. We went out and started looking for that kind of premier middle-market space pure-play space company from which we could build, and what we really quickly realized was that it didn't exist, and that created an opportunity in and of itself. Space is somewhat shaped like a barbell. You have, on the one hand, the really large, diversified primes. They're fantastic. They do great things for space, great things for the country. But if you want to invest in that, maybe 10 cents, you know, of every dollar that you invest is actually going to space or some lesser number, and the rest is going into their diversified base of aerospace and defense contracts. So it's really not the pure-play investment if you're interested in playing space as a high-growth investment. And then you really didn't have much in the middle, especially on a public, in a public way. You used to have Maxar, now they're private, so it's even actually probably worse than when we were first starting out this. And then the, on the other side, you have these smaller businesses that come in two flavors, really. Either a niche technology providers who are doing something really exciting, but are small and focused on a single technology and don't have the ability to scale, either due to a lack of capital or a lack of sophistication, or in many cases, both. And then you have the venture-backed companies that may be doing some sort of innovative technology, but they're usually pre-revenue, pre-EBITDA, a different risk profile than, say, private equity or your average public investor. So our thesis was to build that middle market platform, and then ultimately, we brought it public about three years ago. So we did nine acquisitions of these smaller businesses that we considered to be best of breed at good values. I mean, not ridiculous multiples. All certainly doing well from a revenue perspective, almost all of them EBITDA positive. The idea, bring them together, form that platform, completely integrate them, one brand, one team, and give all the participants, you know, build this, this, this public company, pure-play space platform focused on infrastructure that could scale over time. And that's essentially where we are today. And then maybe if we can just focus on the 2024 growth strategy and protecting the core, scaling production, moving up the value chain, and venture optionality. I mean, how do you think about the core of Redwire today when we think about areas such as structures and avionics? So where are the biggest opportunities? Yeah. So it changes, and it's changing rapidly, right? So, kind of zooming out in the broadest sense, we believe that the most exciting area in space is space infrastructure, and that's in comparison to things like ground-based space infrastructure or launch, as an example, or even in some cases, providing data, although, you know, those are good markets. We see the largest end associated with this idea of that there's an entire ecosystem that's gonna be built out in space. Everything from satellites. So when I talk about space infrastructure, usually people go to satellites immediately in their head. That's certainly an important part of the market, an important segment of the market, but includes satellites at many different orbits: VLEO, LEO, MEO, GEO. Space infrastructure, from our perspective, includes also the International Space Station and any subsequent commercial space stations. It also includes things like tugs. It also includes lunar infrastructure and cislunar infrastructure, things like lunar landers, as well as deep space systems and ultimately even aspirations to do stuff at Mars. We collectively think of that all as space infrastructure, and we think that's one of the areas where people are building out, whether it be governments or commercial entities, building out infrastructures for a variety of different applications. That's where we're focused: what are the fundamental building blocks that every organization that's operating in space needs? And that's what Redwire is trying to develop: to be a leader in those fundamental building blocks. It's things like power, avionics, navigation components, sensing components to include cameras, but also communication components like RF payloads and antennas, as well as structures and mechanisms, like you pointed out, and full systems, as well, to include satellites. So for instance, we recently announced a really exciting win that we had, as part of an evolution of an area we've been investing in and developing a very low Earth orbit spacecraft, and we recently won a development program with DARPA to build on some of the internal investments that we've made in a platform called SaberSat. So in our strategy, that includes, you know, things like spacecraft, but it also includes a program that we announced that we won a number of months back called MASON that was focused on building landing pads and the technologies that are necessary to build landing pads on the Moon. And of course, you can see over my right shoulder here, one of our most successful space infrastructure programs, and that's the ROSA technology. That's an astronaut installing our roll-out solar arrays that we now have six of them installed, you know, currently operating on the International Space Station. That's that it's based, not only on space stations, but also we have the ROSAs on Ovzon, which is now a commercial GEO satellite that reached its orbit. As well as we announced the work that we're doing with Thales on providing ROSAs to their GEO satellites as well. So it's all this infrastructure. So if you think about it, you know, back when the infrastructure bill was really popular and people talked about, "Oh, yeah, we got to rebuild our highways, our bridges," all those things terrestrially, we continue to build out our comms networks. Redwire is that kind of equivalent play in our minds out in space. There's just gonna be a huge expansion in operations of a variety of different ways in space, and all of these different operations are gonna need these fundamental building blocks that we provide. And then, yeah, maybe just staying on ROSA, you know, you did recently disclose that the customer of that $142 million order was Thales Alenia Space. I mean, how do you think about that opportunity? What is the runway with that contract, and where there may be other market share opportunities when you think about that broader ROSA umbrella, which keeps seeming to spread, you know, to more and more customers? Yeah, no, that's a fantastic question, and it's really fundamentally probably the most important aspect of what's going on at Redwire from an investor perspective right now, and I highlighted it extensively in the last earnings call. And you referenced it earlier, and I'm happy that you did, and that's our four principles of growth for 2024: protecting the core, expanding our production, moving up the value chain, and then what we call venture optionality associated with our microgravity development, specifically around advanced materials and biotechnology. And you know, protecting the core is really all about the things that we've been doing for many years, continuing to do that. We've had a lot of success providing these fundamental building blocks of space. But scaling production, the second growth principle, is also equally important, and that's really this idea that, for us, one of our biggest goals is to have one of these fundamental building blocks, like the ROSA, one of our advanced technologies like the ROSA, baselined into a product offering that is also growing, right? This is a tried-and-true aerospace growth approach, where you try to, you know, you try to get baseline into the F-35. When the F-35 scales production, you scale, too. So, you know, we have six of these things on the ISS that really proved out that this is, you know, incredible flight heritage, a highly differentiated technology. But in order to realize our growth objectives, we need to get on programs where we can really scale production. And what was exciting about the recent partnership as a major supplier to Thales on their satellites is that now, as that continues to grow, that's an opportunity for Redwire to continue to grow along with that program as well. And that's what we're trying to do. You know, we've publicized that our antennas have been deployed as part of the early tranches associated with the Space Development Agency, that government organization. Of course, they have really large deployment aspirations that go well beyond the initial tranches. But since we've now have capability that has flight heritage, has been proven on orbit, as the companies that we've partnered there and the SDA writ large continues to scale, we're gonna scale with them. That's really exciting for us because, you know, it just leads to kind of this virtuous cycle of continuing growth as the space infrastructure expands. And then maybe staying on the SDA, you did announce the Tranche 2B award with Rocket Lab. I mean, how big of an opportunity is SDA in general, and maybe what types of trends have you seen as we've been through, you know, almost three tranches so far, kind of awarded to the primes? Yeah, I mean, I think that, it's, it's a tremendous opportunity. If you ask me, I, I do believe that the government, and particularly national security, is, is one of the fastest-growing opportunities in space. It continues to be, probably, the largest, I would say, near-term, opportunity for, you know, real revenue, real deployments, real growth. And the Space Development Agency is, their budgets are healthy, been growing, and they seem to be very successful, and I think you're gonna see it. I mean, they're talking, I don't have the exact numbers of, all of the satellite deployments, that they're talking about doing, as part of their proliferated architecture, but it's in the hundreds of satellites. And we're in the early tranches in the early days. So I believe that organizations that are baselined, that have heritage early on and that are successful are gonna realize significant growth as that proliferated LEO architecture continues to expand. And I think there's other organizations, and in some cases, large commercial constellations, that are seeing the agility and success that the SDA is having with this idea of a proliferated satellite architectures and will want to do the same thing, and that'll create additional opportunities for those organizations like Redwire that are baselined in and have on-orbit experience. Then you did talk about moving up the value chain a little bit. You talked about SaberSat. You have SaberSat and Phantom. Can you maybe just talk about that decision process of what markets to enter? I mean, how do you think about investments and when you decide to kind of move up market? Yeah, yeah. You know, so we want to be space infrastructure. So that doesn't, so, you know, satellites are an important part of that, but we don't want to be a me-too company, right? So we, we, you know, we gotta be—we have limited resources, like, you know, any company, and of course, capital's not cheap, so it's more important than ever that we be disciplined in how we deploy it. So we didn't want—you know, so we kind of looked at the marketplace, and we said, "All right, we have aspirations to move up the value chain," but almost every product that we pursue, we're very disciplined about focusing on having some sort of differentiation, usually around IP or heritage or something like that. So when we looked at opportunities to move up the value chain, specifically around spacecraft, we thought, well, trying to be a follower with another low Earth orbit SmallSat, and competing with organizations that have already invested, in some cases, $hundreds of millions to build that manufacturing capability, have, you know, proven flight heritage, are already, you know, working with the SDA, trying to do that would've been very expensive and overall, over time, might have, you know, just contributed to crowding the market there, which wouldn't have been a benefit to no one. So we started to look at, well, where do we think the puck is going next in terms of the deployment of future spacecraft architectures and very low Earth orbit? Rapidly emerged as a high-growth area with tremendous potential for a number of reasons. It really fills that sweet spot somewhere between unmanned aerial systems, or drones, people sometimes will call them, and low Earth orbit. We made the decision to invest in the SaberSat design, and we were already having success working in Europe developing the spacecraft, the VLEO spacecraft for the SkimSat program, which we call our platform now that supports SkimSat Phantom. So we thought, "All right, this is a place where we can be a leader, and we can be differentiator, and we can get ahead of the technology curve." That's why the announcement of our recent contract award with DARPA is super exciting for us because that, first of all, validates that there are others, and specifically in that case, the government, we believe one of the more forward-thinking parts of the government, that also see this as a critical area for future investment and development. And then it also validates that our investment in developing the SaberSat design could compete and win because it was differentiated enough. And so we're excited about that. We believe that VLEO will be an important part of future space architectures. Is it gonna wipe out LEO? No. Is LEO gonna wipe out GEO? I don't actually think that's the case either. Some people believe that proliferated LEO will completely replace the GEO market. I don't believe that's true. I think there's gonna be evolutions of things that are going on in GEO. MEO also is important, so it's kind of an all of the above. But we wanted to target the areas where we could move up the value chain in a differentiated way, so that we could not only grow, but grow in an area where due to our differentiation, we could maintain really good competitive financials associated with margins and things like that. It's gonna take some investment, that's a reality. But hopefully our history has proven that we can move forward in a responsible way, balancing the near term with the long term. And of course, having a DARPA contract, that development is, you know, in many cases, we're developing new technologies associated with-- that's basically funded by the government. So, that's helpful as well. And then maybe just in terms of venture optionality, can you maybe talk about PIL-BOX a little more? You know, where is that today in terms of the demand, and where can it go from here? Yeah, yeah. Well, so it's kind of in that spot where it's gone beyond just research and development and idea, you know, something that's super R&D-ish. 'Cause this has been something that NASA's been funding and working on for many years now, and so it's kind of proven itself. It's like, yeah, you know, as we've announced, the crystals, t here's a, there's a difference here, right? The crystals are larger and more, you know, better defined, more consistent, and there's scientific papers that our team is putting out about that with our partners. And we got, again, a lot of the stuff in space is like, where are you getting your validation, right? 'Cause people, you know, in the space industry love to make great claims. It's one of the fun nuances of our industry. But it's like, where's your economic or where's your business validation here? You know, like I talked about with DARPA, that was, that was validating for us, in terms of our investment in VLEO. Well, it's similar with our partnership with Eli Lilly, right? There's validation that somebody cares about this. Now, do I think that you're gonna see drugs on the shelves next year that are gonna be based on crystals that were grown in space? No. It's, it-- this is why we call it venture optionality. You know, where we are in the evolution is we've moved past really that, like, you know, you know, deep tech, almost experimentation phase, into. You know, there's still a lot of research going on 'cause there's a lot of, things that continue to have to be refined, but it's also development, right? And, and people are really starting to validate, the value of this. And so we gotta continue to execute. We have many, additional PIL-BOXes, manifested for this year. I believe it's up to 16, depending on when launches occur throughout the year, and delays, and all that other kind of stuff. But, but so we're really starting to get a real operational tempo around this that, can demonstrate it's, it's a real business. And quite frankly, most of the investment has already occurred, so, you know, we're not losing money on these deals. This is not, like, out of Redwire's... You know, off Redwire's balance sheet, that we're funding this stuff, and you know, at losses or anything like that. Like, you know, these aren't huge loss leaders. So it's exciting because, like with any venture optionality, as the program continues to be validated and continues to grow, in that particular case, something that could be small today, in many years out, and it can be difficult to predict, that's why we call it. We try to be realistic about what it is, a venture option. But the implication as it works for biotechnology is so huge that it's easy to get excited about it as well, right? So I think that's where we are. It's early stages of something that's showing extreme promise and has the ability to deliver tremendous results, but we can't plant the flag and declare victory today, and say that, you know, we're done in terms of of really partnering and bringing this capability to market in the biotech world specifically. And then rolling everything together, I mean, how do you think about the outlook for defense and intel versus commercial? Where are we in terms of the evolution of those two markets, and kind of what do you expect to lead going forward? Yeah, it's a great question. If I had a crystal ball and I could predict that, it would make my life a lot easier. The good news about Redwire, I'll say, is that it shouldn't materially matter to us. We're highly diversified. We work across all the different, let's call them customer segments: civil space, NASA … Not only NASA, but ESA as well. National security, we work with all the who's who in terms of both Space Force and intelligence communities and things like that, as well as major commercial players. You know, Lockheed Martin, and Boeing, and Blue Origin, and Thales, these are our, these are our customers. So regardless of where the growth comes from, because we provide fundamental building blocks, and we have great relationships across all those customer segments, we believe we're gonna be there. And it's not just, you know, we could have certain offerings also ebb and flow in terms of overall demand, and we're diversified that way, too. So it's not we're not like a one-hit wonder or a, you know. As long as it's as long as I don't know, pick something, commercial space stations or LEO architecture. As long as, you know, one of those work out, we're fine. But if, you know, if not, then we run into trouble. We you know, we can play you know, Moon to Mars. We're playing, obviously, the different satellite orbits. Commercial space stations are an important part of what we do as well. So from a Redwire perspective, we're diversified, so all those trends are our friends, and any of them. I do believe, though, you know, anybody who looks into my background knows that I've been working in national security for my entire career. And I do believe that space is a war-fighting domain. There's a lot of headlines that have been out there. I think the Wall Street Journal had something about Russia, and they're developing or they're potentially or allegedly developing nukes in space or something to that effect. That's, you know, these kind of things. You know, what the reality is, you know, I don't know. But these are the kind of indicators that I think our national security policymakers are looking at and saying that we need to invest there to ensure freedom of operation and resiliency and continuity in terms of operating in space, and that Redwire is gonna be a part of it. Then maybe just thinking about broader growth trends going forward, you're guiding to 23% growth this year. I mean, what does Redwire look like in five years from now? Among those areas, you know, what do you think of as the biggest opportunities, given everything we've talked about today and the diversity of Redwire? Yeah, I mean, so we used to say, and still do sometimes, "When space wins, Redwire wins." That's part of being kind of this picks and shovels strategy. I believe in space. I believe that, if you're an aerospace and defense investor or if you're a high-tech investor, that space should be part of your portfolio. Because I believe that, you know, that we're not going back in terms of, there's a lot of compelling things that are going on across all customer segments from, you know, people finding really incredible commercial uses for space. Of course, the Artemis Program and what I believe is a strong desire by the public, not only in the United States, but in Europe, as well as India, the Middle East, globally, Japan, that the world wants to continue to explore and is and it is investing in exploration. And of course, I mentioned some of the national security trends as well. So, you know, we don't publish beyond our you know, one year or 2024 growth targets, but I can tell you that I think Redwire's well-positioned and diversified and flight-proven. We got a lot of flight heritage with some differentiated capabilities, like the ROSAs and others, like the VLEO platform, like the PIL-BOX, that, as space continues to be a high-growth industry, we're gonna participate in our share of that growth as well. So that's kind of where I see. And, you know, there just aren't that many, quite frankly, pure-play public platforms that can scale. And we have, on top of all the really exciting stuff that we have going on from an organic perspective, although we haven't been active since our last deal, where we acquired the space division of QinetiQ Space NV, we have, you know, having done 9 acquisitions, we have that muscle. So when the opportunities are correct, certainly we're in organic growth as a tool in our toolkit, as well. So I'm very bullish, obviously, and as would be expected, on the industry and the potential growth opportunities. And then maybe just to wrap it up, and one last one. I mean, what are three takeaways that investors should come away with about Redwire or just broader opportunities? Yeah, I mean, I think the biggest thing to take away from is that we have kind of built-in resiliency around our diversity, that we have a lot of flight heritage, which is kind of the coin of the realm in space, meaning we're out there and we're doing it. And that kind of attracts additional customers 'cause, you know, space can be a little bit paradoxical. Nobody wants to be the first one to pay to put a capability in space, since it's such a harsh environment and it's so unique in terms of getting on orbit performance. But once you're on, people tend to kind of go with you more. So, I think it's that strength and resiliency due to diversity, it's that proven heritage, and really our heritage plus innovation strategy, 'cause it's just not heritage and commoditized stuff, it's, we look for the differentiated capabilities, as well. There has to be some sort of technological differentiation in the different product sets that we offer. And then, lastly is, you know, we got real revenue. Now, we got adjusted EBITDA. We're dancing around free cash flow. So a lot of the, you know, I think we're fiscally positioned to be resilient, economically, in the long term, as well, so. Cool. Well, Peter, thank you for your time, as always. That, that was great, and I'm sure we'll talk soon. Yeah. Thanks, Greg.