Redwire Corp
For the period ended Jun 30, 2024. Filed Aug 8, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 8, 2024
RDW$7.21+16.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-10.
0001819810-24-000043
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0001819810-24-000092
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 89 previous paragraphs and 110 current paragraphs.
56 unchanged; 25 reworded; 22 added; 8 removed; 0 previous and 7 current paragraphs rearranged.
Tables are not compared: 6 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (22)
Current report
•Revenues increased 30% for the three months ended June 30, 2024 compared to the same period in 2023.
Current report
•Net loss increased $12.6 million for the three months ended June 30, 2024 compared to the same period in 2023.
Current report
•Net cash used by operating activities during the six months ended June 30, 2024 improved by $4.5 million to $6.7 million from $11.2 million during the same period in 2023.
Current report
•Book-to-bill ratio increased to 1.47 for the three months ended June 30, 2024, as compared to 0.76 for the same period in 2023.
Current report
Substantially all of our contracts are accounted for under the percentage-of-completion cost-to-cost method. As a result, revenues on contracts are recorded over time based on progress towards completion for a particular contract, including the estimate of the profit to be earned at completion. The following discussion of material changes in consolidated revenues should be read in tandem with the subsequent discussion of changes in consolidated cost of sales because changes in revenues are typically accompanied by a corresponding change in cost of sales due to the nature of the percentage-of-completion cost-to-cost method.
Current report
SG&A expenses increased $0.4 million, or 2%, for the three months ended June 30, 2024, as compared with the same period in 2023. The year-over-year increase in SG&A expenses was primarily driven by an increase in legal expenses of $1.5 million, partially offset by a decrease of $0.8 million in professional fees. This contributed to a year-over-year decrease of SG&A as a percentage of revenue to 23% for the three months ended June 30, 2024 from 29% for the same period in 2023. This decrease reflects the Company’s continued focus on cost discipline and streamlining corporate overhead costs to enhance operating leverage.
Current report
Transaction Expense
Current report
Research and development expenses decreased $0.3 million, or 16%, for the three months ended June 30, 2024, as compared with the three months ended June 30, 2023. The decrease was primarily driven by the redirection of resources to direct billing projects during the three months ended June 30, 2024 as compared to the same period in 2023.
Current report
The net income (loss) attributable to noncontrolling interests for the three months ended June 30, 2024 and 2023 was de minimis. Please refer to Note O – Joint Venture of the accompanying notes to the condensed consolidated financial statements for additional information.
Current report
Revenues
Current report
Cost of Sales
Current report
Cost of sales increased $50.5 million, or 58%, for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. The year-over-year increase in cost of sales was primarily driven by increased labor and subcontractor costs associated with larger contracts in power generation offerings for which there were no related costs during the same period in 2023.
Current report
Gross Margin
Current report
Gross margin decreased $2.3 million, or 8%, for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. As a percentage of revenues, gross margin was 17% and 26% for the six months ended June 30, 2024 and 2023, respectively. The year-over-year decrease in gross margin as a percentage of revenues was driven by changes in contract mix primarily due to larger contracts in power generation offerings with lower margins and a $7.0 million negative impact of net EAC adjustments for the six months ended June 30, 2024. Please refer to Note K – Revenues of the accompanying notes to the condensed consolidated financial statements for additional information related to the Company’s net EAC adjustments.
Current report
Research and Development
Current report
Interest Expense, net
Current report
Other (Income) Expense, net
Current report
Other (income) expense, net increased by $8.0 million, or 547%, for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. This year-over-year increase was primarily due to a $10.1 million loss as a result of an increase in the fair value of the Company’s private warrant liability for the six months ended June 30, 2024 as compared to a $2.0 million loss during the same period in 2023. The change year-over-year is primarily due to a larger increase in the Company’s common stock price during the six months ended June 30, 2024 as compared to the increase during the same period of 2023. The increase was partially offset by a gain of $1.3 million recognized as a result of the sale of the Company’s joint ventures. Please refer to Note C – Fair Value of Financial Instruments and Note O – Joint Venture of the accompanying notes to the condensed consolidated financial statements for additional information related to the private warrants and equity joint ventures, respectively. The increase was also partially due to less favorable impact from foreign currency transactions for the six months ended June 30, 2024 as compared to the same period in 2023.
Current report
Income Tax Expense (Benefit)
Current report
The net income (loss) attributable to noncontrolling interests for the six months ended June 30, 2024 and 2023 was de minimis. Please refer to Note O – Joint Venture of the accompanying notes to the condensed consolidated financial statements for additional information.
Current report
viii. Redwire incurred expenses related to debt financing agreements, including amendment related fees paid to third parties that are expensed in accordance with U.S. GAAP.
Current report
ix. Redwire recognized a gain related to the sale of all its ownership in two joint ventures, presented net of transaction costs incurred, as further described in Note O of the accompanying notes to the condensed consolidated financial statements.
Removed paragraphs (8)
Previous report
•Revenues increased 52% for the three months ended March 31, 2024 compared to the same period in 2023.
Previous report
•Net loss increased 12% for the three months ended March 31, 2024 compared to the same period in 2023.
Previous report
•Net cash provided by operating activities was $2.8 million during the three months ended March 31, 2024, as compared to net cash used in operating activities of $14.0 million during the same period in 2023.
Previous report
Committed Equity Facility
Previous report
On April 14, 2022, the Company entered into an $80.0 million common stock Purchase Agreement (the “Purchase Agreement”) with B. Riley Principal Capital, LLC (“B. Riley”). The Purchase Agreement governs a committed equity facility that provides the Company with the right, without obligation, to sell and issue up to $80.0 million of its common stock over a period of 24 months to B. Riley at the Company’s sole discretion, subject to certain limitations and conditions. Please refer to Note C – Fair Value of Financial Instruments of the accompanying notes to the condensed consolidated financial statements for additional information.
Previous report
Net proceeds under the Purchase Agreement to the Company will depend on the frequency and prices at which the Company sells shares of its common stock to B. Riley. The Company intends to use the net proceeds from this Purchase Agreement to further support its growth strategy through initiatives such as accretive acquisitions and internal investments, to bolster working capital and/or for general corporate purposes.
Previous report
The Company did not sell shares to B. Riley during the three months ended March 31, 2024. As of March 31, 2024, the Company had 7,592,939 registered shares available for purchase under the committed equity facility.
Previous report
On April 14, 2024, the Purchase Agreement with B. Riley expired in accordance with its terms and was not extended.
Reworded paragraphs (25)
Previous wording
During the first quarter of 2024, the Company delivered strong revenue performance year-over-year and generated positive cash flows from operating activities.
Current wording
During the second quarter of 2024, the Company delivered strong revenue performance year-over-year and reduced cash outflows from operating activities on a year-to-date basis.
Previous wording
•Selling, general and administrative expenses as a percentage of revenues decreased to 20%for the three months ended March 31, 2024 from 28% during the same period in 2023.
Current wording
•Selling, general and administrative expenses as a percentage of revenues decreased to 23% for the three months ended June 30, 2024 from 29% during the same period in 2023.
Previous wording
Cost of sales increased $29.6 million, or 68%, for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. The year-over-year increase in cost of sales was primarily driven by increased costs associated with revenue growth for the period.
Current wording
Cost of sales increased $20.9 million, or 47%, for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. The year-over-year increase in cost of sales was driven by increased labor, materials and subcontractor costs primarily associated with larger contracts in power generation offerings for which there were no related costs during the same period in 2023.
Previous wording
Gross margin increased $0.6 million, or 4%, for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. As a percentage of revenues, gross margin was 17% and 25% for the three months ended March 31, 2024 and 2023, respectively. The year-over-year decrease in gross margin as a percentage of revenues was primarily driven by changes in contract mix and the impact of net EAC adjustments for the three months ended March 31, 2024. Please refer to Note K – Revenues of the accompanying notes to the condensed consolidated financial statements for additional information related to the Company’s net EAC adjustments.
Current wording
Gross margin decreased $2.9 million, or 18%, for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. As a percentage of revenues, gross margin was 17% and 26% for the three months ended June 30, 2024 and 2023, respectively. The year-over-year decrease in gross margin was driven by changes in contract mix primarily due to larger contracts in power generation offerings with lower margins and the $3.1 million negative impact of net EAC adjustments for the three months ended June 30, 2024. Please refer to Note K – Revenues of the accompanying notes to the condensed consolidated financial statements for additional information related to the Company’s net EAC adjustments.
Previous wording
Interest expense, net increased $0.3 million, or 10%, for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. This increase was primarily related to an increase in our cost of capital due to unfavorable changes in variable interest rates on the Company’s debt obligations and increased borrowings on the revolving credit facility compared to the same period in 2023. Please refer to Note F – Debt of the accompanying notes to the condensed consolidated financial statements for additional information related to the Company’s debt obligations.
Current wording
Interest expense, net increased $0.3 million, or 13%, for the three months ended June 30, 2024, as compared with the three months ended June 30, 2023. The increase was primarily related to an increase in our cost of capital due to unfavorable changes in variable interest rates on the Company’s debt obligations and increased borrowings on the revolving credit facility compared to the same period in 2023. Refer to Note F – Debt of the accompanying notes to the condensed consolidated financial statements for additional information related to the Company’s debt obligations.
Previous wording
Other (income) expense, net decreased by $0.9 million, or 39%, for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. This year-over-year decrease was primarily due to a $1.1 million loss as a result of an increase in the fair value of the Company’s private warrant liability for the three months ended March 31, 2024 as compared to a $2.8 million loss for the comparable period in 2023. Please refer to Note C – Fair Value of Financial Instruments of the accompanying notes to the condensed consolidated financial statements for additional information related to the private warrants. The decrease was also partially due to less favorable impact from foreign currency transactions for the three months ended March 31, 2024 as compared to the same period in 2023.
Current wording
Other (income) expense, net decreased from net other income to net other expense by $8.9 million, for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023. The year-over-year decrease was primarily related to a loss of $9.0 million recognized as a result of changes in the fair value of the private warrant liability during the three months ended June 30, 2024 as compared to a gain of $0.8 million recognized during the same period of 2023. The change year-over-year is primarily due to an increase in the Company’s common stock price during the three months ended June 30, 2024 as compared to a slight decrease during the same period of 2023. This decrease was partially offset by a gain of $1.3 million recognized as a result of the sale of the Company’s joint ventures. Refer to Note C – Fair Value of Financial Instruments and Note O – Joint Venture of the accompanying notes to the condensed consolidated financial statements for additional information related to the private warrants and joint ventures, respectively.
Previous wording
The following table presents our results of operations for the three months ended March 31, 2024 compared to the three months ended March 31, 2023:
Current wording
Results of operations for the six months ended June 30, 2024 compared to the six months ended June 30, 2023:
Previous wording
Revenues increased by $30.2 million, or 52%, for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. The year-over-year increase in revenues was primarily related to increases in average contract size and increased volume of production in the power generation and structures and mechanisms space infrastructure offerings. These increases were partially offset by the impact of net EAC adjustments for the three months ended March 31, 2024. Please refer to Note K – Revenues of the accompanying notes to the condensed consolidated financial statements for additional information related to the Company’s net EAC adjustments.
Current wording
Revenues increased by $48.2 million, or 41%, for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. The year-over-year increase in revenues was primarily related to increases in average contract size and increased volume of production in the power generation and structures and mechanisms space infrastructure offerings. These increases were partially offset by a $7.0 million negative impact of net EAC adjustments for the six months ended June 30, 2024. Please refer to Note K – Revenues of the accompanying notes to the condensed consolidated financial statements for additional information related to the Company’s net EAC adjustments.
Previous wording
SG&A expenses increased$1.3 million, or 8%, for the three months ended March 31, 2024, as compared to the three months ended March 31, 2023. The year-over-year increase in SG&A expenses was primarily driven by an increase in share-based compensation and legal expenses of $0.6 million and $0.7 million, respectively. SG&A expenses as a percentage of revenues, decreased to 20%for the three months ended March 31, 2024 from 28%during the same period in 2023. This decrease reflects the Company’s continued focus on cost discipline and streamlining corporate overhead costs to enhance operating leverage.
Current wording
SG&A expenses increased$1.7 million, or 5%, for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. The year-over-year increase in SG&A expenses was primarily driven by an increase in legal expenses of $2.2 million. SG&A expenses as a percentage of revenues decreased to 21%for the six months ended June 30, 2024 from 29%during the same period in 2023. This decrease reflects the Company’s continued focus on cost discipline and streamlining corporate overhead costs to enhance operating leverage.
Previous wording
The net income (loss) attributable to noncontrolling interests for the three months ended March 31, 2024 remained materially consistent as compared with the same period in 2023.
Current wording
Transaction expenses for the six months ended June 30, 2024 remained materially consistent as compared with the same period in 2023.
Previous wording
Research and development expenses increased for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. The increase was primarily due to strategic decisions to invest in future developments related to microgravity payloads, radio frequency and power generation technologies.
Current wording
Research and development expenses increased $0.3 million, or 13%, for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. The increase was primarily due to strategic decisions to invest in future developments related to microgravity payloads, radio frequency and power generation technologies.
Previous wording
The change in our effective tax rate for thethree months ended March 31, 2024, as compared to thethree months ended March 31, 2023 is primarily due to the change in the valuation allowance. Please refer to Note H – Income Taxes of the accompanying notes to thecondensed consolidated financial statements for additional information.
Current wording
The change in our effective tax rate for thesix months ended June 30, 2024, as compared to thesix months ended June 30, 2023 is primarily due to the change in the valuation allowance. Please refer to Note H – Income Taxes of the accompanying notes to thecondensed consolidated financial statements for additional information.
Previous wording
Adjusted EBITDA is defined as net income (loss) adjusted for interest expense, net, income tax expense (benefit), depreciation and amortization, impairment expense, acquisition deal costs, acquisition integration costs, acquisition earnout costs, purchase accounting fair value adjustment related to deferred revenue, severance costs, capital market and advisory fees, litigation-related expenses, write-off of long-lived assets, equity-based compensation, committed equity facility transaction costs, debt financing costs, and warrant liability change in fair value adjustments. Pro Forma Adjusted EBITDA is defined as Adjusted EBITDA further adjusted for the incremental Adjusted EBITDA that acquired businesses would have contributed for the periods presented if such acquisitions had occurred on January 1 of the year in which they occurred. Accordingly, historical financial information for the businesses acquired includes pro forma adjustments calculated in a manner consistent with the concepts of Article 8 of Regulation S-X, which are ultimately added back in the calculation of Adjusted EBITDA. From March 2020 through March 31, 2024, the Company has completed nine acquisitions, and as such, we believe Pro Forma Adjusted EBITDA provides meaningful insights into the impact of strategic acquisitions as well as an indicative run rate of the Company’s future operating performance.
Current wording
Adjusted EBITDA is defined as net income (loss) adjusted for interest expense, net, income tax expense (benefit), depreciation and amortization, impairment expense, acquisition deal costs, acquisition integration costs, acquisition earnout costs, purchase accounting fair value adjustment related to deferred revenue, severance costs, capital market and advisory fees, litigation-related expenses, write-off of long-lived assets, gains on sale of joint ventures, equity-based compensation, committed equity facility transaction costs, debt financing costs, and warrant liability change in fair value adjustments. Pro Forma Adjusted EBITDA is defined as Adjusted EBITDA further adjusted for the incremental Adjusted EBITDA that acquired businesses would have contributed for the periods presented if such acquisitions had occurred on January 1 of the year in which they occurred. Accordingly, historical financial information for the businesses acquired includes pro forma adjustments calculated in a manner consistent with the concepts of Article 8 of Regulation S-
Previous wording
viii. Redwire adjusted the private warrant liability to reflect changes in fair value recognized as a gain or loss during the respective periods.
Current wording
x. Redwire adjusted the private warrant liability to reflect changes in fair value recognized as a gain or loss during the respective periods.
Previous wording
Our book-to-bill ratio was 0.40 for the three months ended March 31, 2024, as compared to 0.51 for the three months ended March 31, 2023. For the three months ended March 31, 2024 and 2023, none of the contracts awarded balance relates to acquired contract value.
Current wording
Our book-to-bill ratio was 1.47 for the three months ended June 30, 2024, as compared to 0.76 for the three months ended June 30, 2023. For the three months ended June 30, 2024 and 2023, none of the contracts awarded balance relates to acquired contract value.
Previous wording
Our book-to-bill ratio was 1.11 for the LTM (“Last Twelve Months”) ended March 31, 2024, as compared to 1.76 for the LTM ended March 31, 2023. For the LTM ended March 31, 2024, none of the contracts awarded balance relates to acquired contract value. For the LTM ended March 31, 2023, contracts awarded includes $109.8 million of acquired contract value from the Space NV acquisition, which was completed in the fourth quarter of 2022.
Current wording
Our book-to-bill ratio was 1.28 for the LTM (“Last Twelve Months”) ended June 30, 2024, as compared to 1.49 for the LTM ended June 30, 2023. For the LTM ended June 30, 2024, none of the contracts awarded balance relates to acquired contract value. For the LTM ended June 30, 2023, contracts awarded includes $109.8 million of acquired contract value from the Space NV acquisition, which was completed in the fourth quarter of 2022.
Previous wording
The following table presents our contracted backlog as of March 31, 2024 and December 31, 2023, and related activity for the three months ended March 31, 2024 as compared to the year ended December 31, 2023.
Current wording
The following table presents our contracted backlog as of June 30, 2024 and December 31, 2023, and related activity for the six months ended June 30, 2024 as compared to the year ended December 31, 2023.
Previous wording
We view growth in backlog as a key measure of our business growth. Contracted backlog represents the estimated dollar value of firm funded executed contracts for which work has not been performed (also known as the remaining performance obligations on a contract). Our contracted backlog includes $18.1 million and $19.3 million in remaining contract value from T&M contracts as of March 31, 2024 and as of December 31, 2023, respectively.
Current wording
We view growth in backlog as a key measure of our business growth. Contracted backlog represents the estimated dollar value of firm funded executed contracts for which work has not been performed (also known as the remaining performance obligations on a contract). Our contracted backlog includes $19.0 million and $19.3 million in remaining contract value from T&M contracts as of June 30, 2024 and as of December 31, 2023, respectively.
Previous wording
Although contracted backlog reflects business associated with contracts that are considered to be firm, terminations, amendments or contract cancellations may occur, which could result in a reduction in our total backlog. In addition, some of our multi-year contracts are subject to annual funding. Management fully expects all amounts reflected in contracted backlog to ultimately be fully funded. Contracted backlog from foreign operations in Luxembourg and Belgium was $96.6 million and $106.0 million as of March 31, 2024 and December 31, 2023, respectively. These amounts are subject to foreign exchange rate translations from euros to U.S. dollars that could cause the remaining backlog balance to fluctuate with the foreign exchange rate at the time of measurement.
Current wording
Although contracted backlog reflects business associated with contracts that are considered to be firm, terminations, amendments or contract cancellations may occur, which could result in a reduction in our total backlog. In addition, some of our multi-year contracts are subject to annual funding. Management expects all amounts reflected in contracted backlog to ultimately be fully funded. Contracted backlog from foreign operations in Luxembourg and Belgium was $94.5 million and $106.0 million as of June 30, 2024 and December 31, 2023, respectively. These amounts are subject to foreign exchange rate translations from euros to U.S. dollars that could cause the remaining backlog balance to fluctuate with the foreign exchange rate at the time of measurement.
Previous wording
Our operations are primarily funded with cash flows provided by operating activities and access to existing credit facilities. As of March 31, 2024, we had $32.6 million in cash and cash equivalents and $15.0 million in available borrowings from our existing credit facilities.
Current wording
Our operations are primarily funded with cash flows provided by operating activities and access to existing credit facilities. As of June 30, 2024, we had $30.8 million in cash and cash equivalents and $25.0 million in available borrowings from our existing credit facilities.
Previous wording
Our ability to fund our cash needs is dependent upon the successful execution of our business strategy and future operating results. Our future operating results are subject to, among others, general economic conditions, including as a result of heightened inflation, rising interest rates and supply chain pressures, competitive dynamics in our target markets as well as legislative and regulatory factors that may be outside of our control. As part of our business and debt management strategy, we continuously evaluate opportunities to further strengthen our financial and liquidity position, including the issuance of additional equity or debt securities, refinance or otherwise restructure our existing credit facilities, or enter into new financing arrangements. There can be no assurance that any of these actions will be sufficient to allow us to service our debt obligations, meet our debt covenants, or that such actions will not result in an adverse impact on our business. In the event that we require additional financing, we may not be able to raise such financing on terms acceptable to us or at all.
Current wording
Our ability to fund our cash needs is dependent upon the successful execution of our business strategy and future operating results. Our future operating results are subject to, among others, general economic conditions, including as a result of heightened inflation, rising interest rates and supply chain pressures, competitive dynamics in our target markets as well as legislative and regulatory factors that may be outside of our control. As part of our business and debt management strategy, we continuously evaluate opportunities to further strengthen our financial and liquidity position, including issuing additional equity or debt securities, refinancing or otherwise restructuring our existing credit facilities, or entering into new financing arrangements. There can be no assurance that any of these actions will be sufficient to allow us to adequately service our debt obligations, meet our debt covenants, or that such actions will not result in an adverse impact on our business. In the event that we require additional financing, we may not be able to secure such financing on terms acceptable to us or at all.
Previous wording
During the three months ended March 31, 2024, there were no material changes to the Company’s contractual obligations as presented in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on March 20, 2024, that were outside the ordinary course of our business.
Current wording
During the six months ended June 30, 2024, there were no material changes to the Company’s contractual obligations as presented in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on March 20, 2024, that were outside the ordinary course of our business, except for certain significant future lease obligations as described in Note G – Leases.
Previous wording
Net cash provided by operating activities was $2.8 million during the three months ended March 31, 2024, as compared to net cash used in operating activities of $14.0 million during the same period in 2023, resulting in a $16.8 million decrease in the use of cash year-over-year. The change was primarily due to an increase in cash provided by working capital of $18.2 million partially offset by an increase of $1.4 million in cash used related to the Company’s net loss and non-cash adjustments for the three months ended March 31, 2024 in comparison to the same period in 2023. The increase in cash provided by working capital is primarily related to an increase in accounts payable and accrued expenses of $7.9 million and a decrease in accounts receivable of $13.2 million, partially offset by a decrease in deferred revenue of $15.4 million and an increase in contract assets $3.0 million. The changes in contract assets, accounts receivable and deferred revenue were primarily driven by the timing of billable milestones during the three months ended March 31, 2024 compared to the same period in 2023. The increase in accounts payable and accrued expenses is primarily a result of timing of payments and invoice receipt.
Current wording
Net cash used by operating activities improved for the six months ended June 30, 2024 to $6.7 million as compared to $11.2 million during the same period in 2023. The change was primarily due to a decrease in cash used by working capital of $9.1 million and $8.8 million in the effects of non-cash adjustments partially offset by an increase of $13.5 million in cash used related to the Company’s net loss for the six months ended June 30, 2024 in comparison to the same period in 2023. The decrease in cash used by working capital is primarily related to an increase in accounts payable and accrued expenses of $4.8 million and a decrease in accounts receivable of $10.0 million, partially offset by a decrease in deferred revenue of $8.5 million and an increase in contract assets of $6.4 million. The changes in contract assets, accounts receivable and deferred revenue were primarily driven by the timing of billable milestones during the six months ended June 30, 2024 compared to the same period in 2023. The increase in accounts payable and accrued expenses is primarily a result of timing of payments and invoice receipt.
Previous wording
Net cash used in investing activities increased$1.6 millionfor the three months ended March 31, 2024 as compared to the same period in 2023. The increase is primarily due to an increase in capital expenditures related to licensed software for internal-use and property, plant and equipment.
Current wording
Net cash provided by investing activities for the six months ended June 30, 2024 was $0.5 million, as compared to net cash used of $2.5 million for the same period in 2023, resulting in a $3.1 million decrease in the use of cash year-over-year. The change was primarily due to net proceeds of $4.6 million received from the sale of the Company’s joint ventures, partially offset by an increase in capital expenditures related to licensed software for internal-use and property, plant and equipment.
Previous wording
Net cash provided by financing activities was$2.0 million during thethree months ended March 31, 2024, as compared to net cash used in financing activities of $2.2 million during the same period in 2023, resulting in a $4.3 million decrease in the use of cash year-over-year. The change was primarily due to an increase in net proceeds received from debt of $2.2 million during the three months ended March 31, 2024, compared to net repayments of $1.1 million in the same period in 2023. The increase in proceeds received from debt was driven primarily by increased draws from the Adams Street Revolving Credit Facility during the three months ended March 31, 2024, compared to the same period in 2023.
Current wording
Net cash provided by financing activities was$6.9 million during thesix months ended June 30, 2024, as compared to net cash used in financing activities of $3.4 million during the same period in 2023, resulting in a $10.4 million decrease in the use of cash year-over-year. The change was primarily due to an increase in net proceeds received from debt of $7.0 million during the six months ended June 30, 2024, compared to net repayments of $2.2 million in the same period in 2023 and proceeds of $0.5 million received from the exercise of vested stock options and shares purchased through the ESPP for which there is no comparable activity in the same period in 2023. The increase in proceeds received from debt was driven primarily by increased draws from the Adams Street Revolving Credit Facility during the six months ended June 30, 2024, compared to the same period in 2023.
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
Revenues increased 30% to $78.1 million for the three months ended June 30, 2024, as compared to $60.1 million for the three months ended June 30, 2023. The year-over-year increase in revenues is primarily due to increases in average contract size and increased volume of production in power generation offerings. These increases were partially offset by $3.1 million of net EAC adjustments for the three months ended June 30, 2024. Please refer to Note K – Revenues of the accompanying notes to the condensed consolidated financial statements for additional information related to the Company’s net EAC adjustments.
Current report — wording carried from elsewhere
The effective tax rate decreased to (0.1)% for thethree months ended June 30, 2024, as compared to 1.5% forthree months ended June 30, 2023, primarily due to an increase in the valuation allowance during 2024. Refer to Note H – Income Taxes of the accompanying notes to thecondensed consolidated financial statements for further discussion.
Current report — wording carried from elsewhere
Selling, General and Administrative (“SG&A”) Expenses
Current report — wording carried from elsewhere
Interest expense, net increased $0.6 million, or 12%, for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. This increase was primarily related to an increase in our cost of capital due to unfavorable changes in variable interest rates on the Company’s debt obligations and increased borrowings on the revolving credit facility compared to the same period in 2023. Please refer to Note F – Debt of the accompanying notes to the condensed consolidated financial statements for additional information related to the Company’s debt obligations.
Current report — wording carried from elsewhere
The table below provides information regarding our income tax expense (benefit) for the following periods:
Current report — wording carried from elsewhere
Net Income (Loss) Attributable to Noncontrolling Interests
Current report — wording carried from elsewhere
X, which are ultimately added back in the calculation of Adjusted EBITDA. From March 2020 through June 30, 2024, the Company has completed nine acquisitions, and as such, we believe Pro Forma Adjusted EBITDA provides meaningful insights into the impact of strategic acquisitions as well as an indicative run rate of the Company’s future operating performance.