This is a company that can fund a significant amount of its growth as not just witnessed in the fourth quarter, but also we generated positive operating cash flow, and that’s in addition to an IRAD spend that was significantly higher in the fourth quarter and the full year ’23 than we did in the previous years. So again, we don’t give specific quarterly guidance on that, but we continue our path to profitability, and we’re again focused on making sure that we can fund a lot of our own growth.
Andres Sheppard: Got it. That’s super helpful. And I guess that’s actually a great segue to my next question. So regarding that recent $142 million contracts to produce the solar arrays. I’m wondering how should we be thinking about that translating into revenue over what time period might you expect to recognize the majority of this contract? Thank you.
Peter Cannito: Yes. No, great question. So we’ll be recognizing that over ’24 and a little bit of ’25, like many Redwire’s contracts, its there. Well, I don’t want to make a broad characterization, but many of our contracts are 2-year contracts. And it’s already kicked off and started. So we’ll be seeing the impact of that all through Q1, all the way through the rest of the year.
Andres Sheppard: Got it. I see. Okay. So then I could assume that that’s embedded in the revenue guidance for 2024, I guess?
Peter Cannito: That’s correct.
Andres Sheppard: Got it. Okay. And maybe just one last question, if I may, one for Jonathan. How are you thinking about activity in the M&A market for 2024? I know historically, you have grown inorganically as well as organically. So just curious if you’re looking to remain active in this market. Thank you.
Jonathan Baliff: The answer is yes, but we’re very focused on our return on invested capital, cash flow and profitability. I’ll hand it over to Pete. But again, from a CFO standpoint, we are – we’ve obviously shown an ability to do successful M&A both on a commercial operational and financial basis. We continue to look at it, but we’re pretty disciplined when it comes to M&A. Pete?
Peter Cannito: Well, the good news is we know how to do it. We’ve done it nine times so far, I believe. So the — so that’s a really viable tool in our toolkit. But we’re constantly scanning the market for the best value out there. And yes, if we find something that makes a lot of sense both strategically and has a really nice financial profile that meets our overall objectives, we’re certainly out there and active.
Andres Sheppard: Got it. Very helpful. Congratulations on the quarter again. I’ll pass it on. Thank you.
Peter Cannito: Thank you.
Operator: Thank you. [Operator Instructions] Our next question is coming from the line of Brian Kinstlinger with Alliance Global Partners. Please proceed with your question.
Brian Kinstlinger: Great. Thanks so much. Solid bookings, and thanks for all the backlog and pipeline stats as usual. You submitted more than $944 million in bids in 2023. Can you quantify the value of bids that have yet to be awarded? And then as we look at the $4.8 billion in the pipeline, how much of that do you expect to bid in 2024? Will it be more than 2023?
Peter Cannito: So I’m not sure I totally understand the question, but if I don’t answer it, just let me know. So in terms of characterizing the proposals under review, we don’t give any specific data on that, but I’ll say they all vary in size. So we have a variety of larger programs, as well as a really strong, like I like to say, protecting the core basis for repeat orders as well. So that’s how I would characterize what is under the bids that are under submission right now if that’s what you are asking. In terms of the pipeline, again, I’ll point everybody back to our four growth principles for 2024. We see the pipeline continuing to expand as we move up the value chain and continue to scale production. I think, obviously, it’s really exciting to win a $142 million contract and so just the near-term 2024 impact of that in our financial projections is really exciting.
But it also underscores our ability to compete for and win larger and larger programs. So with that kind of success under our belt, I would anticipate that the intent is for – when it comes to the pipeline that we’re going to continue to include larger swings in that pipeline. Did I answer your question?
Brian Kinstlinger: Kind of. I’m curious, do you expect to bid on more in 2024 than 2023?
Peter Cannito: The pipeline falls out, how it does many times. But yes, we’re investing in our bidding proposal and if we execute on our plan of bidding on larger programs, then you should see that number go up.
Jonathan Baliff: And you’ve seen it go up, Brian, in the last few quarters, both pipeline and bids. And so that trend, again, we’ve seen two quarters of it increasing. That trend, we expect to, again, to continue bidding on larger projects. Like we said, we’ve announced, obviously, a win on that, but there’s – again, we don’t set expectations based on pipeline, but again, the last two quarters has shown a good trend.
Peter Cannito: That’s why I wanted to underscore what we see as the three demand drivers. So I think the market could support us getting more.
Brian Kinstlinger: And then one follow-up on the visibility question that one of the analysts asked. I’m curious, as I’ve listened to some other contractors discuss guidance. I’m curious how much of your $300 million in revenue guidance do you expect to come from the current backlog versus how much do you need to generate in awards or revenue from awards that are yet to be won in 2024 to hit your 2024 goals?
Peter Cannito: So we don’t break it down. But I think if you look at backlog at the start of 2023 and then how we were – what we ended up from a revenue point, I think if the trend continues, you could see that with our current backlog in comparison, which I don’t have the exact number. I believe it’s 3…
