Leadership appointment strengthens strategic and development capabilities
FDA Type D Meeting provides additional guidance for advancing the clinical development of tecarfarin
Collaboration Agreement with Abbott (NYSE: ABT) validates the need for new anticoagulation options
PONTE VEDRA, Fla. – Cadrenal Therapeutics, Inc. (Nasdaq: CVKD), a biopharmaceutical company developing therapeutics for patients with cardiovascular disease, today reported its financial results for the first quarter ended March 31, 2025, and provided an update on the strategic focus of the company and clinical development of tecarfarin.
“In the first quarter of 2025, Cadrenal continued to build on the momentum we achieved during 2024,” said Quang X. Pham, Chairman & CEO. “The appointment of James Ferguson, M.D., FACC, FAHA, as our Chief Medical Officer positions us for success in reviewing potential assets to add to our portfolio and designing and executing our clinical program for tecarfarin. The finalized Collaboration Agreement with Abbott validates the critical need in the market for a new anticoagulant for patients with left ventricular assist devices (LVADs). And our meeting with the FDA provided additional guidance in the design of a pivotal trial.”
Highlights from the Quarter Ended March 31, 2025, and Other Recent Events:
Leadership Advances
In February 2025, Cadrenal appointed James J. Ferguson, M.D., FACC, FAHA, as Chief Medical Officer to lead the review of business development opportunities to expand the Company’s pipeline and drive the late-stage clinical development of tecarfarin for conditions requiring chronic anticoagulation therapy.
Regulatory Update
In February 2025, Cadrenal met with the U.S. Food and Drug Administration (FDA) for a Type D meeting. The FDA provided additional guidance on the appropriate design for a Phase 3 tecarfarin trial and welcomed submission of a final study design for review.
Collaboration Agreement with Abbott
In March 2025, we announced a Collaboration Agreement with Abbott (NYSE: ABT) to support our pivotal TECarfarin Anticoagulation and Hemocompatibility with Left Ventricular Assist Devices (TECH-LVAD) trial. Under the agreement, Abbott will share insights from recent HeartMate 3™ clinical trials and will support Cadrenal with trial design, site identification, trial awareness, and HeartMate 3™ expertise.
Operational Milestones
During the quarter, Cadrenal successfully completed the technical transfer and manufacturing of its tecarfarin drug substance (API) from a CDMO site located in Asia to a CDMO site in the United States. This initiative was done to support the company’s clinical and regulatory development strategy for tecarfarin and to improve supply chain security.
Cadrenal also conducted strategic market opportunity research for multiple indications, including patients with left ventricular assist devices. This research indicates that tecarfarin is uniquely positioned to provide clinical value to patients in the rapidly growing LVAD market, which is projected to nearly double by 2032. This research also showed that tecarfarin has the potential to provide clinical benefit in additional high-need cardiovascular, renal, and mechanical heart valve indications, reinforcing tecarfarin’s potential value proposition for patients.
Participation in Key Investor, Medical, and Business Development Conferences
Cadrenal was active during the first quarter in several significant conferences to build corporate visibility and underscore its commitment to advancing innovation in anticoagulation therapy. Investor interactions included participation at the 43rd Annual J.P. Morgan Healthcare Conference in San Francisco, a Company presentation at the BIO CEO and Investor Conference in New York, and, after the close of the quarter, a Company presentation at the Centri Capital Conference at Nasdaq headquarters in New York. Shortly after the quarter’s close, Cadrenal participated in the 18th National Conference on Anticoagulation Therapy in Washington, D.C.
Strategic Development Collaborations
Cadrenal continues to explore opportunities to add to the Company’s clinical pipeline and collaborate with potential development partners to advance the development of tecarfarin for patients with LVADs and for other indications requiring chronic anticoagulation.
First Quarter 2025 Financial Highlights
Research and development expenses for the quarter ended March 31, 2025, were $1.7 million compared to $0.6 million for the same period in 2024. General and administrative expenses for the quarter ended March 31, 2025, were $2.3 million compared to $1.1 million for the same period in 2024. Cadrenal reported a net loss of $3.8 million for the quarter ending March 31, 2025, compared to $1.7 million for the same period in 2024.
On March 31, 2025, Cadrenal had cash and cash equivalents of $7.3 million, compared to $10.0 million as of December 31, 2024. The Company had approximately 1.9 million shares of common stock outstanding as of March 31, 2025.
About Cadrenal Therapeutics, Inc.
Cadrenal Therapeutics, Inc. is a biopharmaceutical company developing therapeutics for patients with cardiovascular disease. Cadrenal’s lead investigational product is tecarfarin, a novel oral vitamin K antagonist anticoagulant that addresses unmet needs in anticoagulation therapy. Tecarfarin is a reversible anticoagulant (blood thinner) designed to prevent heart attacks, strokes, and deaths due to blood clots in patients requiring chronic anticoagulation. Although warfarin is widely used off-label for a number of indications, extensive clinical and real-world data have shown it can have significant, serious side effects. With tecarfarin, Cadrenal is advancing an innovative solution to address the unmet needs in anticoagulation therapy, aiming to reduce the clinical complexities of warfarin and capture value in a market with high demand for safer, more manageable treatment options.
Cadrenal is pursuing a pipeline-in-a-product approach with tecarfarin. Tecarfarin received Orphan Drug designation (ODD) for advanced heart failure patients with implanted mechanical circulatory support devices, including Left Ventricular Assisted Devices (LVADs). The Company also received ODD and fast-track status for tecarfarin in end-stage kidney disease and atrial fibrillation (ESKD+AFib).
Cadrenal is opportunistically pursuing business development initiatives with a longer-term focus on creating a pipeline of cardiovascular therapeutics. For more information, visit https://www.cadrenal.com/ and connect with us on LinkedIn.
Safe Harbor
Any statements in this press release about future expectations, plans, and prospects, as well as any other statements regarding matters that are not historical facts, may constitute “forward-looking statements.” The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potentially,” “predict,” “project,” “should,” “target,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These statements include statements regarding the appointment of James Ferguson, M.D., FACC, FAHA, as the Company’s Chief Medical Officer positioning the Company for success in reviewing potential assets to add to its portfolio and designing and executing its clinical program for tecarfarin; the finalized Collaboration Agreement with Abbott validating the critical need in the market for a new anticoagulant for patients with left ventricular assist devices (LVADs); Abbott sharing insights from recent HeartMate 3™ clinical trials and supporting Cadrenal with trial design, site identification, trial awareness, and HeartMate 3™ expertise; the LVAD market projected to nearly double by 2032; and tecarfarin having the potential to provide clinical benefit in additional high-need cardiovascular, renal, and mechanical heart valve indications, reinforcing tecarfarin’s potential value proposition for patients. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including the ability to utilize Abbott’s expertise to advance tecarfarin, the ability to successfully collaborate with Abbott, the initiation of the pivotal clinical trial for tecarfarin in LVAD patients by Cadrenal; for tecarfarin to provide clinical benefit in additional high-need cardiovascular, renal, and mechanical heart valve indications, reinforcing tecarfarin’s potential value proposition for patients; the ability of Cadrenal to build a pipeline of specialized cardiovascular therapeutics and other assets and the other risk factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, and the Company’s subsequent filings with the Securities and Exchange Commission, including subsequent periodic reports on Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Any forward-looking statements contained in this press release speak only as of the date hereof and, except as required by federal securities laws, the Company specifically disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise.
RICHMOND, Va.–(BUSINESS WIRE)– Lucky Strike Entertainment (NYSE: LUCK), one of the world’s premier operators of location-based entertainment, today provided financial results for the third quarter of the 2025 Fiscal Year, which ended on March 30, 2025.
Quarter Highlights:
Total revenue increased 0.7% to $339.9 million from $337.7 million in the previous year
Same Store Revenue decreased 5.6% versus the prior year
Net income of $13.3 million versus prior year net income of $23.8 million
Adjusted EBITDA of $117.3 million versus $122.8 million in the prior year
From December 30, 2024 through May 8, 2025, we acquired one family entertainment center and one water park. Total locations in operation as of May 8, 2025 is 367
Continued progress on Lucky Strike rebrand initiative with 34 current Lucky Strike locations
“In the quarter, our Retail and Leagues businesses remained stable, Food sales grew by high single digits, while our Corporate Events business declined as we navigate a period of corporate austerity. The softness in Corporate Events was most pronounced in tech-aligned markets, with California and Seattle accounting for the majority of the underperformance. We have seen encouraging signs of strength, with the Boston, New Jersey and Miami markets recently posting positive comps.,” said Founder, Chairman, and CEO Thomas Shannon.
“As we head into summer, we are energized by the momentum of our Summer Season Pass program, which will drive increased traffic to our locations. Sales of the pass are already over 200% higher than this time last year, reflecting the consumers’ desire for high-value entertainment in their local markets. We’re also entering the season with three water parks, including our recent acquisition of Shipwreck Island in Panama City Beach, Florida. Together with the contributions from the seven family entertainment centers we acquired this year, we expect to benefit from greater scale during the typically slower summer months.”
“In light of ongoing macroeconomic uncertainty, we are maintaining a disciplined approach to expense management and continuing to prioritize only high-return capital investments. Capital expenditures are down 20% year-to-date, and we anticipate this trend will continue into next year,” said Bobby Lavan, Chief Financial Officer.
Share Repurchase and Capital Return Program Update
From December 30, 2024 through May 5, 2025, the Company repurchased 4.5 million shares of Class A common stock for approximately $47 million. The Company has $92 million currently remaining under the share repurchase program.
The Board of Directors declared a quarterly cash dividend of $0.055 per share of common stock for the fourth quarter of fiscal year 2025. The dividend will be payable on June 6, 2025, to stockholders of record on May 23, 2025.
Guidance
Due to increasing economic uncertainty, the Company will not be issuing guidance at this time. We intend to reassess our approach to forward-looking guidance later in the year.
“Although the outlook remains uncertain, we are confident in the Company’s resiliency and our ability to drive revenue growth through strategic initiatives, targeted capital investments, and selective acquisitions,” said Bobby Lavan.
Investor Webcast Information
Listeners may access an investor webcast hosted by Lucky Strike Entertainment. The webcast and results presentation will be accessible at 9:00 AM ET on May 8, 2025 in the Events & Presentations section of the Lucky Strike Entertainment Investor Relations website at https://ir.luckystrikeent.com/overview/default.aspx
About Lucky Strike Entertainment
Lucky Strike Entertainment is one of the world’s premier location-based entertainment platforms. With over 360 locations across North America, Lucky Strike Entertainment provides experiential offerings in bowling, amusements, water parks, and family entertainment centers. The Company also owns the Professional Bowlers Association, the major league of bowling and a growing media property that boasts millions of fans around the globe. For more information on Lucky Strike Entertainment, please visit IR.LuckyStrikeEnt.com.
Forward Looking Statements
Some of the statements contained in this press release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve risk, assumptions and uncertainties, such as statements of our plans, objectives, expectations, intentions and forecasts. These forward-looking statements are generally identified by the use of forward-looking terminology, including the terms “anticipate,” “believe,” “confident,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and, in each case, their negative or other various or comparable terminology. These forward-looking statements reflect our views with respect to future events as of the date of this release and are based on our management’s current expectations, estimates, forecasts, projections, assumptions, beliefs and information. Although management believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. All such forward-looking statements are subject to risks and uncertainties, many of which are outside of our control, and could cause future events or results to be materially different from those stated or implied in this document. It is not possible to predict or identify all such risks. These risks include, but are not limited to: our ability to design and execute our business strategy; changes in consumer preferences and buying patterns; our ability to compete in our markets; the occurrence of unfavorable publicity; risks associated with long-term non-cancellable leases for our locations; our ability to retain key managers; risks associated with our substantial indebtedness and limitations on future sources of liquidity; our ability to carry out our expansion plans; our ability to successfully defend litigation brought against us; our ability to adequately obtain, maintain, protect and enforce our intellectual property and proprietary rights and claims of intellectual property and proprietary right infringement, misappropriation or other violation by competitors and third parties; failure to hire and retain qualified employees and personnel; the cost and availability of commodities and other products we need to operate our business; cybersecurity breaches, cyber-attacks and other interruptions to our and our third-party service providers’ technological and physical infrastructures; catastrophic events, including war, terrorism and other conflicts; public health emergencies and pandemics, such as the COVID-19 pandemic, or natural catastrophes and accidents; changes in the regulatory atmosphere and related private sector initiatives; fluctuations in our operating results; economic conditions, including the impact of increasing interest rates, inflation and recession; and other factors described under the section titled “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) by the Company on September 5, 2024, as well as other filings that the Company will make, or has made, with the SEC, such as Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this press release and in other filings. We expressly disclaim any obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law.
Non-GAAP Financial Measures
To provide investors with information in addition to our results as determined under Generally Accepted Accounting Principles (“GAAP”), we disclose Revenue Excluding Service Fee Revenue, Total Location Revenue, Same Store Revenue and Adjusted EBITDA as “non-GAAP measures”, which management believes provide useful information to investors because each measure assists both investors and management in analyzing and benchmarking the performance and value of our business. Accordingly, management believes that these measurements are useful for comparing general operating performance from period to period, and management relies on these measures for planning and forecasting of future periods. Additionally, these measures allow management to compare our results with those of other companies that have different financing and capital structures. These measures are not financial measures calculated in accordance with GAAP and should not be considered as a substitute for revenue, net income, or any other operating performance or liquidity measure calculated in accordance with GAAP, and may not be comparable to a similarly titled measure reported by other companies. Our fiscal year 2025 guidance measures (other than revenue) are provided on a non-GAAP basis without a reconciliation to the most directly comparable GAAP measure because the Company is unable to predict with a reasonable degree of certainty certain items contained in the GAAP measures without unreasonable efforts. For the same reasons, the Company is unable to address the probable significance of the unavailable information. Such items include, but are not limited to, acquisition related expenses, share-based compensation and other items not reflective of the Company’s ongoing operations.
Revenue Excluding Service Fee Revenue represents total Revenue less Service Fee Revenue. Total Location Revenue represents total Revenue less Non-Location Related Revenue, Revenue from Closed Locations, and Service Fee Revenue, if applicable. Same Store Revenue represents total Revenue less Non-Location Related Revenue, Revenue from Closed Locations, Service Fee Revenue, if applicable, and Acquired Revenue. Adjusted EBITDA represents Net Income (Loss) before Interest Expense, Income Taxes, Depreciation and Amortization, Impairment and Other Charges, Share-based Compensation, EBITDA from Closed Locations, Foreign Currency Exchange Loss (Gain), Asset Disposition Loss (Gain), Transactional and other advisory costs, changes in the value of earnouts, and other.
The Company considers Revenue Excluding Service Fee Revenue as an important financial measure because it provides a financial measure of revenue directly associated with consumer discretionary spending and Total Location Revenue as an important financial measure because it provides a financial measure of revenue directly associated with location operations. The Company also considers Same Store Revenue as an important financial measure because it provides comparable revenue for locations open for the entire duration of both the current and comparable measurement periods.
The Company considers Adjusted EBITDA as an important financial measure because it provides a financial measure of the quality of the Company’s earnings. Other companies may calculate Adjusted EBITDA differently than we do, which might limit its usefulness as a comparative measure. Adjusted EBITDA is used by management in addition to and in conjunction with the results presented in accordance with GAAP. We have presented Adjusted EBITDA solely as a supplemental disclosure because we believe it allows for a more complete analysis of results of operations and assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are that Adjusted EBITDA:
do not reflect every expenditure, future requirements for capital expenditures or contractual commitments;
do not reflect changes in our working capital needs;
do not reflect the interest expense, or the amounts necessary to service interest or principal payments, on our outstanding debt;
do not reflect income tax (benefit) expense, and because the payment of taxes is part of our operations, tax expense is a necessary element of our costs and ability to operate;
do not reflect non-cash equity compensation, which will remain a key element of our overall equity based compensation package; and
do not reflect the impact of earnings or charges resulting from matters we consider not to be indicative of our ongoing operations.
Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Initiating coverage with an Outperform rating. Nicola Mining is a unique junior exploration company because it offers discovery potential through its ownership of its flagship New Craigmont Copper Project, ownership of the Treasure Mountain high-grade silver-lead-zinc mine, a 75% economic interest in the Dominion Creek gold project, along with 100% ownership of the only mill permitted to receive and process material from throughout British Columbia. The company’s Merritt Mill, along with a sand/gravel pit and rock quarry, generates cash flow to support Nicola’s operations and exploration programs, which minimizes the need for dilutive equity issuance.
New Craigmont Copper Project. New Craigmont is in the Quesnel Trough, one of Canada’s most prolific copper belts, and is surrounded by past and present producing copper mines and is adjacent to Teck Resources’ Highland Valley Copper Mine, the largest copper mine in Canada. New Craigmont derives its name from the historic Craigmont open pit and underground mine that operated on the property from 1961 to 1982. The Craigmont mine produced over 36.75 million tons of ore with an average grade of 1.28% copper, yielding 900 million pounds of copper. The mine ceased operations in 1982 due to low copper prices.
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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Patrick McCann, CFA, Research Analyst, Noble Capital Markets, Inc.
Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Solid results. The company reported Q1 revenue of $751 million, slightly below our estimate of $767 million, illustrated in Figure #1 CNDT Q1 Results. Quarterly adj. EBITDA of $37 million was significantly higher than our estimate of $14 million, driven by better-than-expected operating cost reductions as the company works to remove stranded costs from its 2024 divestitures.
New business signings. During Q1, new business annual contract values (ACV) increased to $109 million, up 13.5% from $96 million in the prior year period. The total contract value (TCV) of the Q1 new business wins was $280 million, up an impressive 95.8%, year-over-year, indicating that management’s plan to return the organization to organic revenue growth is off to a good start, following a year that was more squarely focused on divestitures and debt reduction.
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CoreCivic is a diversified, government-solutions company with the scale and experience needed to solve tough government challenges in flexible, cost-effective ways. We provide a broad range of solutions to government partners that serve the public good through high-quality corrections and detention management, a network of residential and non-residential alternatives to incarceration to help address America’s recidivism crisis, and government real estate solutions. We are the nation’s largest owner of partnership correctional, detention and residential reentry facilities, and believe we are the largest private owner of real estate used by government agencies in the United States. We have been a flexible and dependable partner for government for nearly 40 years. Our employees are driven by a deep sense of service, high standards of professionalism and a responsibility to help government better the public good. Learn more at www.corecivic.com.
Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Exceeds Expectations. Driven by an increase in occupancy to 77%, increased bed utilization, and cost management, CoreCivic exceeded internal expectations as well as our projections. Revenue was $488.6 million, better than our $480.1 million estimate. Adjusted EBITDA was $81 million compared to our $69.1 million estimate. FFO was $0.45/sh versus our $0.35/sh estimate, and EPS was $0.23 compared to our estimate of $0.12. In 1Q24, CoreCivic reported revenue of $500.7 million, adjusted EBITDA of $89.5 million, EPS of $0.08, and adjusted EPS of $0.25. The previous year benefited from contracts that were eventually lost during the year.
More Business. In addition to the 2,400 bed Dilley facility, CoreCivic has received letter agreements from ICE for the potential activation of the 1,033-bed Midwest Regional Reception Center in Leavenworth, Kansas and at the 2,560-bed California City Immigration Processing Center in California City, California. Management anticipates additional contracting activity as 2025 progresses.
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Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Hans Baldau, Associate Analyst, Noble Capital Markets, Inc.
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Promising Signs. Management highlighted the success of the Company’s ongoing efforts to improve cash flow and pay down debt. Compared to Q4 2024, Q1 2025 improved across several important financial metrics, resulting in increased profitability and margin growth due to operational efficiencies from the lower cost structure.
Reorganization. This quarter, the company launched its new segment structure: Global Seating, Global Electrical Systems, and Trim Systems and Components. The revised structure aims to better connect with the end market customer and sharpen the Company’s focus on the business units.
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Office Depot, Inc., together with its subsidiaries, supplies a range of office products and services. It offers merchandise, such as general office supplies, computer supplies, business machines and related supplies, and office furniture through its chain of office supply stores under the Office Depot, Foray, Ativa, Break Escapes, Worklife, and Christopher Lowell brand names. The company also provides graphic design, printing, reproduction, mailing, shipping, and other services through design, print, and ship centers. It has operations throughout North America, Europe, Asia, and Central America. The company also sells its products and services through direct mail catalogs, contract sales force, Internet sites, and retail stores, through a mix of company-owned operations, joint ventures, licensing and franchise agreements, alliances, and other arrangements. As of December 31, 2008, Office Depot operated 1,267 North American retail division office supply stores and 162 international division retail stores, as well as participated under licensing and merchandise arrangements in 98 stores. The company was founded in 1986 and is based in Boca Raton, Florida.
Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.
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Q1 Results. Sales for the first quarter were $1.699 billion compared to $1.869 billion last year but were above our expectations of $1.625 billion. Net loss totaled $29 million, or a loss of $0.97/sh, compared to a net income of $15 million, or $0.40/sh, in the prior year. Adjusted EPS was $1.06, which surpassed our estimate of $0.58/sh, but was lower than $1.31 last year. Adjusted EBITDA of $76 million beat our estimate of $59 million and decreased from $91 million last year.
Favorable Developments. The initial hospitality partnership covers approximately 15,000 potential customer locations within a national hotel management group and is expected to provide a foundation for long-term growth in the segment and adjacent industries. Notably, the company is building inventory and hiring experienced sales personnel to support growth. We believe its actions will drive meaningful growth in the hospitality segment, with meaningful contributions in the second half of 2025.
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The GEO Group, Inc. (NYSE: GEO) is a leading diversified government service provider, specializing in design, financing, development, and support services for secure facilities, processing centers, and community reentry centers in the United States, Australia, South Africa, and the United Kingdom. GEO’s diversified services include enhanced in-custody rehabilitation and post-release support through the award-winning GEO Continuum of Care®, secure transportation, electronic monitoring, community-based programs, and correctional health and mental health care. GEO’s worldwide operations include the ownership and/or delivery of support services for 103 facilities totaling approximately 83,000 beds, including idle facilities and projects under development, with a workforce of up to approximately 18,000 employees.
Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
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1Q25 Results. Revenue of $604.9 million, compared to $605.7 million in 1Q24 and our $608 million estimate. Adjusted EBITDA was $99.8 million, down from $117.6 million in 1Q24 and our $114 million estimate. GEO reported net income of $19.6 million, or EPS of $0.14, compared to $22.7 million, or $0.14/sh, in the same period last year.
Ready To Go. GEOremains poised to assist the Federal government in its immigration policies. We have previously discussed a number of new contracts for the Company, and we anticipate additional awards over the remainder of 2025.
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Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Hans Baldau, Associate Analyst, Noble Capital Markets, Inc.
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Commercial Traction Building. NN added $16.4 million of new business in the first quarter. The Company is well on pace to hit the lower end of its $60 to $70 million full-year target. NN continues to see positive traction in targeted markets, including medical, high-value automotive, and electrical components. Additionally, the Company’s commercial pipeline is strong at over $740 million.
Mixed Financial Start Amidst Transition. First quarter net sales came in at $105.7 million, compared to $121.2 million a year ago, with the decline primarily reflecting the Lubbock sale and rationalized business lines. On a pro forma basis, revenue was down just 1.3% year-over-year. Power Solutions declined to $43.5 million from $48.2 million in 2024 due to the sale of Lubbock. Mobile Solutions revenue fell to $62.2 million compared to $73.1 million during the same prior year period, due to the closing of the Juarez plant. Adjusted EBITDA was $10.6 million, slightly lower than last year’s $11.3 million and lower than our $11.6 million estimate. Adjusted EPS loss for the quarter improved year-over-year to $0.03 from a loss of $0.08.
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DLH delivers improved health and readiness solutions for federal programs through research, development, and innovative care processes. The Company’s experts in public health, performance evaluation, and health operations solve the complex problems faced by civilian and military customers alike, leveraging digital transformation, artificial intelligence, advanced analytics, cloud-based applications, telehealth systems, and more. With over 2,300 employees dedicated to the idea that “Your Mission is Our Passion,” DLH brings a unique combination of government sector experience, proven methodology, and unwavering commitment to public health to improve the lives of millions. For more information, visit www.DLHcorp.com.
Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Tempered Results. DLH reported fiscal second quarter 2025 results in-line with our projections. Financial results continue to be negatively impacted by small business set asides and the run off of acquired small business revenue. Despite these headwinds, DLH’s core services revenue remained strong as the Company delivered cutting-edge solutions in support of customers’ mission-critical work.
2Q25 Results. Revenue declined 11.7% to $89.2 million in 2Q25, driven by small business conversions, but was in-line with our $90 million projection. DLH’s adjusted EBITDA totaled $9.4 million, down from $10.2 million in 2Q24. We were at $9.75 million. Net income was $0.9 million, or $0.06/sh, compared to $1.6 million, or $0.12/sh, last year and our estimate of $1.0 million, or $0.07/sh.
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Key Points – Coinbase acquires Deribit in a $2.9B cash-and-stock deal to expand its crypto derivatives business globally. – The acquisition strengthens Coinbase’s presence in Europe and Asia, where leveraged trading is more common. – The deal positions Coinbase for potential future U.S. regulatory shifts that may allow options trading domestically.
Coinbase is making a bold move to expand its global reach and diversify its offerings by acquiring Deribit, a leading crypto derivatives exchange, in a $2.9 billion deal. This acquisition, comprising $700 million in cash and 11 million shares of Coinbase stock, positions Coinbase to tap into the burgeoning market for crypto options and futures, particularly outside the United States.
Deribit, founded in 2016 and now headquartered in Dubai, has established itself as a dominant player in the crypto derivatives space, with 2024 trading volumes nearing $1.2 trillion. The platform’s strength lies in its robust offerings of options, futures, and spot trading services, attracting a growing base of institutional investors.
This acquisition aligns with a broader trend of consolidation in the crypto industry, spurred by a favorable regulatory climate under President Trump’s administration. Recent notable deals include Kraken’s $1.5 billion acquisition of NinjaTrader and Ripple’s $1.25 billion purchase of Hidden Road. Coinbase’s move to acquire Deribit underscores its commitment to expanding its derivatives capabilities and solidifying its position as a comprehensive player in the global crypto market.
The deal is expected to enhance Coinbase’s presence in non-U.S. markets, especially in Asia and Europe, where leveraged trading is more prevalent. By integrating Deribit’s advanced trading infrastructure, Coinbase aims to offer a broader range of derivatives products to its international clients, catering to both institutional and retail traders seeking sophisticated risk management tools.
Analysts view this acquisition as a strategic step for Coinbase to capitalize on the growing demand for crypto derivatives, which offer traders the ability to hedge positions and navigate market volatility effectively. With the crypto market maturing and attracting more institutional participation, the addition of Deribit’s platform is poised to drive significant revenue growth for Coinbase.
In the context of the evolving regulatory landscape, Coinbase’s acquisition of Deribit also reflects a proactive approach to navigating compliance requirements while expanding its global footprint. Deribit’s relocation to Dubai and its licensing under the Virtual Asset Regulatory Authority (VARA) provide Coinbase with a strategic base to operate in a jurisdiction that is increasingly becoming a hub for crypto innovation.
As the crypto industry continues to evolve, Coinbase’s acquisition of Deribit marks a significant milestone in its journey to become a leading global crypto exchange with a comprehensive suite of products and services. This move not only enhances Coinbase’s competitive edge but also signals a broader shift towards the integration of advanced financial instruments in the digital asset ecosystem.
With this acquisition, Coinbase is well-positioned to meet the growing demand for sophisticated trading solutions and to play a pivotal role in shaping the future of the global crypto derivatives market.
Key Points: – The Federal Reserve held interest rates steady at 4.25%–4.5%, resisting pressure from President Trump to cut. – Trump’s tariffs and public criticism have added political heat to the Fed’s cautious approach. – The Fed cited increased uncertainty, persistent inflation, and solid job growth as reasons to hold.
The Federal Reserve left interest rates unchanged on Wednesday, defying calls from President Donald Trump to lower borrowing costs as the U.S. economy faces heightened uncertainty tied to new tariffs and global instability. The decision, which keeps the federal funds rate in a range of 4.25% to 4.5%, marks the third straight meeting where rates have been held steady.
Fed officials voted unanimously, with Chairman Jerome Powell signaling a cautious stance in response to evolving risks. While acknowledging increased economic uncertainty, the central bank maintained that the U.S. economy continues to grow at a “solid pace,” supported by a stable job market.
“In considering the extent and timing of any additional rate changes, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks,” the Fed said in its post-meeting statement.
Trump’s Pressure Campaign
President Trump has been publicly pressuring the Fed to lower rates, arguing that “preemptive cuts” are necessary to counter the economic drag caused by his administration’s new tariffs. Trump has repeatedly attacked Powell on social media, labeling him a “major loser” and saying his “termination can’t come fast enough,” though he later clarified he does not intend to remove Powell before his term ends in 2026.
The president’s trade policy has injected fresh uncertainty into the economic outlook. A rush to import goods before tariffs kicked in helped trigger a contraction in first-quarter GDP — the first economic decline in three years.
Despite these headwinds, Powell made clear that the Fed’s decisions will be driven by data, not politics. “We’re not reacting to any one voice,” Powell said during his press conference. “Our job is to deliver stable prices and full employment — we’ll adjust policy when the facts warrant it.”
Solid Jobs, Sticky Inflation
April’s jobs report showed continued labor market strength, with low unemployment and steady hiring. Fed officials noted this resilience but flagged rising risks around both inflation and employment in the coming months. Inflation remains “somewhat elevated,” the Fed said, citing recent data showing price growth at 2.6% annually in March and a quarterly rate of 3.5% — both above the Fed’s 2% target.
The Fed’s reluctance to cut rates stems from a desire to avoid reigniting inflation, even as growth slows. “We’re watching carefully,” Powell said. “But we want to be confident that inflation is headed sustainably back to target before making further moves.”
A Balancing Act Ahead
The decision leaves the Fed in a holding pattern, waiting to see how Trump’s aggressive trade policies and political rhetoric play out against a backdrop of uncertain growth. Financial markets are now pricing in a possible rate cut later this year, depending on inflation trends and the depth of any economic slowdown.
As the 2026 presidential race begins to loom and Trump ramps up his campaign, the Fed’s independence may come under even more scrutiny. For now, Powell and his colleagues are standing firm — signaling they won’t be rushed into policy shifts without clear justification.
First Quarter 2025 Revenues of $302.6 Million Reflect 9.2 Percent Growth and 7.4 Percent Organic Growth Over First Quarter 2024 Revenues of $277.2 Million
First Quarter 2025 Consolidated Book to Bill Ratio of 1.2 to 1 and Bookings of $365.6 Million
Last Twelve Months Ended March 30, 2025 Consolidated Book to Bill Ratio of 1.2 to 1 and Bookings of $1.401 Billion
SAN DIEGO, May 07, 2025 (GLOBE NEWSWIRE) — Kratos Defense & Security Solutions, Inc. (Nasdaq: KTOS), a Technology Company in the Defense, National Security and Commercial Markets, today reported its first quarter 2025 financial results, including Revenues of $302.6 million, Operating Income of $6.6 million, Net Income attributable to Kratos of $4.5 million, Adjusted EBITDA of $26.7 million and a consolidated book to bill ratio of 1.2 to 1.0.
First quarter 2025 Net Income and Operating Income includes non-cash stock compensation expense of $8.7 million, and Company-funded Research and Development (R&D) expense of $10.0 million, including efforts in our Space, Satellite, Unmanned Systems and Microwave Electronic businesses.
Kratos reported first quarter 2025 GAAP Net Income attributable to Kratos of $4.5 million and GAAP Net Income per share of $0.03, compared to GAAP Net Income attributable to Kratos of $1.3 million and GAAP Net Income per share of $0.01, for the first quarter of 2024. Adjusted earnings per share (EPS) was $0.12 for the first quarter of 2025, compared to $0.11 for the first quarter of 2024.
First quarter 2025 Revenues of $302.6 million increased $25.4 million, reflecting 7.4 percent organic growth from first quarter 2024 Revenues of $277.2 million. Organic revenue growth was reported in our Unmanned Systems of 6.2 percent and KGS segment of 7.8 percent. The most notable growth in our KGS segment was in our Defense Rocket Systems, Microwave Products, and C5ISR businesses, with organic revenue growth rates ranging from 13.1 percent and 18.7 percent compared to the first quarter of 2024.
First quarter 2025 Cash Flow Used in Operations was $29.2 million, primarily reflecting the working capital requirements related to the revenue growth impacting our receivables, increases in inventories for anticipated future deliveries and ramps in production and investments we are making related to certain development initiatives in our Unmanned Systems (KUS) segment. Free Cash Flow Used in Operations for the first quarter of 2025 was $51.8 million after funding of $22.6 million of capital expenditures.
For the first quarter of 2025, KUS generated Revenues of $63.1 million and organic revenue growth of 6.2 percent, as compared to $59.4 million in the first quarter of 2024, primarily reflecting increased target drone sales. KUS’s Operating Loss was $1.7 million in the first quarter of 2025, compared to an Operating Loss of $0.4 million in the first quarter of 2024. KUS’s Adjusted EBITDA for the first quarter of 2025 was $1.7 million, compared to $2.9 million for the first quarter of 2024, reflecting the continued impact of increased material and subcontractor and labor costs on multi-year fixed price production contracts under terms which were negotiated in 2020 and 2021 that we are unable to seek recovery and which we are unable to renegotiate until the next multi-year production lot.
KUS’s book-to-bill ratio for the first quarter of 2025 was 1.8 to 1.0 and 1.3 to 1.0 for the twelve months ended March 30, 2025, with bookings of $115.0 million for the three months ended March 30, 2025, and bookings of $359.5 million for the twelve months ended March 30, 2025. Total backlog for KUS at the end of the first quarter of 2025 was $347.1 million, compared to $295.2 million at the end of the fourth quarter of 2024.
For the first quarter of 2025, Kratos’ Government Solutions (KGS) segment Revenues of $239.5 million increased from Revenues of $217.8 million in the first quarter of 2024, reflecting a 7.8 percent organic growth rate, excluding the impact of the recent acquisition of certain assets of Norden Millimeter, Inc. The increased Revenues includes organic revenue growth across all KGS businesses, with the most notable growth in our C5ISR, Defense Rocket Support and Microwave Products businesses with organic revenue growth rates ranging from 13.1 percent to 18.7 percent across such businesses over the first quarter of 2024.
KGS reported Operating Income of $17.0 million in the first quarter of 2025 compared to $16.6 million in the first quarter of 2024, primarily reflecting the volume and mix in revenues. First quarter 2025 KGS Adjusted EBITDA was $25.0 million, compared to first quarter 2024 KGS Adjusted EBITDA of $23.1 million, primarily reflecting the mix in revenues and resources.
KGS reported a book-to-bill ratio of 1.0 to 1.0 for the first quarter of 2025, a book to bill ratio of 1.2 to 1.0 for the last twelve months ended March 30, 2025 and bookings of $250.6 million and $1.041 billion for the three and last twelve months ended March 30, 2025, respectively. KGS’s total backlog was $1.161 billion at the end of the first quarter of 2025, up from $1.150 billion at the end of the fourth quarter of 2024.
Kratos reported consolidated bookings of $365.6 million and a book-to-bill ratio of 1.2 to 1.0 for the first quarter of 2025, and consolidated bookings of $1.401 billion and a book-to-bill ratio of 1.2 to 1.0 for the last twelve months ended March 30, 2025. Consolidated backlog was $1.508 billion on March 30, 2025, as compared to $1.445 billion on December 29, 2024. Kratos’ bid and proposal pipeline was $12.6 billion at March 30, 2025, as compared to $12.4 billion at December 29, 2024. Backlog at March 30, 2025 included funded backlog of $1.174 billion and unfunded backlog of $334.5 million.
Mr. DeMarco said, “Since our last report to you, the Defense and National Security Funding and priorities environment for the industry and for Kratos has become clearer, including a government full year fiscal 2025 CRA and funding now being put in place, a potential additional $150 billion defense related 2025 Reconciliation Bill progressing and the potential for a $1 trillion fiscal 2026 U.S. National Security Budget, all increasing our confidence in Kratos’ 2025 and 2026 full year financial forecasts, including approximately 10 percent and 14 percent year over year, organic revenue growth, respectively. With funding, programmatic, contractual and schedule clarity also now in place, and a 1.2 to 1.0 Q125 and last twelve months book to bill ratio, Kratos’ 2025 Q3 and Q4 are forecasted to be particularly strong, as customer related predictability is expected to return. Also, importantly, Kratos being a military quality hardware and software company, with substantially all of our vendor base and supply chain being U.S. located and sourced, we expect little impact from existing or any currently contemplated tariffs.”
Mr. DeMarco went on, “Kratos’ Israel-based microwave electronics business is one of our Company’s fastest growing, with some of the highest book to bill ratios and EBITDA margins. As planned, we are on schedule to move our production operations into our new and expanded facilities in late June to support large new programs, including air defense, missile, radar and space-related programs, we have received and expect to be successful on. The move will take a couple of weeks, and we have coordinated closely with our customers so that no contractual disruptions as a result of the move are expected. We have accounted for the potential impact to our manufacturing productivity and related financial impact of the move in our second quarter financial guidance provided today, with forecasted June revenues and EBITDA expected to be lower, and July and August higher, as we return to normal operations in July 2025.”
Mr. DeMarco continued, “Important future growth areas for Kratos include, our hypersonic franchise, jet drones, jet engines and propulsion systems for missiles, drones and spacecraft, microwave electronics and C5ISR systems for air defense, missile, radar, counter UAS and other systems. Also, Kratos’ National Security-focused Space and Satellite Business continues to receive increased funding and contract awards, adding to our confidence for higher expected EBITDA margins in 2026, as we begin executing on these new programs, and as our higher margin microwave and propulsion businesses continue to scale.”
Mr. DeMarco concluded, “The recapitalization of strategic weapon systems and the U.S. Defense Industrial Base is providing significant, generational strategic business opportunities for Kratos. We are focused on making investments in our core business areas, in coordination with our customers and partners, to increase our market share, drive revenue growth, and increase our margins. With Kratos’ unique Mil-Spec hardware and software offerings, capabilities and positioning, now is the time to build our Company and create long term, sustainable value for United States National Security and our stakeholders.”
Financial Guidance
We are providing our initial 2025 second quarter guidance and reaffirming our full year 2025 financial guidance range, which includes our assumptions, including as related to: current forecasted business mix, employee sourcing, hiring and retention; manufacturing, production and supply chain disruptions; parts shortages and related continued significant cost and price increases in each of these areas, that are impacting the industry and Kratos.
Kratos’ 2025 financial forecast and guidance includes elevated investments for capital expenditures for property, plant and equipment, including the expansion of our manufacturing and production facilities and related inventory builds in our Rocket Systems and Hypersonic businesses, primarily related to the recent MACH-TB 2.0 contract award, the continued manufacture of two production lots of Valkyries prior to contract award, to meet anticipated customer orders and requirements, the expansion and build-out of the Company’s Microwave Products production facilities, the expansion and build-out of our small jet engine production and test cell facilities, and the build-out of additional secure facilities for our federal secured space communications business, in accordance with contract and customer requirements. Kratos’ operating cash flow guidance also assumes consummation of certain investments in our rocket systems and unmanned systems businesses.
Our second quarter and full year 2025 guidance ranges are as follows:
Current Guidance Range
$M
Q225
FY25
Revenues
$300 – $310
$1,260 – $1,285
R&D
$9 – $10
$40 – $42
Operating Income
$3 – $5
$34 – $39
Depreciation
$8 – $9
$35 – $37
Amortization
$3 – $4
$12 – $13
Stock Based Compensation
$7 – $8
$31 – $32
Adjusted EBITDA
$21 – $25
$112 – $118
Operating Cash Flow
$50 – $60
Capital Expenditures
$125 – $135
Free Cash Flow Use
($75 – $85)
Management will discuss the Company’s financial results on a conference call beginning at 2:00 p.m. Pacific (5:00 p.m. Eastern) today. The call will be available at www.kratosdefense.com. Participants may register for the call using this Online Form. Upon registration, all telephone participants will receive the dial-in number along with a unique PIN that can be used to access the call. For those who cannot access the live broadcast, a replay will be available on Kratos’ website.
About Kratos Defense & Security Solutions
Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS) is a technology, products, system and software company addressing the defense, national security, and commercial markets. Kratos makes true internally funded research, development, capital and other investments, to rapidly develop, produce and field solutions that address our customers’ mission critical needs and requirements. At Kratos, affordability is a technology, and we seek to utilize proven, leading edge approaches and technology, not unproven bleeding edge approaches or technology, with Kratos’ approach designed to reduce cost, schedule and risk, enabling us to be first to market with cost effective solutions. We believe that Kratos is known as an innovative disruptive change agent in the industry, a company that is an expert in designing products and systems up front for successful rapid, large quantity, low cost future manufacturing which is a value add competitive differentiator for our large traditional prime system integrator partners and also to our government and commercial customers. Kratos intends to pursue program and contract opportunities as the prime or lead contractor when we believe that our probability of win (PWin) is high and any investment required by Kratos is within our capital resource comfort level. We intend to partner and team with a large, traditional system integrator when our assessment of PWin is greater or required investment is beyond Kratos’ comfort level. Kratos’ primary business areas include virtualized ground systems for satellites and space vehicles including software for command & control (C2) and telemetry, tracking and control (TT&C), jet powered unmanned aerial drone systems, hypersonic vehicles and rocket systems, propulsion systems for drones, missiles, loitering munitions, supersonic systems, space craft and launch systems, C5ISR and microwave electronic products for missile, radar, missile defense, space, satellite, counter UAS, directed energy, communication and other systems, and virtual & augmented reality training systems for the warfighter. For more information, visit www.KratosDefense.com
Notice RegardingForward–LookingStatements This news release contains certain forward-looking statements that involve risks and uncertainties, including, without limitation, express or implied statements concerning the Company’s expectations regarding its future financial performance, including the Company’s expectations for its second quarter and full year 2025 revenues, 2025 and 2026 revenue growth rates and expected contributors to 2026 projected revenue growth, organic revenue growth rates, R&D, operating income (loss), depreciation, amortization, stock based compensation expense, and Adjusted EBITDA, and full year 2025 operating cash flow, capital expenditures and other investments, and free cash flow, the Company’s future growth trajectory and ability to achieve improved revenue mix and profit in certain of its business segments and the expected timing of such improved revenue mix and profit, including the Company’s ability to achieve sustained year over year increasing revenues, profitability and cash flow, the Company’s expectation of ramp on projects and that investments in its business, including Company funded R&D expenses and ongoing development efforts, will result in an increase in the Company’s market share and total addressable market and position the Company for significant future organic growth, profitability, cash flow and an increase in shareholder value, the Company’s bid and proposal pipeline and backlog, including the Company’s ability to timely execute on its backlog, demand for its products and services, including the Company’s alignment with today’s National Security requirements and the positioning of its C5ISR and other businesses, planned 2025 investments, including in the tactical drone and satellite areas, and the related potential for additional growth in 2025 and beyond, ability to successfully compete and expected new customer awards, including the magnitude and timing of funding and the future opportunity associated with such awards, including in the target and tactical drone and satellite communication areas, performance of key contracts and programs, including the timing of production and demonstration related to certain of the Company’s contracts and control (TT&C) product offerings, the impact of the Company’s restructuring efforts and cost reduction measures, including its ability to improve profitability and cash flow in certain business units as a result of these actions and to achieve financial leverage on fixed administrative costs, the ability of the Company’s advanced purchases of inventory to mitigate supply chain disruptions and the timing of converting these investments to cash through the sales process, benefits to be realized from the Company’s net operating loss carry forwards, the availability and timing of government funding for the Company’s offerings, including the strength of the future funding environment, the short-term delays that may occur as a result of Continuing Resolutions or delays in U.S. Department of Defense (DoD) budget approvals, timing of LRIP and full rate production related to the Company’s unmanned aerial target system offerings, as well as the level of recurring revenues expected to be generated by these programs once they achieve full rate production, market and industry developments, and any unforeseen risks associated with any supply chain disruptions, availability of an experienced skilled workforce, inflation and increased costs, risks related to potential cybersecurity events or disruptions of our information technology systems, and delays in our financial projections, industry, business and operations, including projected growth. Such statements are only predictions, and the Company’s actual results may differ materially from the results expressed or implied by these statements. Investors are cautioned not to place undue reliance on any such forward-looking statements. All such forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise. Factors that may cause the Company’s results to differ include, but are not limited to: risks to our business and financial results related to the reductions and other spending constraints imposed on the U.S. Government and our other customers, including as a result of sequestration and extended continuing resolutions, the Federal budget deficit and Federal government shut-downs; risks of adverse regulatory action or litigation; risks associated with debt leverage; risks that our cost-cutting initiatives will not provide the anticipated benefits; risks that changes, cutbacks or delays in spending by the DoD may occur, which could cause delays or cancellations of key government contracts; risks of delays to or the cancellation of our projects as a result of protest actions submitted by our competitors; risks that changes may occur in Federal government (or other applicable) procurement laws, regulations, policies and budgets; risks of the availability of government funding for the Company’s products and services due to performance, cost growth, or other factors, changes in government and customer priorities and requirements (including cost-cutting initiatives, the potential deferral of awards, terminations or reduction of expenditures to respond to the priorities of Congress and the Administration, or budgetary cuts resulting from Congressional committee recommendations or automatic sequestration under the Budget Control Act of 2011, as amended); risks that the unmanned aerial systems and unmanned ground sensor markets do not experience significant growth; risks that products we have developed or will develop will not become programs of record; risks that we cannot expand our customer base or that our products do not achieve broad acceptance which could impact our ability to achieve our anticipated level of growth; risks of increases in the Federal government initiatives related to in-sourcing; risks related to security breaches, including cyber security attacks and threats or other significant disruptions of our information systems, facilities and infrastructures; risks related to our compliance with applicable contracting and procurement laws, regulations and standards; risks related to the new DoD Cybersecurity Maturity Model Certification; risks relating to the ongoing conflict in Ukraine and the Israeli-Palestinian military conflict; risks to our business in Israel; risks related to contract performance; risks related to failure of our products or services; risks associated with our subcontractors’ or suppliers’ failure to perform their contractual obligations, including the appearance of counterfeit or corrupt parts in our products; changes in the competitive environment (including as a result of bid protests); failure to successfully integrate acquired operations and compete in the marketplace, which could reduce revenues and profit margins; risks that potential future goodwill impairments will adversely affect our operating results; risks that anticipated tax benefits will not be realized in accordance with our expectations; risks that a change in ownership of our stock could cause further limitation to the future utilization of our net operating losses; risks that we may be required to record valuation allowances on our net operating losses which could adversely impact our profitability and financial condition; risks that the current economic environment will adversely impact our business, including with respect to our ability to recruit and retain sufficient numbers of qualified personnel to execute on our programs and contracts, as well as expected contract awards and risks related to increasing interest rates and risks related to the interest rate swap contract to hedge Term SOFR associated with the Company’s Term Loan A; currently unforeseen risks associated with any public health crisis, and risks related to natural disasters or severe weather. These and other risk factors are more fully discussed in the Company’s Annual Report on Form 10-K for the period ended December 29, 2024, and in our other filings made with the Securities and Exchange Commission.
Note Regarding Use of Non-GAAP Financial Measures and Other Performance Metrics This news release contains non-GAAP financial measures, including organic revenue growth rates, Adjusted EPS (computed using income from continuing operations before income taxes, excluding income (loss) from discontinued operations, excluding income (loss) attributable to non-controlling interest, excluding depreciation, amortization of intangible assets, amortization of capitalized contract and development costs, stock-based compensation expense, acquisition and restructuring related items and other, which includes, but is not limited to, legal related items, non-recoverable rates and costs, and foreign transaction gains and losses, less the estimated impact to income taxes) and Adjusted EBITDA (which includes net income (loss) attributable to noncontrolling interest and excludes, among other things, losses and gains from discontinued operations, acquisition and restructuring related items, stock compensation expense, foreign transaction gains and losses, and the associated margin rates). Additional non-GAAP financial measures include Free Cash Flow from Operations computed as Cash Flow from Operations less Capital Expenditures plus proceeds from sale of assets and Adjusted EBITDA related to our KUS and KGS businesses. Kratos believes this information is useful to investors because it provides a basis for measuring the Company’s available capital resources, the actual and forecasted operating performance of the Company’s business and the Company’s cash flow, excluding non-recurring items and non-cash items that would normally be included in the most directly comparable measures calculated and presented in accordance with GAAP. The Company’s management uses these non-GAAP financial measures, along with the most directly comparable GAAP financial measures, in evaluating the Company’s actual and forecasted operating performance, capital resources and cash flow. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and investors should carefully evaluate the Company’s financial results calculated in accordance with GAAP and reconciliations to those financial results. In addition, non-GAAP financial measures as reported by the Company may not be comparable to similarly titled amounts reported by other companies. As appropriate, the most directly comparable GAAP financial measures and information reconciling these non-GAAP financial measures to the Company’s financial results prepared in accordance with GAAP are included in this news release.
Another Performance Metric the Company believes is a key performance indicator in our industry is our Book to Bill Ratio as it provides investors with a measure of the amount of bookings or contract awards as compared to the amount of revenues that have been recorded during the period and provides an indicator of how much of the Company’s backlog is being burned or utilized in a certain period. The Book to Bill Ratio is computed as the number of bookings or contract awards in the period divided by the revenues recorded for the same period. The Company believes that the rolling or last twelve months’ Book to Bill Ratio is meaningful since the timing of quarter-to-quarter bookings can vary.
