SAN DIEGO, Feb. 06, 2024 (GLOBE NEWSWIRE) — Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS), a Technology Company in the Defense, National Security and Global Markets, announced today that it will publish financial results for the fourth quarter and fiscal year 2023 after the close of market on Tuesday, February 13th. Management will discuss the Company’s operations and financial results in a conference call beginning at 2:00 p.m. Pacific (5:00 p.m. Eastern).
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
SAN DIEGO, Jan. 16, 2024 (GLOBE NEWSWIRE) — Kratos Defense & Security Solutions, Inc. (Nasdaq: KTOS), a Technology Company in Defense, National Security and Global Markets, announced today that it has recently received approximately $50 million in awards for Products and Hardware, including for and in support of Counter Unmanned Aerial System (CUAS), Air Defense and Radar Systems. The $50 million total includes contracts and programs that were awarded to Kratos on a single award or sole source basis. Kratos is an industry leader in systems, hardware and microwave electronics, including for and in support of CUAS, unmanned aerial drone, missile, radar and air defense related systems. At Kratos, affordability is a technology, with Kratos offerings envisioned and designed up front, for rapid, low-cost manufacturing and production, at scale and in large quantities. Work under these recently received awards will be performed at secure Kratos manufacturing facilities and customer locations. Due to security related, competitive and other considerations, no additional information will be provided.
Eric DeMarco, President and CEO of Kratos, said, “Kratos’ technology, products, software and systems are supporting the U.S. warfighter and our allies defense and security related needs and requirements, including in current contested and high intensity conflict areas globally. Kratos’ ability to rapidly develop, produce and provide relevant, affordable solutions at scale and in quantity, we believe, is a competitive differentiator for our Company, customers, teammates and partners, and an important element of today’s global security and defense environment.”
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 design, develop, produce and field solutions that address our customers’ mission critical needs and requirements. At Kratos, affordability is a technology, and we utilize proven, leading-edge approaches and technology, not unproven bleeding edge approaches or technology, with Kratos’ approach reducing cost, schedule and risk, and enabling us to be first to market with cost effective solutions. Kratos is known as the 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 and as a competitive differentiator for our large traditional prime system integrator partners and also to our government and commercial customers. 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 Regarding Forward-Looking Statements Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made on the basis of the current beliefs, expectations and assumptions of the management of Kratos and are subject to significant risks and uncertainty. 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 Kratos undertakes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise. Although Kratos believes that the expectations reflected in these forward-looking statements are reasonable, these statements involve many risks and uncertainties that may cause actual results to differ materially from what may be expressed or implied in these forward-looking statements. For a further discussion of risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of Kratos in general, see the risk disclosures in the Annual Report on Form 10-K of Kratos for the year ended December 25, 2022, and in subsequent reports on Forms 10-Q and 8-K and other filings made with the SEC by Kratos.
Kratos Press Contact: Yolanda White 858-812-7302 Direct
First-to-Market OpenSpace Platform is a Software-Based Networking Solution that Connects Space to the Dynamic Ground, Supporting Multiple Satellites, Orbits, Payloads and Services
SAN DIEGO, Jan. 04, 2024 (GLOBE NEWSWIRE) — Kratos Defense & Security Solutions, Inc. (Nasdaq: KTOS), a technology company in Defense, National Security and Global Markets and Rancher Government Solutions (RGS), the leading provider of enterprise Kubernetes management solutions to the U.S. Government, announced today a strategic partnership to enable customers to seamlessly deploy and scale virtual ground systems using Kratos’ software-based OpenSpace® Platform.
With increasingly complex and dynamic satcom and Earth Observation missions, satellite operators and government agencies are transitioning from fixed and proprietary hardware to flexible and scalable generic compute-based cloud environments. This enables a virtualized and software-defined ground system like Kratos’ OpenSpace Platform to more cost effectively and securely support multiple missions simultaneously, deliver services faster and streamline operations.
Today, customers leverage a range of computing environments from bare metal, virtual machines to the cloud, making the deployment of software-based ground systems more complex and time consuming. Working together, Kratos and Rancher Government Solutions have enhanced the ability of the OpenSpace Platform, the first commercially available, fully virtualized and software-defined satellite ground system to be deployed more easily across customer environments.
“With Rancher, the OpenSpace Platform deploys its virtual functions including modems, channelizers, combiners, and more, as Kubernetes-based containerized software applications that act as independent and portable computing environments that can run and scale on any infrastructure,” said Brandon Gulla, Chief Technology Officer at RGS. “We are proud to be working with Kratos to support this truly transformational platform that will free satellite operators from proprietary hardware architectures and move to software-defined, flexible and extensible virtual platforms.”
By the nature of it being software-defined and containerized, the OpenSpace Platform is already much faster, and more flexible to deploy than traditional hardware-based satellite ground systems. As customer demands grow, the software-based OpenSpace Platform can reconfigure on the fly and deploy new services automatically and cost effectively in minutes. Software containers can be spun up and down and scaled on demand elastically using a single management interface from the Rancher Platform.
“Rancher serves as the Kubernetes management technology that supports the OpenSpace Platform’s ability to automate the deployment, scaling, and management of our containerized workloads,” said Anthony Semiao, Chief Solutions Architect of the OpenSpace Platform. “The combined technologies support hybrid and multi-cloud environments enabling OpenSpace customers to run in the data center and cloud environment of their choice such as Google, Amazon or Microsoft and to easily switch from one cloud provider to another.”
About Kratos OpenSpace Kratos’ OpenSpace family of solutions enables the digital transformation of satellite ground systems to become a more dynamic and powerful part of the space network. OpenSpace® is the industry’s only commercially available digital transformation solution that enables operators of satellites, Ground Systems-as-a-Service (GSaaS) providers, teleports and others in the satellite services supply chain to capitalize on dynamic ground capabilities. The OpenSpace family consists of three product lines: OpenSpace SpectralNet for converting satellite RF signals to be used in digital environments; OpenSpace quantum products, which are virtual versions of traditional hardware components; and the OpenSpace Platform, the first commercially available, fully orchestrated, software-defined ground system. These three OpenSpace lines enable satellite operators and other service providers to implement digital operations at their own pace and in ways that meet their unique mission goals and business models. For more information about the OpenSpace family, visit www.KratosDefense.com/OpenSpace.
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 utilize proven, leading edge approaches and technology, not unproven bleeding edge approaches or technology, with Kratos’ approach reducing cost, schedule and risk, and enabling us to be first to market with cost effective solutions. Kratos is known as the 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 and as a competitive differentiator to our large traditional prime system integrator partners and also to our government and commercial customers. 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.
About Ranger Rancher Government Solutions (RGS) is specifically designed to address the unique security and operational needs of the U.S. Government and military as it relates to application modernization, containers, and Kubernetes.
Rancher is a complete open source software stack for teams adopting containers. It addresses the operational and security challenges of managing multiple Kubernetes clusters at scale, while providing DevOps teams with integrated tools for running containerized workloads.
RGS supports all Rancher products with U.S. based American citizens who are currently supporting programs across the Department of Defense, Intelligence Community, and civilian agencies. From more information, visit www.ranchergovernment.com
Notice Regarding Forward-Looking Statements Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made on the basis of the current beliefs, expectations and assumptions of the management of Kratos and are subject to significant risks and uncertainty. 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 Kratos undertakes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise. Although Kratos believes that the expectations reflected in these forward-looking statements are reasonable, these statements involve many risks and uncertainties that may cause actual results to differ materially from what may be expressed or implied in these forward-looking statements. For a further discussion of risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of Kratos in general, see the risk disclosures in the Annual Report on Form 10-K of Kratos for the year ended December 25, 2022, and in subsequent reports on Forms 10-Q and 8-K and other filings made with the SEC by Kratos.
Kratos Press Contact: Yolanda White 858-812-7302 Direct
Target Systems Included BQM Cruise Missile and Short-Range Aegis Readiness Assessment Vehicles
SAN DIEGO, Nov. 27, 2023 (GLOBE NEWSWIRE) — Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS), a Technology Company in the Defense, National Security and Global Markets, announced today that its Defense & Rocket Systems business supported the successful intercept test of two Short-Range Ballistic Missile (SRBM) targets, known as Aegis Readiness Assessment Vehicle (ARAV) by two Standard Missile 3 Block IA (SM-3 Blk IA) interceptors during the test event Vigilant Wyvern, also known as Flight Test Aegis Weapon System-48 (FTM-48). The successful test demonstrated the capability of a ballistic missile defense-configured Aegis ship to detect, track, engage and execute intercepts of two SRBM targets while concurrently demonstrating an Anti-Air Warfare (AAW) engagement of two subsonic anti-ship cruise missile drone targets. This live-fire, raid scenario represented one of the largest Integrated Air and Missile Defense (IAMD) events ever conducted in the U.S. Indo-Pacific Command Area of Responsibility and demonstrated for the first time a concurrent Ballistic Missile Defense and Anti-Air Warfare raid.
The successful intercepts by the Arleigh Burke-class destroyer USS CARL M. LEVIN (DDG 120) were the highlight of the Vigilant Wyvern/FTM-48 event and the culmination of a four-week campaign during which Kratos Rocket Systems business, along with its government and industry partners, integrated and launched the two SRBM targets from the Pacific Missile Range Facility (PMRF) in Hawaii. Both ARAV target systems, which have a long-standing, successful, flight-demonstrated heritage on test and intercept missions for the U.S. Navy and MDA, executed nominal trajectories while meeting target requirements.
“Our team works side-by-side with our government customers to deliver transformative and affordable target systems and vehicles from mission inception through successful launch operations. FTM-48, which was one of our largest recent mission campaigns, is just the latest example of this successful partnership,” said Dave Carter, President of Kratos Rocket Systems Division. “Kratos’ affordable systems allow our customers to cost effectively effect multi system raid scenarios like Vigilant Wyvern, and we are grateful to be able to continue supporting the U.S. DoD and its allies in this very important mission area.”
The BQM is a sub-sonic aerial target, capable of speeds greater than .09 Mach and minimum altitude of 6.6 feet, and has no equal when it comes to delivering realistic anti-ship missile threat emulation.
Kratos is a leading provider of products, solutions, and services supporting ballistic missile defense for Aegis Weapon System, hypersonic testing, atmospheric science research and technology maturation.
About Kratos Defense & Security Solutions Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS) is a technology company that develops and fields transformative, affordable systems, products, and solutions for United States National Security, our allies, and global commercial enterprises. At Kratos, Affordability is a Technology, and Kratos is changing the way breakthrough technology is rapidly brought to market – at a low cost – with actual products, systems, and technologies rather than slide decks or renderings. Through proven commercial and venture capital-backed approaches, including proactive, internally funded research and streamlined development processes, Kratos is focused on being First to Market with our solutions well in advance of the competition. Kratos is the recognized Technology Disruptor in our core market areas, including Space and Satellite Communications, Cyber Security and Warfare, Unmanned Systems, Rocket and Hypersonic Systems, Next-Generation Jet Engines and Propulsion Systems, Microwave Electronics, C5ISR, and Virtual and Augmented Reality Training Systems. For more information go to www.KratosDefense.com.
Notice Regarding Forward-Looking Statements Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made based on the current beliefs, expectations, and assumptions of the management of Kratos and are subject to significant risks and uncertainty. 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 Kratos undertakes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise. Although Kratos believes that the expectations reflected in these forward-looking statements are reasonable, these statements involve many risks and uncertainties that may cause actual results to differ materially from what may be expressed or implied in these forward-looking statements. For a further discussion of risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of Kratos in general, see the risk disclosures in the Annual Report on Form 10-K of Kratos for the year ended December 25, 2022, and in subsequent reports on Forms 10-Q and 8-K and other filings made with the SEC by Kratos.
Shares of Virgin Galactic Holdings Inc. (SPCE) surged over 30% on Thursday after the company unveiled plans to reduce costs and temporarily pause spaceflight operations. The stock jumped from $1.56 to over $2 as investors reacted positively to Virgin Galactic’s aim to conserve cash while developing its next generation of spaceships.
Virgin Galactic announced it will wind down flights of its existing VSS Unity spacecraft in mid-2024. The company will then focus resources on finalizing assembly of its new Delta class spaceship line.
The Delta class ships represent the future of Virgin Galactic’s space tourism business. Pausing VSS Unity flights will allow engineers to concentrate on getting the Delta fleet ready to fly tourists on suborbital trips to the edge of space.
Cutting Costs to Fund New Spaceships
To finance the spaceship transition, Virgin Galactic is cutting costs substantially. This week the company laid off around 18% of its workforce, about 185 employees. The reductions will generate $25 million in annual cost savings.
The job cuts come as Virgin looks to trim expenses and streamline operations during the fleet transition. Management aims to direct as much capital as possible toward completing work on the Delta class vessels.
Virgin Galactic also announced it will reduce the flight rate of its current VSS Unity ship. Since June, VSS Unity has been flying commercial tourist missions roughly once per month. Going forward it will shift to quarterly flights before fully standing down in 2024.
Fewer VSS Unity flights will conserve rocket fuel and other operating costs. These savings can be redirected to accelerate progress on the new generation Delta ships.
VSS Unity Flights Winding Down
VSS Unity began commercial service in July 2021 and has completed five revenue-generating passenger flights so far. It will continue making quarterly trips to the fringes of space until its retirement in mid-2024.
So far this year VSS Unity flew its first fully private astronaut mission in June. This was followed by its first Italian researcher flight in September. Both missions generated crucial revenue for Virgin Galactic.
But VSS Unity is only capable of flying four passengers to space on each trip. The Delta class spacecraft will increase that capacity to six passengers. This 50% bump is critical to ramping up Virgin’s space tourism business.
The company is aiming to begin Delta test flights from its New Mexico spaceport in 2025. With a smoother flight profile and more spacious cabin, the Delta promises a superior overall experience compared to VSS Unity.
Stock Surges on Cash Conservation Plan
Virgin Galactic’s shares have suffered in 2022, falling over 50% year-to-date before Thursday’s 30% pop. The market responded favorably to management’s decisive actions to reinforce its financial position.
The workforce reductions and spaceflight pause will slow Virgin’s cash burn rate while buying time to ready the Delta fleet. With its existing cash balance, the company has ample runway to execute the transition.
Pausing VSS Unity flights will allow Virgin to upgrade ground infrastructure at its spaceport to support Delta operations. By winding down one program and preparing for the next, Virgin Galactic hopes to hit the ground running once the Delta ships are flight ready.
If executed successfully, the cost cutting and spaceflight hiatus could put Virgin in position to ramp up flights profitably after the Delta class ships come online. With improved ships unlocking expanded market opportunities, Virgin Galactic aims to soar both literally and financially over the long term.
Knowles Corporation is aggressively transforming into an industrial technology powerhouse. The components supplier announced it will acquire capacitor manufacturer Cornell Dubilier in a $263 million all-cash deal. This strategic purchase provides Knowles with expanded exposure to highly attractive end markets including medtech, defense, and industrial electrification.
Privately-held Cornell Dubilier, based in South Carolina, is a leader in film, electrolytic and mica capacitors used in demanding applications. Its capacitors are found in sectors like aerospace, automation, and critical care medical devices. The company generates over $135 million in revenue annually.
The acquisition brings new state-of-the-art capacitor technology into Knowles’ portfolio. This allows Knowles to offer more innovative solutions and cross-selling opportunities to customers. Cornell Dubilier’s offerings create a compelling combined value proposition for Knowles in the industrials space.
Knowles CEO Jeffrey Niew stated the purchase will help Knowles “grow with new and existing customers as we work to generate stronger earnings and cash flow and create shareholder value.” The deal is expected to contribute positively to Knowles’ earnings per share (EPS) beginning in 2024.
Specifically, the acquisition provides three key benefits:
Expands Knowles’ addressable market – Cornell Dubilier significantly expands Knowles’ serviceable available market through its broad capacitor capabilities and presence in diverse sectors including medtech, defense, aerospace, and industrial automation.
Diversifies product portfolio – Combined with Knowles’ existing precision devices like RF filters and ceramic capacitors, the deal delivers a wider range of capacitor products and solutions including film, electrolytic, and mica capacitors.
Boosts profitability – Knowles expects the acquisition to be accretive to earnings per share starting in 2024. The purchase is forecast to contribute to the bottom line while Knowles maintains balance sheet flexibility through its capital deployment strategy.
For investors, the strategic deal offers exposure to higher growth markets as Knowles pivots towards attractive areas with strong tailwinds. The companies noted defense spending increases, healthcare application growth, and industrial automation advances are driving demand.
The announced $263 million price consists of $140 million upfront and $123 million in seller notes due over the next two years. Knowles expects to finance the deal through cash, existing credit, and the deferred paper. The total fair value transferred is estimated at 9.6x Cornell Dubilier’s trailing EBITDA including synergies.
The acquisition caps off a transformative year for Knowles as it shifts towards high value industrial technology. Knowles recently restructured divisions to optimize its focus areas. It is also reviewing strategic options for its consumer microphones segment.
Together, these moves aim to reshape Knowles into a higher growth, higher margin technology supplier. The company is working to leverage megatrends like IoT, EVs, and 5G adoption. Knowles is strengthening its industrial roots to drive value for shareholders.
The Cornell Dubilier deal provides Knowles with an expanded presence in crucial growth industries. It also refocuses the company towards participating in rising opportunities like defense, medtech, and automation. For investors, the transformative purchase plants Knowles firmly in key sectors, unlocking value over the long-term.
Pennsylvania instrumentation company AMETEK (NYSE: AME) is expanding its testing and measurement capabilities with the acquisition of United Electronic Industries.
Massachusetts-based UEI is a leader in data acquisition and control solutions for aerospace, defense, energy and semiconductor sectors. Its products enable customers to build robust systems for simulation, monitoring and automated testing.
AMETEK CEO David Zapico expressed excitement about bringing UEI’s innovative solutions into the company’s Power Systems and Instruments division. He said the $35 million deal broadens AMETEK’s presence in attractive markets that complement existing strengths.
UEI will join AMETEK’s Electronic Instruments Group, known for analytical, calibration and display instruments. The acquisition aligns with AMETEK’s growth strategy of targeting niche segments and making strategic buys.
Headquartered near Philadelphia, AMETEK has annual sales over $6 billion globally. The 90-year-old firm focuses on cash flow and capital deployment to drive double-digit earnings growth.
Take a moment to learn about Kratos Defense & Security Solutions, a company that specializes in satellite communications, missile defense, and hypersonic systems.
MCLEAN, Va., Aug. 30, 2023 /PRNewswire/ — V2X, Inc., (NYSE: VVX), a leading provider of critical mission solutions and support to defense clients globally, announced that company management will address the Jefferies Industrials Conference, on Wednesday, September 6, at 4:30 p.m. Eastern time.
V2X builds smart solutions designed to integrate physical and digital infrastructure – from base to battlefield – by aligning people, actions, and outputs. Formed by the merger of Vectrus and Vertex, we bring a combined 120 years of successful mission support. Our lifecycle solutions improve security, streamline logistics, and enhance readiness.
The Company delivers a comprehensive suite of integrated solutions across the operations and logistics, aerospace, training, and technology markets to national security, defense, civilian and international clients. Our global team of approximately 15,000 employees brings innovation to every point in the mission lifecycle, from preparation to operations, to sustainment, as it tackles the most complex challenges with agility, grit, and dedication.
Contact Information
Investor Contact Mike Smith, CFA Vice President, Treasury, Corporate Development and Investor Relations IR@goV2X.com 571-337-3862
Media Contact Angelica Spanos Deoudes Senior Media Strategist Communications@goV2X.com 571-338-5195
SAN DIEGO, July 25, 2023 (GLOBE NEWSWIRE) — Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS), a Technology Company in the Defense, National Security and Global Markets, announced today that it will publish financial results for the second quarter 2023 after the close of market on Thursday, August 3rd. Management will discuss the Company’s operations and financial results in a conference call beginning at 2:00 p.m. Pacific (5:00 p.m. Eastern).
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 Company that develops and fields transformative, affordable systems, products and solutions for United States National Security, our allies and global commercial enterprises. At Kratos, Affordability is a Technology, and Kratos is changing the way breakthrough technology is rapidly brought to market – at a low cost – with actual products, systems, and technologies rather than slide decks or renderings. Through proven commercial and venture capital backed approaches, including proactive, internally funded research and streamlined development processes, Kratos is focused on being First to Market with our solutions, well in advance of competition. Kratos is the recognized Technology Disruptor in our core market areas, including Space and Satellite Communications, Cyber Security and Warfare, Unmanned Systems, Rocket and Hypersonic Systems, Next-Generation Jet Engines and Propulsion Systems, Microwave Electronics, C5ISR and Virtual and Augmented Reality Training Systems. For more information, visit www.KratosDefense.com.
Why Diversify Your Portfolio Into Smaller Government Contractors
Will there be a recession, or will the Fed orchestrate a rare soft landing? Coming off a down year last year, with the stock market now up mid-year by 7%, which is the average expected return for a full year of the broader indexes, many investors find themselves straddling a fence. On one side of the fence is the fear of missing out (FOMO), and on the other is a money market rate that is higher than it has been in decades. In a weakening economy, investors don’t have to exit the stock market completely to find stocks that are not expected to be negatively impacted. Until there is more clarity, perhaps it is worth taking a portion of your holdings on a side trip, to look at government contractors.
When company earnings are dependent on the consumer, its stock price may be tied to the pace of the economy – it’s likely to at least be correlated to activity within its industry. While many investment options are available, one often overlooked but potentially rewarding segment is companies that generate revenue through government contracts, not consumer sales or business-to-business. Let’s explore the benefits of investing in such companies, particularly smaller ones where a new contract is most impactful to the bottom line. These company’s still have above average growth potential but can be quite resilient during economic downturns.
Stable Revenue Streams
Companies that secure government contracts often enjoy stable and predictable revenue streams, they also are billing an entity that can tax and is not reliant on stable earnings itself. Government contracts typically involve long-term agreements that provide a consistent flow of income for the duration of the contract. This stability can be particularly beneficial for investors seeking reliable returns on their investments. Aerospace companies, for instance, often receive substantial contracts for the production and maintenance of military aircraft, providing a steady stream of income.
Reduced Vulnerability to Recessions
One of the key advantages of investing in companies with government contracts is their potential indifference to economic downturns. During recessions or periods of economic uncertainty, government spending has even been known to increase as a means to stimulate a weak economy. This increased spending often benefits companies with government contracts, as governments prioritize projects related to defense, infrastructure development, and public services. This makes aerospace and dredging companies, which are heavily involved in such projects, relatively impervious to recessions.
Long-Term Growth Opportunities
Government contracts often involve large-scale projects that span several years or even decades. This long-term nature provides companies with ample opportunities for growth and expansion. For example, aerospace companies may secure contracts to develop advanced military aircraft, including drones, or provide satellite-based communication systems. Similarly, dredging companies might be contracted for extensive port development projects. These opportunities allow companies to invest in research, development, and innovation, positioning them for sustained growth and profitability.
Competitive Advantage of Being Established
Government contracts typically involve rigorous bidding processes and stringent eligibility criteria. Companies that successfully secure these contracts gain a competitive advantage over their peers. Once established, they often become preferred suppliers for subsequent projects, further solidifying their market position. This advantage can translate into increased market share, higher profitability, and enhanced investor confidence, making these companies attractive for long-term investments.
Great Lakes Dredge & Dock Corporation (GLDD) would seem to fit the above criteria. It is the largest provider of dredging services in the United States, and is engaged in expanding its core business into the rapidly developing offshore wind energy industry. Great Lakes also has a history of securing significant international projects. GLDD has a 132-year history, has a market-cap of $542 million, and is up 37% year-to-date.
The most recent research note from Noble Capital Markets on GLDD is available here.
Kratos Defense & Security Solutions, Inc. (KTOS), a military contractor that has admirable specialties compared to the large names that typically come to mind. Kratos is changing the way transformative breakthrough technology for the industry is rapidly brought to market through proven approaches, including proactive research and streamlined development processes. KTOS treats affordability as a technology that needs to be considered. It specializes in unmanned systems, satellite communications, cyber security/warfare, microwave electronics, missile defense, hypersonic systems, training, combat systems and next generation turbo jet and turbo fan engine development. KTOS has a $1.72 billion market-cap and is up 31% year-to-date.
The most recent research note from Noble Capital Markets on KTOS is available here.
Technological Advancements and Spin-Off Opportunities
Working on government contracts often requires companies to push the boundaries of technology and innovation. Aerospace companies, for example, are at the forefront of developing advanced defense systems, satellite technologies, and commercial aircraft. Similarly, dredging companies and those involved in wind energy may invest in state-of-the-art equipment and techniques to execute complex infrastructure projects. These advancements can lead to spin-off opportunities in commercial markets, expanding the company’s revenue streams beyond government contracts.
Take Away
Investing in companies that recieve revenue primarily through government contracts, particularly those that are small cap companies, may provide a recession-fearful investor with some comfort that the stock(s) they are investing in are less likely to suffer from consumers tightening their wallets, yet they have potential to grow.
As with all investing and forecasting the future, if it was easy, everyone would already be doing it. But, the two examples listed above may be a good start to help inspire discovering stocks that are situated differently than traditional consumer or business-to-business companies.
SAN DIEGO, June 05, 2023 (GLOBE NEWSWIRE) — Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS), a Technology Company in the Defense, National Security and Global Markets, has been awarded a contract by the Naval Surface Warfare Center Dahlgren Division (NSWCDD) for thermo-mechanical and aerothermal ground testing of thermal protection system materials in ballistic reentry and reentry-like environments in its Kratos SRE business unit in Birmingham, Alabama. The five-year contract includes options with a total value up to $46.7 million, with an initial award of $8.6 million under a cost-plus-fixed-fee contract.
The effort will test materials supporting technical efforts for the U.S. and the U.K. with direct oversight from the NSWCDD Reentry Systems Office. The support includes sample preparation, instrumentation, testing and gathering thermo-mechanical data on materials at extremely high temperatures and in high heat flux/shear environments. The contract enables Kratos SRE to conduct ground testing of thermal protection materials at external ground test facilities and produce flight hardware for the Navy. It requires the unique ability to test and collect data at maximum temperatures of 5,500 degrees Fahrenheit to properly test materials in reentry-like environments.
Michael Johns, Senior Vice President of Kratos SRE, said, “We are honored to support NSWCDD for this important program and are proud that we have been able to do so for decades. We bring a unique capability to this program and through the hard work of our expert team, we look forward to helping our nation as part of the larger Navy team.”
Dave Carter, President of Kratos’ Defense & Rocket Support Services Division, said, “Our division has a long and valued relationship with the Navy supporting research rocket and ballistic missile target programs. The addition of the NSWCDD RSO work by adding KSRE to our division team is exciting, and we look forward to continuing our role as a trusted provider for the Navy.”
Kratos SRE, formerly part of Southern Research and acquired by Kratos in May 2022, is an advanced concept group within Kratos’ Defense & Rocket Support Services (KDRSS) Division. SRE currently employs about 175 engineers, technicians and program support professionals conducting work in support of the space community, the Department of Defense and other national security customers.
About Kratos Defense & Security Solutions Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS) is a Technology Company that develops and fields transformative, affordable systems, products and solutions for United States National Security, our allies and global commercial enterprises. At Kratos, Affordability is a Technology, and Kratos is changing the way breakthrough technology is rapidly brought to market – at a low cost – with actual products, systems and technologies rather than slide decks or renderings. Through proven commercial and venture capital backed approaches, including proactive, internally funded research and streamlined development processes, Kratos is focused on being First to Market with our solutions, well in advance of competition. Kratos is the recognized Technology Disruptor in our core market areas, including Space and Satellite Communications, Cyber Security and Warfare, Unmanned Systems, Rocket and Hypersonic Systems, Next-Generation Jet Engines and Propulsion Systems, Microwave Electronics, C5ISR and Virtual and Augmented Reality Training Systems. For more information, please visit www.KratosDefense.com.
Notice Regarding Forward-Looking Statements Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made on the basis of the current beliefs, expectations, and assumptions of the management of Kratos and are subject to significant risks and uncertainty. 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 Kratos undertakes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise. Although Kratos believes that the expectations reflected in these forward-looking statements are reasonable, these statements involve many risks and uncertainties that may cause actual results to differ materially from what may be expressed or implied in these forward-looking statements. For a further discussion of risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of Kratos in general, see the risk disclosures in the Annual Report on Form 10-K of Kratos for the year ended December 25, 2022, and in subsequent reports on Forms 10-Q and 8-K and other filings made with the SEC by Kratos.
Revenue of $943.5 million, up 12.0% y/y on a pro forma basis
Continued expansion in the Pacific driving strong revenue growth of ~300% y/y
Awarded new contracts valued at ~$600 million and secured ~$250 million in recompetes
Reported operating income of $30.6 million; adjusted operating income1 of $62.6 million
Adjusted EBITDA1 of $68.0 million with a margin1 of 7.2%
Diluted EPS of ($0.57); adjusted diluted EPS1 of $0.80
2023 Guidance:
Reiterating full-year 2023 guidance
MCLEAN, Va., May 9, 2023 /PRNewswire/ — V2X, Inc. (NYSE:VVX) announced first quarter 2023 financial results.
“V2X reported an excellent start to the year with revenue increasing 12.0% year-over-year, on a pro forma basis during the first quarter,” said Chuck Prow, President and Chief Executive Officer of V2X. “Adjusted EBITDA for the quarter was $68.0 million or a 7.2% margin and reflects a benefit from strong revenue volume and program productivity. The pace of award activity is improving and was exemplified by approximately $600 million in new business awarded to V2X. With over $4 billion in bids under evaluation and a robust backlog of ~$12 billion, the outlook for V2X remains solid.”
“Revenue growth in the quarter was generated by continued expansion on existing programs, contribution from new awards, as well as success in securing recompete wins late last year and in early 2023,” said Mr. Prow. “Our teams continued to drive momentum with several notable wins in the quarter. This has been achieved while successfully expanding on our core programs. Importantly, we continue to experience significant growth in the Pacific or INDOPACOM, with our presence and footprint in the region proving to be a key channel to support increasing mission requirements.”
Mr. Prow continued, “Our growth activities during the quarter were robust. In March, we were awarded two strategically important new business contracts. Firstly, we were the successful bidder on the Naval Test Wing Pacific contract valued at $440 million over seven years, which further builds on the services V2X is providing under the $880 million Naval Test Wing Atlantic program. This effort to support the critical test and evaluation activities performed by the Naval Test Wing Pacific leveraged V2X’s proprietary and innovative technology-based solution, AMMO®, and demonstrates our commitment to maintaining high levels of mission readiness. We are honored to be selected to support the Navy’s preeminent organization for flight testing and flight test support of the latest systems. Secondly, V2X was also awarded a three-year, approximately $100 million contract to provide critical cybersecurity support services to a government client. This is a key win for V2X in the cyber and IT support domain and leverages our core mission of intersecting our technology and operations capabilities.”
“In addition, during the first quarter, we were awarded over $250 million in recompetes,” said Mr. Prow. “This includes a five-year, $142 million contract with Naval Air Systems Command (NAVAIR) PMA 281 in support of mission planning systems. PMA-281 is responsible for the acquisition and life cycle management of a range of mission planning, control system and execution tools that are developed and integrated in partnership with other services, and foreign nation partners. This recompete win with the Navy represents successful execution on this deliberate client engagement campaign. We also secured a five-year recompete contract valued at over $90 million with a National Security client. Transition to the new contract is complete and I’d like to thank our team for their exceptional performance and dedication to this important client.”
Mr. Prow concluded, “The significant momentum in harnessing combined V2X solutions offers an opportunity to deliver growth with access to pursuits that would not have been achievable in the past. We remain focused on delivering on our strategy to drive growth by creating more value in our core markets with converged solutions, increasing market share where our operational knowledge sets us apart, and expanding mission capabilities into adjacent markets.”
First Quarter 2023 Results
On July 5, 2022 (“Closing Date”), Vectrus, Inc. (“Vectrus”) completed its merger (“the Merger”) with Vertex Aerospace Services Holding Corp. (“Vertex”), thereby forming V2X, Inc. First quarter 2022 “reported results” reflect the contributions of Vectrus from January 1, 2022, through March 31, 2022, unless otherwise noted. Comparisons to historical periods are relative to legacy Vectrus results, unless otherwise noted.
Revenue of $943.5 million, up 12.0% y/y on a pro forma basis
Operating income of $30.6 million, including merger and integration related costs of $9.4 million, and amortization of acquired intangible assets of $22.6 million
Adjusted operating income1 of $62.6 million
Adjusted EBITDA1 of $68.0 million with a 7.2% adjusted EBITDA margin1
Diluted EPS of ($0.57)
Adjusted diluted EPS1 of $0.80
Net debt as of March 31, 2023 of $1,288.6 million
Total backlog as of March 31, 2023 of $11.8 billion
“Our first quarter financial results were a strong start to the year,” said Susan Lynch, Senior Vice President and Chief Financial Officer. “Pro forma revenue increased 12.0% year-over-year to $943.5 million. Revenue growth was driven by momentum in the Pacific, expansion on existing programs, and the contribution from new business wins awarded in 2022 and 2023. Notably, revenue from the Pacific increased approximately 300% year-over-year and 18% sequentially, reflecting our agile readiness position to support the increased operational tempo of mission exercises in the region.”
For the quarter, the Company reported operating income of $30.6 million and adjusted operating income1 of $62.6 million. Adjusted EBITDA1 was $68.0 million with a margin of 7.2%. First quarter diluted EPS was ($0.57), due primarily to merger and integration related costs, loss on extinguishment of debt, amortization of acquired intangible assets, and interest expense. Adjusted diluted EPS1 for the quarter was $0.80 cents.
Ms. Lynch continued, “In the first quarter, V2X successfully enhanced its capital structure through a lower cost credit facility with greater liquidity. The new $750 million credit facility eliminated the second lien term loan B, the incremental portion of the first lien term loan B, and the asset-based loan revolver and was replaced with a lower cost $500 million revolver and a $250 million term loan A. In order to manage interest rate risk and uncertainty, the Company also entered into interest rate swaps, converting 30% of its variable-rate term loan debt into fixed rate-debt. I would like to thank our banking partners for their support and trust in our business. At the end of the quarter, our net consolidated indebtedness to EBITDA1 (net leverage ratio) was 3.8x. We are focused on reducing debt and expect that our leverage ratio will show further improvement in 2023.”
“Net cash used in operating activities for the quarter was $38.5 million. Adjusted net cash used in operating activities1 was $23.4 million, which adds back $13.4 million of CARES Act related payments and $1.7 million of M&A and integration costs,” said Ms. Lynch. “Cash flow followed our normal seasonal pattern and we expect operating cash flow to ramp to our previously communicated guidance.”
Total backlog as of March 31, 2023, was $11.8 billion and funded backlog was $2.6 billion. The trailing twelve-month book-to-bill was 1.4x.
Reiterating 2023 Guidance
Ms. Lynch concluded, “I am pleased with our strong start to the year. Our teams continue to work together seamlessly, making notable progress on integration milestones while driving results across the board. We have made great strides in harmonizing our processes, technology, and applications, which is allowing us to deliver on our commitments. As such, the Company is reiterating its guidance for 2023.” Guidance for 2023 remains as follows:
$ millions, except for per share amounts
2023 Guidance
2023 Mid-Point
Revenue
$3,800
To
$3,900
$3,850
Adjusted EBITDA1
$290
To
$310
$300
Adjusted Diluted Earnings Per Share1
$3.80
To
$4.30
$4.05
Adjusted Net Cash Provided by Operating Activities 1
$115.0
To
$135.0
$125.0
Forward-looking statements are based upon current expectations and are subject to factors that could cause actual results to differ materially from those suggested here, including those factors set forth in the Safe Harbor Statement below.
First Quarter 2023 Conference Call
Management will conduct a conference call with analysts and investors at 4:30 p.m. ET on Tuesday, May 9, 2023. U.S.-based participants may dial in to the conference call at 888-886-7786, while international participants may dial 416-764-8658. A live webcast of the conference call as well as an accompanying slide presentation will be available here: https://app.webinar.net/4AayJaN5XPr
A replay of the conference call will be posted on the V2X website shortly after completion of the call and will be available for one year. A telephonic replay will also be available through May 23, 2023, at 844-512-2921 (domestic) or 412-317-6671 (international) with passcode 30124902.
Presentation slides that will be used in conjunction with the conference call will also be made available online in advance at https://investors.vectrus.com/. V2X recognizes its website as a key channel of distribution to reach public investors and as a means of disclosing material non-public information to comply with its obligations under the U.S. Securities and Exchange Commission (“SEC”) Regulation FD.
Footnotes: 1 See “Key Performance Indicators and Non-GAAP Financial Measures” for descriptions and reconciliations.
About V2X
V2X is a leading provider of critical mission solutions and support to defense clients globally, formed by the 2022 Merger of Vectrus and Vertex to build on more than 120 combined years of successful mission support. The Company delivers a comprehensive suite of integrated solutions across the operations and logistics, aerospace, training and technology markets to national security, defense, civilian and international clients. Our global team of approximately 15,000 employees brings innovation to every point in the mission lifecycle, from preparation, to operations, to sustainment, as it tackles the most complex challenges with agility, grit, and dedication.
Safe Harbor Statement
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 (the “Act”): Certain material presented herein includes forward-looking statements intended to qualify for the safe harbor from liability established by the Act. These forward-looking statements include, but are not limited to, all the statements and items listed under “Reiterating 2023 Guidance” above and other assumptions contained therein for purposes of such guidance, other statements about our 2023 performance outlook, revenue, contract opportunities, and any discussion of future operating or financial performance.
Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “could,” “potential,” “continue” or similar terminology. These statements are based on the beliefs and assumptions of the management of the Company based on information currently available to management.
These forward-looking statements are not guarantees of future performance, conditions, or results, and involve a number of known and unknown risks, uncertainties, assumptions, and other important factors, many of which are outside our management’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the Company’s historical experience and our present expectations or projections. For a discussion of some of the risks and uncertainties that could cause actual results to differ from such forward-looking statements, see the risks and other factors detailed from time to time our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other filings with the SEC.
We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Key Performance Indicators and Non-GAAP Measures
The primary financial performance measures we use to manage our business and monitor results of operations are revenue trends and operating income trends. Management believes that these financial performance measures are the primary drivers for our earnings and net cash from operating activities. Management evaluates its contracts and business performance by focusing on revenue, operating income, and operating margin. Operating income represents revenue less both cost of revenue and selling, general and administrative (SG&A) expenses. Cost of revenue consists of labor, subcontracting costs, materials, and an allocation of indirect costs, which includes service center transaction costs. SG&A expenses consist of indirect labor costs (including wages and salaries for executives and administrative personnel), bid and proposal expenses and other general and administrative expenses not allocated to cost of revenue. We define operating margin as operating income divided by revenue.
We manage the nature and amount of costs at the program level, which forms the basis for estimating our total costs and profitability. This is consistent with our approach for managing our business, which begins with management’s assessing the bidding opportunity for each contract and then managing contract profitability throughout the performance period.
In addition to the key performance measures discussed above, we consider adjusted net income, adjusted diluted earnings per share, adjusted operating income, adjusted EBITDA, adjusted EBITDA margin, adjusted operating cash flow, and pro forma revenue to be useful to management and investors in evaluating our operating performance, and to provide a tool for evaluating our ongoing operations. This information can assist investors in assessing our financial performance and measures our ability to generate capital for deployment among competing strategic alternatives and initiatives. We provide this information to our investors in our earnings releases, presentations, and other disclosures.
Adjusted net income, adjusted diluted earnings per share, adjusted operating income, adjusted EBITDA, adjusted EBITDA margin, adjusted operating cash flow, and pro forma revenue, however, are not measures of financial performance under GAAP and should not be considered a substitute for financial measures determined in accordance with GAAP. Definitions and reconciliations of these items are provided below.
Pro forma revenue is defined as the combined results of our operations for the three months ended March 31, 2023 and April 1, 2022 as if the Merger had occurred on January 1, 2021.
Adjusted operating income is defined as operating income, adjusted to exclude items that may include, but are not limited to, significant charges or credits, and unusual and infrequent non-operating items that impact current results but are not related to our ongoing operations, such as M&A, integration, and related costs.
Adjusted EBITDA is defined as operating income, adjusted to exclude depreciation and amortization of intangible assets, and items that may include, but are not limited to, significant charges or credits, and unusual and infrequent non-operating items that impact current results but are not related to our ongoing operations, such as M&A, integration, and related costs.
Adjusted EBITDA margin is defined as adjusted EBITDA divided by revenue.
Adjusted net income is defined as net income, adjusted to exclude items that may include, but are not limited to, significant charges or credits, and unusual and infrequent non-operating items that impact current results but are not related to our ongoing operations, such as M&A, integration and related costs, amortization of acquired intangible assets, amortization of debt issuance costs, and loss on extinguishment of debt.
Adjusted diluted earnings per share is defined as adjusted net income divided by the weighted average diluted common shares outstanding.
Cash interest, net is defined as interest expense, net adjusted to exclude amortization of debt issuance costs.
Adjusted operating cash flow is defined as net cash provided by (or used in) operating activities adjusted to exclude infrequent non-operating items, such as M&A payments and related costs.
In this document, the Company presents certain forward-looking non-GAAP metrics. The Company does not provide outlook on a GAAP basis because the items that the Company excludes from GAAP to calculate the comparable non-GAAP measure can be dependent on future events that are less capable of being controlled or reliably predicted by management and are not part of the Company’s routine operating activities. Additionally, management does not forecast many of the excluded items for internal use and therefore cannot create or rely on outlook done on a GAAP basis. The occurrence, timing and amount of any of the items excluded from GAAP to calculate non-GAAP could significantly impact the Company’s fiscal 2023 GAAP results.
MCLEAN, Va., April 25, 2023 /PRNewswire/ — V2X, Inc., (NYSE: VVX), a leading provider of critical mission solutions and support to defense clients globally, will report first quarter 2023 financial results on Tuesday, May 9, 2023, after market close. Senior management will conduct a conference call at 4:30 p.m. ET that same day.
U.S.-based participants may dial in to the conference call at 888-886-7786, while international participants may dial 416-764-8658. A live webcast of the conference call as well as an accompanying slide presentation will be available under the Investors section of the V2X website at https://gov2x.com/.
A replay of the conference call will be posted on the V2X website shortly after completion of the call and will be available for one year. A telephonic replay will also be available through May 23, 2023, at 844-512-2921 (domestic) or 412-317-6671 (international) with passcode 30124902.
ABOUT V2X V2X is a leading provider of critical mission solutions and support to defense clients globally, formed by the 2022 merger of Vectrus and Vertex to build on more than 120 combined years of successful mission support. The Company delivers a comprehensive suite of integrated solutions across the operations and logistics, aerospace, training and technology markets to national security, defense, civilian and international clients. Our global team of approximately 15,000 employees brings innovation to every point in the mission lifecycle, from preparation, to operations, to sustainment, as they tackle the most complex challenges with agility, grit and dedication.
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