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Kratos Awarded a $499 Million Multiple Award, Indefinite-Delivery/Indefinite-Quantity Contract for the Design, Build, Test, and Delivery of Functioning Anti-Tamper Solutions

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Kratos Defense & Security Solutions, Inc. (KTOS) secures a $499 million contract for anti-tamper solutions to protect critical program information for Department of Defense programs. The contract spans until February 2030, with work to be done in the US. This award opens new opportunities for Kratos in the national security sector.
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The contract awarded to Kratos Defense & Security Solutions represents a significant commitment by the Department of Defense (DoD) to enhance the security of its technology and systems against tampering. This is particularly crucial as defense systems increasingly rely on sophisticated electronics and software that are vulnerable to espionage and sabotage. The size of the contract, nearly half a billion dollars, underscores the strategic importance of anti-tamper technology in maintaining the integrity and confidentiality of critical program information.

From an industry perspective, the demand for advanced anti-tamper solutions is likely to grow as nations across the globe ramp up their efforts to secure defense technologies. Kratos, being at the forefront with this sizable contract, is positioned to benefit from this expanding market. For stakeholders, the long-term nature of the contract through 2030 provides a stable revenue stream and potential for growth as the company may leverage this experience to secure additional contracts in the future.

Given that Kratos SRE operates in strategic deterrence systems, missiles and space and satellite communications, among other areas, this contract could signal an increased market confidence in the company's capabilities and potential for innovation. The competitive nature of the acquisition, with twenty offers received, indicates a robust market competition and Kratos' ability to stand out in this crowded field. This could have positive implications for their market positioning and stock valuation.

Investors should note the potential for Kratos to leverage this contract to access new contractual channels and customers, as mentioned by President Michael Johns. This diversification of revenue sources could mitigate risks associated with reliance on a limited number of contracts or clients. Moreover, the integration of such advanced solutions across a broad range of DoD programs may lead to cross-selling opportunities and expansion into new defense segments.

The announcement of this contract is likely to have immediate positive effects on Kratos' financial health and future earnings projections. A contract of this magnitude can significantly improve the company's order backlog, which is a critical indicator of future revenue and financial stability in the defense sector. It's essential to evaluate how this influx of funds will be allocated for research and development, production and whether it will lead to increased operational efficiencies or require additional capital expenditures.

Furthermore, the financial implications extend beyond the company's balance sheet. The defense sector often operates on a 'cost-plus' basis, where contractors are reimbursed for allowable costs and receive an additional payment to allow for a profit. Understanding the specific terms of the contract will be key in assessing the potential profitability and cash flow impact for Kratos over the next several years.

SAN DIEGO, March 04, 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 been awarded a $499,000,000 multiple award, indefinite-delivery/indefinite-quantity contract for the design, build, test, and delivery of functioning anti-tamper solutions that will be ready for follow-on production to be integrated into a broad range of Department of Defense programs. The development of these solutions enables the necessary protection of critical program information from adversarial tamper efforts. Work will be performed in the continental United States and is expected to be completed February 28, 2030. This contract was a competitive acquisition, and twenty offers were received. The Air Force Life Cycle Management, Wright Patterson Air Force Base, Ohio, is the contracting activity.

Kratos SRE is a technology business focused on strategic deterrence systems, missiles, space and satellite communications, exotic material test and analysis, intelligence, surveillance and reconnaissance, hypersonic platforms, trusted and assured microelectronics, anti–tamper technology and other platforms and systems.

Michael Johns, President of Kratos SRE, said, “This recent award provides Kratos access to a new contractual channel and new customers for certain of our most sophisticated technology and products, specifically related to the protection of mission critical national security programs and systems from tampering efforts.”  

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 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 31, 2023, 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

Kratos Investor Information:
877-934-4687
investor@kratosdefense.com


FAQ

What contract did Kratos Defense & Security Solutions, Inc. (KTOS) secure?

KTOS secured a $499,000,000 multiple award, indefinite-delivery/indefinite-quantity contract for anti-tamper solutions.

What is the focus of the contract awarded to Kratos Defense & Security Solutions, Inc. (KTOS)?

The contract focuses on the design, build, test, and delivery of anti-tamper solutions to protect critical program information for Department of Defense programs.

Where will the work for the contract be performed?

The work for the contract will be performed in the continental United States.

Who is the contracting activity for the awarded contract to Kratos Defense & Security Solutions, Inc. (KTOS)?

The contracting activity for the awarded contract is the Air Force Life Cycle Management at Wright Patterson Air Force Base, Ohio.

What does Michael Johns, President of Kratos SRE, mention about the recent award?

Michael Johns stated that the recent award provides Kratos access to new customers and contractual opportunities for their advanced technology and products related to national security.

Kratos Defense & Security Solutions, Inc.

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About KTOS

kratos defense & security solutions, inc. (nasdaq:ktos) is a specialized national security technology business providing mission critical products, services and solutions for united states national security priorities. kratos’ core capabilities are sophisticated engineering, manufacturing and system integration offerings for national security platforms and programs. areas of expertise include c5isr, satellite communication systems, electronic warfare, unmanned systems, missile defense, cyber warfare, cybersecurity, information assurance and critical infrastructure security. kratos has primarily an engineering and technically-oriented work force of approximately 3,900.