Kratos Issues a Statement
20 March 2018 - 12:00AM
Kratos Defense & Security Solutions, Inc. (Nasdaq:KTOS), a
leading National Security Solutions provider, is aware of a report
on the Company that has recently been published in the market
place, which includes statements that are factually incorrect and
makes misleading assertions related to Kratos and its
leadership. Kratos is successfully executing on the strategic
business plan the Company previously communicated of building a
product and technology business where Kratos owns important
intellectual property, focused on the National Security
requirements of the United States and its allies. Between
2010 and 2012, Kratos made a series of acquisitions consistent with
this strategy. These acquisitions are now integrated,
enabling our Company to successfully pursue large new program and
contract opportunities. Kratos’ qualified bid and proposal
pipeline at December 31, 2017 was approximately $6.8 billion.
Kratos’ core focus areas as a result of these
integrated businesses include unmanned systems, satellite
communications, microwave electronics, missile defense and training
solutions. Over the past few months, Kratos has announced
approximately $270 million in contract awards received, the
majority of which are for high performance jet powered unmanned
aerial drone systems (UAS) and are either sole source or single
award to Kratos in nature. The Company recently received
approval from the U.S. State Department to market its Mako tactical
unmanned aerial drone systems in Europe and the Asia Pacific area.
The Company believes the Mako is the only high performance jet
powered tactical UAS in its class flying today. The Mako has flown
in multiple large-scale military exercises and could soon be put
into production for combat use. Kratos is currently beginning
production on a number of new, long-term, national security-related
programs, while increasing production on several existing programs,
in our microwave electronics, unmanned systems and training
solutions businesses and we recently announced the opening of a new
engineering and manufacturing facility in Oklahoma to address
expected future increases in UAS production. The Company is
also under contract for several new tactical high performance
unmanned aerial drone systems. It is anticipated that the
achievement of production status for any of these tactical UAS
systems will significantly accelerate Kratos’ already expected
future growth in revenue, profitability and cash flow. Kratos
recently announced that it was one of 14 organizations awarded a
position on the Test & Evaluation Technologies for Ranges,
Armaments & Spectrum (TETRAS) program - a shared ceiling,
multiple award indefinite delivery/indefinite quantity (IDIQ)
contract in the amount of $998 million. Even though Kratos
expects to generate significant revenue under the TETRAS program
over the contracts life, Kratos will only include in its Backlog
Funded Tasking Received, which is consistent with all similar type
multiple award IDIQ contracts Kratos receives.
Today, approximately 75 percent of the largest
satellite operators in the world and approximately 90 percent of
U.S. Space missions rely on Kratos’ systems, products and solutions
and Kratos believes that it currently operates the only
company-owned global RF spectrum signal monitoring, interference
detection and geolocation system in the world. Kratos recently
announced the divestiture of its Public Safety & Security
System (PSS) Integration business, which is expected to yield
approximately $70 million in net cash proceeds, or approximately
10X 2017 LTM adjusted PSS EBITDA. The divestiture of PSS,
which was publically identified as a non-core business by Kratos in
2016, allows for additional focus on the Company’s core businesses,
and provides increased liquidity and flexibility for the expected
production increases of Kratos’ unmanned aerial drone systems.
Based on the most recent publicly available
information, Kratos believes that its insiders currently own
approximately 15% of the Company. The Company believes this
ownership percentage is among the highest insider ownership of a
public company government contractor like Kratos, with Kratos’
management and Directors routinely purchasing Kratos shares in the
open market, including over the past few weeks. As a result,
Kratos believes the interests of its management and Board of
Directors are clearly aligned with the Company’s shareholders—they
remain focused on continued successful execution and value
generation for all Kratos stakeholders. Kratos has nine reputable
independent analysts which closely follow, research and publish
reports on the Company, including certain of the largest banking
institutions in the world, and we encourage the investing community
to refer to these publications regarding our Company.
About Kratos Defense & Security
SolutionsKratos Defense & Security Solutions,
Inc. (NASDAQ:KTOS) develops transformative, affordable
technology for the Department of Defense and commercial
customers. Kratos is changing the way breakthrough
technologies for these industries are brought to market through
proactive research and a streamlined development
process. Kratos specializes in unmanned systems,
satellite communications, cyber security/warfare, microwave
electronics, missile defense, training and combat systems. For more
information go to www.kratosdefense.com.
Notice Regarding Forward-Looking
StatementsCertain 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, 2017 and in subsequent reports on Forms 10-Q and 8-K and other
filings made with the SEC by Kratos.
Press Contact:Yolanda
White858-812-7302 Direct Investor
Information:877-934-4687investor@kratosdefense.com
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