Leonardo DRS Receives $45 Million U.S. Navy Investment Commitment to Bolster US Submarine Industrial Base

Rhea-AI Summary

Leonardo DRS (NASDAQ: DRS) has secured a $45 million U.S. Navy Submarine Industrial Base investment commitment through contracts with HII's Newport News Shipbuilding. The investment will enhance DRS's new 140,000 square-foot naval propulsion manufacturing facility in Goose Creek, SC, enabling a 40,000 square-foot expansion and infrastructure improvements.

The facility, set to open in 2026, will strengthen steam turbine system capabilities and support the Columbia Class submarine program. DRS is currently manufacturing critical components including the main propulsion motor, drives, and controller for the Columbia Class and international allied navies. The investment builds on previous Navy-funded engineering contracts from Newport News Shipbuilding and General Dynamics Electric Boat, reinforcing DRS's naval propulsion capabilities and the U.S. submarine industrial base.

Positive

• Secured $45 million U.S. Navy investment commitment
• 40,000 square-foot facility expansion planned
• New 140,000 square-foot manufacturing facility opening in 2026
• Ongoing production of Columbia Class submarine components
• Extended collaboration with U.S. Navy and shipbuilding partners

Negative

• None.

Insights

Defense Industry Analyst

The $45 million U.S. Navy investment in Leonardo DRS's naval propulsion facility represents a strategic reinforcement of critical defense manufacturing capabilities with multiple positive implications for the company's market position and future growth trajectory.

The expansion demonstrates several key strategic advantages:

• The investment effectively creates a government-backed expansion of DRS's manufacturing capabilities, reducing capital expenditure risks while strengthening their competitive moat in naval propulsion systems
• The facility's dual-use capability for both U.S. Navy and international allied navies positions DRS to capture additional market share in the global naval propulsion sector
• The timing aligns perfectly with the Columbia Class submarine program, which represents a multi-decade revenue opportunity as the Navy replaces its aging Ohio-class ballistic missile submarines

The steam turbine system capabilities are particularly noteworthy as they represent critical technology for nuclear-powered vessels. This positions DRS as an essential supplier in the naval nuclear propulsion supply chain, a highly regulated and restricted market with significant barriers to entry.

The facility's expanded footprint to 180,000 square feet and enhanced capabilities in electric propulsion systems suggest DRS is positioning itself for next-generation naval platforms, potentially securing their role in future defense programs beyond current commitments. This investment effectively transforms their Goose Creek facility into a cornerstone of the U.S. submarine industrial base, likely leading to preferred supplier status for future naval programs.

ARLINGTON, Va.--(BUSINESS WIRE)-- Leonardo DRS, Inc. (NASDAQ: DRS) announced today that it has received a $45 million U.S. Navy Submarine Industrial Base (SIB) investment commitment through contracts with HII’s Newport News Shipbuilding. The investment is expected to expand the capabilities of DRS’s new, 140,000 square-foot naval propulsion manufacturing facility currently under-construction in Goose Creek, SC, and includes capital equipment and other infrastructure enhancements.

The $45 million SIB investment will serve as a catalyst for a 40,000 square-foot expansion of the facility in support of capabilities critical to current and future U.S. Navy nuclear submarines and aircraft carriers. This investment builds on several Navy funded engineering contracts, including Newport News Shipbuilding, and from General Dynamics Electric Boat previously issued to Leonardo DRS. These contracts, combined with internal investments, will strengthen steam turbine system design, manufacture, integration, and test capabilities, including steam turbine generators.

"This significant investment is the result of extensive collaboration between Leonardo DRS, the U.S. Navy, and our shipbuilding customers," said Jon Miller, senior vice president and general manager of the Leonardo DRS Naval Power Systems business unit. “It signifies the depth of our combined resolve to address some of the most pressing challenges facing our nation’s submarine industrial base with respect to capacity needed to deliver critical capability on-time and on-budget for the warfighter.”

The Leonardo DRS purpose-built facility is expected to open in 2026 and will grow the company’s naval propulsion capability and streamline its support of the Columbia Class submarine program. The company is currently producing the Columbia Class electric propulsion system components, including the main propulsion motor, the main propulsion drives, and main propulsion controller, and other components in addition to similar systems for international allied navies. The facility will support electric drive for next-generation naval platforms and enables an expansion of DRS’s organic capability. It represents a significant expansion in the company’s ongoing collaboration with the U.S. Navy and enhances the nation’s submarine industrial base.

About Leonardo DRS

Headquartered in Arlington, VA, Leonardo DRS, Inc. is an innovative and agile provider of advanced defense technology to U.S. national security customers and allies around the world. We specialize in the design, development and manufacture of advanced sensing, network computing, force protection, and electric power and propulsion, and other leading mission-critical technologies. Our innovative people are leading the way in developing disruptive technologies for autonomous, dynamic, interconnected, and multi-domain capabilities to defend against new and emerging threats. For more information and to learn more about our full range of capabilities, visit www.LeonardoDRS.com.

Forward-Looking Statements

This communication contains statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Those statements reflect current expectations, assumptions and estimates of future performance and economic conditions. The company cautions investors that any forward-looking statements which include contract values, contract performance and our development and production of products are subject to risks and uncertainties that may cause actual results and future trends to differ materially from those matters expressed in or implied by such forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250224114840/en/

Leonardo DRS Investor Relations Contacts

Steve Vather

Senior Vice President, Investor Relations and Corporate Finance

+1 703 409 2906

stephen.vather@drs.com

Leonardo DRS Media Contact

Michael Mount

Vice President, Communications and Public Affairs

+1 571 447 4624

mmount@drs.com

Source: Leonardo DRS, Inc.

FAQ

What is the value of the U.S. Navy investment in Leonardo DRS (NASDAQ: DRS)?

The U.S. Navy has committed $45 million in Submarine Industrial Base investment to Leonardo DRS through contracts with Newport News Shipbuilding.

When will Leonardo DRS's new naval propulsion facility in Goose Creek open?

The new naval propulsion manufacturing facility is expected to open in 2026.

What is the size of Leonardo DRS's new manufacturing facility and its planned expansion?

The facility is 140,000 square feet with a planned 40,000 square-foot expansion.

What components is DRS manufacturing for the Columbia Class submarine program?

DRS is producing the main propulsion motor, main propulsion drives, main propulsion controller, and other components for the Columbia Class submarine program.

How will the Navy's investment in DRS impact submarine production capabilities?

The investment will enhance steam turbine system design, manufacture, integration, and test capabilities, while expanding capacity to deliver critical components on-time and on-budget.