Kratos Defense & Security Solutions, Inc. Completes Development of the Zeus Solid Rocket Motor (SRM) Family with the Successful Zeus 2 Static Test Fire
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Insights
The successful completion of the Zeus 2 solid rocket motor (SRM) static test fire represents a significant milestone for Kratos Defense & Security Solutions, Inc. in the context of the defense industry's push towards more versatile and cost-effective propulsion systems. The company's statement highlights the desire to meet the urgent demand for commercial launch vehicle stages, pertinent to a range of applications from hypersonic testing to ballistic missile targets. This accomplishment not only solidifies Kratos' positioning in the SRM market but also underscores the trend towards internal funding of defense research and development (R&D) initiatives.
Given the reference to the motors' alignment with the Hypersonic Flyers and SRMs portfolio, the underlying strategic implication for Kratos is the enhancement of its competitive edge. By offering a 'first to market' solution, Kratos could capitalize on early adoption and potential long-term contracts. However, it is essential to assess the sustainability of this advantage, particularly as competitors may accelerate their R&D to close the gap. The cost structures and the scalability of Kratos' SRMs will be important factors in determining their long-term market success.
From an investment standpoint, the announcement of the Zeus family's completion could signal a positive forecast for Kratos' financial performance in the defense sector. The initiation of orders for Zeus 1 and Zeus 2 SRMs indicates tangible revenue-generating prospects. Investors should note the potential for increased sales volume following this significant R&D phase completion, especially considering the stated upcoming customer flights.
The development of internally funded technologies, such as the Zeus SRMs, provides insight into Kratos' operational strategy; it reflects a commitment to proactive capital investment in growth areas, which could lead to a strengthened balance sheet through product diversification and new revenue streams. Nevertheless, the long-term return on investment is contingent upon market acceptance and the performance of these SRMs in operational environments. Close monitoring of subsequent testing phases, customer feedback and competitor responses will be imperative for a comprehensive investment analysis.
SAN DIEGO, April 15, 2024 (GLOBE NEWSWIRE) -- Kratos Defense & Security Solutions, Inc. (Nasdaq: KTOS), a technology company in the defense, national security and global markets, announced today that its Space & Missile Defense Systems (SMDS) Business Unit, a part of Kratos’ Defense & Rocket Support Services (DRSS) Division, successfully completed the static test firing of the Zeus 2 solid rocket motor (SRM) with Aerojet Rocketdyne, an L3Harris Technologies [NYSE: LHX] company, at their Camden, Arkansas facility. This Zeus 2 milestone combined with the successful Zeus 1 static test firing last year, completes the development phase of Kratos’ new affordable commercial SRM family.
Zeus 2 Solid Rocket Motor Fires During April 10th Static Test
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/5361a221-aa5c-4fd9-a782-2e24cab859d9
Zeus 1 and Zeus 2 are high-performance 32.5-inch diameter solid rocket motors envisioned and internally funded by Kratos. The Zeus motors, designed with commonality, versatility, and affordability in mind, coupled with the Kratos ongoing development of the Erinyes and Dark Fury Hypersonic Flyers demonstrates Kratos’ commitment to investing in crucial defense industrial base technology. Kratos’ technology investments are delivering leading-edge systems and expanding our extensive portfolio of Hypersonic Flyers and SRMs available for our customers.
Kratos has now initiated orders for a combined total of nine Zeus 1 and Zeus 2 SRMs in preparation for upcoming customer flights. The Kratos developed Zeus family of SRMs is in direct response to the urgent need for affordable commercial launch vehicle stages for hypersonic test, ballistic missile target, sounding rocket and other customer missions.
Dave Carter, President of the KDRSS Division, said, “I am very excited to introduce Kratos’ family of Zeus SRMs and commend our SMDS group and teammate, L3HARRIS/Aerojet, for successfully completing this crucial motor development program. Zeus motors enable us to bring to market affordable rocket systems to support critical MACH-TB Hypersonic testing, NASA Sounding Rocket Program experiments, and Navy/MDA target program requirements.”
Eric DeMarco, President and CEO of Kratos Defense & Security Solutions, Inc., said, “Kratos’ successful completion of this internally funded Zeus family of motors will enable rapid and affordable hypersonic testing and be 'first to market' with a highly relevant system to support DoD, NASA and commercial customers. At Kratos, we are committed to rapid development, delivery of relevant systems and introduction of affordable technology to support warfighter requirements for the United States and our Allies' National Security.”
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.
Press Contact:
Yolanda White
858-812-7302 Direct
Investor Information:
877-934-4687
investor@kratosdefense.com
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