Kratos Reports Fourth Quarter and Full Year 2024 Financial Results
Kratos Defense & Security Solutions (KTOS) reported strong financial results for Q4 and full year 2024. Full year revenues reached $1.136 billion, showing 9.6% growth from 2023's $1.037 billion. The company achieved net income of $16.3 million with EPS of $0.11 per share.
Q4 2024 highlights include revenues of $283.1 million, operating income of $3.0 million, and a robust book-to-bill ratio of 1.5 to 1. The company generated significant cash flow with $45.6 million from operations and $32.0 million in free cash flow.
Notable segment performance includes Unmanned Systems revenue growth of 27.5% to $270.5 million and Government Solutions segment growth of 5.0% to $865.8 million. The company's total backlog reached $1.445 billion with a substantial bid pipeline of $12.4 billion.
Looking ahead, Kratos forecasts 10% organic revenue growth for 2025 and projects 13-15% growth for 2026, driven by recent program awards.
Kratos Defense & Security Solutions (KTOS) ha riportato risultati finanziari solidi per il quarto trimestre e l'intero anno 2024. I ricavi annuali hanno raggiunto 1,136 miliardi di dollari, mostrando una crescita del 9,6% rispetto ai 1,037 miliardi di dollari del 2023. L'azienda ha registrato un utile netto di 16,3 milioni di dollari con un EPS di 0,11 dollari per azione.
Tra i punti salienti del quarto trimestre 2024 ci sono ricavi di 283,1 milioni di dollari, un reddito operativo di 3,0 milioni di dollari e un solido rapporto book-to-bill di 1,5 a 1. L'azienda ha generato un flusso di cassa significativo con 45,6 milioni di dollari dalle operazioni e 32,0 milioni di dollari in flusso di cassa libero.
Le prestazioni dei segmenti notevoli includono una crescita dei ricavi dei Sistemi Senza Pilota del 27,5% a 270,5 milioni di dollari e una crescita del segmento Soluzioni Governative del 5,0% a 865,8 milioni di dollari. L'ammontare totale degli ordini in sospeso dell'azienda ha raggiunto 1,445 miliardi di dollari con un sostanziale pipeline di offerte di 12,4 miliardi di dollari.
Guardando al futuro, Kratos prevede una crescita organica dei ricavi del 10% per il 2025 e proietta una crescita del 13-15% per il 2026, sostenuta da recenti aggiudicazioni di programmi.
Kratos Defense & Security Solutions (KTOS) reportó resultados financieros sólidos para el cuarto trimestre y el año completo 2024. Los ingresos anuales alcanzaron 1.136 millones de dólares, mostrando un crecimiento del 9.6% en comparación con los 1.037 millones de dólares de 2023. La compañía logró un ingreso neto de 16.3 millones de dólares con un EPS de 0.11 dólares por acción.
Los aspectos destacados del cuarto trimestre de 2024 incluyen ingresos de 283.1 millones de dólares, un ingreso operativo de 3.0 millones de dólares y una sólida relación book-to-bill de 1.5 a 1. La empresa generó un flujo de efectivo significativo con 45.6 millones de dólares de operaciones y 32.0 millones de dólares en flujo de caja libre.
El rendimiento notable de los segmentos incluye un crecimiento en los ingresos de Sistemas No Tripulados del 27.5% a 270.5 millones de dólares y un crecimiento en el segmento de Soluciones Gubernamentales del 5.0% a 865.8 millones de dólares. El total de la cartera de pedidos de la empresa alcanzó 1.445 millones de dólares con un pipeline de ofertas sustancial de 12.4 millones de dólares.
De cara al futuro, Kratos pronostica un crecimiento orgánico de ingresos del 10% para 2025 y proyecta un crecimiento del 13-15% para 2026, impulsado por recientes adjudicaciones de programas.
Kratos Defense & Security Solutions (KTOS)는 2024년 4분기 및 전체 연도에 대한 강력한 재무 실적을 보고했습니다. 연간 수익은 11억 3,600만 달러에 도달하여 2023년의 10억 3,700만 달러 대비 9.6% 성장했습니다. 회사는 1,630만 달러의 순이익을 달성했으며 주당 EPS는 0.11달러입니다.
2024년 4분기의 주요 내용은 2억 8,310만 달러의 수익, 300만 달러의 운영 수익, 그리고 1.5 대 1의 강력한 수주-청구 비율을 포함합니다. 회사는 운영에서 4,560만 달러의 상당한 현금 흐름을 창출했으며, 3,200만 달러의 자유 현금 흐름을 기록했습니다.
주목할 만한 부문 성과로는 무인 시스템 부문의 수익이 27.5% 증가하여 2억 7,050만 달러에 달하고, 정부 솔루션 부문은 5.0% 성장하여 8억 6,580만 달러에 도달했습니다. 회사의 총 백로그는 14억 4,500만 달러에 도달했으며, 124억 달러의 상당한 입찰 파이프라인을 보유하고 있습니다.
앞으로 Kratos는 2025년 10%의 유기적 수익 성장을 예측하며, 최근 프로그램 수주에 힘입어 2026년에는 13-15%의 성장을 예상하고 있습니다.
Kratos Defense & Security Solutions (KTOS) a annoncé de solides résultats financiers pour le quatrième trimestre et l'année complète 2024. Les revenus annuels ont atteint 1,136 milliard de dollars, affichant une croissance de 9,6% par rapport aux 1,037 milliard de dollars de 2023. L'entreprise a réalisé un bénéfice net de 16,3 millions de dollars avec un BPA de 0,11 dollar par action.
Les points forts du quatrième trimestre 2024 comprennent des revenus de 283,1 millions de dollars, un résultat opérationnel de 3,0 millions de dollars et un solide ratio commandes/factures de 1,5 à 1. L'entreprise a généré un flux de trésorerie significatif avec 45,6 millions de dollars provenant des opérations et 32,0 millions de dollars en flux de trésorerie libre.
Les performances notables des segments comprennent une croissance des revenus des Systèmes Sans Pilote de 27,5% à 270,5 millions de dollars et une croissance du segment Solutions Gouvernementales de 5,0% à 865,8 millions de dollars. Le carnet de commandes total de l'entreprise a atteint 1,445 milliard de dollars avec un pipeline d'offres substantiel de 12,4 milliards de dollars.
En regardant vers l'avenir, Kratos prévoit une croissance organique des revenus de 10% pour 2025 et projette une croissance de 13-15% pour 2026, soutenue par des attributions de programmes récentes.
Kratos Defense & Security Solutions (KTOS) berichtete über starke finanzielle Ergebnisse für das vierte Quartal und das gesamte Jahr 2024. Die Gesamteinnahmen des Jahres erreichten 1,136 Milliarden Dollar, was einem Wachstum von 9,6% im Vergleich zu 1,037 Milliarden Dollar im Jahr 2023 entspricht. Das Unternehmen erzielte einen Nettogewinn von 16,3 Millionen Dollar mit einem EPS von 0,11 Dollar pro Aktie.
Zu den Highlights des vierten Quartals 2024 gehören Einnahmen von 283,1 Millionen Dollar, ein Betriebsergebnis von 3,0 Millionen Dollar und ein solides Verhältnis von Aufträgen zu Rechnungen von 1,5 zu 1. Das Unternehmen generierte einen erheblichen Cashflow mit 45,6 Millionen Dollar aus dem Betrieb und 32,0 Millionen Dollar an freiem Cashflow.
Bemerkenswerte Segmentleistungen umfassen ein Umsatzwachstum im Bereich Unbemannte Systeme von 27,5% auf 270,5 Millionen Dollar sowie ein Wachstum des Segments Regierungslösungen von 5,0% auf 865,8 Millionen Dollar. Der gesamte Auftragsbestand des Unternehmens erreichte 1,445 Milliarden Dollar mit einer erheblichen Angebots-Pipeline von 12,4 Milliarden Dollar.
Für die Zukunft prognostiziert Kratos ein organisches Umsatzwachstum von 10% für 2025 und erwartet ein Wachstum von 13-15% für 2026, was durch die jüngsten Programmvergabe unterstützt wird.
- Revenue growth of 9.6% to $1.136B in 2024
- Strong Q4 book-to-bill ratio of 1.5 to 1
- Unmanned Systems revenue up 27.5% to $270.5M
- Backlog increased to $1.445B from $1.227B YoY
- Positive net income of $16.3M vs loss in 2023
- Q4 operating cash flow of $45.6M
- KUS Operating Income declined to $2.9M from $4.2M YoY
- Increased material and subcontractor costs impact margins
- Space and Satellite business revenue declined $47.8M
- Operating under Continuing Resolution Authorization until March 2025
- KGS Q4 Operating Income dropped to $11.0M from $17.5M YoY
Insights
Kratos Defense & Security Solutions delivered strong financial results for 2024, with full-year revenue reaching $1.136 billion, representing
The Unmanned Systems segment was the standout performer, generating
Profitability metrics showed improvement but remain modest relative to revenue scale. Full-year operating income of
The company's book-to-bill ratio of 1.5:1 for Q4 and 1.2:1 for the full year signals strong demand. Total backlog grew to
Management's forward guidance is notably optimistic, projecting
The company's strategic positioning aligns well with the incoming administration's defense priorities focused on cost-effective, rapidly deployable systems to counter near-peer adversaries. Kratos' emphasis on "affordability as a technology" and its focus on tactical systems that can be fielded quickly rather than perfect solutions developed over decades matches the shift toward deterring nation-state threats rather than counterterrorism operations.
Kratos' 2024 results reveal a defense technology company successfully navigating the transition from counterterrorism-focused systems to platforms designed for great power competition. The
The company's strategic investments in Valkyrie drone production capacity ahead of contract awards represents a calculated risk that appears to be paying off based on management's confident 2026 growth projections. This approach of building manufacturing capability in anticipation of demand rather than waiting for firm orders demonstrates how medium-sized defense contractors must position themselves to capture market share in emerging technology areas.
Recent contract momentum in hypersonics is particularly significant. The MACH-TB 2.0 (Multiservice Advanced Capability Test Bed) program mentioned as driving facility expansion represents a critical DoD initiative to accelerate hypersonic testing. Kratos' Erinyes and Dark Fury hypersonic vehicles align perfectly with the Pentagon's urgent need to field counter-capabilities to Chinese and Russian hypersonic advancements.
The company's work in small jet engine production deserves special attention, as propulsion systems represent a critical vulnerability in the defense supply chain. By expanding domestic jet engine manufacturing capacity, Kratos is addressing a strategic capability gap while positioning for growth in both manned and unmanned applications.
The
Despite operating under a Continuing Resolution Authorization environment for 12 of the past 18 months – which severely constrains new program starts – Kratos has maintained growth momentum. This demonstrates effective program management and customer relationship skills in navigating the complex defense acquisition system.
The negative
CEO DeMarco's emphasis on "affordability as a technology" and "better is the enemy of good enough ready to field today" perfectly aligns with the defense establishment's recognition that rapidly fielding capable systems at scale is more important than pursuing perfect solutions that take decades to develop.
Full Year 2024 Revenues of
Full Year 2024 Unmanned Systems Revenues of
Full Year 2024 KGS Revenues of
Full Year 2024 Net Income of
Fourth Quarter 2024 Revenues of
Fourth Quarter 2024 Cash Flow Generated from Operations and Free Cash Flow of
Fourth Quarter 2024 Consolidated Book to Bill Ratio of 1.5 to 1 and Bookings of
Last Twelve Months Ended December 29, 2024 Consolidated Book to Bill Ratio of 1.2 to 1 and Bookings of
2025 Financial Forecast Includes 10 Percent Organic Revenue Growth and 2026 Initial Revenue Growth Forecast of 13 to 15 Percent over 2025 Forecast Based on Recent Program Awards
SAN DIEGO, Feb. 26, 2025 (GLOBE NEWSWIRE) -- Kratos Defense & Security Solutions, Inc. (Nasdaq: KTOS), a Technology Company in the Defense, National Security and Commercial Markets, today reported its fourth quarter 2024 financial results, including Revenues of
Fourth quarter 2024 Net Income and Operating Income includes non-cash stock compensation expense of
Kratos reported fourth quarter 2024 GAAP Net Income attributable to Kratos of
Fourth quarter 2024 Revenues of
Fourth quarter 2024 Cash Flow Generated from Operations was
For the fourth quarter of 2024, Kratos’ Unmanned Systems (KUS) segment generated Revenues of
KUS’s book-to-bill ratio for the fourth quarter of 2024 was 1.3 to 1.0 and 1.2 to 1.0 for the twelve months ended December 29, 2024, with bookings of
For the fourth quarter of 2024, Kratos’ Government Solutions (KGS) segment Revenues of
KGS reported Operating Income of
KGS reported a book-to-bill ratio of 1.6 to 1.0 for the fourth quarter of 2024, a book to bill ratio of 1.2 to 1.0 for the last twelve months ended December 29, 2024 and bookings of
Kratos reported consolidated bookings of
Full Year 2024 Results
Kratos reported its full year 2024 financial results, including Revenues of
Included in the full year 2024 Net Income and Operating Income is non-cash stock compensation expense of
Kratos reported full year 2024 GAAP Net Income of
Full year 2024 Revenues of
For full year 2024, KUS generated Revenues of
For full year 2024, KGS Revenues of
KGS reported operating income of
Eric DeMarco, Kratos’ President and CEO, said, “Kratos’ full year 2024 and fourth quarter demonstrated once again that we can significantly organically grow the business, and make sizable internally funded investments, positioning the Company for accelerating future growth, while also generating significant, positive operating cash flow. We have recently received several large new program and contract awards, including in the hypersonic, target drone, jet engine, rocket, and satellite system areas, enabling us to increase our expected revenue growth rate for 2026 to a range of 13 percent to 15 percent above our current 2025 financial forecast that we provided today, which includes 10 percent growth over 2024. Kratos’ fourth quarter 1.5 to 1.0 book to bill ratio and our
Mr. DeMarco continued, “The Trump Administration has increased emphasis on reducing cost, rapidly fielding new technology and systems and getting more for less, all which are and have been pillars of Kratos’ Mission. At Kratos, “Affordability is a Technology” and “Better is the Enemy of Good Enough Ready to Field Today”, as represented in our Erinyes, Dark Fury and other hypersonic vehicles, our Zeus, Oriole and other rocket systems, and our jet drones, jet engines and propulsion systems. We believe Kratos’ alignment with the new Administration’s objectives will be recognized in increased bookings, increased expected future growth rates and increased future profitability, including as based on recent meetings and discussions with certain of our customers.”
Mr. DeMarco concluded, “After decades of focus on fighting terrorism and asymmetric warfare, the United States has begun a generational rebuild of its industrial base and the ability to deter and defeat Nation State adversaries. The Axis of Resistance and the threat to the U.S. and its Allies is real, and Kratos is a key element of the proven Peace through Overwhelming Strength approach to Global Security and stability. As a result, we expect a future, multiyear, up and to the right organic growth trajectory with increased margins and profitability, and Kratos making the necessary investments in, among other things, property, plant, and equipment, to successfully execute for our customers and country.”
Financial Guidance
We are providing our initial 2025 first quarter and full year 2025 financial guidance range, which includes our assumptions, including as related to: current forecasted business mix, employee sourcing, hiring and retention; manufacturing, production and supply chain disruptions; parts shortages and related continued significant cost and price increases in each of these areas, that are impacting the industry and Kratos. Additionally, a U.S. Government budget was not passed by October 1, 2024, the beginning of Federal Fiscal Year 2025, and as a result, Kratos and others in our industry are operating under a Continuing Resolution Authorization (CRA), which currently expires March 14, 2025, under which no new contracts and no increases in existing contracts production or funding, among other stipulations, is permitted. If the current CRA is not resolved by March 14, 2025, the industry and Kratos will have operated under CRAs, without a DoD Budget, for approximately 12 of the previous 18 months. Kratos has a number of new and existing programs and contracts which are directly being impacted by the current CRA. Kratos’ 2025 financial forecast and guidance provided today assumes that the current CRA will be resolved by March 14, 2025, and that a U.S. Federal and DoD budget which includes no unexpected funding cuts impacting our business occurs. If the current CRA goes substantially beyond the existing March 14, 2025 date, or if there are significant reductions or changes to programs, contracts or initiatives that Kratos is or expects to be involved with, we will evaluate Kratos’ 2025 and future financial forecasts at that time, based on the existing facts, circumstances and expectations and make any adjustments required.
Kratos’ 2025 financial forecast and guidance includes elevated investments for capital expenditures for property, plant and equipment, including the expansion of our manufacturing and production facilities and related inventory builds in our Rocket Systems and Hypersonic businesses, primarily related to the recent MACH-TB 2.0 contract award, the continued manufacture of two production lots of Valkyries prior to contract award, to meet anticipated customer orders and requirements, the expansion and build-out of the Company’s Microwave Products production facilities, the expansion and build-out of our small jet engine production and test cell facilities, and the build-out of additional secure facilities for our federal secured space communications business, in accordance with contract and customer requirements. Kratos’ operating cash flow guidance also assumes certain investments in our rocket systems and unmanned systems businesses.
Our first quarter and full year 2025 guidance ranges and a summary of the forecasted investments for new programs and opportunities are as follows:
| $M | Q125 | FY25 |
| Revenues | ||
| R&D | ||
| Operating Income | ||
| Depreciation | ||
| Amortization | ||
| Stock Based Compensation | ||
| Adjusted EBITDA | ||
| Operating Cash Flow | ||
| Capital Expenditures | ||
| Free Cash Flow Use | ( | |
| FY25 Forecasted Investments for New Program and Opportunities ($M) | |||||||
| Estimated Spend | Program/Opportunity | ||||||
| Capital Expenditures | |||||||
| Microwave Products Expansion and Build-Out of Facilities | $ | 15 | - | $ | 16 | Various Microwave Products | |
| Advanced Manufacturing Facility for Hypersonics/Engines & Test Cell | $ | 14 | - | $ | 15 | Various Engine Opportunities | |
| Payload Integration Facility | $ | 22 | - | $ | 24 | MACH-TB and Other | |
| C5ISR Facility and Machinery | $ | 5 | - | $ | 6 | Sentinel Program | |
| Space and Satellite Additional Secure Facility Build-Out | $ | 5 | - | $ | 6 | Various Confidential Programs | |
| Valkyrie Second Production Lot 12 Build | $ | 28 | - | $ | 30 | Various Customer Opportunities | |
| $ | 89 | - | $ | 97 | |||
| Normal Maintenance Capital Expenditures | $ | 36 | - | $ | 38 | ||
| Total FY25 Forecasted Capital Expenditures | $ | 125 | - | $ | 135 | ||
| Other Investments included in Working Capital | |||||||
| Rocket System Inventory Build - Zeus/Oriole | $ | 10 | - | $ | 15 | Various including MACH-TB | |
| Unmanned Systems Initiative/Enhancements | $ | 13 | - | $ | 16 | Various Customer Opportunities | |
| $ | 23 | - | $ | 31 | |||
| Total FY25 Forecasted Total Investments | $ | 148 | - | $ | 166 | ||
Management will discuss the Company’s financial results, on a conference call beginning at 2:00 p.m. Pacific (5:00 p.m. Eastern) today. 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
Notice Regarding Forward-Looking Statements
This news release contains certain forward-looking statements that involve risks and uncertainties, including, without limitation, express or implied statements concerning the Company’s expectations regarding its future financial performance, including the Company’s expectations for its first quarter and full year 2025 revenues, 2026 revenue growth rates and expected contributors to 2026 projected revenue growth, organic revenue growth rates, R&D, operating income (loss), depreciation, amortization, stock based compensation expense, and Adjusted EBITDA, and full year 2025 operating cash flow, capital expenditures and other investments, and free cash flow, the Company’s future growth trajectory and ability to achieve improved revenue mix and profit in certain of its business segments and the expected timing of such improved revenue mix and profit, including the Company’s ability to achieve sustained year over year increasing revenues, profitability and cash flow, the Company’s expectation of ramp on projects and that investments in its business, including Company funded R&D expenses and ongoing development efforts, will result in an increase in the Company’s market share and total addressable market and position the Company for significant future organic growth, profitability, cash flow and an increase in shareholder value, the Company’s bid and proposal pipeline and backlog, including the Company’s ability to timely execute on its backlog, demand for its products and services, including the Company’s alignment with today’s National Security requirements and the positioning of its C5ISR and other businesses, planned 2025 investments, including in the tactical drone and satellite areas, and the related potential for additional growth in 2025 and beyond, ability to successfully compete and expected new customer awards, including the magnitude and timing of funding and the future opportunity associated with such awards, including in the target and tactical drone and satellite communication areas, performance of key contracts and programs, including the timing of production and demonstration related to certain of the Company’s contracts and control (TT&C) product offerings, the impact of the Company’s restructuring efforts and cost reduction measures, including its ability to improve profitability and cash flow in certain business units as a result of these actions and to achieve financial leverage on fixed administrative costs, the ability of the Company’s advanced purchases of inventory to mitigate supply chain disruptions and the timing of converting these investments to cash through the sales process, benefits to be realized from the Company’s net operating loss carry forwards, the availability and timing of government funding for the Company’s offerings, including the strength of the future funding environment, the short-term delays that may occur as a result of Continuing Resolutions or delays in U.S. Department of Defense (DoD) budget approvals, timing of LRIP and full rate production related to the Company’s unmanned aerial target system offerings, as well as the level of recurring revenues expected to be generated by these programs once they achieve full rate production, market and industry developments, and any unforeseen risks associated with any public health crisis, supply chain disruptions, availability of an experienced skilled workforce, inflation and increased costs, risks related to potential cybersecurity events or disruptions of our information technology systems, and delays in our financial projections, industry, business and operations, including projected growth. Such statements are only predictions, and the Company’s actual results may differ materially from the results expressed or implied by these statements. 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 the Company undertakes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise. Factors that may cause the Company’s results to differ include, but are not limited to: risks to our business and financial results related to the reductions and other spending constraints imposed on the U.S. Government and our other customers, including as a result of sequestration and extended continuing resolutions, the Federal budget deficit and Federal government shut-downs; risks of adverse regulatory action or litigation; risks associated with debt leverage; risks that our cost-cutting initiatives will not provide the anticipated benefits; risks that changes, cutbacks or delays in spending by the DoD may occur, which could cause delays or cancellations of key government contracts; risks of delays to or the cancellation of our projects as a result of protest actions submitted by our competitors; risks that changes may occur in Federal government (or other applicable) procurement laws, regulations, policies and budgets; risks of the availability of government funding for the Company's products and services due to performance, cost growth, or other factors, changes in government and customer priorities and requirements (including cost-cutting initiatives, the potential deferral of awards, terminations or reduction of expenditures to respond to the priorities of Congress and the Administration, or budgetary cuts resulting from Congressional committee recommendations or automatic sequestration under the Budget Control Act of 2011, as amended); risks that the unmanned aerial systems and unmanned ground sensor markets do not experience significant growth; risks that products we have developed or will develop will become programs of record; risks that we cannot expand our customer base or that our products do not achieve broad acceptance which could impact our ability to achieve our anticipated level of growth; risks of increases in the Federal government initiatives related to in-sourcing; risks related to security breaches, including cyber security attacks and threats or other significant disruptions of our information systems, facilities and infrastructures; risks related to our compliance with applicable contracting and procurement laws, regulations and standards; risks related to the new DoD Cybersecurity Maturity Model Certification; risks relating to the ongoing conflict in Ukraine and the Israeli-Palestinian military conflict; risks to our business in Israel; risks related to contract performance; risks related to failure of our products or services; risks associated with our subcontractors’ or suppliers’ failure to perform their contractual obligations, including the appearance of counterfeit or corrupt parts in our products; changes in the competitive environment (including as a result of bid protests); failure to successfully integrate acquired operations and compete in the marketplace, which could reduce revenues and profit margins; risks that potential future goodwill impairments will adversely affect our operating results; risks that anticipated tax benefits will not be realized in accordance with our expectations; risks that a change in ownership of our stock could cause further limitation to the future utilization of our net operating losses; risks that we may be required to record valuation allowances on our net operating losses which could adversely impact our profitability and financial condition; risks that the current economic environment will adversely impact our business, including with respect to our ability to recruit and retain sufficient numbers of qualified personnel to execute on our programs and contracts, as well as expected contract awards and risks related to increasing interest rates and risks related to the interest rate swap contract to hedge Term SOFR associated with the Company’s Term Loan A; currently unforeseen risks associated with any public health crisis, and risks related to natural disasters or severe weather. These and other risk factors are more fully discussed in the Company’s Annual Report on Form 10-K for the period ended December 29, 2024, and in our other filings made with the Securities and Exchange Commission.
Note Regarding Use of Non-GAAP Financial Measures and Other Performance Metrics
This news release contains non-GAAP financial measures, including organic revenue growth rates, Adjusted EPS (computed using income from continuing operations before income taxes, excluding income (loss) from discontinued operations, excluding income (loss) attributable to non-controlling interest, excluding depreciation, amortization of intangible assets, amortization of capitalized contract and development costs, stock-based compensation expense, acquisition and restructuring related items and other, which includes, but is not limited to, legal related items, non-recoverable rates and costs, and foreign transaction gains and losses, less the estimated impact to income taxes) and Adjusted EBITDA (which includes net income (loss) attributable to noncontrolling interest and excludes, among other things, losses and gains from discontinued operations, acquisition and restructuring related items, stock compensation expense, foreign transaction gains and losses, and the associated margin rates). Additional non-GAAP financial measures include Free Cash Flow from Operations computed as Cash Flow from Operations less Capital Expenditures plus proceeds from sale of assets and Adjusted EBITDA related to our KUS and KGS businesses. Kratos believes this information is useful to investors because it provides a basis for measuring the Company’s available capital resources, the actual and forecasted operating performance of the Company’s business and the Company’s cash flow, excluding non-recurring items and non-cash items that would normally be included in the most directly comparable measures calculated and presented in accordance with GAAP. The Company’s management uses these non-GAAP financial measures, along with the most directly comparable GAAP financial measures, in evaluating the Company’s actual and forecasted operating performance, capital resources and cash flow. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and investors should carefully evaluate the Company’s financial results calculated in accordance with GAAP and reconciliations to those financial results. In addition, non-GAAP financial measures as reported by the Company may not be comparable to similarly titled amounts reported by other companies. As appropriate, the most directly comparable GAAP financial measures and information reconciling these non-GAAP financial measures to the Company’s financial results prepared in accordance with GAAP are included in this news release.
Another Performance Metric the Company believes is a key performance indicator in our industry is our Book to Bill Ratio as it provides investors with a measure of the amount of bookings or contract awards as compared to the amount of revenues that have been recorded during the period and provides an indicator of how much of the Company’s backlog is being burned or utilized in a certain period. The Book to Bill Ratio is computed as the number of bookings or contract awards in the period divided by the revenues recorded for the same period. The Company believes that the rolling or last twelve months’ Book to Bill Ratio is meaningful since the timing of quarter-to-quarter bookings can vary.
Press Contact:
Claire Burghoff
claire.burghoff@kratosdefense.com
Investor Information:
877-934-4687
investor@kratosdefense.com
| Unaudited Condensed Consolidated Statements of Operations | |||||||||||||||
| (in millions, except per share data) | |||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||
| December 29, | December 31, | December 29, | December 31, | ||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Service revenues | $ | 106.5 | $ | 100.8 | $ | 423.4 | $ | 402.6 | |||||||
| Product sales | 176.6 | 173.0 | 712.9 | 634.5 | |||||||||||
| Total revenues | 283.1 | 273.8 | 1,136.3 | 1,037.1 | |||||||||||
| Cost of service revenues | 77.1 | 76.0 | 310.0 | 303.2 | |||||||||||
| Cost of product sales | 136.2 | 125.9 | 539.1 | 465.3 | |||||||||||
| Total costs | 213.3 | 201.9 | 849.1 | 768.5 | |||||||||||
| Gross profit - service revenues | 29.4 | 24.8 | 113.4 | 99.4 | |||||||||||
| Gross profit - product sales | 40.4 | 47.1 | 173.8 | 169.2 | |||||||||||
| Total gross profit | 69.8 | 71.9 | 287.2 | 268.6 | |||||||||||
| Selling, general and administrative expenses | 47.9 | 47.4 | 195.8 | 184.1 | |||||||||||
| Acquisition and restructuring related items and other | 3.7 | 0.4 | 3.9 | 1.3 | |||||||||||
| Research and development expenses | 10.6 | 8.0 | 40.3 | 38.4 | |||||||||||
| Depreciation | 2.5 | 2.1 | 9.6 | 6.9 | |||||||||||
| Amortization of intangible assets | 2.1 | 2.3 | 8.6 | 6.8 | |||||||||||
| Operating income | 3.0 | 11.7 | 29.0 | 31.1 | |||||||||||
| Interest expense, net | (0.3 | ) | (5.0 | ) | (3.0 | ) | (20.5 | ) | |||||||
| Other income, net | 1.3 | 0.9 | 0.5 | 0.5 | |||||||||||
| Income before income taxes | 4.0 | 7.6 | 26.5 | 11.1 | |||||||||||
| Provision for income taxes | 0.1 | 2.0 | 10.2 | 8.7 | |||||||||||
| Net Income from consolidated operations | 3.9 | 5.6 | 16.3 | 2.4 | |||||||||||
| Less: Net income attributable to noncontrolling interest | - | - | 3.2 | - | 11.3 | ||||||||||
| Net income (loss) attributable to Kratos | $ | 3.9 | $ | 2.4 | $ | 16.3 | $ | (8.9 | ) | ||||||
| Basic income (loss) per common share attributable to Kratos | 0.03 | $ | 0.02 | $ | 0.11 | $ | (0.07 | ) | |||||||
| Diluted income (loss) per common share attributable to Kratos | $ | 0.03 | $ | 0.02 | $ | 0.11 | $ | (0.07 | ) | ||||||
| Weighted average common shares outstanding: | |||||||||||||||
| Basic | 152.7 | 132.1 | 149.0 | 130.4 | |||||||||||
| Diluted | 154.7 | 134.4 | 150.9 | 130.4 | |||||||||||
| Adjusted EBITDA (1) | $ | 25.2 | $ | 29.1 | $ | 105.7 | $ | 95.4 | |||||||
| Unaudited Reconciliation of GAAP to Non-GAAP Measures | |||||||||||||||
| Note: (1) Adjusted EBITDA is a non-GAAP measure defined as GAAP net income (loss) attributable to Kratos adjusted for net income | |||||||||||||||
| attributable to noncontrolling interest, net interest income (expense), provision for income taxes, depreciation and amortization expense | |||||||||||||||
| of intangible assets, amortization of capitalized contract and development costs, stock-based compensation, acquisition and | |||||||||||||||
| restructuring related items and other, and foreign transaction (gain) loss. | |||||||||||||||
| Adjusted EBITDA as calculated by us may be calculated differently than Adjusted EBITDA for other companies. We have provided | |||||||||||||||
| Adjusted EBITDA because we believe it is a commonly used measure of financial performance in comparable companies and is provided to | |||||||||||||||
| help investors evaluate companies on a consistent basis, as well as to enhance understanding of our operating results. Adjusted EBITDA | |||||||||||||||
| should not be construed as either an alternative to net income (loss) or as an indicator of our operating performance or an alternative to cash flows | |||||||||||||||
| as a measure of liquidity. The adjustments to calculate this non-GAAP financial measure and the basis for such adjustments are outlined below. | |||||||||||||||
| Please refer to the following table below that reconciles GAAP net income (loss) to Adjusted EBITDA. | |||||||||||||||
| The adjustments to calculate this non-GAAP financial measure, and the basis for such adjustments, are outlined below: | |||||||||||||||
| Interest income and interest expense, net. The Company receives interest income on investments and incurs interest expense on loans, capital leases and | |||||||||||||||
| other financing arrangements, including the amortization of issue discounts and deferred financing costs. These amounts may vary from period to period | |||||||||||||||
| due to changes in cash and debt balances. | |||||||||||||||
| Income taxes. The Company's tax expense can fluctuate materially from period to period due to tax adjustments that may not be directly related to | |||||||||||||||
| underlying operating performance or to the current period of operations and may not necessarily reflect the impact of utilization of our NOLs. | |||||||||||||||
| Depreciation. The Company incurs depreciation expense (recorded in cost of revenues and in operating expenses) related to capital assets purchased, | |||||||||||||||
| leased or constructed to support the ongoing operations of the business. The assets are recorded at cost or fair value and are depreciated over the estimated useful lives of individual assets. | |||||||||||||||
| Amortization of intangible assets. The Company incurs amortization of intangible expense related to acquisitions it has made. These intangible assets are | |||||||||||||||
| valued at the time of acquisition and are amortized over the estimated useful lives. | |||||||||||||||
| Amortization of capitalized contract and development costs. The Company incurs amortization of previously capitalized software development and non- | |||||||||||||||
| recurring engineering costs related to certain targets in its Unmanned Systems, ballistic missile target and space and satellite businesses as related units are sold. | |||||||||||||||
| Stock-based compensation expense. The Company incurs expense related to stock-based compensation included in its GAAP presentation of selling, | |||||||||||||||
| general and administrative expense. Although stock-based compensation is an expense of the Company and viewed as a form of compensation, these | |||||||||||||||
| expenses vary in amount from period to period, and are affected by market forces that are difficult to predict and are not within the control of management, | |||||||||||||||
| such as the market price and volatility of the Company's shares, risk-free interest rates and the expected term and forfeiture rates of the awards. | |||||||||||||||
| Management believes that exclusion of these expenses allows comparison of operating results to those of other companies that disclose non-GAAP | |||||||||||||||
| financial measures that exclude stock-based compensation. | |||||||||||||||
| Foreign transaction (gain) loss. The Company incurs transaction gains and losses related to transactions with foreign customers in currencies other than | |||||||||||||||
| the U.S. dollar. In addition, certain intercompany transactions can give rise to realized and unrealized foreign currency gains and losses. | |||||||||||||||
| Acquisition and transaction related items. The Company incurs transaction related costs, such as legal and accounting fees and other expenses, related to | |||||||||||||||
| acquisitions and divestiture activities. Management believes these items are outside the normal operations of the Company's business and are not | |||||||||||||||
| indicative of ongoing operating results. | |||||||||||||||
| Restructuring costs. The Company incurs restructuring costs for cost reduction actions which include employee termination costs, facility shut-down | |||||||||||||||
| related costs and lease commitment costs for unused, excess or exited facilities. Management believes that these costs are not | |||||||||||||||
| indicative of ongoing operating results as they are either non-recurring and/or not expected when full capacity and volumes are achieved. | |||||||||||||||
| Legal related items. The Company incurs costs related to pending legal settlements and other legal related matters. Management believes | |||||||||||||||
| these items are outside the normal operations of the Company's business and are not indicative of ongoing operating results. | |||||||||||||||
| Adjusted EBITDA is a non-GAAP financial measure and should not be considered in isolation or as a substitute for financial information provided in | |||||||||||||||
| accordance with GAAP. This non-GAAP financial measure may not be computed in the same manner as similarly titled measures used by other | |||||||||||||||
| companies. The Company expects to continue to incur expenses similar to the Adjusted EBITDA financial adjustments described above, and investors | |||||||||||||||
| should not infer from the Company's presentation of this non-GAAP financial measure that these costs are unusual, infrequent, or non-recurring. | |||||||||||||||
| Reconciliation of Net Income (Loss) attributable to Kratos to Adjusted EBITDA is as follows: | |||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||
| December 29, | December 31, | December 29, | December 31, | ||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net income (loss) attributable to Kratos | $ | 3.9 | $ | 2.4 | $ | 16.3 | $ | (8.9 | ) | ||||||
| Interest expense, net | 0.3 | 5.0 | 3.0 | 20.5 | |||||||||||
| Provision for income taxes | 0.1 | 2.0 | 10.2 | 8.7 | |||||||||||
| Depreciation (including cost of service revenues and product sales) | 8.2 | 6.9 | 31.7 | 26.4 | |||||||||||
| Stock-based compensation | 6.8 | 6.3 | 29.8 | 25.3 | |||||||||||
| Foreign transaction (gain) loss | (0.7 | ) | 0.3 | 0.5 | 1.7 | ||||||||||
| Amortization of intangible assets | 2.1 | 2.3 | 8.6 | 6.8 | |||||||||||
| Amortization of capitalized contract and development costs | 0.8 | 0.3 | 1.7 | 2.3 | |||||||||||
| Acquisition and restructuring related items and other | 3.7 | 0.4 | 3.9 | 1.3 | |||||||||||
| Plus: Net income attributable to noncontrolling interest | - | 3.2 | - | 11.3 | |||||||||||
| Adjusted EBITDA | $ | 25.2 | $ | 29.1 | $ | 105.7 | $ | 95.4 | |||||||
| Reconciliation of acquisition and restructuring related items and other included in Adjusted EBITDA: | |||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||
| December 29, | December 31, | December 29, | December 31, | ||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Acquisition and transaction related items | $ | 0.5 | $ | 0.4 | $ | 0.7 | $ | 0.4 | |||||||
| Legal related items | 3.2 | - | $ | 3.2 | $ | 0.9 | |||||||||
| $ | 3.7 | $ | 0.4 | $ | 3.9 | $ | 1.3 | ||||||||
| Kratos Defense & Security Solutions, Inc. | |||||||||||||||
| Unaudited Segment Data | |||||||||||||||
| (in millions) | |||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||
| December 29, | December 31, | December 29, | December 31, | ||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Revenues: | |||||||||||||||
| Unmanned Systems | $ | 61.1 | $ | 55.4 | $ | 270.5 | $ | 212.2 | |||||||
| Kratos Government Solutions | 222.0 | 218.4 | 865.8 | 824.9 | |||||||||||
| Total revenues | $ | 283.1 | $ | 273.8 | $ | 1,136.3 | $ | 1,037.1 | |||||||
| Operating income (loss) | |||||||||||||||
| Unmanned Systems | $ | (0.7 | ) | $ | 1.0 | $ | 2.9 | $ | 4.2 | ||||||
| Kratos Government Solutions | 11.0 | 17.5 | 56.6 | 52.7 | |||||||||||
| Unallocated corporate expense, net | (7.3 | ) | (6.8 | ) | (30.5 | ) | (25.8 | ) | |||||||
| Total operating income | $ | 3.0 | $ | 11.7 | $ | 29.0 | $ | 31.1 | |||||||
| Note: Unallocated corporate expense, net includes costs for certain stock-based compensation programs (including stock-based compensation costs for the employee stock purchase plan and restricted stock units), the effects of items not considered part of management’s evaluation of segment operating performance, and acquisition and restructuring related items, corporate costs not allocated to the segments, legal related items, and other miscellaneous corporate activities. | |||||||||||||||
| Reconciliation of Segment Operating Income (Loss) to Adjusted EBITDA is as follows: | |||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||
| December 29, | December 31, | December 29, | December 31, | ||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Unmanned Systems | |||||||||||||||
| Operating income (loss) | $ | (0.7 | ) | $ | 1.0 | $ | 2.9 | $ | 4.2 | ||||||
| Other income (loss) | (0.1 | ) | - | - | 0.1 | ||||||||||
| Depreciation | 2.3 | 1.9 | 9.2 | 7.8 | |||||||||||
| Amortization of intangible assets | 1.0 | 1.0 | 4.0 | 1.3 | |||||||||||
| Amortization of capitalized contract and development costs | 0.1 | 0.1 | 0.2 | 1.4 | |||||||||||
| Adjusted EBITDA | $ | 2.6 | $ | 4.0 | $ | 16.3 | $ | 14.8 | |||||||
| % of revenue | 4.3 | % | 7.2 | % | 6.0 | % | 7.0 | % | |||||||
| Kratos Government Solutions | |||||||||||||||
| Operating income | $ | 11.0 | $ | 17.5 | $ | 56.6 | $ | 52.7 | |||||||
| Other income | 0.7 | 1.1 | 1.0 | 2.0 | |||||||||||
| Depreciation | 5.9 | 5.0 | 22.5 | 18.6 | |||||||||||
| Amortization of intangible assets | 1.1 | 1.3 | 4.6 | 5.5 | |||||||||||
| Amortization of capitalized contract and development costs | 0.7 | 0.2 | 1.5 | 0.9 | |||||||||||
| Acquisition and restructuring related items and other | 3.2 | - | 3.2 | 0.9 | |||||||||||
| Adjusted EBITDA | $ | 22.6 | $ | 25.1 | $ | 89.4 | $ | 80.6 | |||||||
| % of revenue | 10.2 | % | 11.5 | % | 10.3 | % | 9.8 | % | |||||||
| Total Adjusted EBITDA | $ | 25.2 | $ | 29.1 | $ | 105.7 | $ | 95.4 | |||||||
| % of revenue | 8.9 | % | 10.6 | % | 9.3 | % | 9.2 | % | |||||||
| Kratos Defense & Security Solutions, Inc. | |||||||||||||||
| Unaudited Condensed Consolidated Balance Sheets | |||||||||||||||
| (in millions) | |||||||||||||||
| December 29, | December 31, | ||||||||||||||
| 2024 | 2023 | ||||||||||||||
| Assets | |||||||||||||||
| Current assets: | |||||||||||||||
| Cash and cash equivalents | $ | 329.3 | $ | 72.8 | |||||||||||
| Accounts receivable, net | 323.8 | 329.2 | |||||||||||||
| Inventoried costs | 162.1 | 156.2 | |||||||||||||
| Prepaid expenses | 18.0 | 16.0 | |||||||||||||
| Other current assets | 38.9 | 20.0 | |||||||||||||
| Total current assets | 872.1 | 594.2 | |||||||||||||
| Property, plant and equipment, net | 288.2 | 243.6 | |||||||||||||
| Operating lease right-of-use assets | 37.6 | 45.7 | |||||||||||||
| Goodwill | 568.9 | 569.1 | |||||||||||||
| Intangible assets, net | 53.8 | 62.4 | |||||||||||||
| Other assets | 130.3 | 117.5 | |||||||||||||
| Total assets | $ | 1,950.9 | $ | 1,632.5 | |||||||||||
| Liabilities and Stockholders’ Equity | |||||||||||||||
| Current liabilities: | |||||||||||||||
| Accounts payable | $ | 82.0 | $ | 63.1 | |||||||||||
| Accrued expenses | 38.8 | 35.4 | |||||||||||||
| Accrued compensation | 71.9 | 64.7 | |||||||||||||
| Billings in excess of costs and earnings on uncompleted contracts | 76.3 | 101.8 | |||||||||||||
| Current portion of operating lease liabilities | 11.3 | 12.1 | |||||||||||||
| Current portion of finance lease liabilities | 1.9 | 1.3 | |||||||||||||
| Other current liabilities | 14.5 | 14.1 | |||||||||||||
| Total current liabilities | 296.7 | 292.5 | |||||||||||||
| Long-term debt | 174.6 | 219.3 | |||||||||||||
| Operating lease liabilities, net of current portion | 29.8 | 37.8 | |||||||||||||
| Finance lease liabilities, net of current portion | 64.4 | 50.9 | |||||||||||||
| Other long-term liabilities | 32.2 | 33.5 | |||||||||||||
| Total liabilities | 597.7 | 634.0 | |||||||||||||
| Commitments and contingencies | |||||||||||||||
| Redeemable noncontrolling interest | - | 22.5 | |||||||||||||
| Stockholders’ equity: | |||||||||||||||
| Common stock | 0.2 | - | |||||||||||||
| Additional paid-in capital | 2,017.4 | 1,654.5 | |||||||||||||
| Accumulated other comprehensive income | (0.5 | ) | 1.7 | ||||||||||||
| Accumulated deficit | (663.9 | ) | (680.2 | ) | |||||||||||
| Total Kratos stockholders’ equity | 1,353.2 | 976.0 | |||||||||||||
| Total liabilities and stockholders’ equity | $ | 1,950.9 | $ | 1,632.5 | |||||||||||
| Kratos Defense & Security Solutions, Inc. | |||||||||||||||
| Unaudited Condensed Consolidated Statements of Cash Flows | |||||||||||||||
| (in millions) | |||||||||||||||
| Twelve Months Ended | |||||||||||||||
| December 29, | December 31, | ||||||||||||||
| 2024 | 2023 | ||||||||||||||
| Operating activities: | |||||||||||||||
| Net income | $ | 16.3 | $ | 2.4 | |||||||||||
| Adjustments to reconcile net income from consolidated operations to net cash provided by operating activities: | |||||||||||||||
| Depreciation and amortization | 40.3 | 33.2 | |||||||||||||
| Amortization of lease right-of-use assets | 11.6 | 11.5 | |||||||||||||
| Deferred income taxes | 4.4 | 2.5 | |||||||||||||
| Stock-based compensation | 29.8 | 25.3 | |||||||||||||
| Amortization of deferred financing costs | 0.7 | 0.7 | |||||||||||||
| Provision for doubtful accounts | - | 1.0 | |||||||||||||
| Changes in assets and liabilities, net of acquisitions: | |||||||||||||||
| Accounts receivable | 11.2 | (13.1 | ) | ||||||||||||
| Unbilled receivables | (6.1 | ) | 14.4 | ||||||||||||
| Inventoried costs | (5.0 | ) | (29.6 | ) | |||||||||||
| Prepaid expenses and other assets | (37.4 | ) | (16.2 | ) | |||||||||||
| Operating lease liabilities | (12.4 | ) | (11.4 | ) | |||||||||||
| Accounts payable | 15.1 | 4.4 | |||||||||||||
| Accrued compensation | 7.0 | 12.4 | |||||||||||||
| Accrued expenses | 1.7 | 1.4 | |||||||||||||
| Billings in excess of costs and earnings on uncompleted contracts | (25.7 | ) | 28.4 | ||||||||||||
| Income tax receivable and payable | (0.3 | ) | (0.5 | ) | |||||||||||
| Other liabilities | (1.5 | ) | (1.6 | ) | |||||||||||
| Net cash provided by operating activities | 49.7 | 65.2 | |||||||||||||
| Investing activities: | |||||||||||||||
| Cash paid for acquisitions, net of cash acquired | (11.5 | ) | 0.3 | ||||||||||||
| Capital expenditures | (58.2 | ) | (52.4 | ) | |||||||||||
| Proceeds from sale of assets | - | 8.3 | |||||||||||||
| Net cash used in investing activities | (69.7 | ) | (43.8 | ) | |||||||||||
| Financing activities: | |||||||||||||||
| Borrowing under credit facility | 10.0 | 69.0 | |||||||||||||
| Repayment under credit facility and term loan | (52.5 | ) | (101.0 | ) | |||||||||||
| Proceeds from the issuance of common stock, net of issuance costs | 330.7 | - | |||||||||||||
| Payment under finance leases | (1.4 | ) | (1.5 | ) | |||||||||||
| Payments of employee taxes withheld from share-based awards | (17.4 | ) | (3.7 | ) | |||||||||||
| Proceeds from shares issued under equity plans | 8.2 | 6.5 | |||||||||||||
| Net cash provided by (used in) financing activities | 277.6 | (30.7 | ) | ||||||||||||
| Net cash flows | 257.6 | (9.3 | ) | ||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | (1.1 | ) | 0.8 | ||||||||||||
| Net increase (decrease) in cash and cash equivalents | 256.5 | (8.5 | ) | ||||||||||||
| Cash and cash equivalents at beginning of period | 72.8 | 81.3 | |||||||||||||
| Cash and cash equivalents at end of period | $ | 329.3 | $ | 72.8 | |||||||||||
| Kratos Defense & Security Solutions, Inc. | |||||||||||||||
| Unaudited Non-GAAP Measures | |||||||||||||||
| Computation of Adjusted Earnings Per Share | |||||||||||||||
| (in millions, except per share data) | |||||||||||||||
| Adjusted income from consolidated operations and adjusted income from consolidated operations per diluted common share (Adjusted EPS) are non-GAAP measures for reporting financial performance and exclude the impact of certain items and, therefore, have not been calculated in accordance with GAAP. Management believes that exclusion of these items assists in providing a more complete understanding of the Company's underlying consolidated operations results and trends and allows for comparability with our peer company index and industry. The Company uses these measures along with the corresponding GAAP financial measures to manage the Company's business and to evaluate its performance compared to prior periods and the marketplace. The Company defines adjusted income from consolidated operations before amortization of intangible assets, depreciation, stock-based compensation, foreign transaction gain/loss, and acquisition and restructuring related items and other. The estimated impact to income taxes includes the impact to the effective tax rate, current tax provision and deferred tax provision, and excludes the impact of discrete items, including transaction related expenses and release of valuation allowance, or benefit related to the add-backs.* | |||||||||||||||
| Adjusted EPS reflects adjusted income on a per share basis using weighted average diluted shares outstanding. | |||||||||||||||
| The following table reconciles the most directly comparable GAAP financial measures to the non-GAAP financial measures. | |||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||
| December 29, | December 31, | December 29, | December 31, | ||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net income (loss) attributable to Kratos | $ | 3.9 | $ | 2.4 | $ | 16.3 | $ | (8.9 | ) | ||||||
| Less: GAAP provision for income taxes | 0.1 | 2.0 | 10.2 | 8.7 | |||||||||||
| Less: Net income attributable to noncontrolling interest | - | 3.2 | - | 11.3 | |||||||||||
| Income from consolidated operations before taxes | 4.0 | 7.6 | 26.5 | 11.1 | |||||||||||
| Add: Amortization of intangible assets | 2.1 | 2.3 | 8.6 | 6.8 | |||||||||||
| Add: Amortization of capitalized contract and development costs | 0.8 | 0.3 | 1.7 | 2.3 | |||||||||||
| Add: Depreciation | 8.2 | 6.9 | 31.7 | 26.4 | |||||||||||
| Add: Stock-based compensation | 6.8 | 6.3 | 29.8 | 25.3 | |||||||||||
| Add: Foreign transaction (gain) loss | (0.7 | ) | 0.3 | 0.5 | 1.7 | ||||||||||
| Add: Acquisition and restructuring related items and other | 3.7 | 0.4 | 3.9 | 1.3 | |||||||||||
| Non-GAAP Adjusted income from consolidated operations before income taxes | 24.9 | 24.1 | 102.7 | 74.9 | |||||||||||
| Income taxes on Non-GAAP measure Adjusted income from consolidated operations* | 5.1 | 8.1 | 28.8 | 20.7 | |||||||||||
| Non-GAAP Adjusted net income | $ | 19.8 | $ | 16.0 | $ | 73.9 | $ | 54.2 | |||||||
| Diluted earnings per common share | $ | 0.03 | $ | 0.02 | $ | 0.11 | $ | (0.07 | ) | ||||||
| Less: GAAP provision for income taxes | - | 0.01 | 0.07 | 0.07 | |||||||||||
| Less: Net income attributable to noncontrolling interest | - | 0.03 | - | 0.09 | |||||||||||
| Add: Amortization of intangible assets | 0.01 | 0.02 | 0.06 | 0.05 | |||||||||||
| Add: Amortization of capitalized contract and development costs | 0.01 | - | 0.01 | 0.02 | |||||||||||
| Add: Depreciation | 0.05 | 0.05 | 0.21 | 0.20 | |||||||||||
| Add: Stock-based compensation | 0.04 | 0.05 | 0.20 | 0.20 | |||||||||||
| Add: Foreign transaction (gain) loss | - | - | - | 0.01 | |||||||||||
| Add: Acquisition and restructuring related items and other | 0.02 | - | 0.02 | 0.01 | |||||||||||
| Income taxes on Non-GAAP measure Adjusted income from consolidated operations* | (0.03 | ) | (0.06 | ) | (0.19 | ) | (0.16 | ) | |||||||
| Adjusted income from consolidated operations per diluted common share | $ | 0.13 | $ | 0.12 | $ | 0.49 | $ | 0.42 | |||||||
| Weighted average diluted common shares outstanding | 154.7 | 134.4 | 150.9 | 130.4 | |||||||||||
| *The impact to income taxes is calculated by recasting income before income taxes to include the add-backs involved in determining Adjusted income from consolidated operations before income taxes and recalculating the income tax provision, including current and deferred income taxes, using the Adjusted income from consolidated operations before income taxes. The recalculation also adjusts for any discrete tax expense, including transaction related expenses and the release of valuation allowance, or benefit related to the add-backs. | |||||||||||||||
FAQ
What was Kratos (KTOS) revenue growth in 2024?
How much cash flow did KTOS generate in Q4 2024?
What is KTOS's current backlog and bid pipeline value?
What are KTOS's growth projections for 2025 and 2026?
How did KTOS's Unmanned Systems segment perform in 2024?
