Kratos Welcomes U.S. Sen. Gary Peters, U.S. Rep. Lisa McClain to TDI Manufacturing Facility in Oxford, Michigan
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Insights
The recent contract award to Kratos Defense & Security Solutions by the Department of Defense, valued at $9 million, is a significant development within the defense sector. This contract is expected to enhance job creation, capability and capacity growth at Technical Directions Inc. (TDI), a subsidiary of Kratos. The award underscores the U.S. government's commitment to revitalizing domestic manufacturing capabilities, particularly in the area of small turbine engine production for defense applications. The strategic importance of this initiative lies in its potential to reduce dependency on foreign suppliers and improve the national security supply chain.
From a business perspective, this contract could lead to a sustainable increase in Kratos' revenue streams, given the DoD's emphasis on affordable mass production of defense technologies. The focus on cost-effective manufacturing aligns with the current defense spending trend towards maximizing value without compromising on performance. Additionally, leveraging Michigan's automotive industry expertise could offer competitive advantages in manufacturability and innovation, potentially leading to further contracts and expansion in the sector.
The economic implications of the Kratos contract with the DoD extend beyond the immediate financial gain for the company. The emphasis on local manufacturing and job creation in Michigan has broader macroeconomic benefits, including the stimulation of the local economy through job creation and the potential multiplier effect of increased spending. Furthermore, the investment in defense technologies can act as a catalyst for innovation within the region, potentially spurring growth in related industries and contributing to economic diversification.
Long-term, the success of Kratos' turbine engines and turbogenerators could attract further investment into the region, reinforcing Michigan's position as a hub for defense manufacturing. This could lead to increased capital inflows and enhance the state's economic resilience. However, it is crucial to monitor the balance between defense spending and other economic priorities to ensure sustainable growth.
The defense industry is highly competitive and Kratos' focus on small-thrust-class turbine engine solutions positions the company favorably in a niche market segment. The ability to produce these engines at a low cost and high volume is particularly relevant given the current global geopolitical tensions, which have underscored the need for cost-effective defense capabilities. The visit by Senator Peters and Representative McClain not only serves as an endorsement of Kratos' capabilities but also highlights the political support for defense initiatives that prioritize domestic manufacturing.
It is important to analyze the potential market demand for Kratos' products beyond the DoD contract. The company's strategy to be first to market with its engines suggests an aggressive approach to capturing market share. However, the defense market is subject to fluctuations based on government budgets and policies and Kratos must navigate these variables effectively to ensure long-term success. The impact of this contract on Kratos' stock performance will likely be monitored closely by investors, who will be keen to understand the company's ability to deliver on the contract and secure additional business.
SAN DIEGO, Feb. 06, 2024 (GLOBE NEWSWIRE) -- Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS), a Technology Company in the Defense, National Security and Global Markets and an industry-leading provider of high-performance, jet-powered unmanned aerial systems, recently welcomed U.S. Senator Gary Peters (D-MI) and U.S. Representative Lisa McClain (R-MI-9) to Technical Directions Inc. (TDI) headquartered in Oxford, Michigan, to showcase Kratos’ family of affordable turbine engines and turbogenerators.
Steve Fendley, President of Kratos Unmanned Systems Division, said, “TDI’s engines are a key enabler for producing small cruise missile and loitering munitions in mass, thanks to our laser-focus on manufacturability for scale with an incredibly high performance-to-cost ratio. These characteristics mirror the Kratos’ corporate strategy, but more importantly, provide a U.S. designed, manufactured, integrated, and tested affordable small-thrust-class turbine engine solution which has effectively been unachievable from U.S. manufacturers in recent years. We’re very proud of the products we’ve developed and proud to be growing in Michigan where we are able to leverage the deep experience of the automotive industry. We appreciate the opportunity to show them firsthand to Sen. Peters and Rep. McClain.”
Sen. Peters, Rep. McClain visit TDI is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/758519ef-b746-4f81-987e-de7ec470115d
TDI has developed and refined turbine engine technologies for military applications in Michigan since 1983—providing unique features in support of low-cost, high-production, expendable turbojet engine applications, such as small cruise missiles and other Unmanned Aerial Vehicles (UAVs). With the engineering, manufacturing, and system integration employees in the Oxford, Michigan facility, TDI’s subject matter experts leverage Michigan’s deep automotive expertise and apply it to the defense sector and have experience that encompasses all aspects of this turbine engine class, from clean-sheet design, through performance testing, vehicle integration, flight testing, and production manufacturing. By making its own internally funded investments that are not tied to any specific customer or budget process, TDI is able to rapidly develop and be first to market with its engines.
TDI-J85 Engine is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/7d84c68c-4793-48bb-8561-7f7cab2063ec
In 2023, Kratos received a
Senator Peters, a member of the Senate Armed Services and Appropriations Committees, said, “Michigan defense manufacturers excel at producing innovative solutions to our most pressing national security challenges, and Kratos and the TDI team here in Oxford are a key partner in that success. It was great to see firsthand the important work they are doing to build the next-generation of defense technologies that protect our men and women in uniform, and to celebrate this new contract that will support Michigan-made products and jobs.”
“Touring the Kratos TDI facility this morning was a terrific experience that gave me a first-hand perspective of the work that goes into creating turbine engines and turbogenerators,” said Representative McClain. “I am proud that Kratos continues to call Oxford home, and I am excited to see their impact in the community grow throughout this year and beyond.”
About Kratos Defense & Security Solutions, Inc.
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 25, 2022, 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
FAQ
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