Kratos Wins $579M Single Award IDIQ for Space Force SATCOM C2 System
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Insights
The award of the C-SAR IDIQ contract to Kratos Defense & Security Solutions represents a significant development within the defense sector, particularly concerning the satellite command and control (C2) capabilities of the U.S. military. The contract's potential maximum value of $579 million underscores the scale and strategic importance of the CCS-C program, which is central to the operations of the U.S. Space Force's MILSATCOM systems. This contract not only solidifies Kratos's position in the defense market but also reflects the U.S. government's commitment to investing in space systems' resiliency and security.
From an industry perspective, the fact that Kratos is the single recipient of the contract indicates a high level of trust in the company's specialized capabilities and past performance. This could potentially lead to an increase in market confidence in Kratos, possibly affecting its stock valuation positively. However, investors should be aware that the actual financial impact will depend on the issuance and execution of future task orders and the exercise of options through 2032.
With the growing emphasis on space as a contested domain, contracts such as the C-SAR IDIQ are becoming increasingly critical. The announcement of Kratos's win may have a ripple effect across the defense technology market, as competitors and partners alike reassess their positions and strategies in response. This contract win could position Kratos as a key player in the space domain, potentially influencing partnerships, mergers and acquisitions within the industry.
Furthermore, the focus on sustainment and resiliency in satellite communications reflects a broader market trend towards long-term service contracts and the importance of lifecycle management for defense systems. Companies with the ability to offer comprehensive post-production support and enhancements are likely to benefit from similar opportunities in the future, shaping the competitive landscape of the defense technology sector.
The financial implications of the C-SAR contract for Kratos are multifaceted. On one hand, the contract provides a steady stream of revenue over an extended period, which can contribute to stable financial forecasts and potentially improve the company's creditworthiness. On the other hand, the execution of the contract options and the issuance of task orders will determine the actual financial impact on the company's bottom line.
Investors should monitor Kratos's quarterly reports and management discussions to gauge the progress and profitability of the C-SAR contract. It is also crucial to consider the company's ability to manage the costs associated with the contract's deliverables effectively. Any cost overruns or delays could impact projected earnings, while successful management could result in operational efficiencies and enhanced shareholder value.
Services Will Support Satellite Command and Control System Sustainment and Resiliency
SAN DIEGO, Feb. 13, 2024 (GLOBE NEWSWIRE) -- Kratos Defense & Security Solutions, Inc. (Nasdaq: KTOS), a technology company in the defense, national security and global markets, announced today that it is the single recipient for the Command and Control (C2) System Consolidated (CCS-C) Sustainment and Resiliency (C-SAR) indefinite-delivery/indefinite-quantity (IDIQ) contract with a maximum value of
C-SAR ensures secure and integrated communications for the U.S. MILSATCOM requirements. CCS-C provides consolidated MILSATCOM tracking, telemetry and command capability for the Space Force Space Systems Command (SSC), Space Delta 8 for on-orbit and anomaly resolution operations. The CCS-C program develops the C2 system for most U.S. MILSATCOM systems including the Defense Satellite Communications System, Milstar, Wideband Global SATCOM and Advanced Extremely High Frequency satellites.
Phil Carrai, President of the Kratos Space, Training and Cyber Division, said, “Through CCS-C, Kratos supports the U.S. military with the satellite-based services to achieve their mission. This is an important recompete win for one of our largest space domain contracts. Kratos is one of the few companies that can provide a mix of cutting-edge technology and expertise to strengthen global capabilities of the U.S. Space Force, other branches of the U.S. military and international allies.”
The C-SAR contract provides sustainment, post-production development services and enhancements for the CCS-C system. C-SAR provides satellite and communication system products, hardware and equipment in support of the SSC’s mission to develop, acquire, equip, field and sustain lethal and resilient space capabilities.
"C-SAR is critical to delivering C2 services required by the warfighter and Kratos will maintain mission-specific requirements without risking gaps in operations,” said Larry Lind, Senior Vice President of Kratos Federal Space. “These services and solutions for the U.S. Space Force are fundamental to addressing today’s competitive domain.”
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
FAQ
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