Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS) Spiked, Here’s Why

0

If you are looking for the cause of the latest movement in the stock of Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS), look no further than the recently announced big contract win. The company recently won a competitive contract worth $40.8 million involving unmanned aerial systems.

Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS) terms the $40.8 million contract as based on cost-sharing between it and a government agency called Air Force Research Laboratory (AFRL). The company disclosed that the company’s investment in the unmanned aerial system technology could hit $100 million.

KTOS also said that the terms of the contract give it the rights to maintain ownership of important data, software, platform and intellectual property. Considering the efforts that KTOS has been putting in improving its unmanned defense division, the latest contract comes as a milestone.

A boost to unmanned systems business

The management of Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS) hopes that the latest contact with the government agency will boost revenue and profitability. KTOS reported revenue of $14.2 million in its Unmanned Systems division in 1Q2016, which increased nearly 15% over the year-ago quarter. But overall, KTOS needs a major turnaround on its bottom-line.

A stream of orders

Before the AFRL order for unmanned systems, KTOS had announced a $9.4 million contract relating to helicopter training systems. The company didn’t name the client behind the order, but said it was a U.S. ally.

Prior to the helicopter training deal, KTOS had announced a $22.3 million from the Defense Department relating to TMIP-J (Theater Medical Information Program – Joint). The company said that the deal included a base contract and five year renewal options.

1Q2016 financials Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS)

Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS) generated revenue of $153 million in 1Q2016. Adjusted EBITDA came in at $4.6 million. The results were consistent with the company’s forecast for the quarter. KTOS said that about 62% of its revenue in 1Q came from customers affiliated to the federal government.

Share.

Leave A Reply