KTOS - Earnings call transcript Q4 2019 | Kratos Defense & Security Solutions, Inc.

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Kratos Defense & Security Solutions Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. Instructions] [Operator

like Mendoza, conference General Senior go ma'am. now speaker to Counsel. hand ahead, Marie today, Vice to would over the your Please I President and

Marie Mendoza

Officer. for everyone. quarter Executive fourth fiscal Officer; and Kratos' is year call. Lund, for Thank Eric Security conference and Thank Executive XXXX and and me Good Defense & Deanna afternoon, joining you. Chief Vice Chief us With the end DeMarco, Kratos Solutions President Financial you President today Kratos'

begin uncertainties of of everyone safe included substance and in we emphasizes to uncertainties please we in initiatives, today's market future call. as the potential harbor is the risks like Before strategic statements call, discuss inherent today's I'd operational paragraph and of the guidance today's make during that release. end take forward-looking financial the these at This outlook major press this and note opportunities, the paragraph will mind risks keep we afternoon. Please

include non-GAAP considered in will Regulation a measures be not call is financial should G. from, Non-GAAP discussion or in financial term that also substitute compliance at isolation as defined of Today's press as financial reconciliation measures accordance with the we a GAAP. presented today's the a with financial for of have results end provided measures non-GAAP prepared in information release, these to in financial Accordingly, company's GAAP. of

will the Eric turn call I now that, to With over DeMarco.

Eric DeMarco

recently is for our than our report better remarks, our to have the we tactical week XXXX is you, and milestones achieve and shareholders. to positioned what significant important strategy since planned the ever of certain related last our In stakeholders, Marie. partners, discuss you, Kratos as Today including for just will last Thank and drone successfully and beyond. as I my achieved returns our

million financial our quarter's have XXXX XXXX reduction providing today, initial $XX we're which an you. our growth, guidance year-over-year we over call except protest organic Kratos primarily situation an due XXXX business last training on with to is business, discussed approximate unit that ongoing forecasting currently our forecast for every For we

Additionally, our not we and number until XXXX guidance, XXXX in as items, will both we we the excluded factored a from significantly have of forecast financial impact related to or potentially which our include have important initial forecast, have clarity. timing

example, not any XXXX system activities. in or other from financial drone Valkyrie have For we production included our guidance initial Kratos expected or tactical contribution integration

lack We have these of as excluded a of items not result confidence.

will We Valkyrie timing works rather program ever the like confidence have contribution currently our structure contract forecast until items the potential related certain in and but exclude that we than the more quantities, are and from literally the opportunity finalized. pricing, the is financial

appropriate We adjust as intend our expected these initial guidance once XXXX occur. to events financial

we other clarity items have also discuss In number have also either addition in significantly a financial financial from today have we of which important resolution or as for to also once we our intend that forecast to factored we will we appropriate. adjust and XXXX or excluded additional our Valkyrie, forecast

large program for forecast potential we of to as also expected are adjust number opportunities which would we're Kratos XXXX, we in currently of successful. our appropriate have awarded new pursuing, we And are if a XXXX which to also excluded certain be

revenue of the generating finished growth So for Kratos revenue unmanned and organic XXXX, XX.X% growth we year overall. our systems XX.X% business year-over-year with generating

adjust tactical $X.X does this potential production other for, Gremlins we drone with XX.X% expected our systems currently XX.X%. once Valkyrie, XX.X%, our XX% values opportunities. XXXX business to additional growth have clarity. $X $X.X full of adjusted the will bid we with Nearly pipeline our growth comprised substantially billion pipeline $X.X single of expected a or pipeline And with year-over-year for and EPS of billion, we billion pipeline was not billion of of unmanned all EBITDA Our the award adjusted year-over-year opportunities, or up related finished or which include bid is

We the the and business of believe available of the opportunities in number current Kratos. pipeline opportunity depth drone breadth our reflects unmanned both systems

the Valkyrie and opportunity to very future our trajectory. our supports strong growth and addition In Gremlins and forecast

the our the state In allies for addition those another funding order to and peer, areas. the key that increased element near-peer pipeline, Security is opportunity to our is priorities its future with systems, National weapons in strategic Kratos and threats recapitalize nation of and organic growth expected alignment DoD forecast address as U.S.

recently budget and We believe satellite program most National hypersonic emphasize that as and microwave Defense FYDP, and communications, DoD in missile or aligns future Kratos with Strategy XXXX systems space XXXX defense and which the and CXISR includes systems. defense DoD request electronics, reflected and drones, the the autonomous in priorities year’s

electronics, balance XX% the satellite space and hypersonic of and turbine unmanned technologies missiles, CXISR approximately and in is our and business in Today, communications XX% XX% Approximately of being microwave business training Kratos’ systems. is with a radars defense, is missile solutions. in systems, approximately

XXXX in I ever related As we funding planned on before, requests. our the make and understand XXXX growth programs, long-term including significant now on for progress And based and continued congressional budget our having Valkyrie executing we significant greater systems DoD Kratos recently have platforms to beginning we're now mentioned place new strategy. released to with clarity Kratos’ be than

F-XX achieved you both first Progress in made re-engineered half recovery nominally have F-XX Valkyrie the Battle to involved multiple being to a aircraft the of and is where business be operating System satellite all aspects. or platforms the is exercise will without program. the ABMS or being network and our space connecting be incident. that and machine manned This points Valkyrie system with reported last data Kratos’ in January the new Advanced targeting in since report successful Management Valkyrie drones multi-domain including reported will and being multibillion includes, that planned mega It’s flying also at dollar fourth speeds, XXXX. move a test in with It's the flight we an certain

reported includes future will aircraft drone the over program that of reported period, three-year a Air to is and services Skyborg the for programs be expected which Force’s changers, unmanned the enabled being next-generation program. supported Skyborg selected Vanguard Kratos’ by a the fighter fielded was was Skyborg Air indicated the U.S. Vanguard is Valkyrie U.S. we technologies to developed Skyborg. forecasting program, wingman manned plan are which be that recently drone. With are AF and drones. the one specifically division Force Kratos’ for Valkyrie under U.S. It artificial intelligence It be three game awarded has where which

and XQ-XXA award for communications, warfighter complexity the that underway performance currently technology for underway into including or for planned, excuse Laboratory for project contract Laureate funded. missionize to the being XQ-XXA the for – the Valkyrie with are Force air those contract payload The while now Valkyrie and a team me, aspects The also or maintaining capability attributable to low received with be those that high innovation, mass, have the integration unpredictability. operationalize Research provides power proving class weapon of providing aircraft and pathfinder the system of the can are achieved either cost And the of Air under and and planned, the funded. various under including and Kratos process

representative of program We last production exclusive Kratos the forward, Gremlins will the more I has the Gremlins is first few months these and that on are past our trajectory. DARPA drone, of to points has X the And since data comment jet now Also later. announced momentum which you, report Phase that which rights for. a flight moving over successful believe progress,

few Army Kratos’ partnerships and new $X.X position Kratos’ Kratos and space IDIQ GTACS anticipated of Tactical of a be GTACS, continued Communications won the community initiative a organic contract or expected our to past award satellite Systems have Kratos’ company satellite number the the U.S. drone a stakeholders. hardware tactical continues over future a make, element has receive growth relationships and on Also large significant business. for multiple with The Advanced and the opportunity to of programs, the Global and including projectory to vehicle. our and production of key product space business is billion our months, customer

million IDIQ-MAC won $XX new also contract received systems contract of a won on unmanned an the business large systems CXISR $XXX single initial $X.X family a our Kratos’ to surface division award and a program Kratos’ business of CXISR unmanned single award million opportunity. vehicle. on Kratos system position million record

approximate a million dollar expected $XX business for Our And to an warfare our millions microwave won also are well. program tens of program initial system. new be production These missile we new production company. long-term as initial for production received multi of recently programs electronics two electronic $XX million a

and owned proprietary network situational a in an $XX received unique Kratos’ increasing contract space Kratos’ Kratos’ and congested million are SSA satellite related global awareness to globally environment. space space sole-source today's and network. SSA capabilities demand business operated

later awards execution received resulted has of the had these right out in certain originally to push of we've than expected, certain aspects. So we a which

received trajectory. remain approximately years revenue trajectory. unmanned projected we multiple growth growth achieve projected drone to on next in and In have the our target in programs now organic us organic contribute with Kratos to provide them, to confidence We future additional having few in long-term which $XXX expected business, our systems opportunities track this million

or or BQM-XXXAs initial systems full-rate go year full-rate For drone to Navy example, recently is early target expect production in full-rate production the FYXXXX. currently program negotiations either XX next production production to BQM-XXX LRIP, the was in this reported on that awards FRP and expected achieve just later or that year year. to is purchase low-rate this into with U.S. or One two target expected plans it we drone on are SSAT that

in also will full-rate the term. target begin the manufacturer quantities a these negotiations expect substantial involve next of increase a on we five-year continued and to in drone negotiations We production produced expect that over currently

system for completed ago. successfully the expect These make this as anomaly we contract into a test are believe early year The to and Valkyrie to the year. sole-source initial government And also tactical FRP we weeks mentioned, year. we recent program system on that this a demonstrated to issue investigation that our third under have future Valkyrie in flight or begin I programs addressed In next its flight progress most substantial area, recently in the has successful recovery We later experienced year few believe production continued Kratos. all as towards for confidential Kratos’ fielding. drone this being last

now XQ-XX. Kratos’ like program and rapid This pushed can the programs resolved development recovery right. types anomalies complete six months system in to These delays of that resulted in and customer related the occur have previous expectation approximately Valkyrie investigation situation and delays plan

integration payload the details stakeholders. defense pursuing, the work an XX forecasting are currently the of the the DoD several and the we initial including opportunities months. XQ-XX that of as funding process award we of the where completion complete related current with in with just XX XXXX the entity, believe with one in sometime one currently expect Valkyrie fiscal we are place This approximately next months process, within Valkyrie for an production We to Valkyrie is total now a appropriation drones orders we related system is

these As the customers, Oklahoma expected the on in our with availability of be stakeholders thereafter. first have progress lead initial the expectation production able long communications related XXXX initial monthly Valkyries. Valkyries a made, we the with for our City Valkyries items deliveries result of have additional build orders our XXXX near-term begin of delivery of current for of now and expect supporters awards, plan, of increased to QX we and and production XX XX fiscal to of funding, we our first year manufacturing Based

the but production expected awards are information that contract of highly initial not confident of when Valkyrie have. We based the are is most that we we here, if, leaning on as receipt forward ahead recent contracts

expectations Valkyrie, expected for right, program previous and Kratos’ ultimate to the continued moved initial record. process the we even In potential timing awards of line now have have significant we summary, to for contract of customers. though of make And with our an on our sight

The UAS the tactical was had flight flight Dugway impacted can been flight flight Proving result XXXX. I Gremlins at DARPA program executed operations, of planned. year’s in last months as its a where reported first which first for This initially initial range was conducted flight Gremlins recently several successfully As Gremlins Lake China mentioned, delayed the successful Ground. California the November earthquake,

arm with cold ground engine all no the during XX validating including a collecting the and completed lasted the test, start which air the test air to data control DARPA Dynetics vehicle. handing and flew between control the stable hour deploying the flight, drone docking and one Gremlins stations, the data of links, minutes, transitioning off objectives, and on X-XXA And Gremlin from X-XXA team anomalies

At recovery understand however, that shoe. sequence system. vehicle system test failure the This to is was is part certain lost system a due the the during working reengineer the recovery of the main to operational extract mission, used system. we not our end for of the the and Dynetics flight partner recovery the This with provider to ground only is

as importantly, a few a of Gremlin air However, Kratos weeks airborne Dynetics, DARPA that Phase that I X-XXA X plans operations vehicles demonstrate reported before, ago, of Gremlins the to mentioned award just to four using distributed our now minimum of partner produces.

would numbers the low that for in the Forces and transport increase Gremlins the contested bomber of U.S. The operational combat augment launch the recover of capability to large is airspace. or manned to enhance survivability aircraft unmanned and Armed cost develop of goal aircraft host flexibility capability to and aircraft

result a confident award, flight transition a now Gremlins and expected will which Phase Program remains and F, renamed future been Gremlins on successful track. remain DARPA’s service a to of has we major program. of Airwolf, an As announcement the that X become

over place now and demonstration are system scheduled. now several is in months funding next additional the Additional multiple flights

initiatives Thanatos tactical tactical in Kratos’ demonstration also Kratos’ and all deploying and a tactical drone Program year. other other expectations, our on with drones programs track drone including this remain a

made the regarding Over drone, the several marketplace. Generation and of certain received number the Xth received we XGAT XGAT a Target program certain a public past comments or in result weeks, of have has inquiries publicity as Aerial the

I’ll Accordingly, currently successfully Aerial ground Generation this is contract not drone its engine reported is and Xth to had on these program is was later flown year. scheduled certain working on XGAT first team run. under A initial few the flight by funded inquiries address Kratos ago, now. its the it a has for the and that of yet The test Kratos Target government. weeks XGAT

Kratos’ developed set is XGAT unique not is mission from target drone, for a aircraft Valkyrie. as The drone tactical very unique and a different a a vastly

XGAT or can example, refueled. base. hours For approximately X.X hours the weapons base. The the bomb Valkyrie has The on has than or fly Valkyrie refueled, on XGATs no internal weapons nine bomb imply for greater internal

and And cost Valkyrie independent, while the Kratos’ cost Valkyrie to the million. is These tied and approximately Valkyrie. is XGAT are the just and the to the approximately reported is runway has a at landing is the of gear million, while some upon affordable $XX differences runway. dependent low between $X and XGAT XGAT

have an we Additionally, solution to Kratos currently we previously will sets far disclosed majority confident at have cost. its a XGAT a solution for affordable which of are envisioned that better the own prove mission not be

contract the awards including the ultimate magnitude growth over expected forth and so this awards, contract tactical growth. For the the production for program certain mentioned organic increased programs Kratos’ I expected business with strong of year-over-year our expecting targets drones, XXXX and spite the Unmanned timing in including moving of Systems XXXX are determining including or initial from CRA, we to of right, of recent

also expecting program over the organic are for DoD growth We XXXX year-over-year current FYDP. visibility, XXXX, request budget XXXX greater based the and even on

In I and a have to wins. mentioned last our Satellite our Space as of you, business, important number we since contract report received

execution to which received later the XXXX pushing related certain So awards will certain than planned, we is of initially these right.

tasking, as an of to the these Included a and program, contract sole large organic driver or to satellite delays be a which related business are NDSA, pursuing, larger Defense we new is future numerous be is to including generation in growth long-term our that also the compromised source of Architecture was satellite opportunities National expected forecast related resilient threats, to There dissemination which layer new significant provide full and one which targeting seven are Space award anticipated different next additional control mission for data and future to programs. space architecture, at of assured include missile transport global worldwide scales, a layers, hypersonic battle and systems. closure also to latency to and including platforms, campaign provide a a indications, data layer management advanced command communications kill and layer to time-sensitive warning, missile connectivity low warfighter to chain range and of tracking military tracking support provide a

five dollars and stated live orbit $XX to Related be operate shorter want for per recently years about today’s hundred they cost cheaper Pentagon a to at to one million its the of different NDSA, expected seven week approximately anticipated industry billions military the few satellite function. than typical satellite at to decades. tons with are that The which satellites the can plans at kilograms satellites, and weigh each are provide which and smaller under constellations to having a each

space have This will equipment. orbit dozen which incredibly more. about plan for DoD expecting ground through is other all market XXXX CX, opportunity calls, program, has been transition large dozens provide part continue talking to and to of satellites believe the previous the announced then several Under its the to on we with Kratos an NDSA I launch to our SSA

We opportunity. new are this about truly excited

QX, our space have defined the previously. continued business expected and in in discussed we Also content the transition product mix, business to model software we

an hardware revenue transition products resulting a the to dedicated expect in defined margin. XXXX, architecture also continue We growth to reduced in expected but software rate, products higher open resulting legacy in EBITDA from analog

reduced mix program expecting saw higher a transition and organic We with business mix for margins. further growth over satellite with business are we in XXXX occurring in XXXX. of that’s XXXX revenue delays, revenues our profit and trend Irrespective XXXX XXXX certain growth for of this organic QX somewhat the over of solid expected

largest XXXX, be also received we mentioned is what initial award the a and I the airborne for as this expected $XX business the million programs before EW initial one at we production business, products end system. Electronics expected order received $XX million to Microwave new for of our production of And the

time and and Kratos’ microwave expecting revenue solid Unmanned that Satellite to Systems record Our business to Communications similar continue growth expected all XXXX. XXXX has currently an we growth over over XXXX are XXXX with backlog for businesses, organic

targets BMD XXXX. forecasting systems over businesses hypersonic CXISR Our for and also XXXX turbine are growth organic

With areas. forecasted programs of radar, a schedule. in systems missile, growth, engine on generation unmanned of driver including remain being and weapons next this systems initiatives the strategic hypersonic, key Kratos’ and Turbine’s BMD the recapitalization

a in new we to award contributing In received XXXX. we of fiscal QX CXISR, as immediately single million I mentioned, approximate $XX contract, begin expected recently which

award Kratos a to Kratos work protested now stop this the a has by However, with notice been issued competitor customer. resulting by

removed expected financial XXXX the Accordingly, is award guidance until successfully we have from single out the situation the contribution our of protest resolved. program initial

As the largest a quarter’s Royal U.S. remains training situation Navy with is I Saudi and on discussed in in previously. protest last we our also contract as earlier call, Kratos’ business, and discussed

through least As this Kratos uncertainty. working currently XXXX $XX expects of XXXX. continue currently reduction protest with situation being at XX impacting revenue due situation The March forecast Kratos’ XXXX to initial XXXX million is is to significantly approximate guidance the resolved, to an

update resolved. is this Deanna? situation We our will accordingly as guidance

Deanna Lund

Kratos’ timing our you, $XXX fourth of XXXX afternoon. production to to of our QX of $XXX expected just schedules as estimate Thank in quarter training of low and and the a good result CXISR Unmanned million below million, Eric, revenues primarily end the delays commencing ramped of starts $XXX.X XXXX. were million and production and Systems contribute business, businesses are certain forecast of now of received our and have which contract in the

revenues estimate space to adjusted of million, EBITDA mix million of $XX of million due our satellite at the primarily and communications, Our favorable businesses. to solutions our products $XX and high and in microwave $XX.X a execution, was training end of

$X.XX share share Our quarter. also for per adjusted EPS the per of our of $X.XX forecast exceeded to $X.XX

which X.X% we again year. of FTT, the acquired in contributed Kratos’ $XX.X in quarter compared revenues quarter, and the the million Excluding fourth for impact prior XXXX in revenues the which to grew

Importantly, XXXX in of we like there XXXX. in was no QX had CRA

operating generated $XX.X XXXX. or for million million revenues million million from $XXX.X up QX $XX.X million of In and of $XX in EBITDA XX.X% $XXX.X from of $XX.X of the XXXX of fourth in revenues up income QX KGS XX.X% Adjusted QX from million up XXXX. quarter,

of year-over-year. Excluding organically the increased impact acquisition, the KGS revenues FTT X%

expenses. revenues, positively revenues Operating income by higher a and impacted margin and and manufacturing adjusted were favorable mix EBITDA the in fourth administrative overhead leverage fixed software on including of quarter

a existing programs rate XXXX Revenues segment period are Unmanned quarter programs, drone new to is both of the $X.X million, primarily in mix development EBITDA or number expected on was in and including development tactical million for project our adjusted increased received. awards production This programs. for certain $XX.X profit into which have million X.X% mix of lower from XXXX and Systems increased to we forecast reflecting $XX.X XXXX are increases production continue in fourth a of full working XXXX typically programs margin than new in until production that

to income primarily an Our million, operating approximately in related acquisition. $XXX,XXX was quarter the ongoing dispute to of income fourth amortization $XXX,XXX the operating related XXXX QX down to with due an XXXX million from FTT consolidated of fees increased $X.X international of customer $XX.X legal and in

Our for operations from net is attributable non-controlling excludes compensation quarter loss million. including adjusted income to the fourth $X.X stock-based and of interests, cost continuing non-cash or consolidated EBITDA

costs gains of and $XXX,XXX and items other and legal Foreign $XXX,XXX and $XXX,XXX. and acquisition of related of restructuring transaction

for fourth which interest $XXX,XXX provision loss the includes of and basis, million, On $X a million of income and $XXX,XXX. a non-controlling of discontinued quarter operations $X was attributable net from GAAP tax to loss

to XXXX year fiscal revenues from $XX.X million increased For or XXXX. XXXX XX.X%

revenues year XX.X% organically. X.X% million, to EBITDA Excluding million $XX.X acquisition, or the increased which adjusted increased FTT contributed million. XXXX $XX.X Full $XX.X

balance liquidity. the sheet and to on Moving

outstanding. credit balance outstanding net million. and cash we end, at outstanding at of was debt At on quarter of $XXX.X December Debt $XXX.X $X.X end, million $XXX.X and line million amounts Our letters zero had quarter was credit our bank was XXth. million of

leverage of million Our a ratio X.X with X. $XX.X LTM to adjusted EBITDA net was

free flow million, million fourth of million. a was cash from $X.X flow generated use $X.X for the use operations of or Cash $X.X less capital quarter of expenditures

million, less for $X.X CapEx million was of flow cash cash generated For flow fiscal free of continuing $XX.X from million. $XX.X generation operations XXXX

the projects free PSS addition, certain to to $XX in compares FY receivable to XXXX collected expected due XXXX primary of $XX our the from $X.X expectation This disposition we million In retained flow with for variance related to collections million of cash business. we million legacy our the being estimated the that in at XXX not Solutions of XXX business. year end come before quarter This due contractual from did being DSOs end. increase days the the delivery days by long-term in end payments primarily project our reflected Training of in year the the was third to to milestone on at

The most significant industry or complete the in to and of of at of performance no as contractor. number being originally November. TforC what items planned in government convenience customer end period time training is the That a of delivered fault changed say. for or a contracting collection the exactly large from they at received program impacting occur the the TforC representing year time can convenience scope systems we government basically be the through on to milestone very termination simulator DSOs late a A was substantially that

until the long-term Under related as due the program to the has Kratos’ until these to settlement final contract, On milestone now is of are over to like government be XX% currently collect we system project, contracts, by million XX% achieved are receivable incurred this will the balance, customer amounts TforC, costs typically been XX% to XX% retention end, or withholds at however, amounts bill and project payments customer. billings primarily we with bill have $X with milestones paid on million. withheld We’ve nearly training able or accepted. of delivery or expected XXXX process last the by payments final $XX this termination the completed which not year these are

customer-requested Kratos’ delays separate certain schedule system a resulted XXXX deliveries a large resulted delivery training milestones configuration requested until also impacting forecast made. change Also customer billing training unit in cash which modification system This are schedule delivery in for program. �� with delay, from

$X A and program As XXXX XXXX a been an billings million. was quarter estimated to have this our by deliveries contract time pushed XXXX situation cost mix and result, for price, plus, approximate XXXX. XX% With impacting from materials. fixed and now XX% X% the

were from XX% the commercial Federal XX%. for customers. We revenues customers DoD, generated non-DoD Government XX% from the government with contracts from including Revenues federal contracts, XX%, approximately which contracts approximately and with the FMS agencies U.S. generated and were from quarter foreign generated

X. ratio for the to to was for was quarter the book-to-bill Our XX X.X and trailing months X.X X,

were bookings backlog $XXX.X million $XXX.X quarter, of million. for the total with Our

bookings for the $XXX.X were Our million. year

an cash guidance $XX we million. XXXX to and $XXX million. $X of flow use million. year million EBITDA $XX of a providing $XX $XX are generation Operating initial to of a Today, expenditures million million, free for capital of to a full $XX revenue $XX of million Adjusted flow of XXX to $XX And million million. cash guidance to

number a guidance assumptions includes factors discuss. initial Our of will and I Excuse me.

the XXXX the end being fiscal our As you CR the with of DoD approved. the resolution resolved at begin December year with know, being industry had a to three-month continuing budget

contracts. you call new no cut CR, quarter’s with discussed under we new there As increases programs and last no new on production production start, a on cost no are existing

and very commence numerous new over programs we our in program in production past which receiving discussed, As we that are has currently production the to when Kratos in expected. development expected currently years, awards, few increased are with been the production successful reported programs QX with initial

a that have financial our forecast more XXXX was current stated delays forecast. so cost. could wait we of CRA This the was result now that we our information would that Kratos’ near to initial provided potential reason XXXX large provide new of until we guidance our As programs we at to number exposed term primary

XXXX ramp today’s programs initial and In the and right the impacting months program This first often summary, the ramps three half CR into taken up execution second basically guidance. expected from XXXX. is of approximately certain more year in pushed the a our number pushing program of and expected into XXXX to contract expected to six consideration half or forecasts into awards

deliverables Additionally, excluded until or XXXX continue scope, and we exclude tactical our from contract or their which initial financial related we timing, receive battery production contribution. revenue, awards and will have system understand guidance we to drone any other tactical exact

our we also have you significantly RSN USN with guidance initial which the year. protest last which in, reduced contract We discuss Eric for XXXX app and situation, also mentioned factored will

program The this USN of rates from to expected app that the currently is $XX margin revenues reduced estimated and to situation and million training due $XX million protest million new contractual $XX Navy structure. impact and approximately reduced

legacy XXXX, eliminated million decline $XX headwinds is continued $XX also any factoring approximately our Even have XXXX guidance, forecasted by from also into we operation revenue million to government over million. of for million reduced we guidance $XX and quarter business. our $XX organic for have the the our award XXXX unit guidance. of XXXX the business XXXX factoring except was a which our all growth tempo solutions first is when impact to our contribution current from the competitor forecasting business which received, protested from and services government We The of services been initial RSNF CXISR every inventory Kratos’ contract training has from these guidance reflected business, considerations in

reflected building prior we For Eric to are forecasting to leading to which includes $XX production be related approximately capital expenditures. million $XX of mentioned we will had to million XX expenditures drones that contract capital which million fiscal see, is million, and currently XXXX planning and Valkyries. company-owned XX tactical Kratos forward $XX the as

Once cost we have revenue a awards, the contract generating program. be to transfer received will

opportunities million in to investments to approximately small development we in approximately forecasting And lease businesses. to order business certain for capital Kratos requirements. million our machine $X drones of We’re at million engine or other investment, KTT are capital and to approximately related be on also target on hand to plan in satellites $X we that customer quickly forecasting aggregating have million for CXISR $XX address $X building able new

be reflecting our reflecting estimated XXXX past expected impact is that the over in to to increase million $X.X to of taxes our approximately years. year million expenditures depreciation million we for be losses at is to the flat $XX $X for to have Amortization million expect $X per approximately cash increase XXXX million few over incurred approximately capital for and FY $X approximately expected million $XXX have. net XXXX We the operating we in

intends expense address to to the way comparable basis. adjust increase a EPS of expected metric provide this computing impact year-over-year purposes on forward company for to more The going adjusted to depreciation of

for EPS of compared As share. FY XXXX adjusted per using adjusted forecasted $X.XX for adjustment depreciation XXXX such, is similar a $X.XX to FY $X.XX to the expense EPS

First quarter compared EPS adjusted $X.XX to at of $X.XX a on forecasted QX basis is to $X.XX XXXX XXXX per share. comparable Eric?

Eric DeMarco

you, Thank Deanna.

in that you. closing, attributable cost the with Valkyrie, low performance tactical disclose class Airwolf. The has Kratos drones high I Gremlins, four in So our flying can Mako jet today

and competitive we others several the certain only affordable drones have disclosed this security that not including development today, other related company class with we in are have for considerations. flying are in We or

will LCAD, As We Arsenal represented disclosed there believe programs. DoD by certain demand and Plane, programs Gunslinger most including has to Vanguard, that drones Skyborg, The be Kratos. future DARPA’s ABMS, significant date, like the recently LongShot for

Valkyrie in Force We Skyborg budget. will We fiscal believe that that the what System was the execute, attritable called be reflected in services see April successful. expects will most is next to an last the the the Where fly Force Force Management stated the Air believe XXXX that reported if by that recently the Battle that momentum Advanced drone continue we experiment by we’ll Air the program week. and we in Air just Kratos has

over moderator With that, I’ll turn it questions. the for to

Operator

first Sheila you. comes Kahyaoglu question with Thank from [Operator Jefferies. Instructions] Our

question. with may your proceed You

Sheila Kahyaoglu

some Eric, items just Good and thank Thank all for you you. Eric don’t Valkyrie I those the if comments. afternoon, of wanted to mind. Deanna. you clarify

in right, a we What about just little the the pieces for thinking but we related unmanned to moving late. through was then how slipped a go on through should budget be place. bit we profitability And bigger the it and are that as to mix? timeline the walk into that? picture mentioned on have you Valkyrie XXXX the You XXXX Can

Eric DeMarco

Right.

about you So reach go on and Valkyrie, out that what’s publicly to. I’ll can Sheila, there talk

for announced be the months. that of As I sometime in Force has ABMS million will future be if my line integrated in interchangeably, XXXX in you adequately heading for flying in LCAD into week, million congressional for some Force adequately were $XXX. at another If the the experimentation. its few take line There’s that the there a last is and of XXXX to $XXX a and towards prototyping another that’s of and about budget the transition like its and Skyborg ads of the $XXX for Skyborg budget, of months. the specifically with the stated and the experimentation a mentioned, program funded next flying couple next ties both heading we’re they is there’s Air an all the budget, the exercise going It’s we Force program The project XXXX. for There’s for demos Air F-XX to look was in F-XX funds That Air program, technology The XXXX. the and there. the I $XX in million. what funded tech is lines, Valkyrie in understanding that believe Skyborg program they – Skyborg talking

we execute, to successfully to So continue to fly. question, need to continue your successfully

discussions of customers of talked about belief right with we our as for, what’s in because are We happen. contract now awards, to about

We are build. to starting

building We XX have Valkyries. production begun initial

of first can of month these then first one start every delivering month we a in year and two or thereafter. the So the next deliver quarter

So, tracking we if succeed. we're going we that we’re to believe we and execute,

Sheila Kahyaoglu

XX assume now correct in XXXX million that production So, it is to guide, but guidance? the so $XX the vehicles was the to six there months those are right, that

Deanna Lund

sure not Sheila, guidance. first quite we’re you’re asking. is giving Well, the we’re XXXX This what time

provided So we there not previously. guidance because previously was included nothing have

Sheila Kahyaoglu

prepared slipping the by you months. a remarks right in to said, Okay. comment There to the was six alluded

of wanted just was timing delivery? I to production that the So, clarify the

Deanna Lund

Yes.

the a the we’re $XX related XXXX the impact to Royal that’s was million slip reflected that from there Naval is the the about talking The So schedule guide. is Forces XXXX in XXXX. in training production estimated Saudi to of and program,

Sheila Kahyaoglu

then profitability, there follow-up any Okay. that? is Got you it. And the – a to if guys on unmanned just bridge can you way

Deanna Lund

Sure.

And then rates. the a so an two income. other that piece – So in to the quarter developmental from $XXX,XXX the on XXXX, is side as production is the there’s rate customer international legal are margin dispute the of mix margin target income typically operating a of perspective fees programs. for related It’s included approximately fourth international customer an compared an with of more which operating focused to standpoint, lower quarter, in of programs, the fourth

Sheila Kahyaoglu

you. Thank Okay.

Deanna Lund

Sure.

Operator

Thank you.

comes Skibitski Pete with Alembic from question Global. next Our

You may proceed question. with your

Pete Skibitski

Hello guys. Yes.

you $XX and tell us CXISR maybe do executed like the XX to protest On it? think million would on it. the the over years if is it’s protested, you name retain when of be to expected program And when period many the that at how can days then been be up? didn’t rule I

Eric DeMarco

Right.

literally more don’t for now. the the program, to you’re full it’s with on The customer because the is to here. active want I want it were over GAO, So, period Peter, it’s XX to the involved was because XXX, looking – no five right burn ratably. fairly name get the years, don’t I on – publicly we run days. and four, Typically it than right

Pete Skibitski

Got it.

update Okay. of Then competitions? Can us Rocket just follow-up. The one Solid the BMD Target, on you some ones. Motor hypersonic

the can did third never and think, you Last a won sense in an the running one execution had one. update on that a you you’ve that got kind size and third got think of also, period and I a one I maybe you year. still one, the last second for when? one of I was And the us

Eric DeMarco

Right.

one million. were contract is that us The to options single it we start the and we $XXX I’ll there. over that base contribution and So on, all one a period award projected – the the successful was

to third us. it is period. year that’s it year much expected and we’re On to awarded and And about later going this That’s, I’m be for to to Okay? one, be solicitation – going not enter to the it’s expected talking it. to because this contribution compete it’s is the be about there a

Pete Skibitski

Okay. years The that $XXX over? was million, how many

Eric DeMarco

was that The protested? one

Pete Skibitski

one, Another you won the first one.

Eric DeMarco

up. over was one that Oh,

probably, Six six seven. or seven. to going or was it We’re

Pete Skibitski

guys. Okay. Thanks

Eric DeMarco

Yes.

Operator

Thank you.

comes Herbert Our next with Ken from Canaccord. question

question? with may You your proceed

Ken Herbert

Hi, Eric good and afternoon, Deanna.

Deanna Lund

Ken. Hi,

Ken Herbert

wanted just you or obviously budget. Skyborg for from it follow-up Valkyrie. fully fiscal obviously Valkyrie or customers and the intensity the you Force. like ABMS. Skyborg right the schedule priority Valkyrie a the forward? on not it’s of the I the the and looks think made enacted have obviously terms part now priority comment or a that as and your of funded And I it XXXX Eric, list view the you Air how you programs or broader but, think just your that’s high customer the just but to moving is around elements unfunded you if changed ABMS do Hey, on in intention comment, as, believe mean, But it’s Can of you through

Eric DeMarco

it the XXXX, it why they said and Force Air not was they the using Valkyrie program where – but Skyborg as point in send to of And the interchangeably. I’m drone one and specifically number They I Ken, here, Skyborg to XXXX I’ll can Right. you. they attributable on may I, they’ve they I said to one remarks believe being a and record because the going Skyborg the is XXXX the them was changed. by program so paraphrasing priority. Air move Force reported be that felt of believe, reported that in said, were the was this It is priority reasons week that adequately I you already – list, think, last I were to definitely unfunded in was funded the Where spot and XXXX.

further they said going entire which think believe the enthusiasm very very, high be I are as remains by And now. for further, that I to available we is publicly my represented is their program, opinion

for very very we and that over We’re going the includes reiterate the high the that ABMS involved to the believe, happen year with performance, things a are to drum. out are course very, program a there we’re F-XX those and the expected which happen F-XX be obviously and other are the publicly enthusiasm low going of that ones cost aware or to are of of that this number soon,

Ken Herbert

for investing, XX year do the I’m imagining, just the visibility expect you’re you – in the of million testify year? on Valkyries. of a April in on contract CapEx on April $XX after this Thank the change you. production later visibility better or mean, to scheduled you expecting I And Okay. the Are

Eric DeMarco

sorry. I’m prepared now, remarks. to getting comment the going beyond I anybody. because not of not of I’m where right Ken, things ahead I’m are

Ken Herbert

That’s great. Okay.

year Just $XX fully January. spending you’ll to produce capital I’m you in or is the early start question. Again you well? XX going deliver, on said those year the as prepared final expect be one XXXX into preproduction, million guessing to to or I spill the think next this or to Do in that

Eric DeMarco

a good question. That’s

planning are Valkyrie one QX, then first and or month every we – on delivering We’re thereafter. in or Valkyries the two

Ken Herbert

Okay.

units. those obviously the XX that CapEx, both We’ll XXXX this year – production and like spill sounds So XXXX from but the of will this funds year. CapEx it cover

Eric DeMarco

it. Correct. if on we And based that increase Exactly. increase input, we’ll the XX then

Ken Herbert

Perfect.

Thank Okay. you.

Eric DeMarco

Sure.

Operator

you. Thank

comes next Our from with FBR. Crawford Mike Riley question B.

your question. proceed with may You

Mike Crawford

Thanks.

we recognized pricing, capitalized Given revenue better expected if then that’s have quantities, and ketchup timing. also until unknown? builds complete that guidance as revenue percent will into that excluding you get and that like be on Once Valkyrie being structure based be that, milestones and visibility a that – it you’re you there a or is fees will is

Deanna Lund

on the that would on of be of At a this that’s point, the expect complete we is total Mike, what cost, completion would the based expected. percent percentage cost,

Mike Crawford

Yes.

reported, say would the we Just know to second a when quarter, got CapEx second you’ve a from then ketchup progress like these things revenue there on – move I be work see hypothetically, guess and an quarter in award, as don’t I and… let’s

Deanna Lund

would That be Yes. the expectation.

Mike Crawford

$X.X the but Thank million, that's And billion pipeline in targets? unmanned, like of just you. XX% Okay. that's so it's the for $XXX then – on proposal been

Eric DeMarco

Yes.

Deanna Lund

Yes.

Eric DeMarco

Yes. may substantially be a cat in there, there absolutely substantially, or but And that's dog I'll drones. say target all

Mike Crawford

F, then renamed? initial of for when Program Is get that for And Okay. that it like why could start low-rate that to sort or was renamed, you on when the anything any production Airwolf, there expectation program? was

Eric DeMarco

flights maybe final, in expected are them to scheduled. call several a deliver the we assuming in successful, it what of would between be QX – I'll of the justification year. year is I second will And for – units. have now. number number we're the that name. half then are to say made next that And decision XX the the begin change And just some flights was And and that's X we a those

Mike Crawford

great. you. Okay, Thank

Eric DeMarco

you. Thank

Operator

you. Thank

from Seth Our next question JP Seifman Morgan. comes with

question. proceed with your may You

Seth Seifman

the wonder second of afternoon. the third good we and the the rate down, in how are what much getting target that very target million third was about guess, it then, we beyond? you can we and point I to come do to moving previously. And drones in reproaching Why forward? $XXX in the when of the quarter that, what and closer came or just kind in it see the I mid-XXs do get drones, just thinking saw that down Thanks at back something to where trajectory mid-XXs kind then kind can of did were that we to run unmanned provide see quarter business, themselves?

Eric DeMarco

Right.

there the year. Navy, because been production. into FRP baseline going be to I executing – on at specifically to can we've two now the that development. a and we're planned So XX been are initial XX The with go we've is are of there, mentioned indicated moved about talk moving LRIP. and on is They it's program, to one out where XX BQM-XXX that to they information programs per public year quantity per have or we've I in those full-rate LRIP as the Both programs

five-year negotiations be annual entering going are build those AVSAT, the have to build been Air that – to a the to then next the million in that quantities there, five-year going on and to be program we one higher to to that's that $XX that program, And it so levels. up the at at step we appears build see $XX is expected million And get is moving that Force for somewhere confidential and FRP the revenue. previous

There factors have those that those and some what trajectory ups that been has the some ones. those and up have have they're and So for are of not we handfuls of up that – years. – and that's operations of have see production too not that years And international three timing the you every and annual two down those one are ones the causing big ups the on the the before, every are the the operations. customers are how we recurring. and international drones going mentioned been downs two are certain There caused happen that of

international importantly, international service-type ones, a certain customers, they do very these And of on the model. Seth,

what pay an for they'll to called work that flights, for set of So arrange to XX be will fee month's do one – in with will drones are out for for a those example, bring is worth they representations. exercise month my us which paid

year they they if shoot year. and one buy them they the If XX next down down they so shoot the the year, shoot drones, down XX and

in they down. quarter more, XX when it like they shoot cause shoot an them they we when because build that we get that down course, can to down increase shot that Of more

Seth Seifman

do with regard Okay. talked will outlook, level visibility And you what have you toward the guess, year some of XXXX. this that then backlog higher I be at end of it the that to exiting was than about confidence guess, XXXX? I

Eric DeMarco

we own else it's and the we looking the it Seth, When to the one that we're to in to on full in was and going XXXX important the XXXX airplane If it's is, your where of what's going follow and this our the expected will, be no take – on, very a it's build timing timing a data XXXX may not holds, point point contract high right And award, it. what's let's now – five-year a production. But in what rate contract request. five we years budget, going get if to contract sole-source holds on full-rate the backlog. rights to because very be some production, can put in the then it's – we're that very, the

only put single though as award, at do sole-source one-year one-year. will even a contract. funded, we it. the way it's It's a time in in We We put it's five-year

keep that please So mind in also.

Seth Seifman

Thanks great. much. Okay, very Thanks.

Eric DeMarco

Yes.

Operator

with [Operator question Peter comes Instructions] next you. from Baird. Our Arment Thank

You may question. proceed your with

Peter Arment

afternoon, guidance biggest we I takeaways I to in factors to questions Eric, thinking But tied the Eric, guess should lot I the do, Deanna. have a of that guess percentage Yes, Valkyrie. just factors swing wanted – good million of about there's obviously two been in the be been would complete, contract, Valkyrie have be we that any guidance. don't about? swing under thinking Saudi fact from those you which two and XXXX the should Is are then the big the $XX are the

Deanna Lund

correct, That's Peter.

that The $XX other to government year-over-year pieces business legacy expected is decline million related to well. as services our

services revenue related you've reporting Valkyrie. Saudi, got of So to the on exclusion for then million production on and $XX orders any the

Peter Arment

follow-up And Okay. that. if I then just to could

the So else call given kind of you the what's the anything XXX when at the Is there factor seven XXX that and that looking biggest we're would swing you've – out? Eric, out?

Eric DeMarco

I'm full on noodling. No, there's I'd that nothing else right now Nothing. call out year. the

Peter Arment

Okay.

Eric DeMarco

Nothing else to… or – no comes individual item program

Peter Arment

planned always So sometime that during that – demonstration and to know have Airwolf XXXXs. I flights was

Sounds sounds revenue in that like correct? that in lot opportunity got but like XXXX, QX you've is more a

Eric DeMarco

I of a one, yes. material say, Yes, would

Peter Arment

helpful. that's No, Okay.

You've answered again, Eric. Thanks my question.

Eric DeMarco

you. Thank

Operator

Thank you.

Our next Sachs. Goldman with question comes from Noah Poponak

You with question. proceed may your

Noah Poponak

everyone. Hello,

Eric DeMarco

afternoon. Good

Noah Poponak

you do Valkyrie When a expect now award?

Eric DeMarco

I Crawford's any I believe As out am to on Mr. discussion the I with in times – customer. as going said question. put not there we're

Noah Poponak

not finalization finalization – XXXX budget budget has in wants – still happened hasn't the had customer what or and in a expected occurred that you're if occurred enthusiastically what XX-day that said, confused window window changed the why this within you award thought – capability, mid-December days in I'm of the guess as, Okay. Eric, so previously changed? XX-day what you it an XX from I

Eric DeMarco

customer is That And ones. of it In complete months made changed recovery that my mind investigation is into we investigation is to decision an a few have happened. anomaly and item primary Valkyrie. now. when do a the what on in is the the one The – system took that opinion, my the primary

Noah Poponak

time from incident until of took how time the exactly of investigation So upon long? resolution that agreed

Eric DeMarco

Yes, a Hold half on. or three four months. and

Noah Poponak

I… Should Okay.

Eric DeMarco

it third right, to the anomaly is occurred scheduled were happened after to had that Noah, had pushed the additional out flight weeks flights out just be we We turned that where – flights the a immediately few which fourth ago. the

Noah Poponak

the plan XXXX? quarter below was for Okay. your of What fourth

Deanna Lund

business. couple business there that delays some And in vendors our were as our then… modular execution with of well CXISR some we’ve So systems in some unmanned had as of timing production our

Noah Poponak

are XXXX those have you revenue in Do guidance? Okay. – your

Deanna Lund

Yes.

Noah Poponak

to spent one new a eventually regard with sort then this your production about to a learning it’s hand of before, we’ve but much they getting down own curve and on programs and on trying already rate getting a of asked and you’ve to the But be are can margins, in discern industry before And higher the R&D lot then dollars. little full the tricky margins. hand, dilutive, margin this Okay. you other

incremental suggest would You’ve on place have lot that facilities already margins. empty, are a good you have through – already and new which really the these programs would in capital in that drop of revenue

You’re your guidance though, more for guiding you revenue much implies XXXX would. down. thinking all we including were Even margins newer to program are than of – not the you

that? So rate Is there a about direction closer helpful. it how longer is year is are could the run dilution margin? full thinking one can a – would – to should it it shut we they lower rate? Any be be more Or basis? is get margin than you you until light of Or on that

Eric DeMarco

what on. first – said part absolutely the spot of you Right. was No

about to unmanned talked said. some as as on you’ve biggest before back and a ramping, We of [Audio Dip], have dilutive I’m to development particular – programs for business, our number new margins those Thanatos. one in being are that I’ve programs reasons, the that are scaling of going and the And of pure be

Gremlins. margins exist Going or covering for the into significant, expect orders fixed be they’re production, receive as Valkyrie today the are coverage we that on when that those would quantities. the Exactly we production have to you manufacturing overheads don’t facility in because going said, fully

So you’re on correct that.

we I building that now of manufacturing lots competitive do City, want have drones for – facilities. want address we – not empty in Oklahoma said I you we are to just reasons… jet don’t to fire right Now them. that

Noah Poponak

I will empty, less efficient they ultimately… meant just I shouldn’t said have than

Eric DeMarco

see hopefully certain they’re on Correct. going we margins and target to full the margins. way we drone units, we as as the lower things development we LRIP offsetting those But more and production move the on correct. materialize rate side, materialize your of these is thesis deliver from believe higher programs to But tactical as being

Noah Poponak

Okay. Thank you.

Eric DeMarco

sir. Yes,

Operator

Thank you.

from comes Our with next Joe question Capital. NOBLE Gomes

question. your with proceed may You

Joe Gomes

Good afternoon.

Eric DeMarco

Joe. Hi,

Joe Gomes

guys successful the something you their you just about you wondering Valkyrie, expansion. and flight about that. by what us mentioned were I envelope fourth And talking substantial was meant When

Eric DeMarco

maneuvers. put – that’s publicly out believe been has I been what what faster higher, it’s is believe I and I there, more believe disclosed.

Joe Gomes

of there give to were didn’t had as AeroVironment. talked and about you as one and maybe early can’t anything flight you able XXXX And might mention an Okay. you previously be on you talking an previously update. know us I you the

Eric DeMarco

Absolutely.

So since remarks. I prepared it asked, I’ll touched on briefly the in specific. you’ve be But very

the have systems. tactical We drone AeroVironment

at and of integration sent them followed specifically facility. have begun. last me CEO with I actually We AeroVironment was has week our he we on and System up it. this the something today just on

range I can is So that flex only item the range in see QX. timing getting and timing the pencil things are the specific slot tracking or

Joe Gomes

might with towards just Okay. us just either last your I company. a that mean positively give acquisition. saw And might we one one, what negatively quarter as Dynetics last or And if little that obviously, to the relationship was color wondering, you

Eric DeMarco

just what that there Lido a nothing is ours. mode and us. very seen with has and great hopeful because company. them our no and They’re say of We’ve as And operating I specifically to entity, in I of staying function – to few Dynetics. been announced they weeks, we have Dynetics to same a have the President I related has at be David an as combined that change their King, few fantastic. a be relationship partner pleased CEO very, with with I – the all meeting you was of see will incredible is yet am will extremely know, scheduled teammate Dynetics in the of him a the in

Joe Gomes

Okay, great. Thank you.

Operator

Thank you.

from next with Sheila Jefferies. Our question Kahyaoglu comes

question. your with proceed may You

Sheila Kahyaoglu

if again. Hey, I you a on mentioned follow-up that’s I Thank Eric, okay. you, questions XX have BQM-XXX, guys. think two year.

previously, had range. I XX misunderstand think or or is You a talked ramp next a is about year? Did I the number to in correct there higher XXX that

Eric DeMarco

on initial year right will by I specifically Right? year it’s what and What there in – is rate the that, publicly at full out one quantities been initial want what’s and people what other other about public, any The That’s don’t is wanted that to since that. to drones. beyond – I – XX there that’s it. now by, I update saying released production one say has not Sheila, talk I’m out

Sheila Kahyaoglu

what or the is number misunderstood than XXX have guess lower to see not I that XX I a were expected – referring to that’s Is Okay. is rate to. you or full what you

Eric DeMarco

That initial initially expected. somewhat Yes. number I is lower than

Sheila Kahyaoglu

Got Okay. it.

Eric DeMarco

We’ll see we move as forward. happens what

Sheila Kahyaoglu

the then, you this to you last this, harp And expect award Valkyrie. sometime on one question on Okay. said, Do but – integration month. you a sorry

how change, you’re So or… about would that thinking it

Eric DeMarco

careful insinuate I not to No. I I that said apologize. Sheila, have did, that, I been if apologize. any timing, insinuated very if so or I

Sheila Kahyaoglu

you Thank much. Okay. very

Eric DeMarco

Okay.

Operator

you. Thank

Arment question Our next from Peter with comes Baird.

with question. proceed your may You

Peter Arment

Yes.

up question. similar on following a Just

payload later the is integration the initial related award point year and quarter. not So production this some in system

Eric DeMarco

going going I’m say going I’m Peter discussion right literally on to going now. timing I’m interactions is and not to that. it not say to The are – say, any on it.

Peter Arment

Got it. Eric. Thanks, That’s helpful.

Operator

I’m this Eric remarks. further the would now for to turn at questions any time. further And I to over back not you. like DeMarco any showing call Thank

Eric DeMarco

Great. today us report all look joining to talking Thank and to you for forward when QX. we you we’ll

Operator

this you gentlemen, concludes and call. Thank participating. Thank you. for conference today’s Ladies

Kratos Defense & Security Solutions (KTOS) 24 Feb 202019 Q4 Earnings call transcript