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Kratos Defense & Security Solutions(KTOS) - 2024 Q3 - Quarterly Results
KTOSKratos Defense & Security Solutions(KTOS)2024-11-07 21:13

Revenue Performance - Q3 2024 revenues of 275.9million,a0.5275.9 million, a 0.5% increase from Q3 2023 revenues of 274.6 million[1][4] - Q4 2024 total revenues reached 275.9million,withservicerevenuesat275.9 million, with service revenues at 103.9 million and product sales at 172.0million[28]−Fullyear2024totalrevenuesamountedto172.0 million[28] - Full year 2024 total revenues amounted to 853.2 million, with service revenues at 316.9millionandproductsalesat316.9 million and product sales at 536.3 million[28] - Total revenues for the three months ended September 29, 2024, were 275.9million,slightlyupfrom275.9 million, slightly up from 274.6 million in the same period in 2023[35] Unmanned Systems Segment - Unmanned Systems revenues of 64.2millioninQ32024,upfrom64.2 million in Q3 2024, up from 56.7 million in Q3 2023, with 8.7% organic revenue growth[1][4][7] - Q3 2024 Unmanned Systems Segment (KUS) bookings of 32.6millionanda12−monthbook−to−billratioof1.1to1.0withbookingsof32.6 million and a 12-month book-to-bill ratio of 1.1 to 1.0 with bookings of 295.1 million[9] - Unmanned Systems segment revenues for the three months ended September 29, 2024, increased to 64.2millionfrom64.2 million from 56.7 million in the same period in 2023[35] - Unmanned Systems segment Adjusted EBITDA for the three months ended September 29, 2024, was 3.6million,representing5.63.6 million, representing 5.6% of revenue, down from 5.4 million (9.5% of revenue) in the same period in 2023[36] Government Solutions Segment - Q3 2024 Government Solutions Segment (KGS) bookings of 234.6millionanda12−monthbook−to−billratioof1.1to1.0withbookingsof234.6 million and a 12-month book-to-bill ratio of 1.1 to 1.0 with bookings of 945.0 million[12] - Kratos Government Solutions segment revenues for the three months ended September 29, 2024, were 211.7million,downfrom211.7 million, down from 217.9 million in the same period in 2023[35] - Kratos Government Solutions segment Adjusted EBITDA for the three months ended September 29, 2024, was 21.0million,representing9.921.0 million, representing 9.9% of revenue, down from 22.3 million (10.2% of revenue) in the same period in 2023[36] Bookings and Backlog - Q3 2024 consolidated book-to-bill ratio of 1.0 to 1.0, with bookings of 267.2millionanda12−monthbook−to−billratioof1.1to1.0withbookingsof267.2 million and a 12-month book-to-bill ratio of 1.1 to 1.0 with bookings of 1.240 billion[1][13] - Q3 2024 consolidated backlog of 1.294billion,withfundedbacklogof1.294 billion, with funded backlog of 1.098 billion and unfunded backlog of 195.4million[13]FinancialGuidance−Q42024revenueguidanceof195.4 million[13] Financial Guidance - Q4 2024 revenue guidance of 270 million to 295millionandfull−year2024revenueguidanceof295 million and full-year 2024 revenue guidance of 1.125 billion to 1.150billion[16][17]−Full−year2024AdjustedEBITDAguidanceof1.150 billion[16][17] - Full-year 2024 Adjusted EBITDA guidance of 102 million to 107million[17]−Kratosexpectsbasecaserevenuegrowthofapproximately10107 million[17] - Kratos expects base case revenue growth of approximately 10% for fiscal year 2025[18] Adjusted EBITDA and Operating Income - Q4 2024 Adjusted EBITDA was 24.6 million, compared to 27.7millioninthesameperiodlastyear[27]−Fullyear2024AdjustedEBITDAreached27.7 million in the same period last year[27] - Full year 2024 Adjusted EBITDA reached 80.5 million, up from 66.3millioninthepreviousyear[27]−Q42024operatingincomewas66.3 million in the previous year[27] - Q4 2024 operating income was 6.5 million, down from 12.2millioninQ42023[28]−Fullyear2024operatingincomestoodat12.2 million in Q4 2023[28] - Full year 2024 operating income stood at 26.0 million, compared to 19.4millionin2023[28]−AdjustedEBITDAforthethreemonthsendedSeptember29,2024,was19.4 million in 2023[28] - Adjusted EBITDA for the three months ended September 29, 2024, was 24.6 million, compared to 27.7millionforthesameperiodin2023[33]−TotalAdjustedEBITDAfortheninemonthsendedSeptember29,2024,was27.7 million for the same period in 2023[33] - Total Adjusted EBITDA for the nine months ended September 29, 2024, was 80.5 million, compared to 66.3millionforthesameperiodin2023[36]NetIncomeandEarningsPerShare−Q42024netincomeattributabletoKratoswas66.3 million for the same period in 2023[36] Net Income and Earnings Per Share - Q4 2024 net income attributable to Kratos was 3.2 million, compared to a net loss of 1.6millioninQ42023[28]−Fullyear2024netincomeattributabletoKratoswas1.6 million in Q4 2023[28] - Full year 2024 net income attributable to Kratos was 12.4 million, compared to a net loss of 11.3millionin2023[28]−NetincomeattributabletoKratosforthethreemonthsendedSeptember29,2024,was11.3 million in 2023[28] - Net income attributable to Kratos for the three months ended September 29, 2024, was 3.2 million, compared to a net loss of 1.6millionforthesameperiodin2023[41]−Non−GAAPAdjustednetincomeforthethreemonthsendedSeptember29,2024,was1.6 million for the same period in 2023[41] - Non-GAAP Adjusted net income for the three months ended September 29, 2024, was 17.2 million, up from 15.7millioninthesameperiodin2023[41]−DilutedearningspercommonshareforthethreemonthsendedSeptember29,2024,was15.7 million in the same period in 2023[41] - Diluted earnings per common share for the three months ended September 29, 2024, was 0.02, compared to a loss of 0.01pershareinthesameperiodin2023[41]−NetincomeattributabletoKratosfortheninemonthsendedSeptember29,2024,was0.01 per share in the same period in 2023[41] - Net income attributable to Kratos for the nine months ended September 29, 2024, was 12.4 million, compared to a net loss of 11.3millionforthesameperiodin2023[41]−Non−GAAPAdjustednetincomefortheninemonthsendedSeptember29,2024,was11.3 million for the same period in 2023[41] - Non-GAAP Adjusted net income for the nine months ended September 29, 2024, was 54.1 million, up from 35.3millioninthesameperiodin2023[41]−DilutedearningspercommonsharefortheninemonthsendedSeptember29,2024,was35.3 million in the same period in 2023[41] - Diluted earnings per common share for the nine months ended September 29, 2024, was 0.08, compared to a loss of 0.09pershareinthesameperiodin2023[41]CashFlowandLiquidity−Cashandcashequivalentsincreasedsignificantlyfrom0.09 per share in the same period in 2023[41] Cash Flow and Liquidity - Cash and cash equivalents increased significantly from 72.8 million to 301.5million,reflectingastrongliquidityposition[37]−Totalcurrentassetsrosefrom301.5 million, reflecting a strong liquidity position[37] - Total current assets rose from 594.2 million to 838.4million,indicatingimprovedshort−termfinancialhealth[37]−Long−termdebtdecreasedfrom838.4 million, indicating improved short-term financial health[37] - Long-term debt decreased from 219.3 million to 177.0million,showingareductioninfinancialleverage[37]−Netcashprovidedbyoperatingactivitiesimprovedto177.0 million, showing a reduction in financial leverage[37] - Net cash provided by operating activities improved to 4.1 million from a negative 2.2million,signalingbettercashflowmanagement[38]−Capitalexpendituresincreasedto2.2 million, signaling better cash flow management[38] - Capital expenditures increased to 44.6 million from 33.1million,reflectinghigherinvestmentinproperty,plant,andequipment[38]−Proceedsfromtheissuanceofcommonstock,netofissuancecosts,amountedto33.1 million, reflecting higher investment in property, plant, and equipment[38] - Proceeds from the issuance of common stock, net of issuance costs, amounted to 330.7 million, indicating strong equity financing[38] Balance Sheet and Liabilities - Accounts receivable decreased from 329.2millionto329.2 million to 319.1 million, suggesting improved collection efficiency[37] - Inventoried costs increased slightly from 156.2millionto156.2 million to 158.9 million, indicating stable inventory levels[37] - Total liabilities decreased from 634.0millionto634.0 million to 569.5 million, reflecting a stronger balance sheet position[37] Non-GAAP Metrics - Adjusted income from consolidated operations excludes amortization of intangible assets, depreciation, and stock-based compensation, providing a clearer view of operational performance[40] - Non-GAAP Adjusted income from consolidated operations before income taxes for the three months ended September 29, 2024, was 24.6million,upfrom24.6 million, up from 22.6 million in the same period in 2023[41] - Non-GAAP Adjusted income from consolidated operations before income taxes for the nine months ended September 29, 2024, was 77.8million,upfrom77.8 million, up from 50.8 million in the same period in 2023[41] Stock-Based Compensation and Depreciation - Stock-based compensation expense for the three months ended September 29, 2024, was 7.2million,upfrom7.2 million, up from 6.4 million in the same period in 2023[33] - Depreciation expense for the three months ended September 29, 2024, was 8.1million,upfrom8.1 million, up from 6.7 million in the same period in 2023[33] - Amortization of intangible assets for the three months ended September 29, 2024, was 2.2million,upfrom2.2 million, up from 1.5 million in the same period in 2023[33] Future Growth and Profitability - The company expects significant future organic growth, profitability, and cash flow from investments in tactical drone and satellite areas[22] - Kratos anticipates improved revenue mix and profit in certain business segments, with sustained year-over-year revenue growth[21] - Kratos is manufacturing ~165 jet drones annually, with plans to increase to ~400 annually, including Valkyrie[14] Share Count and Weighted Average Shares - Weighted average diluted common shares outstanding for the three months ended September 29, 2024, increased to 154.1 million from 129.6 million in the same period in 2023[41] - Weighted average diluted common shares outstanding for the nine months ended September 29, 2024, increased to 147.8 million from 129.3 million in the same period in 2023[41]