KTOS - Kratos Defense & Security Solutions Inc. (KTOS) Q4 2023 Earnings Call Transcript

2024-02-13 21:25:05 ET

Kratos Defense & Security Solutions, Inc. (KTOS)

Q4 2023 Earnings Conference Call

February 13, 2024, 05:00 PM ET

Company Participants

Marie Mendoza - SVP, General Counsel

Eric DeMarco - President and CEO

Deanna Lund - EVP and CFO

Conference Call Participants

Michael Ciarmoli - Truist Capital

Peter Arment - Baird

Seth Seifman - JPMorgan

Mike Crawford - B. Riley Securities

Ken Herbert - RBC Capital Markets

Pete Skibitski - Alembic Global

Joe Gomes - NOBLE Capital

Sheila Kahyaoglu - Jefferies

Presentation

Operator

Thank you for standing by and welcome to Kratos Defense & Security Solutions Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]

I would now like to hand the call over to VP and General Counsel, Marie Mendoza. Please go ahead.

Marie Mendoza

Thank you. Good afternoon, everyone. Thank you for joining us for the Kratos Defense & Security Solutions fourth quarter and full year 2023 conference call. With me today is Eric DeMarco, Kratos' President and Chief Executive Officer, and Deanna Lund, Kratos' Executive Vice President and Chief Financial Officer.

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

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

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

Eric DeMarco

Thank you, Marie. Good afternoon, everybody. In 2023, Kratos achieved each of the goals we laid out at the beginning of the year, including 10% organic revenue growth, increased EBITDA, with positive cash flow generation, while also making significant internally funded investments, and potential transformational growth areas, for our company.

Expected growth areas include high-performance jet drone systems, hypersonic rocket motors and systems, next-generation jet engines for drones, missiles, and loitering munitions, and OpenSpace software for virtualized satellites, C2 and TT&C.

Kratos' product systems and software, which we envision, design, and engineer from the outset, to be produced in large quantities at a low cost, are a value-added differentiator for our customers and also, importantly, for our prime system integrator partners and teammates....

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