Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) Q4 2022 Earnings Conference Call February 23, 2023 5:00 PM ET

Company Participants

Marie Mendoza - Senior Vice President and General Counsel

Eric DeMarco - President and Chief Executive Officer

Deanna Lund - Executive Vice President and Chief Financial Officer

Conference Call Participants

Mike Crawford - B. Riley

Ken Herbert - RBC Capital Markets

Seth Seifman - J.P. Morgan

Noah Poponak - Goldman Sachs

Greg Konrad - Jefferies

Joe Gomes - Noble Capital

Austin Moeller - Canaccord Genuity

Operator

Good day and thank you for standing by. Welcome to the Kratos Defense & Security Solutions' Fourth Quarter 2022 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.

I would now like to hand the conference over to your speaker today, Marie Mendoza, Senior Vice President and General Counsel.

Marie Mendoza

Thank you. Good afternoon everyone and thank you for joining us for the Kratos Defense & Security Solutions fourth quarter 2022 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 the 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 and financial guidance 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. Kratos is positioned as the leading disruptive technology company, designing, developing and fielding relevant systems product and solutions, continues to progress, reflecting the trust our customers have in your company.

Kratos along with our strategic partners, vendors and suppliers are aligned and removing rapidly to address the evolving threat, not with PowerPoint's, press releases and scripted publications, but with real systems that we will discuss today. We believe that 2023 will be a transition year for Kratos to greater revenue, profit and cash flow with significant prior year investments in technology, products and systems, transitioning from development RDT&E or LRIP to fund the programs, contracts or full rate production, which will result in increased revenue, profit and operating cash flow for the company. This includes today's announcement that Kratos's BQM-177A unmanned aerial target drone is now entering full production.