2020 annual report - kratos defense & security solutions, inc
TRANSCRIPT
2020 Annual Report
Kratos Defense & Security SolutionsPhone: 858.812.7300
www.KratosDefense.com
2020 An
nu
al Rep
ort
Kratos develops transformative, a�ordable technologyfor the Department of Defense and is changing
the way breakthrough technologies are broughtto the defense industry.
Technology Innovation for National Security
Kratos specializes in areas where technologyadvances can have a force multiplier effect.
Unmanned Systems
SpaceCommunications
C5ISR Systems
AdvancedTurbines
Virtual GroundSystems
ISR Drones C2 Systems
MissileDefense
SignalManagement
SpaceSituationalAwareness
ProtectedCommunications
MicrowaveDevices
MixedReality
Training
CommandSystems
AutonomousFighters
Warfighter Readiness
Kratos Defense & Security Solutions, Inc. is traded on the Nasdaq Global Select Market Exchange under the stock ticker: KTOS
Officers
Eric DeMarcoPresident and Chief Executive Officer
Deanna LundExecutive Vice President andChief Financial Officer
Jonah AdelmanSenior Vice PresidentPresident, Microwave Electronics
Phil CarraiSenior Vice PresidentPresident, Space, Training, & Cyber
Dave CarterSenior Vice PresidentPresident, Defense & Rocket Support Services
Steve FendleySenior Vice PresidentPresident, Unmanned Systems
Thomas MillsSenior Vice PresidentPresident, C5ISR
Stacey RockSenior Vice PresidentPresident, Turbine Technologies
Ben GoodwinSenior Vice PresidentCorporate Development & Government Affairs
Maria Cervantes de BurgreenVice President and Corporate Controller
Marie MendozaSenior Vice President & General Counsel
Directors
Scott AndersonPrincipalCedar Grove Partners, LLC
Eric DeMarcoPresident and Chief Executive OfficerKratos Defense & Security Solutions, Inc.
William HoglundChairman of the Kratos BoardSafeboats International, LLP
Scot JarvisPrincipalCedar Grove Partners, LLC
Jane JuddSenior Financial Executive (Ret.)Titan Corporation
Sam LiberatoreSenior Vice President (Ret.)Madison Research Division
Amy ZegartSenior Fellow, The Hoover InstitutionStanford University
Registrar/Transfer AgentEQShareowner Services1110 Center Pointe Curve, Suite 101Mendota Heights, MN 55120
Corporate Headquarters10680 Treena Street, 6th FloorSan Diego, CA 92131Phone: 858.812.7300
Principal Executive Office1 Chisholm Trail, Suite 3200Round Rock, TX 78681Phone: 512.238.9840
External Legal CounselPaul Hastings, LLP4747 Executive Drive, 12th FloorSan Diego, CA 92121
Independent AccountantsDeloitte & Touche, LLP655 W. Broadway, Suite 700San Diego, CA 92101
Corporate Contact InformationCorporate Communications/Investor RelationsKratos Defense & Security Solutions, Inc.Corporate HeadquartersToll Free: 877.934.4687
Corporate News Releases, SEC Formsincluding 10-K and 10-Q, and otherinformation may be found at:www.KratosDefense.com
COPYRIGHT 2021. All rights reserved. Kratos is a
registered trademark of Kratos Defense & Security
Solutions, Inc. Certain other product names, brand
names and company names may be trademarks or
designations of their respective owners.
10-KLetter to the Stockholders
To Kratos Stockholders,
Throughout 2020 Kratos continued the successful execution of our business plan, including being a recognized
leader in innovation and delivering affordable, transformative, low cost systems, products and solutions for national
security. Kratos’ ability to rapidly develop, demonstrate and field relevant systems for our customers, on schedule
and on budget, is aligned with our customers’ requirements and is an important differentiator for our Company.
Similarly, Kratos’ ability to successfully transition from test or prototype to full rate unit production, while
remaining on forecast cost estimates, including most recently in our high performance unmanned aerial jet drone
business, clearly sets Kratos apart from the traditional legacy competitors. At Kratos, affordability is a technology,
and Kratos’ products are designed up front, from the beginning, to be affordable, including through system
sustainment, also separating Kratos from the large, traditional, legacy industry suppliers.
Kratos’ Mission is to bring disruptive innovation and approaches to the National Security Market and Industry. One
way Kratos is doing this is by utilizing proven leading-edge technology, not unproven bleeding edge technology,
which approach significantly reduces schedule, performance and financial risk to the system, program and customer.
We believe that Kratos’ approach is of increasing importance, as the U.S. and its allies transition from addressing
terrorists and asymmetric warfare, towards a rapidly growing and capable peer threat, where the fielding of
quantities of systems and mass on the battle field is of primary importance. We believe Kratos’ business, including
high performance jet unmanned aerial drone systems, hypersonic and ballistic rocket launch systems, laser systems,
space and satellite systems, microwave electronics, C5ISR systems and next generation engines for drones, missiles
and powered munitions are uniquely aligned with today’s and future national security priorities.
As we begin 2021, we are more confident than ever that given a fair competitive playing field, Kratos’ strategy of
listening closely to our customers, then making truly internally funded Company investments in leading technology,
in advance of the competition and being first to market with a working product or system, is a winner for both the
United States and our stakeholders. I thank our employees for the incredible work they performed for the national
security mission and for our Country this past year in an incredibly difficult COVID-19 impacted environment.
Sincerely,
Eric DeMarcoPresident & Chief Executive Officer
10-K
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 27, 2020
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
Commission file number 001-34460
KRATOS DEFENSE & SECURITY SOLUTIONS, INC. (Exact name of Registrant as specified in its charter)
Delaware 13-3818604
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
1 Chisholm Trail, Suite 3200 Round Rock, TX 78681
(512) 238-9840 (Address, including zip code, and telephone number, including
area code, of Registrant’s principal executive offices) SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT
Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.001 par value KTOS The NASDAQ Global Select Market
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes No ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No The aggregate market value of the registrant’s voting and non-voting common stock held by non-affiliates as of June 26, 2020, the last business day of the
registrant’s most recently completed second fiscal quarter, was approximately $1.8 billion, based on the closing sale price for shares of the registrant’s common stock as reported by the NASDAQ Global Select Market on such date. This disclosure excludes shares of common stock held by executive officers, directors and stockholders whose individual ownership exceeded 10% of the common stock outstanding on June 26, 2020 because such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for any other purpose.
As of February 19, 2021, 123,463,096 shares of the registrant’s common stock were outstanding.
Documents Incorporated by Reference
Items 10, 11, 12, 13 and 14 of Part III of this annual report on Form 10-K incorporate information by reference from the registrant’s definitive proxy statement to be filed pursuant to Regulation 14A in connection with the registrant’s 2021 Annual Meeting of Stockholders or an amendment to this annual report on Form 10-K to be filed with the Securities and Exchange Commission within 120 days after the close of the fiscal year covered by this annual report on Form 10-K.
Kratos develops transformative, a�ordable technologyfor the Department of Defense and is changing
the way breakthrough technologies are broughtto the defense industry.
Technology Innovation for National Security
Kratos specializes in areas where technologyadvances can have a force multiplier effect.
Unmanned Systems
SpaceCommunications
C5ISR Systems
AdvancedTurbines
Virtual GroundSystems
ISR Drones C2 Systems
MissileDefense
SignalManagement
SpaceSituationalAwareness
ProtectedCommunications
MicrowaveDevices
MixedReality
Training
CommandSystems
AutonomousFighters
Warfighter Readiness
Kratos Defense & Security Solutions, Inc. is traded on the Nasdaq Global Select Market Exchange under the stock ticker: KTOS
Officers
Eric DeMarcoPresident and Chief Executive Officer
Deanna LundExecutive Vice President andChief Financial Officer
Jonah AdelmanSenior Vice PresidentPresident, Microwave Electronics
Phil CarraiSenior Vice PresidentPresident, Space, Training, & Cyber
Dave CarterSenior Vice PresidentPresident, Defense & Rocket Support Services
Steve FendleySenior Vice PresidentPresident, Unmanned Systems
Thomas MillsSenior Vice PresidentPresident, C5ISR
Stacey RockSenior Vice PresidentPresident, Turbine Technologies
Ben GoodwinSenior Vice PresidentCorporate Development & Government Affairs
Maria Cervantes de BurgreenVice President and Corporate Controller
Marie MendozaSenior Vice President & General Counsel
Directors
Scott AndersonPrincipalCedar Grove Partners, LLC
Eric DeMarcoPresident and Chief Executive OfficerKratos Defense & Security Solutions, Inc.
William HoglundChairman of the Kratos BoardSafeboats International, LLP
Scot JarvisPrincipalCedar Grove Partners, LLC
Jane JuddSenior Financial Executive (Ret.)Titan Corporation
Sam LiberatoreSenior Vice President (Ret.)Madison Research Division
Amy ZegartSenior Fellow, The Hoover InstitutionStanford University
Registrar/Transfer AgentEQShareowner Services1110 Center Pointe Curve, Suite 101Mendota Heights, MN 55120
Corporate Headquarters10680 Treena Street, 6th FloorSan Diego, CA 92131Phone: 858.812.7300
Principal Executive Office1 Chisholm Trail, Suite 3200Round Rock, TX 78681Phone: 512.238.9840
External Legal CounselPaul Hastings, LLP4747 Executive Drive, 12th FloorSan Diego, CA 92121
Independent AccountantsDeloitte & Touche, LLP655 W. Broadway, Suite 700San Diego, CA 92101
Corporate Contact InformationCorporate Communications/Investor RelationsKratos Defense & Security Solutions, Inc.Corporate HeadquartersToll Free: 877.934.4687
Corporate News Releases, SEC Formsincluding 10-K and 10-Q, and otherinformation may be found at:www.KratosDefense.com
COPYRIGHT 2021. All rights reserved. Kratos is a
registered trademark of Kratos Defense & Security
Solutions, Inc. Certain other product names, brand
names and company names may be trademarks or
designations of their respective owners.
2020 Annual Report
Kratos Defense & Security SolutionsPhone: 858.812.7300
www.KratosDefense.com
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