Kratos Defense & Security Solutions… Financially Speaking…

[SatNews] Kratos Defense & Security Solutions, Inc. (Nasdaq:KTOS) has reported third quarter 2011 revenues…

Q3 2011 revenues were $211.0 million, up from third quarter 2010 revenues of $119.9 million, and third quarter 2011 Adjusted EBITDA of $29.5 million, or 14.0 percent of revenues, up year-over-year from $11.7 million, or 9.8 percent of revenues, from the third quarter of 2010. Kratos’ third quarter adjusted EBITDA margin of 14.0 percent reflects the continued successful integration of Kratos’ strategic acquisitions and the related expected cost synergies, notably in the recently closed acquisition of Integral Systems. The third quarter adjusted EBITDA rate of 14.0 percent also reflects a favorable program and contract mix for the quarter, including in the Cyber Security, Electronic Warfare, Electronic Attack and Intelligence, Surveillance and Reconnaissance related business areas. Kratos’ third quarter cash flow from operations of $24.8 million, excluding the payment of $7.0 million of acquisition expenses, also reflects the success of the integration of acquired businesses, and strong third quarter business mix.

Eric DeMarco, President and Chief Executive Officer, said, “Kratos generated solid third quarter results in an obviously very challenging federal government budgetary and contracting environment. During the third quarter, as a result of a favorable contract mix and the continued successful integration of the acquired businesses, including Integral Systems which closed during the third quarter, we achieved an EBITDA profit margin rate of 14 percent, generated cash flow from operations of just under $25 million and executed on our stated plan to delever the balance sheet after the recent acquisitions. Additionally, we saw strong organic growth in our Public Security and Safety, Critical Infrastructure Security, and AEGIS BMD business areas, which helped offset weakness the entire industry is seeing in certain legacy services and information technology related business areas. Importantly, in Kratos’ Critical Infrastructure Security business, during the third quarter we generated sequential organic growth of over 25%, as well as year over year pro forma organic growth of over 11%, with strength in the transportation, energy, power transmission and strategic asset security and surveillance areas. This business, which makes up approximately 15 percent of Kratos today, is not DoD or Federal government funded, is growing rapidly, and is playing an increasingly important part for Kratos during these challenging federal government budgetary times.” To read the entire financial report, access this direct link.