Kratos Defense & Security Solutions (NASDAQ:KTOS) moved higher after announcing that it had secured approximately $400 million in new funding from the U.S. Department of Defense to support hypersonic weapons programs and other national security initiatives.
The defense contractor said the additional funding will strengthen several existing programs focused on advanced hypersonic technologies.
Funding Expected to Accelerate Growth
According to Kratos, the funding process began in June and gathered pace during July, providing a meaningful boost to the company’s growth outlook.
President and Chief Executive Officer Eric DeMarco said the new awards are expected to improve the company’s financial position by accelerating cash receipts while reducing receivables, inventory levels and assets that Kratos had previously financed to meet customer delivery schedules.
Expansion of Hypersonic Programs
Kratos is involved in the design, development, production and integration of hypersonic systems, flight vehicles, solid rocket motors and other high-speed defense technologies.
The company said the latest funding covers several hypersonic system projects as well as additional national security programmes backed by the Department of Defense.
Company Expects Additional Contract Wins
Dave Carter, President of Kratos’ Defense and Rocket Support Services Division, highlighted the company’s ability to rapidly design, engineer, test and deploy systems that can be produced at scale while maintaining relatively low production costs.
He added that Kratos expects to secure further hypersonic-related contract awards over the coming months.
Portfolio Supports Advanced Defense Programs
Kratos supplies both propulsion technologies and hypersonic flight systems, including the Erinyes Hypersonic Flyer, Dark Fury platform, Zeus and Oriole solid rocket motors.
The company said work related to the newly funded programmes will be carried out at secure Kratos facilities as well as designated U.S. government sites.
Due to national security, competitive and confidentiality considerations, Kratos did not disclose further details regarding the specific defence programmes receiving the funding.