Kratos Awarded $50 M TSER Contract Option

Kratos Defense & Security Solutions, Inc. (Nasdaq:KTOS), a leading National Security Solutions provider, today announced the award of a five year, $50 million contract option under the Department of Defense at the White Sands Missile Range, New Mexico Theoretical Studies and Engineering Research (TSER) multiple award contract. This option award is a follow-on to the base contract the company was awarded in March 2008.

Since the initial TSER contract award, Kratos' Rocket Support Services (RSS) business unit, located in Glen Burnie, Maryland, has provided over a dozen ARAV-A, ARAV-B and ARAV-C low-cost targets utilizing the Kratos Oriole rocket system for the Missile Defense Agency (MDA) testing of the U.S. Navy sea-based Aegis ballistic missile defense system. Kratos is also producing six Oriole rocket systems for NASA's use in conducting scientific research, one of which was launched as part of NASA's recent Anomalous Transport Rocket Experiment (ATREX) mission to gather information needed to better understand the high-altitude jet stream located 60 to 65 miles above the surface of the Earth. The third area of support provided under the TSER Contract is hypersonic propulsion research; the first mission is the joint United States Air Force/ Australian DSTO HIFiRE-2 launch scheduled for early May 2012.

The award of the TSER contract option will enable Kratos to continue to expand its role supporting target programs, scientific research and technology development. Kratos will be expanding its capabilities to also provide targets for land-based missile defense systems, including Aegis Ashore, THAAD and PAC-3 with the addition of the Guided Oriole rocket system to include thrust vector control, which will have its first flight in early 2013.

Dave Carter, President of Kratos' Defense Engineering Solutions division, which includes the RSS business unit, stated, "The TSER contract has enabled Kratos to provide low-cost targets and launch support services for a wide variety of MDA target missions and other research and technology programs. We are very proud of the 100% mission success achieved to date under our TSER contract and look forward to continuing our support of DOD Theoretical Studies and Engineering Research."

Eric DeMarco, Kratos' President and Chief Executive Officer, said, "We are very pleased to be a successful provider of low-cost targets for MDA ballistic missile defense programs and other DOD research activities under the TSER contract and look forward to continuing this partnering relationship with the DOD under the TSER contract option."

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Source: Kratos
Date: May 8, 2012