FOR IMMEDIATE RELEASE
January 26, 2018

Governor Mary Fallin Announces Opening of Kratos Design and Production Facilities in Oklahoma City

OKLAHOMA CITY – Governor Mary Fallin today announced that Kratos Defense & Security Solutions, Inc. (Nasdaq:KTOS), a leading National Security Solutions provider, is opening administrative and engineering offices and production facilities in Oklahoma City. The offices and productions facilities will accommodate expected increased demand for high-performance, jet-powered unmanned aerial tactical and target drone systems.

“Oklahoma is one of the world's premier destinations for the aerospace and defense industry. Kratos’ announcement of a new facility is a testament to the strength of the industry in our state,” said Fallin. “Our skilled aerospace and engineering workforce, combined with the Quality Jobs Program and the Aerospace Engineering Tax Credit incentives along with our proximity to other world-class companies and defense operations, made Oklahoma City the right choice for Kratos.”

Representatives from the Oklahoma Department of Commerce initially met with the company at the Farnborough International Airshow, a weeklong event in the United Kingdom, in 2016. U.S. Rep. Steve Russell, R-OK, had met the company executives earlier that year at a Kratos reception in Washington D.C.  These exchanges prompted the company to begin looking at Oklahoma as a potential location for expanded operations for the company’s unmanned systems division.

“Advanced military target drones with fighter-like performance have been the mainstay of our company, and we have come to dominate that market as our customers are replacing their drone fleets with the latest technology, and as a result, orders have increased substantially,” said Steve Fendley, president of Kratos Unmanned Systems Division.   

Referring to a recent Aviation Week and Space Technology article entitled, “Kratos Expands Target Drone Business,” which discusses target drones with fighter-like performance; Fendley said: “This is Kratos’ niche in the unmanned aircraft arena, and the article reports that more than 1,500 MQM-107 target aircraft were produced. Our BQM-167, already in production with the U.S. Air Force since the mid-2000s, has now also been selected as the replacement for the MQM-107, and begins production for the U.S. Army this year. We see the potential as even greater than for the heritage 107s with the increased capabilities our 167 offers. In addition, our tactical UAS (unmanned aircraft systems) drone systems have generated significant interest, and we expect to be focusing these efforts and ramping up production of these tactical aircraft in Oklahoma, which has a highly educated and technical workforce, offers a cost-effective business and family environment, and is a great place for employees to live.” 

Kratos is initially occupying an 8,800-square-foot facility in Oklahoma City near Tinker Air Force Base, where the focus will be on engineering and production planning. Within six months, the company plans to expand into a 75,000-square-foot facility to support its initial production efforts in Oklahoma. The company expects to employ more than 350 workers in Oklahoma within the next few years.

“We are both honored and privileged to be here today in the great state of Oklahoma,” said Eric DeMarco, president and chief executive officer of Kratos. “Kratos is focused on delivering technology and products for greater effectiveness at an affordable cost for our customers, and our new facility in Oklahoma City is another step forward in the successful execution of that strategy.”

Earlier this month, Kratos announced a $23 million unmanned aerial drone system production award from an unnamed customer and a $93 million contract to supply target drones to the Army. This most recent contract makes Kratos the sole supplier of jet-powered, sub-scale target drones to all branches of the U.S. military. Kratos’ unmanned target drones recently participated in  Exercise Formidable Shield 2017, a live-fire integrated air and missile defense (IAMD) exercise conducted by Naval Striking and Support Forces NATO on behalf of the U.S. 6th Fleet.  

Kratos is also currently under contract to develop and demonstrate high-performance tactical drone systems that act as a loyal wingman to manned fighter aircraft or can operate independently. The company’s Mako tactical unmanned aerial drone system completed its initial successful test flights in 2015 and most recently participated in a major military exercise, with additional flights planned for this year. Kratos is scheduled to deliver its next generation tactical drone, the Valkyrie, in 2018.

“I have been deeply impressed with the incredible advanced technology Kratos is developing to defend our country and airspace,” said Russell. “I have every expectation that Kratos will bring quality, high-paying jobs to the people of our great state, their presence will boost the Oklahoma economy, and most importantly, their work will ensure America has superiority in our airspace for decades to come.”

“I am pleased to welcome Kratos to Oklahoma. With our skilled workforce and longstanding commitment to supporting our armed forces, Oklahoma is an excellent choice for Kratos’ new facility for tactical drone systems,” said U.S. Sen. Jim Inhofe, R-OK. “Kratos, a leader in developing drone technology and producing tactical drone systems to support our military, will create hundreds of high-paying jobs in Oklahoma City, and grow our economy.”

Kratos will continue target drone production from its existing Sacramento, California, facility, with a significant production ramp-up, having already begun at that facility, and expected to increase even more over the next 24 months. Oklahoma will be the site for new tactical drone production and excess demand requirements related to target drone production.

About Kratos Defense & Security Solutions

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) develops transformative, affordable technology for the U.S. Department of Defense and commercial customers. Kratos is changing the way breakthrough technology for these industries are brought to market through proactive research and a streamlined development process. Kratos specializes in unmanned systems, satellite communications, cyber security/warfare, microwave electronics, missile defense, and training and combat systems. For more information go to www.kratosdefense.com

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