Ladies and gentlemen, thank you for standing by, and welcome to the Kratos Defense & Security Solutions Fourth Quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. I would now like to hand the conference over to your speaker today, Ms. Marie Mendoza, Senior Vice President and General Counsel. Thank you. Please go ahead, ma'am. Thank you. Good afternoon, everyone. Thank you for joining us for the Kratos Defense & Security Solutions Fourth Quarter 2020 conference call. With me today is Eric DeMarco, Kratos's President and Chief Executive Officer, and Deanna Lund, Kratos's Executive Vice President and Chief Financial Officer. Before we begin the substance of today's call, I'd like everyone to please take note of the safe harbor paragraph that is included at the end of today's press release. This paragraph emphasizes the major uncertainties and risks inherent in the forward-looking statements we will make this afternoon. Please keep these uncertainties and risks in mind as we discuss future strategic initiatives, potential market opportunities, operational outlook, and financial guidance during today's call. Today's call will also include a discussion of non-GAAP financial measures as that term is defined in Regulation G. Non-GAAP financial measures should not be considered in isolation from or as a substitute for financial information presented in compliance with GAAP. Accordingly, at the end of today's press release, we have provided a reconciliation of these non-GAAP financial measures to the company's financial results prepared in accordance with GAAP. With that, I will now turn the call over to Eric DeMarco. Thank you, Marie. Good afternoon. Kratos ended 2020 on track, including a fourth quarter book-to-bill ratio of 1.2 to one and a last 12 months book-to-bill ratio of 1.4 to one, positioning our company for continued future growth. Kratos's Unmanned Systems Q4 book-to-bill ratio was 2.0:1, including a number of tactical and target drone awards we received in the fourth quarter. Our Unmanned Systems business last 12 months book-to-bill ratio was 1.4:1, reflecting increasing customer demand for Kratos' affordable high-performance jet drones. As we begin 2021, approximately 60% of our business is focused on space, satellite, and unmanned system areas. With these businesses being some of the fastest-growing and highest margin in our company. I believe that with today's report, you will see that the inner inertia of Kratos' business is rapidly accelerating and that Kratos is positioning on several expected to be exceptionally long-term, sustained strong growth areas has substantially increased. We believe that this rapidly increasing inertia is particularly representative in Kratos' Space and Satellite business, which I analogize somewhat to the computer mainframe business years ago, and then the PC and Microsoft came along and totally disrupted the market, which in a way is what Kratos is looking to do with our software-based OpenSpace platform to the legacy dedicated monolithic satellite ground infrastructure market. It is possible that later this year, we will be able to report certain needle-moving opportunities or milestones that our S pace and Satellite business has been successful on or achieved. Kratos' mission strategy and business plan remains being a disruptive technology and intellectual property-based company, focused on national security and where affordability is a technology. We believe that Kratos' affordability and demonstrated ability to truly, rapidly innovate and quickly deliver technology-leading products and systems will be an increasing differentiator and a competitive advantage to the company. Since our last report to you, Kratos has received the largest Skyborg program task order from the United States Air Force, totaling approximately $38 million, which includes drone aircraft, associated payload system integration, and demonstration flights, all as the DoD continues to move forward with its plan for affordable, attritable, unmanned loyal wingman aircraft to augment and perform autonomous missions in support of human pilots. The Air Force has stated that they will be aggressively testing and flying Skyborg drones in 2021 in preparation for providing manned-unmanned teaming and force-multiplying Skyborg initial operating capability to the hands of the warfighter in 2023. The Air Force stated intention for Skyborg drone IOC by 2023 is an incredibly important new development for Kratos. In addition to the $38 million Skyborg award, Kratos also received an approximately $18 million single award contract from the Air Force Research Lab related to the low-cost attritable aircraft or LCAAT program, also as related to LCASD and the Valkyrie. This LCAAT program award to Kratos includes drone aircraft and the continued evolution of the low-cost attritable drone capability set. In addition to the $38 million Skyborg and this $18 million LCASD contract award, we also received additional approximate $10 million in contract awards related to tactical drones and the Valkyrie, including weapon and other system and operational of the aircraft. Since our last report to you, the United States Air Force has announced that the Kratos XQ-58A Valkyrie is the USAF AttritableONE drone, which has now completed its fifth successful flight. In this flight, the F-22 Raptor and F-35 Lightning II, the United States' two fifth-generation fighters, formed up off the wings of the Valkyrie, as the Valkyrie flew autonomously in formation in a new Gateway One program test. During the flight, data was successfully shared between the USAF F-35As and F-22 Raptors and the Marine Corps F-35B using the Gateway One communication system, which had been integrated into the Valkyrie. The Air Force reported that this was another major milestone in the service's efforts to provide low-cost force multipliers in relevant operational environments. The Advanced Battle Management System, or ABMS, AttritableONE AFRL program, also reported that the XQ-58A's modularity and its ability to carry robust payloads enabled the rapid capability and integration into an attritable vehicle, and that they were pleased with the seamless integration and demonstration of the flight. These are representative of just some of the significant Valkyrie-related milestones we have recently achieved and the ones that I am able to publicly disclose to you at this time. Kratos currently has two company-owned Valkyries that are flying today, including in this recent ABMS AttritableONE program. With these Kratos-owned assets expanding our first-to-market leading position in this class of high-performance affordable jet drone aircraft, as we continue to fly and progress with our customers and our partner, the United States Air Force. In addition to these two currently flying Kratos-owned Valkyries, at our Oklahoma facility, we are currently producing 12 additional Valkyries, with the first of these 1s scheduled to come off the production line in Q2 or Q3 of this year, with an expected production rate of one or two aircraft a month thereafter, depending on a number of factors, including, importantly, the customer demand signal. There are now several of our 12 in-production Valkyries under customer contract, with delivery scheduled to begin later this year, and we are in discussion with customers related to all remaining unsold Valkyries at this time. Accordingly, we have begun internal planning for production of the next block of Valkyries, once the initial block is complete. For customer-related, competitive, and other reasons, I cannot provide any additional information at this time. We remain highly confident in the ultimate success of Kratos' Valkyrie as Kratos' partner is the United States Air Force. Kratos' Valkyrie is the only high-performance, affordable, attritable drone in its class flying today. As a result of Valkyrie's leading position, multiple and various communications, weapon, and other systems and payloads have been and are being integrated and tested on the Valkyrie, including in live flight exercises with the actual flying aircraft, not surrogates or virtual simulations. The Valkyrie has now flown with several U.S. fifth-generation stealth fighters, the F-35A, F-35B, and the USAF F-22. The Valkyrie is part of multiple large customer-funded priority programs, including Skyborg, ABMS, AttritableONE, LCAAT, LCASD, and the Vanguards. The Valkyrie is affordable and made in the USA. In the final 2021 DoD budget, which is now approved, a bipartisan Congress increased the funding for attritable drones like the Valkyrie by $50 million over The Pentagon base budget request. This increase was in addition to the $100 million congressional add for similar attritable drone technologies included in the final 2020 budget. We believe these increases are representative of the high priority and level of focus on this class of high-performance jet drone. Importantly, as noted in the final congressional documents, the additional 2021 $50 million is to assist in transitioning attritable drones like Valkyrie, Skyborg, and LCAAT to fully operational capabilities. Also related to funding and the developing market, it was recently reported that the USAF is reviewing budget and platform considerations related to the FY 2023 fight up, which begins in calendar 2022 for potential large fleet augmentation quantities of attritable drones to be procured for fielding. The Air Force also recently stated that the Skyborg could develop multiple drones and missions. As I mentioned before, just a few weeks ago, the Air Force announced that the high-priority Skyborg program to develop low-cost autonomous drones able to team with piloted aircraft was planned for initial operating capability by 2023. From a new opportunity standpoint and representative of the plan for and continuing growing emphasis for Kratos' type of drones, the Air Force just this week released a call for proposals for a new low-cost attritable aircraft program. The Air Force has recently discussed an additional very large new opportunity that we feel Kratos is uniquely well-positioned for with the Valkyrie and certain of our other tactical drone suite. Representative milestones for the Valkyrie currently planned for in 2021 include additional planned demonstration flights for certain customers and programs, continued integration of various payloads, including weapon systems, the continued operationalization of the Valkyrie for delivery to the warfighter, and the delivery to customers of under-contract Valkyrie aircraft as they come off the production line. In our 2021 financial guidance for Valkyrie, we have taken into consideration the program delays we have experienced to date, including as related to COVID, and also that Assistant Secretary of Defense of the Air Force for Acquisition and Technology and Skyborg and ABMS program advocate, Dr. Roper, has now left with the administration change and the potential for additional delays that could arise as a result of the transition of his position. On Gremlins, it was reported by DARPA and Dynetics, Kratos' prime Gremlins partners, that the Gremlins Program has continued to make progress, including the successful completion of a third test flight series, in which the Gremlins Air Vehicle, or GAV, and the Gremlins recovery system successfully flew several additional times. The recent test series focused on certain objectives, including demonstrating the automated and manual system safety behaviors and continuing progress toward a multiple aerial docking scenario. The safety behaviors successfully demonstrated safe operation of the X-61A Gremlin in range and in close formation with the manned C-130 recovery vehicle. The Gremlins team is now planning to have the C-130 recover multiple X-61A Gremlins in midair in a flight series scheduled for this coming spring. Importantly, it was also recently reported that a new additional phase of demonstrations will focus on Gremlin operational capabilities, including with the Gremlins performing suppression and destruction of enemy air defense missions, and that this demonstration will involve integrating intelligence, surveillance, and reconnaissance sensors and certain autonomy with the Gremlin drones. It was reported that DARPA has now announced that they are in discussions with multiple DoD organizations for the Gremlins to transition to once the DARPA program is complete. Related to concept of operations, it's been reported that a government program representative recently stated that the whole concept is that the Air Force wants to see that attritable drones and related distributed air operations work like we've been discussing, and that in an operational setting, Gremlins X-61As would create a layered effect, flying in cohort with XQ-58A Valkyries to achieve manned-unmanned teaming, as the Defense Department wants more runway independence in future contested environments. The government representative also reportedly said that if we have a more expensive Valkyrie, we may keep the Valkyries a little bit further out. If I have a less expensive Gremlins-type air vehicle, we could push them in a little bit further into a threat environment, and that this really does give the services flexibility and extra tools to determine what's that best mix of multiple attritable vehicles, both large and small, as well as manned aircraft, to be able to go up against whatever the threat happens to be. Obviously, we are extremely excited about these recent developments, and we remain highly confident that the Gremlins, similar to the Valkyrie, will ultimately transition to the services and become a program of record. Also similar to the Valkyrie, there is currently no competing drone flying today in the Gremlins class. Kratos, with our partners, are pushing ahead to achieve first-to-market position for delivery and fielding of the Gremlin to the war fighter. Planned for upcoming 2021 Gremlins milestones include additional successful demonstration flights to prove out the system and achieve all program objectives. We have taken into consideration in our 2021 financial guidance that DARPA recently stated that the program has been delayed and pushed to the right by at least a year due to COVID, range-related, and other considerations. Kratos' Mako tactical drone program also continued to have excellent performance over the past few months, including successful customer flights demonstrating system performance and capabilities, including with additional and new payloads. We expect Kratos' Mako position as a very high-performance tactical jet unmanned test vehicle to continue under contract and with multiple customers, and we have just begun discussions with a certain customer for potential weaponization and tactical mission utilization of the platform. As I have mentioned previously, most of the work related to the Mako is now classified, and I'm unable to comment further. Similar to Kratos' Valkyrie and the Gremlins, there is no competing drone in the Mako class flying today. Kratos' AirWolf continued to make progress over the past few months with a number of successful flights, certain of which had been initially planned for early last year, but which were delayed, including due to COVID and related range access issues. We have additional flights for AirWolf currently scheduled over the next several months, which are critical to this program moving forward. As I have mentioned previously, AirWolf, as well as Valkyrie and Gremlins, have all been significantly impacted by COVID-19 range-related and other restrictions, and I do remain concerned on a potential loss of AirWolf program momentum, although these recent successful system flights are encouraging. Also similar to Valkyrie and Gremlins and Mako, Kratos' Airwolf tactical system is once again the only system in its class flying today. Kratos' Thanatos program, which is also classified, continues on schedule with a number of important milestones we need to achieve in 2021 so the program can move to its next phase. Kratos' Rattlesnake program with our partner AeroVironment also continued to make progress, including a successful flight in the past few months by Kratos' modified tactical Firejet drone, the drone mothership, if you will, for the Rattlesnake program. We are now hoping for additional flights in the next several months, where we expect to successfully deploy AeroVironment's tactical systems drone from drone. Even though Rattlesnake has also been significantly impacted from a schedule standpoint, including as a result of adverse COVID impacts and weapons range impacts, I remain extremely excited about Kratos and AeroVironment's opportunity here. The AeroVironment team is a clear national asset, in my opinion. Kratos' Ghost Works has continued to make important progress since our last report to you on a very exciting initiative, which Kratos is investing in, which if successful, could lead to initial flights of the system as early as the first half of next year. I believe that this top priority Kratos Ghost Works program could be another potential game changer if successful, based on recent government feedback, as recently as just yesterday, and the customer demand signal for the system and capability. We are currently now preparing for a flight at Kratos' new Oklahoma jet UAS drone port and range facility with Kratos' tactical and other UASs. Kratos' drone port, which is near our tactical UAS production facility, we believe will be an incredibly important strategic and competitive asset for our company, as this will provide us the flexibility to rapidly test and demonstrate, including for our customers, tactical drone systems and save the company a significant amount of money in range and other fees. The facility will also enable us to fly confidential Kratos Ghost Works and other aircraft out of sight from our competitors and others, including an upcoming plan for near-term flight. I want to impress upon you the strategic significance and importance of Kratos' new drone test facility and range. We are forecasting significant growth for Kratos' Tactical Drone business for 2021 over 2020, with 2021 tactical drone revenues estimated to increase up to approximately $50 million-$60 million, with upside potential with additional potential contract awards and opportunities. Kratos' Target Drone business continued to perform well in Q4 with the recapitalization of strategic weapon systems driving demand for Kratos' target drone systems to test and evaluate these weapon systems and ensure the war fighter operational readiness. Since our last report to you, Kratos' U.S. Air Force BQM-167 AFSAT program remains in full rate production, and we are currently negotiating the next multi-year sole source production award with expected increased quantities. We have now received an additional full rate production contract award from the U.S. Navy on the BQM-177 SSAT program, or FRP 2, for 48 aircraft. Deliveries of initial FRP 1 for 35 aircraft that we previously received are planned to begin in 2022, with FRP unit deliveries following in future periods. As you know, the U.S. Navy SSAT program is a key element in Kratos' target growth forecast. We have received an order for an additional 20 target drone systems from an existing international customer, this customer's largest order to date, with deliveries of these units now forecast to begin next year. On a confidential program, we are currently in low-rate initial production, and we now expect to receive a full-rate production award in mid-2022, with deliveries of FRP units now forecast for 2023. This is approximately one year behind what we had previously anticipated. On an additional large new pending international target drone award, where Kratos was the only bidder, we continue to wait for U.S. Government approval of this contract. With the change in administration, we do not have an update for you at this time on expected timing. This potential contract award is now approximately one year delayed from our initial expectations. With our Army customer, orders of target drones under our nearly $100 million contract continue to be significantly below our previous expectations for a number of customer-related reasons. There are several new target drone opportunities we are currently pursuing, both domestic and international, with current expected award dates beginning sometime next year. We expect continued organic growth for Kratos' Target Drone business for 2021 over 2020. In our largest business, Kratos' Space and Satellite, our OpenSpace products and technology, which represent a brand-new approach to enable dynamic ground system operations, continues to be extremely well-received by the market and our customers. Kratos' OpenSpace is based on common interfaces and open standards, providing a truly adaptable, scalable, and flexible platform. With Kratos' OpenSpace, almost every piece of the ground station and segment can be turned from hardware to software and then can react rapidly, dynamically, and affordably to changing conditions. Kratos' OpenSpace platform is the first fully digital, virtualized, software-defined platform in the satellite industry. Kratos' OpenSpace disrupts ground networks that have been historically based upon purpose-built proprietary hardware and stovepipe software applications by utilizing leading-edge, standard-based, fully integrated technology with end-to-end service delivery running on a COTS server or in the cloud. Kratos' OpenSpace is a software-defined network that can be dynamically configured, managed, and deployed with virtual functions that run on generic, inexpensive computers, with dynamics to match the capabilities of new payloads, supporting LEO, MEO, and GEO systems, and its open architecture to allow the integration with other applications on the ground and in the space layer. In the coming world of thousands of multi-orbit, highly configurable spacecraft, a ground system built for one payload or constellation will not scale. It won't enable roaming. It will not be resilient or reliable, and it won't enable the brand-new applications and services required in the air and on the ground. This is all critical for both military and commercial applications and requirements, and Kratos' first to market OpenSpace and other proprietary technologies address these requirements. Additionally, Kratos' OpenSpace SpectralNet and DataDefender products enable the space-based analog RF signal to IP conversion without losing the critical timing aspect. Simply stated, Kratos' products convert and digitize space-based analog RF system signals and transport the related IP packets reliably over any distance and network. Kratos' new space and satellite technologies have been critical in allowing us to win, obtain, or expand a number of large, new, and important customers, programs, and relationships, including EarthLink and Microsoft Azure, which has partnered with Elon Musk's Starlink system, which plans for thousands of satellites in its global internet connectivity network. Kratos is now working with several Web 2.0 companies, also referred to as hyperscalers, which is a key element of our forecast extremely strong future space and satellite growth trajectory. 5G is another additional large new market opportunity area for Kratos' Space and Satellite business. As customers stream more videos, shop online, video conference, and get used to telemedicine visits with the doctor, dependence on connectivity is exploding, and 4G LTE networks just cannot keep up. Additionally, and including a large new national security AI-related market opportunity, the race is on to implement artificial intelligence across an increasing number of systems and devices that need 5G. As part of the 5G FAST Plan, the FCC hopes to sell more than 5,000 new flexible-use overlay licenses for C-band spectrum in the 3.7 GHz- 3.98 GHz frequency. In the first phase of the auction, which ran from December 8 to January 15, they received bids totaling $80.9 billion, the highest grossing auction of its kind in U.S. history, representative of the enormous future 5G market opportunity. Kratos' opportunities in the 5G area, as I have discussed in detail previously, include working with our existing satellite customers, like SES, Intelsat, and others, as they plan for and execute the relocation of their customers out of this 5G spectrum to new spectrum with this effort, including new satellites and the associated ground infrastructure, all of which is within Kratos' core expertise. On the DoD side, a deep disaggregation of the space and ground system procurement by the customer, similar to our commercial customer's approach, is also creating a large new opportunity set for Kratos, including a number of new near-term opportunities we are currently pursuing. For competitive reasons, I will not comment further here, but the new DoD LEO and MEO constellations and this new customer procurement approach is opening this new market for Kratos. We believe that Kratos' Space and Satellite business extremely well and uniquely positioned for the ongoing, very large industry transformation and the opportunities this is presenting. We expect Kratos' Space and Satellite business to experience organic growth for 2021 over 2020 with an up and to the right trajectory for the foreseeable future. Kratos' Cybersecurity business, which also includes a satellite and space focus, continues to perform well with the federal government-mandated Cybersecurity Maturity Model Certification, or CMMC, adding to our market-leading FedRAMP compliance practice. Consisting of five maturity levels of security practices ranging from basic to advanced, CMMC will be phased into DoD RFPs over the next several months. A CMMC third-party assessment organization called C3PAO will be required to conduct assessments on organizations seeking a CMMC level certification, and Kratos was recently accredited as a C3PAO by the CMMC accreditation body, with Kratos being one of the first organizations to receive such an accreditation. We are forecasting organic growth for Kratos' Cybersecurity business for 2021 over 2020. Kratos' Turbine Technologies business was recently awarded a $12.7 million task order under its Advanced Turbine Technologies for Affordable Missions IDIQ contract, which is representative of the progress we are making in the execution of our disruptive next-generation engine strategy. The ATTAM program will be managed by the turbine engine division of the Air Force Research Laboratory. This Kratos award follows the successful ground testing of an affordable turbojet design for use in future low-cost cruise missiles and attritable unmanned aerial drones. The design and test of the Kratos 200-lb thrust class turbojet engine was completed in under 18 months, once again demonstrating Kratos' rapid design and demonstration capabilities to meet the needs of today's The Pentagon. Testing of Kratos' new engine was performed at our new and recently commissioned Kratos Engine Test Facility in Florida. Similar to Kratos' Jet Drone Port and Range Facility, we believe that our new engine test facility will provide flexibility and enable more rapid development, test, and fielding of Kratos' engines, providing our company with a significant competitive advantage and our customers significant capability and value. In addition to the ATTAM program I mentioned, Kratos currently has multiple engines running and designed in on next-generation platforms, with vehicle flight test planned for two of these new systems in the coming months. We believe that two of the current USAF Vanguard programs, Skyborg and Golden Horde, will provide significant future opportunity for Kratos' next-generation affordable high-performance engines, in addition to the significant and increasing demand for drones, cruise missiles, and powered munitions. We are forecasting organic growth for Kratos' DoD-focused Engine business for 2021 over 2020 as we continue our engine development programs with production planned for future years. We expect Kratos' commercial-focused Engine business to be down in 2021 from 2020. This is primarily due to COVID impacts on the market. Kratos' Microwave Electronics business recently received an $11 million development contract award related to a new planned-for next-generation satellite program. This recent award is representative of the continued successful execution of our Microwave business strategy, including designed-in positions on major new production programs, including a focus on space and satellites. Our Microwave business is pursuing a number of large new opportunities, and we are forecasting solid year-over-year organic growth for this business for 2021 over 2020. Kratos' C5ISR business performed extremely well throughout 2020, and we believe it is well-positioned for an expected sustained and up-and-to-the-right organic growth trajectory, including the expected ramp-up of the new GBSD program. The recapitalization of strategic weapons systems is presenting multiple new opportunities across Kratos, including for our C5ISR business, and we are currently in pursuit of several large new program opportunities, certain of which we hope to receive and report to you this year. We are forecasting organic 2021 revenue growth for C5ISR over 2020, with margins expected to be down primarily as a result of program maturity mix, as development programs like GBSD and others typically generate lower margins than mature full rate production programs. Kratos' Rocket System business also performed well in 2020, and we expect this level of performance and revenues to continue to increase in 2021, including growth in ballistic missile defense, hypersonics, suborbital targets, and other vehicle areas. Our high-performance Directed Energy and Laser Weapons business is also forecasting a strong and growing 2021 over 2020, driven by expansion of existing and new program wins. We have a number of exciting programs in our Laser Weapon and Directed Energy business. Due to the nature of most of this work, we're unable to provide many details. In Kratos' Training business, we recently lost the Royal Saudi Navy recompete I discussed on our Q3 call. This program contributed approximately $35 million in revenue in 2020. In our 2021 guidance, we have assumed that we will continue working on the RSF contract until May, which is the extension that we have received, which is expected to generate approximately $15 million in 2021 or a $20 million decrease from what we got in 2020 from this contract. Other key factors taken into consideration related to Kratos' initial full-year guidance and our Q1 guidance we're giving today. In late December and continuing into Q1 of this year, Kratos experienced significantly increased incidents of employees exposed to or testing positive for COVID, including in California and at our drone, satellite, and C5ISR locations. Additionally, on December 31st, 2020, The Pentagon reinstated military travel restrictions, which as you know, has severely impacted Kratos' Drone business related to weapons range and facility access, pushing many Kratos programs, including tactical drone programs, to the right. Also, increased global COVID restrictions and quarantine mandates, including in Europe, Australia, and in the Pacific Rim and elsewhere internationally, has significantly impacted Kratos' ability to travel to customer locations, including for system and program sign-off and acceptance, impacting Kratos' satellite, international target drone, and other businesses. At Kratos, our employees are clearly our number one asset, and employee safety and wellbeing is our first priority. Accordingly, we have taken the necessary precautions to keep our employees safe, including significant distancing, spacing, and multiple shifts in the workspace, employee quarantines, and we have restricted their travel. We have tried to estimate the continued impact of the continuing COVID situation in our 2021 guidance, which impact is significant at this time. As you know, Kratos Microwave business, or Microwave Electronics, is headquartered in Israel. Over the past several quarters, including the past several months, the U.S. dollar has significantly weakened against the Israeli shekel. What this means is that while Kratos' customers pay us in U.S. dollars, Kratos pays its employees and its vendors in Israel in shekels. This has resulted in a significant reduction in profitability in our Microwave business that has zero to do with operations or business execution. For example, Kratos' forecasted fiscal 2021 EBITDA would be $2 million- $3 million higher in 2021 if the shekel-dollar exchange rate today were what it was on January 1, 2020. We have tried to estimate any further changes in the shekel-dollar conversion situation in our 2021 guidance. Our 2021 guidance includes internally funded investments in our Unmanned Systems business for the continued production of our 12 pre-contract Valkyries, and internally funded investments related to the recently awarded GBSD development program, which has an approximate initial value to Kratos of $200 million, as we are establishing a new leased facility, and we are acquiring all of the machinery, tooling, and manufacturing, and other equipment needed to successfully execute this program. Our 2021 guidance includes investments in our Space and Satellite Communication business to support a large number of new programs we have received or that we expect to receive, including where we need additional secure or other infrastructure to perform the work and includes an expansion of our owned space situational awareness global network. Our 2021 guidance includes investments in both our Rocket System and Turbine Engine businesses, where we are developing new engines in conjunction with the customer, and where we are making internally funded investments in the form of capital equipment and non-recurring engineering so that Kratos owns critical intellectual property. The majority of these investments that we are making are to support large new programs that Kratos has received or that we expect to receive, including in our space, satellite, unmanned system, C5I, and engine areas, which are critical to our expected and long-term up and to the right organic growth trajectory. Importantly, even after assuming all of these planned four investments and excluding the low price technically acceptable Royal Saudi contract we lost from both 2020 and 2021, our fiscal year 2021 guidance reflects both organic growth of over 10% and EBITDA growth with forecasted 2021 revenue growth of approximately 14% year-over-year. In summary, with the exception of our Training business, we are expecting organic revenue growth across all of our other business units, which is the result of the investments we have made over the past few years. We expect to increase our market share in future years as we continue to make these key strategic investments I went through today, Deanna. Thank you, Eric. Good afternoon. Kratos' fourth quarter 2020 revenues of $206.4 million were as we forecasted and in our range of $184 million-$224 million. Adjusted EBITDA for the fourth quarter was $22.3 million, above our expectation of $14 million-$20 million, due primarily to a favorable mix of revenues, including certain programs and products in more mature life cycles. In the fourth quarter, our unmanned systems segment reported revenues of $49.5 million, up 29.2% from the fourth quarter of 2019, due primarily to confidential programs. Unmanned systems generated adjusted EBITDA of $5.5 million, up from $2.9 million in the fourth quarter of 2019, primarily reflecting the increased drone system related revenues and a favorable mix of revenues. KGS reported revenues of $156.9 million, up from $146.8 million in the fourth quarter of 2019, reflecting $11.7 million from the recent ASC Signal acquisition and organic growth in our Space and Satellite, Defense Rocket, and Microwave products businesses. This increase was offset partially by a net reduction of approximately $5.7 million in our Training Solutions business, which was related to the previously disclosed reduction in scope of certain international contracts. KGS' fourth quarter 2020 revenues also included a net reduction of $2.7 million in the company's KTT business, resulting primarily from COVID-19 impacts in our Commercial Aero business area. KGS' fourth quarter 2020 adjusted EBITDA was $16.8 million, down from $17.3 million in the fourth quarter of 2019, reflecting a less favorable mix of revenues and increased R&D costs of approximately $2.4 million. GAAP EPS was $0.62 per share for the quarter, compared to $0.03 in the fourth quarter of 2019. Included in GAAP net income is a $75.3 million tax benefit, primarily reflecting the release of the valuation allowance or reserve on our deferred tax assets relating to our Net Operating Losses, or NOLs. Previously, we had recorded a full reserve on the carrying value of the assets related to these NOLs. Based on our recent earnings history over the past few years, and based upon our long-term forecast and expected tax deductions based upon current tax regulations and the expected utilization of our remaining NOLs, a substantial portion of the valuation allowance was no longer deemed necessary. Also included in fourth quarter net income is a loss from discontinued operations of $100,000 and a loss from non-controlling interest of $100,000. Our Q4 2020 consolidated operating income was $9 million, down from the fourth quarter of 2019 operating income of $9.3 million, reflecting fourth quarter 2020 increases in stock compensation expense of $3.7 million and increased R&D of $2.6 million in the current period, which was primarily in our Space and Satellite business. As a reminder, over 80% of our total R&D is typically invested in our Space and Satellite business. Our adjusted EBITDA for the fourth quarter is from consolidating continuing operations, including net income or loss attributable to non-controlling interests and excludes non-cash stock-based compensation costs of $6.5 million, acquisition and restructuring related costs of $200,000, and foreign transaction loss of $400,000. Moving on to the balance sheet and liquidity. Our cash balance was $380.8 million at December 27th, and we had zero amounts outstanding on our bank line of credit and $5.9 million of letters of credit outstanding. Debt outstanding was $301 million at the quarter end, and net cash at quarter end was $79.8 million. Cash flow generated from operations for the fourth quarter was $25.6 million, less capital expenditures of $12.9 million or free cash flow generated from ops of $12.7 million. For fiscal 2020, cash flow generated from ops was $44.7 million, less capital expenditures of $35.9 million, with free cash flow generated from ops of $8.8 million. Included in our full year cash flow generated from operations was approximately $9.5 million of employer-related payroll taxes that were deferred under the CARES Act, of which 50%, or approximately $5 million, is due by the end of 2021, and the remaining amount is due at the end of 2022. Capital expenditures include approximately $9 million of amounts related to the Valkyrie assets we are currently building. Our contract mix for the quarter was 74% related to fixed price contracts, 21% on cost plus contracts, and 5% on time and material contracts. Revenues generated from contracts with the U.S. federal government during the quarter were approximately 71%, including revenues generated from contracts with the DoD, non-DoD federal government agencies, and FMS contracts, which were approximately 5%. We generated 9% from commercial customers and 20% from foreign customers. Our backlog at quarter end was $922.2 million, up sequentially from third quarter end backlog of $873.1 million. Bookings of $254 million, and a book-to-bill ratio of 1.2:1 for the fourth quarter of 2020. Funded backlog at quarter end was $643.3 million, with $278.9 million unfunded. Our bookings and pipeline give us visibility into our expected future revenue flow over the next 18 to 24 months. For the year ended 12/27/2020, our book-to-bill ratio was 1.4: 1, with total bookings of $1.03 billion. Our book-to-bill ratio for the year was 1.4: 1 for both our unmanned systems segment and our KGS segment. Now moving on to financial guidance. We are providing our initial first quarter and full year 2021 guidance of revenues of $185 million-$195 million and $810 million-$850 million, an adjusted EBITDA of $12 million-$16 million and $81 million-$87 million respectively. As Eric mentioned, our guidance reflects the impact of the recent loss of an international training contract, which had contributed over $34.5 million in revenue in 2020, and which is expected to generate approximately $15 million in 2021, or a decrease of $20 million year-over-year. It includes a full year of the recent ASC Signal acquisition that closed in mid-2020. We expect our unmanned systems revenues for fiscal 2021 to be in the range of $210 million-$240 million, reflecting expected target revenues and contribution from recent tactical awards. We expect to be awarded certain international target awards during fiscal 2021 that we have been pursuing. Under the new accounting standards under ASC 606, due to the expected contractual terms, the expected revenues will be recorded as delivered, which is not expected until 2022 and thereafter, rather than under a percentage of completion method as work is performed under the contract. Many of the expected international contract awards will be recorded under a delivery basis, which is expected to be in 2022 and thereafter, rather than over time as work is performed during 2021. Kratos's revenue mix for 2021 is expected to be more developmentally weighted, including as a result of the large number of new contract awards that we have received and includes discretionary investments versus a more mature product life cycle in 2020. Discretionary investments include continued R&D expenditures, primarily in our Space and Satellite business, resulting in an expected increase in R&D of $3 million-$5 million over 2020 levels. Other discretionary investments include infrastructure costs of approximately $3 million-$4 million related to government-mandated cybersecurity or Cybersecurity Maturity Model Certification, or CMMC costs. As Eric mentioned, the results of our Israeli microwave products EBITDA is directly impacted by the strength of the shekel versus the U.S. dollar, which is currently expected to negatively impact 2021 EBITDA by $2 million-$3 million when compared to 2020 exchange rate levels. We are providing full-year 2021 free cash flow guidance of a use of $30 million-$40 million. Forecasted investments for non-recurring engineering in our Rocket System and Engine businesses for new products is expected to be approximately $10 million for FY 2021. Consolidated capital expenditures are estimated to be $55 million-$60 million for 2021. Approximately $20 million-$25 million of the expected outlay is related to the continued production of Valkyrie aircraft prior to receipt of expected customer awards. Therefore, these aircraft are currently reflected as company-owned assets until receipt of the related customer awards. Kratos will adjust the forecasted CapEx outlays as to ultimate balance sheet classification of these investments once expected customer orders and the nature of the contract terms can be determined, at which time those expenditures may be reflected as inventory and will impact operating cash flow. In total, approximately $30 million-$33 million of our expected capital expenditures are related to our Unmanned Systems segment. Our expected capital expenditures also include investments in the company's Space and Satellite business secure facilities and expansion of our company-owned situational awareness network of approximately $11 million-$15 million. Capital investments related to the recent GBSD award in our C5ISR business of over $7 million-$8 million, and investments related to the company's Turbine and Rocket System businesses. Included in our 2020 operating cash flow is a benefit of $9.5 million related to the deferred payroll tax, related taxes under the CARES Act, of which 50%, or approximately $5 million, is required to be repaid by the end of 2021, and the remainder to be repaid by the end of 2022. In summary, there is an approximate $15 million negative impact in 2021 operating cash flow when compared to 2020, resulting from the approximate $10 million 2020 payroll tax deferral, plus the approximate $5 million 2021 repayment. In addition, there is an approximate $10 million of engine-related NRE investment expected in 2021, resulting in an aggregate $25 million negative impact to 2021 operating cash flow when compared to 2020. Kratos' fiscal year 2021 guidance includes the current forecast financial contribution from the recent Skyborg, AFRL, and other tactical drone system contract awards, including as related to Valkyrie. Kratos' fiscal year 2021 guidance excludes any contribution from potential additional Valkyrie or other tactical drone production or system contracts, with potential additional awards to be taken into consideration in our financial forecast adjusted once such contracts or orders are received and the related financial contribution can be estimated, which would be dependent on criteria including the type of contract vehicle, scope, timing, and period of performance. Thank you. As we begin 2021, the organic opportunity set for Kratos across the company has truly never been greater. Over the past several months, as a result of certain industry-related dynamics, a number of interesting potential acquisition opportunities have arisen that we believe could uniquely and significantly benefit us, which we're gonna be investigating. I'm not sure if anything will come out of them, but we're gonna be looking at them. With that, I'll turn it over to the moderator for questions. We have our first question from Ken Herbert from Canaccord. Your line is now open. Hi, Eric and Deanna. Good evening. Good evening. Hi. Hey. Hey, Eric. Appreciate all the detail on the programs and the outlook. I guess, just at a high level, your comments imply very significant sort of opportunity set and a growing opportunity set. As you look at your portfolio, are there any areas that you'd identify as perhaps at risk if we are in a more challenged budget environment, not necessarily in fiscal 2022, but in fiscal 2023 and beyond? The one that comes to mind, Ken, again, we're not the prime, and in no way am I speaking for our partner, Northrop, would be GBSD. The strategic triad. That is the one that I read about. Okay. On the flip side, you obviously lost an ally when Dr. Roper transitioned out of the Air Force. What signals are you getting, or what are your conversations like today with your customers in the Air Force and across the military on specifically the tactical drone side? It sounds like there's still broad support. Can you point to specific examples that give you confidence that you'll continue to see very strong budget support for the tactical effort? I believe that our relationships and support with the Skyborg program office could not be any stronger than it is. I believe that our support with the Air Force Research Laboratory and LCAAT and LCASD, I don't see how it could be any stronger than it is, especially with what's coming down the pipe for Kratos. A lot of us have done this a long time. We always make sure that there's no single point of failure. I don't want to name names on this line, but we have numerous, multiple individuals and offices that are firmly behind attritable aircraft, affordability, bringing quantities to the fight. You've noticed today, I stressed multiple times that Kratos has four jet drones that are flying today that I can tell you about. Four of them. No one else has anything like it. They are becoming operationalized. They are becoming missionized. You heard me talk about IOC is coming. You heard me talk about a new procurement opportunity just came out this week. This is happening. I believe we have the right products at the right price, at the right place, at the right time, and the customer appreciates that. Perfect. Thanks, Eric. I'll stop there and pass it back. Yes, sir. Next question is from the line of Noah Poponak from Goldman Sachs. Your line is now open. Hello, everybody. Good afternoon, sir. Eric, you gave us a ton of detail there on the programmatic moving pieces, and obviously, you continue to speak to a number of opportunities to grow. You've also had some things move against you in terms of timelines and COVID related delays. If I zoom out, despite all of that, you're saying you're gonna grow about 10% organically top line this year, and the margins actually look pretty flat despite the incremental investments, with the EBITDA margin a little over 10%. I guess, beyond this year, which has a number of kind of transition elements to it, how should we think about, does Kratos have a top-line organic growth rate that accelerates meaningfully? Or does it just kind of hang around that 10% range? And do the margins expand meaningfully, or do they kind of hang around where they are as we move beyond 2021? Both are forecast in our five-year plan to expand meaningfully. Okay. If current forecasts hold, Noah, the only item I can see that would impact us is the ranges and range access. Okay. 2022, organically, is a step function revenue above, step function above 2021. Okay. Space and satellite, I believe our customers speak for themselves, and we are going to start delivering product, software and product, in 2021 to these customers I've gone through. On the tactical drone side, again, if the current plans hold, there is going to be, in our Drone business, a step function in growth next year. Then back to Ken's question, Noah, on GBSD, there is a significant step function for Kratos from 2021 to 2022, then from 2022 to 2023, as we execute on for our partner, Northrop. Okay. These are under contract. Okay. No, that's helpful. Hopefully timelines hold and these things can stick together. Yep. Can you dive a little further into what's gone on with Valkyrie and your accounting for it? Last year, you had introduced the notion of it being in your CapEx until you got an order, and you said once you got an order, you could then move it into revenue. It sounded like you only anticipated that happening last year. Did you move anything into revenue on Valkyrie in 2020? Why is this still happening in 2021, given you had the orders you expected you'd have? Sure. Noah, it depends on the contractual terms of what is awarded. For instance, if it's for flight demonstrations or exercises or testing payloads, et cetera, then that would be more recorded as those exercises and demonstrations are performed. For outright sales of aircraft, then it would be on a percentage of completion basis as we're building those aircraft. Yeah. Those costs would be transferred from fixed assets to inventory. It depends on the actual makeup of the contractual terms. Is that to say that you were expecting production orders and you only got flight demonstration orders? Oh, no. We have received orders for several vehicles. Okay. That we will be delivering the first ones very soon. We have to be very careful here, Noah, because of the nature of these contracts the government has not disclosed. Okay. We will be delivering, and the government customers, because we have several that have ordered aircraft, will be taking, my word here, title ownership transfer of the aircraft to them beginning this year and then continuing into next year. As I indicated in my remarks, we're planning on more to come as we move through the year. Okay. The $50 million-$60 million of revenue that you mentioned in your 2021 plan for tactical drone, is that basically the Valkyrie orders you've received so far? It's a big part of it. Yes, sir. How are you thinking about the potential for more orders in this year that convert this year? Should we think about incremental orders this year and beyond convert beyond 2021? It depends on the nature of the contract. If the contract is such that we receive something, say, in June or July, and ownership begins transferring of the work in progress, then it's percent complete. If the nature of the contract, and there's one in particular we're working on, where it's not until delivery occurs and they sign off on acceptance with the DD 250, the revenue, we won't get it until Q1 of 2022. Okay. I'll leave it there and maybe follow up. Thanks so much. I appreciate it. Okay. Thank you, sir. We have our next question from Greg Konrad from Jefferies. Your line is now open. Good evening. Good evening. Good evening. You ended the script at kind of a cliffhanger, talking about acquisition opportunities that may or may not materialize. Any other details or at least appetite or maybe areas that you're seeing in organic opportunities? Greg, as you know, over the past multiple years, we have been focused organically. That's coming to fruition over this year, and it's going to be accelerating, like I said, next year and thereafter. We've stayed away from anything large. We've done tuck-ins. There are some certain dynamics that are happening out there in the industry that have brought potential opportunities to us that are right in our bailiwick. We're not going to do anything outside our bailiwick. Right in our bailiwick that could truly be for us one plus one equals four or five, not one plus one equals two. Because of that change in potential mindset, we'll have to see what happens. I wanted to mention that to the group here, because we've been focused primarily organically. That's helpful. Can you just remind us of the size of the Space business today? You mentioned needle-moving space opportunities, and I think you talked a little bit about them in the script, but any other detail around size, timing, or just kind of the potential trajectory of the overall Space business? Sure, Greg, the current business is just a little over $200 million currently. Perfect. Greg, on the second part of your question. Heretofore, a large opportunity for us would typically, say, be less than $50 million. Okay. Right now, because of some of the changes I've talked about in the procurement posture by the customers, which is incredibly favorable for Kratos, okay, we have several opportunities we're bidding as prime over $100 million. This has never happened to us before. These are real, and this is what the customer wants. The customer wants to disaggregate the aggregation of buying space, satellites, and ground. We have the technology advantage now with OpenSpace. With the technology advantage and the change in the customer posture, and you have to calibrate me because the glass is always 90% full. We're going to win some of these. We are very well positioned technologically and price. Thank you. That's helpful. Thank you. Yeah. Have a good night. Next is Mike Crawford from B. Riley Securities. Your line is now open. Thank you. With the additional lot of Skyborg or Valkyrie builds contemplated to start later in the year, and also this NRE related to the military jet turbine engines, you have a little bit of additional CapEx this year. Do you expect CapEx then to come back down to like a $20 million or $30 million or lower level in 2022 and beyond? Might there always be these- Yes. ...structures that will keep? We expect it to come down. Yeah. Mike, it would probably be more normalized in that $25 million-$30 million range. Okay. Excellent. You mentioned briefly your partnership with AeroVironment this is what you're contemplating putting the Switchblade into one of your drones? Mike, I'm hesitating because I just don't know if it's been disclosed precisely which variants of their drones we're doing. We are integrating certain of their drones into our aircraft. Again, I'm not being coy. I just don't want to misspeak here on which variant, because they've come out with some new variants. Okay. Back to your Engine business. Can you disclose maybe what was the Commercial Aero revenue associated with those two businesses you acquired, say, in 2019 versus 2020, and where that level might be this year before it potentially rebounds in 2022, 2023? Yeah. The COVID related impacts were over $10 million in 2020, Mike. They were down from about, and I don't have the precise numbers, but I want to say they were about, in 2019, closer to $20 million, and then down to $10 million in 2020. For 2021? It's looking- We forecasted, Mike, even substantially less than that. Okay. Just finally, there are some outsized potential hypersonics related opportunities, particularly with the engines. Are those also pushing to the right due to travel and other restrictions? Have any of those getting closer to a decision point? They are not pushing to the right thus far because of COVID or travel. Okay. However, on two large hypersonic programs we are on that are publicly out there, okay. We were scheduled to do several launches for our customers this year. Those have moved into Q1 or Q2 of 2022 for reasons not related to COVID. Okay. Thank you, Eric and Deanna. Thank you. Thanks, Mike. We have our next question from Peter Arment from Baird. Your line is now open. Oh, sorry. We have Michael Ciarmoli from Truist Securities. Your line is now open. Hey, good evening, Eric and Deanna. Thanks for taking the questions. Eric, just on the Valkyries, I mean, obviously, you're building them on your own dime right now. I mean, the expectation, just to calibrate us, I think you said they'll start, you'll deliver the first one in 2Q or 3Q. I mean, you've got a lot of 12. Should we think 8- 10 realistic this year? As obviously COVID ranges, is this seemingly below your expectations of how fast you would've been able to build and deploy these? I see your question. Yes. We're doing our best to match them coming off the line with a customer. That's what we're doing our best so they don't sit in capital for an extended period. It could be 6- 10 this year, okay, just depending on that customer dynamic. Mike, I'm glad you asked this question because there's another opportunity coming that we're going after that I think we're going to get. It's an opportunity where we will own the aircraft, and this is the wrong word, the government will lease them for ops. They'll pay a service fee for ops. Okay. That's a potential that we're seeing, too, for these aircraft. Got it. Then just, I think you may have answered Ken's question around one of the challenges maybe or headwinds being range access. I mean, as you sit here today, how are you thinking about the competition? It seems like, the various agencies you're working with have given your potential competition ample time to sort of catch up to you and close that gap. How are you, realizing no one's flown yet, how are you looking at some of these decisions, delays, and the competition obviously having time to prove their own platforms? Right. As you guys and gals that know me, you know I have ants in my pants. The delays, I don't like them one bit because we are doing everything we can to match Kratos with what The Pentagon is saying is a top priority. Which is to rapidly develop, demonstrate, and field systems, including digital engineering, which of course we are a leader in that. We don't talk about that much, but we are an industry leader in that, probably second to none on that. We have the capability, and Mike, we're doing it. We are popping out a new aircraft every couple, three years. I understand it. I don't like it. I'm very frustrated, but we will win. The reason we are going to win is we have a family of aircraft flying today. They're being missionized and operationalized. Okay. They're incredibly affordable compared to anything the competition can do. Why is that? Because we are producing hundreds of target drones. We are levering off that supply chain, the materials, the engines, the electronics, the avionics, the wire harnesses. I can go on and on. We are leveraging off of all the quantities we're buying for the target drones, which is driving down the cost of our tactical drones. No one has that. Got it. No one has that potential. They cannot do it. All right? Got it. You mentioned, no one has anything flying today. You are right. This is hard. These aircraft that we can talk about, that I can talk about here, they go up to Mach 0.95 and pull an incredible amount of Gs and do certain things, and a lot of it is on autonomous systems. I'm not going to call it fully AI yet. This is not easy. Again, the fact that we do hundreds and hundreds of flights with our target drones, which you just switch out the payloads and switch out certain things, and it's a tactical drone. This has given us an incredible advantage, and this is why we will win. Got it. Just one last one, maybe kind of a little housekeeping. Deanna, I think you said some of these international awards and programs are going to be more delivery weighted versus percent of completion. Is that creating a bit of a revenue headwind this year? Yes. Should we expect maybe a little bit more of a step function then next year? Absolutely, yes. With the contractual terms under international contracts, typically, they would not fall under percent complete. Under the new revenue recognition standard, that will be based on delivery, which would push it out a year or so. Okay. Would you quantify that or no? Mike, I'd say this year, I think we're going to be building 30-50 target drones for international customers. Okay. Think about that, 30 or 50. Okay. Helpful. Thanks, guys. Yep. Thank you. We have our next question from Peter Arment from Baird. Your line is now open. Yeah, thank you. Good evening, Eric and Deanna. Eric, you had talked a lot about, in the past, getting the unmanned segment up to kind of $250 million in revenues or at least approaching that. Do we get that this year, or is it just because some of the delays that you've seen that are out of your control, that you won't be able to hit that? Yeah. We're not going to get there this year. Good to hear from you, Peter. I talked about in my prepared remarks, that Army contract, that Army program we won, that was just under $100 million a couple of years ago. I can't get into the reasons why, but that is rolling out far slower than we thought. It just is. We have another program. I can't talk much about it at all, but we are under contract. We are working our way through LRIP. That has been pushed out. Full rate production has been pushed out a couple of years. As Deanna just said, this international, this new accounting rule, where these international ones, where we would typically do percent complete, and we'd get the revenue as we'd be building them. Now we're going to get the revenue on certain of these upon delivery. As we were just chatting with Mr. Ciarmoli, I think it's somewhere between 30 and 50 international target drones this year, that we're not going to deliver these until 2022 or 2023. A bunch of those are revenue recognition is on delivery. That's moved that out. That's why. The opportunity set is still there. Those are the dynamics that are around it. No, that's helpful. You also, just on the Gremlins push out, it's got nothing to do with your system. Obviously, DARPA still hasn't, I guess, is still trying to validate the recovery system. Is that the main factor you're seeing it kind of slide to the right by 12 months or so? Oh, no. The Dynetics system is incredible. It's incredible. Remember, we've had two impacts here. Number one was the massive earthquake a year and a half ago at China Lake, where the demonstration flights were supposed to be. If you pull up China Lake earthquake, it was like $7 billion in damage to the range. That was the first delay that delayed us six months until I think we went to Dugway. Okay? COVID hit. Think about the range operations. You got to go in the command centers. There's no way you can social distance in a command center out there. There was the DoD travel restrictions, et cetera. This is why, like in the past couple of months, the DARPA program manager, and I'm going to paraphrase here, I don't remember exactly what he said, but he said, "We've been pushed out approximately a year or more because of these types of things." Okay. No, that's a really helpful color. I appreciate all the details as always. Thanks. Thank you, sir. I'll pass it back. Next question is Seth Seifman from JP Morgan. Your line is now open. Thanks very much. Good evening, Eric and Deanna. Good afternoon. One thing I just wanted to clarify the $210 million-$240 million of unmanned revenue that you talked about for 2021, does that include the $50 million-$60 million of growth on the tactical drones? It includes $50 million-$60 million of tactical drones. That's not growth. That's absolute dollars. Absolute. Tactical. Yes. Right. Okay. Yes. Got it. Okay. Was there meaningful tactical drone revenue in 2020? There was. That was some of the development classified work that we're working on. It was in the range of $20 million plus. Right. Yeah. Okay. That's right. The growth there. Yeah. Like $20 million. Okay, the growth there is going from $20 million up to that $50 million-$60 million range. That's correct. Yes. Okay. Not to totally belabor the point, but just to understand a little bit better the Valkyrie accounting, I guess the orders that you have thus far cover an undisclosed portion of the initial 12 that you were building. What you'll be building next year, the CapEx, covers a remaining portion of those 12 plus the one to two a month that you are thinking about building thereafter? Correct. Yeah. The customers have not disclosed how many aircraft they're procuring from us. It's several. We are under strict guidance. We cannot get ahead of them on this. Right. These are percentage of completion, right? Potentially. I think that was the question. We have to be- Yeah. ...careful because, again, the customers have been very clear to us on this. I'll just refer back to the, I think it was a question Noah had asked. It depends on the specific contract terms- Yeah. ...delivery, et cetera, and what the deliverable is. Right. The ones that are already under contract, or maybe it's not something that's disclosable. Of the 12, the ones that are already under contract, are those percentage of completion or delivery? We're not going to say. We can't. We can't say. No, I understand. Fair enough. Sorry. No, that's fair enough. I'll get a totally different question then. Eric, you talked about M&A a little bit there at the end, and talked about what sound like some really interesting opportunities. I guess, just when you think about what kind of capacity you have and what you might want the balance sheet to look like and all that kind of stuff, what color can you put around that in the context of the M&A opportunities you described? We're very fortunate right now that we're in a, in my opinion, a substantive net cash positive position. Yep. No bonds. That means we have significant debt capability if we want to go that route. We are positioned where we can be very flexible with where we're at, depending on if any of these items that we're assessing. As I said way up front, I don't know if anything will happen here. I really don't. They have to be perfect for us. We're not a big acquiring company. These are so interesting, and these would, like I said, these are not one plus one equals two. I'm talking about going after and winning new work, big programs. These are one plus one equal four. It depends on, obviously, what it would look like and what it would take. Right now, we feel comfortable with all of our options. Right. Okay. Great. Thanks very much. Okay. Thank you. Next is Joe Gomes from Noble Capital. Your line is now open. Good evening. Good afternoon. Most of my questions have been answered here already, but I'll take a different tack. You put out a press release earlier this month about your autonomous truck. I was wondering maybe give us a little more color on that and what that might mean to the company. Yeah. What kind of addressable market are we talking about here? Joe, if you could see me, I'm smiling ear to ear because no one ever asks that question, and I purposely don't talk about this because this is one of a handful of areas where we're going to sneak up on the market in a very positive way. As you're alluding to, we're not developing something. We have taken a military technology on autonomous vehicles, okay? Like autonomous tanks and autonomous trucks, and we have commercialized it, and we have a strategic agreement with a number of players including Royal Trucking, and we are now rolling this out across the U.S. in, I think we're in six, seven, eight states already. The opportunity pipeline is incredible. The market expansion in other areas, because we're proving this out from a safety standpoint, a reduction in cost standpoint. A green I don't focus on that much at all. A green standpoint. It is significant. This year could be the year where we announce we've landed this, which will be meaningful financially for us in 2022. It's an incredible technology that our guys down in Florida developed for the military, and we are exploiting it commercially. No one has anything like this. We're the industry leader. Thanks for that, Eric. Appreciate it. Thank you for your time. Thanks for asking the question. Next is Noah Poponak from Goldman Sachs. Your line is now open. Eric, are you looking at more acquisition candidates or larger acquisition candidates? Larger. Good question. This is not a quantity thing. These are very specific that have come to us. Should we be thinking about size of your cash balance or size of your cash balance plus what you'd add if you took leverage to two or three turns? Or should we be thinking you would potentially issue equity for something transformational? Or would you rule that out? I don't know yet, and let me tell you why. The debt interest rates right now are incredibly low. They're incredibly low. That would be one path. Depending on the size, we may be able to handle it with what we have and not significantly debt up the company at all because of our EBITDA and our cash position in the EBITDA and the balance sheet construct of the potential targets. If it's a certain type of opportunity and with the seller, et cetera, maybe it's a combination of those, maybe there's some equity involved. I truly just don't know yet. What I indicated before is we're very fortunate we're in a position where all those alternatives are open to us. Noah, very importantly, don't look for us to come out of anything in a significant leveraged position. Okay. We're not going to do that. Okay. It's helpful. How much revenue did you lose out of 2021 from the accounting change on the international items? I'm going to do a total guess here. I'm going to pick the midpoint of my number. If we're at 40 drones, and it's a mix of Firejets, et cetera, I'm going to say 15-20. Maybe 20. 15-20. Deanna's nodding. 15-20, 25, in there, just depending on the percent complete- Yeah. ...that moved. Okay. Great. Thank you. Thank you. Thanks. No further questions at this time. I turn the call back over to Mr. Eric DeMarco. Great. Thank you for joining us today. I know that this one, the prepared remarks were a little longer than usual. It's because obviously it was the end of the year. We haven't had a chance to chat with you in four or five months, and there have been a lot of exciting things that have happened in our Space business, which is really looking good, and obviously in the Drone business. Thank you very much for joining us. Ladies and gentlemen, this concludes today's conference call. Thank you all for participating. You may now disconnect.