Good afternoon, ladies and gentlemen, and welcome to the Kratos Defense & Security Solutions third quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. I would now like to hand the conference over to your host, Marie Mendoza, Senior Vice President and General Counsel. Ma'am, please go ahead. Thank you. Good afternoon, everyone. Thank you for joining us for the Kratos Defense & Security Solutions third quarter 2021 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. In the third quarter, Kratos's unmanned systems business generated revenues of $61.3 million, which represents organic growth of 14.6% over the third quarter of 2020. Kratos's space, satellite, and cyber business generated revenue of $72 million, organically increasing 17.5% over the third quarter of 2020. Our unmanned systems and space businesses are our company's largest, they're our fastest-growing, and are both expected to continue to generate very strong year-over-year future revenue growth. This is representative of the successful execution of our internally funded investment, organic growth-focused strategy, which growth we believe our C5ISR, our Rocket system, Microwave Electronics, and engine businesses will each also see in the future based on recent program wins like GBSD, Iron Dome, next generation small engine, development contracts and opportunities. We currently have multiple under contract large and new programs where we are expecting significant future increases, including Sub-Sonic Aerial Target or SSAT with the United States Navy, Skyborg, Thanatos, Air Wolf, Off-Board Sensing Station, Ground Based Strategic Deterrent, Overhead Persistent Infrared, Tactical Intelligence Targeting Access Node, the Hypersonic and Ballistic Tracking Space Sensor, and several classified programs, among others, all of which are under contract, which also provides the confidence in our future year-over-year growth forecast and up into the right trajectory. As you know, the final revenues from our legacy international training business, which contributed approximately $35 million in 2020 revenue and over $14 million this year before completely winding down in Q2, have been masking Kratos's overall core business growth rate, which we will continue to highlight for you until financial performance is comparable in Q3 next year. Excluding the legacy training revenues, Kratos's 2021 over 2020 forecasted overall organic growth rate is still forecast at greater than 8%, with this growth even after we saw approximately $31 million of Q3 and Q4 2021 revenues deferred to future periods due to COVID-related travel, supply chain, and customer issues, which we identified as potential execution risks on our Q2 call with you, including in the Q&A. I will emphasize here again, as I did in Q2, that substantially all Kratos's Q3 and Q4 2021 forecasted revenue was and is already under contract with customers. Accordingly, irrespective of these issues, which all will eventually pass, Kratos is in a great position today. We continue to execute. We control what we can control. We're winning new programs, and we're driving the business plan. Specifically to execution, since our last report to you, we have received a $374 million sole source, single award target drone-related contract with the United States Air Force, of which we expect to realize substantially all, if not the entire $374 million IDIQ amount in Kratos's revenue over the period of performance. The United States Navy's SSAT program office, PMA-208, recently completed three back-to-back test flights with Kratos's newest Sub-Sonic Aerial Target drone, the BQM-177A, in preparation for full operational capability of this Kratos target drone system, which is now expected to come later this year. We now expect the next sole source full rate production contract to come in the next few months. Our tactical drone-related programs continue to progress, including a recent successful series of customer flights for Kratos's Air Wolf drone and fourth Thanatos, which we now, with these successes, expect significant increased future revenues. We have successfully competed for and received an AFRL OBSS, or Off-Board Sensing Station, affordable tactical jet drone program award, which we believe has potential future growth opportunities similar to Kratos' Valkyrie, the Gremlins program, Air Wolf, and Thanatos. We believe that Kratos' recent receipt of the OBSS award for a new low-cost attritable unmanned aircraft program demonstrates Kratos' digital engineering and technology leading position. The OBSS drone system continues to expand Kratos' industry-leading family of affordable, disposable, reusable, and attritable drone systems, each with their individual capabilities and mission focuses. With the OBSS award, we continue to believe that Kratos is the best-positioned company to realize incredible growth in the forecasted to be incredibly large tactical drone area as Kratos continues to successfully bid for and receive significant awards in this area. Kratos' Ghost Works, including our air-gapped group, played a key role in our OBSS success, and Kratos' Ghost Works is now currently focused on additional new program system opportunities, certain of which we expect to hear on in the coming months, and hopefully, we will be able to report to you. Just a few weeks ago, as I noted, Kratos' Ghost Works had a successful Thanatos flight as this program initiative continues to progress. On August 16th, the Air Force reiterated its commitment to be ready for a 2023 Skyborg Vanguard program of record, under which Kratos' Valkyrie and Mako jet drones are both recognized participants. The Kratos Valkyries under the contract with the Skyborg program are expected to be delivered shortly, and the Valkyrie aircraft under contract with the LCAT, or Low Cost Attritable Aircraft Technology program, which also remains on track, also now are scheduled for delivery. In addition to Skyborg and LCAT, we have been in discussions with additional customers and program offices for Valkyrie, which funding is anticipated in the pending 2022 budget if everything holds as currently expected. It was recently reported that the general in charge of the Air Combat Command stated that the first low-cost attritable jet drones could be in a stealth red air role as adversaries for fifth-generation fighters, and that low-cost attritable aircraft systems will be a future growth industry. We believe that Kratos' Valkyrie and its capabilities would be an excellent system for this adversary air mission, and we understand that there is currently a significant funding plan in the 2022 budget NDAA markup for this ADAIR initiative, which we view as another large new potential opportunity for Kratos' Valkyrie. It was also just reported that Kratos' Valkyrie was specifically mentioned this week by the government for a certain new mission and opportunity in the Pacific region, which we have been working on. These are just the most recent examples of where Kratos' clear industry leading position in affordable, high-performance, made-in-America jet drones with multiple classes flying today. We don't have PowerPoints or renderings. Flying today are the Valkyrie, Gremlins, Air Wolf, Mako, and others, and this is a clear first to market competitive advantage for our company and why we are so confident in our future success and the growth trajectory. The production of the initial 12 Valkyries remains on track in our Oklahoma facility, with the possibility now based on the 2022 DoD budget, once finally approved, that we may be making a decision to accelerate and pull certain of these 12 to the left, completing them sooner, if possible, in conjunction with our customers' input. We now have begun planning for a potential second Valkyrie production spiral lot in addition to the current initial 12 in production to begin next year, which would also be in close cooperation with our customers' demand signals and expected funded contracts. We recently announced that Kratos' Air Wolf tactical drone system completed a 100% successful flight at the Burns Flat, Oklahoma range facility. This Air Wolf mission, which was the inaugural flight at the Burns Flat range location, included multiple new payloads carried by Kratos' Air Wolf, including a proprietary Kratos artificial intelligence and autonomy system, which has been developed by Kratos specifically for high-performance jet drone aircraft. Kratos' Air Wolf flight demonstrates the value that the Burns Flat range facility asset brings to Kratos, including the ability of Kratos' Ghost Works to now conduct flights rapidly, affordably, and in a secure, confidential environment away from the competitor's site. Kratos' Air Wolf also recently performed another successful flight series in addition to the Burns Flat site, including a critical customer flight, which was 100% successful, and we are optimistic that these recent successful flights will lead to future program opportunities. It was also recently reported that Kratos' Air Wolf combat drone launched a loitering munition in flight, another important milestone for the system as we move toward missionization. On Gremlins, it was recently reported that an additional new test series is now planned for the program with our prime partner, Dynetics, with a potential additional contract award in the first half of 2022. This potential additional phase will reportedly feature operations-focused testing and mission demonstrations that could include a single operator controlling multiple Gremlin vehicles and payloads and intelligence, reconnaissance, and surveillance missions facilitated by certain types of electronic and cyber payloads. This phase would serve as a pilot program to develop and mature military mission capabilities and assist the DARPA Gremlins program to successfully get through the infamous DoD Valley of Death and transition successfully to a military service and program of record, which Kratos fully expects will occur, similar to Valkyrie and Air Wolf. It was also reported that multiple service branches have been involved in conversations about the future of the Gremlins program after transition, including the Air Force, the Marine Corps, and now the U.S. Navy, and that DARPA intends to bridge the DoD Valley of Death with at least two drone programs, both of which are currently supported by Kratos, one of them including Gremlins. Kratos' Mako tactical jet drone also continues to achieve success under various programs and initiatives, but as I have mentioned before, most of this is now classified. The Thanatos development program remains on track, including the recent successful flight, as are each of our other tactical drone programs and initiatives. We expect significant future year-over-year organic growth for Kratos' unmanned aerial jet drone business, both tactical and target, as the demand for these types of drones and systems continues to increase. Directly related to Kratos' affordable drone initiatives, the Air Force Research Lab recently announced that Kratos is part of their team under the Design for Manufacture of Attritable Aircraft Primary Structure, or DMAPS program, which is an AFRL Aerospace Systems Directorate team of researchers and engineers, which has now successfully tested a new low-cost attritable aircraft fuselage and wings design. As you know, attritable refers to a new class of unmanned aircraft that are purpose-designed and routinely reusable, built affordably to allow a combatant commander to tolerate putting them at risk. Improving attritable aircraft technology is crucial to providing the operational warfighter with a tool that is affordable and easily manufactured in tight time constraints. The AFRL stated that the autonomous collaborative platforms, or ACP, these will play an increasingly important role in various Air Force missions, and that the main tenets of ACPs are autonomy, affordability, speed of design and build, and mission effectiveness, each a Kratos strength area. The DMAPS program is directly addressing these characteristics, which are critical to the ability to develop affordable, attritable drone systems in large numbers and present a military challenge to peer adversaries. The announcement of Kratos' participation in DMAPS is incredibly important to our unmanned tactical drone system long-term strategy and success, and once again is representative of Kratos' industry-leading position in the next-generation UAV area. Simply stated, as I believe is reflected in today's report, unmanned jet drones will be joining the combat air forces, flying alongside manned aircraft, carrying additional munitions, performing surveillance and jamming, and making attacks, including to protect their manned wingmen. Low-cost, attritable unmanned drone systems will affordably increase the size and capability of the air fleets without adding additional pilots, and unlike manned systems, these drones are designed for short operational lives, reducing or eliminating the cost of depot-level maintenance or service life extensions, or SLEPs. Needless to say, we're extremely excited and optimistic for Kratos' unmanned systems business and our related next-generation engines, which go in these systems, as well. Kratos' space and satellite and cyber business has now successfully delivered the first set of products to support the U.S. Army Tactical Intelligence Targeting Access Node, or TITAN, space-to-ground system prototype, which is being developed by Kratos' partner, Northrop Grumman. The purpose of the space-to-ground TITAN system will be to provide near-real-time data to commanders at all levels for timely targeting solutions. In Q3, our space and satellite business continued to successfully perform and deliver on OPIR, or Overhead Persistent Infrared, a missile warning satellite program and one of our business' largest programs. Kratos' space, satellite, and cyber business also supports AEHF, WGS, SBIRS, MUOS, HBTSS, and many other confidential classified programs. Our third quarter adjusted EBITDA was stronger than forecast, primarily due to a more favorable mix in our space, satellite, and cyber business, including certain government agency programs. We expect this favorable mix to continue in the fourth quarter and thereafter based on our backlog, opportunities, and execution plans. We also continue to forecast future year-over-year organic growth with increasing margins for Kratos' space, satellite, and cyber business. From a value creation standpoint for our shareholders, Kratos' Space and Satellite business is approximately $280 million, excuse me, in revenue, growing organically approximately 17.5% with mid-teen EBITDA margins, which are expected to increase. There is currently incredible interest in the Space and Satellite industry, driven in part by forecast significant future market growth, including estimates of as many as 100,000 operational satellites in orbit by 2030, up from 3,500 today, in a future $1 trillion space economy. Kratos is the industry leader in satellite ground systems, including our new first to market OpenSpace virtualization products. The vast majority of the satellites in orbit and that are going into orbit are gonna require ground infrastructure to successfully perform their mission, including command and control, telemetry tracking and control or TT&C, modems, recorders, antennas, digitizers and more, all of which are Kratos products and solution areas. Kratos is also the only company in the world with a Kratos owned and operated global Space Domain Awareness network, which value is substantially increasing and in demand by our commercial customers. As more satellites go up that can interfere or crash into each other, our customers want to know where they are, what they're doing, and they want situational awareness, and Kratos can provide that to them with our global network. Kratos' space and satellite business is both an industry and a Kratos crown jewel, with valuations of assets and businesses in the space and satellite industry receiving valuations as high as 15x revenue as recently reported. We are focused on continuing to invest and create significant value for our shareholders with this asset. Since our last report, Kratos' Rocket Systems Support business provided multiple advanced ballistic missile targets for the first test Aegis Weapon System FTM-33, supported by the United States Navy and Missile Defense Agency. We have multiple additional future missions currently planned, which are part of our forecasted future organic growth trajectory. We expect future year-over-year organic growth in Kratos' Rocket Systems Support business, including growth in the ballistic missile target, sounding rocket, special mission, and hypersonic systems areas. Our C5ISR business received approximately $13.2 million in program awards, including for a large U.S. National Security program, which we hope we're gonna be able to provide details to you on in the future. Our C5 business is currently under contract for or in pursuit of multiple large missile, radar, space, satellite, and other system-related programs, many of which are focused on the recapitalization of strategic weapon systems to address the peer threat. We continue to expect future year-over-year organic revenue growth for Kratos' C5ISR business, including significant expansion and growth in the GBSD program beginning in the second half of next year, and then further increasing into 2023, where Kratos is a subcontractor to Northrop Grumman. Kratos Turbine Technologies business, or KTT, received an approximate $3.2 million contract award for the development of a next generation small engine for a certain national security program. KTT is currently under contract and in development for several next generation turbojet, turbofan, and other engines for certain national security priority areas, including unmanned aerial drone systems, cruise missiles, powered munitions, and other platforms and systems. KTT expects to receive a large multiple tens of millions of dollars additional engine-related contract in the next few months, continuing this business's momentum, which also includes our engine business's work on Gray Wolf, Speed Racer, and several other missile and powered munition programs. We are also forecasting 2022 over 2021 year-over-year organic growth for KTT in both our government program areas and in our commercial program areas where we are now expecting recovery from the recent COVID-related industry impacts. We expect future year-over-year organic growth in our microwave electronics business. This is driven in part by Israeli demand, India, and other international radar, missile communication, and satellite system demands, and by a recapitalization of hundreds of Iron Dome interceptors, of which Kratos is a supplier. As we know, fiscal year 2022 began on October 1st, 2021, with no fiscal 2022 budget in place and the U.S. government now operating under a continuing resolution through at least December 3rd, 2021. A continuing resolution continues the preexisting appropriations at the same levels as the previous year with no new program starts, no transition from development programs to production programs, and no increases in existing production programs, each of which directly is related to Kratos, especially in light of the new and increasing programs Kratos has recently received and is currently executing under. The possibility of CRs is a primary reason why we typically wait until our fourth quarter to provide the next year's financial guidance. In this case, the guidance for fiscal year 2022, as the length of the CR will directly impact Kratos' next fiscal year forecast and performance. Accordingly, we will provide our FY 2022 forecast in February when we report our Q4 and our full year 2021 results. As I mentioned in our Q2 report and earlier today, similar to many other companies in the industry, supply chain issues and delays, including as related to COVID, continue to be a challenge. Especially as related to increasing lead times for critical parts from vendors and vendors canceling or significantly changing previously committed to delivery schedules at the last minute. We have recently seen approximately $31 million of under contract revenue deferred from our third and fourth quarters of 2021 to future periods, primarily as a result of COVID supply chain and customer related issues. These issues include our microwave electronics, space and satellite, and C5ISR businesses being unable to timely receive certain parts which were previously committed, and COVID related international quarantine and related travel restrictions in our commercial satellite business, where we are unable to enter certain countries to execute on or deliver under contract customer systems. As soon as we can practically enter the countries to complete the work or we receive product from certain suppliers, we'll be able to execute and record the related revenue. Also included in the $31 million is an approximate $14 million shift from 2021 to future periods in our C5 business on a large, in excess of $150 million under contract Kratos program we are working on, where we understand our customer had to re-baseline their execution plan and schedule in cooperation with the government request. On September 9th, 2021, the president issued an executive order mandating that by December 8th, 2021, all federal contractor employees must be fully vaccinated against COVID-19 unless excluded by certain limited exemptions. The company is moving to comply with the President's Executive Order. However, as a result of the Executive Order, Kratos and our subcontractors, our suppliers, partners, customers, et al, are experiencing certain disruptions, including but not limited to employee distraction, unrest, some retirements, resignations, et cetera, and other situations that we had not previously anticipated or planned for. All of which we are now monitoring, we're managing to the best of our ability, and which potential impact we have included in today's forecast. Irrespective of these challenges, as I discussed today, Kratos continues to successfully execute the business plan. Our Unmanned Systems and Space and Satellite Communication businesses have industry-leading growth. We continue to win large and important new program opportunities, and we're forecasting continued strong year-over-year organic growth with increasing profit margins. In closing, Kratos's business model is organic growth based, one where we are making targeted internal investments in pursuing and winning large new program opportunities. Accordingly, we do not expect to pursue or consummate any acquisitions of size, only maybe potentially small tuck-ins that are clearly aligned with our current business and strategy. Deanna? Thank you, Eric. Good afternoon. Kratos's third quarter 2021 revenues of $200.6 million were at the midpoint of our estimated range of $195 million-$205 million. Unfortunately, delays in deliveries from our vendor and supply chain base and travel restrictions have resulted in a delay in our ability to execute and deliver on certain of our projects, primarily in our commercial ground satellite and antenna and C5ISR businesses, which resulted in expected third quarter revenues of $8.3 million to be deferred to future periods. As we mentioned on our last call when we provided the guidance range for the third quarter and full year, the revenue and EBITDA forecast assumed an increase in execution and delivery timing and our supply chain's ability to deliver on time and on budget, and our ability to hire necessary resources. Unfortunately, similar to what we are seeing across the industry, our ability to execute and timely deliver has been impacted by supply chain challenges and COVID restrictions, including international travel restrictions. Our Q3 2021 consolidated operating income was $10.5 million, down from the third quarter of 2020 operating income of $12.7 million, which includes third quarter 2021 increases in stock compensation expense of $1.4 million, increased R&D of $300,000, primarily in our unmanned systems business, and increased SG&A costs of $5.1 million, including increased headcount in our Unmanned Systems business. Total headcount in our Unmanned Systems business has increased to 830 from 755 in Q3 of last year to 885. Net loss was $2.4 million for the quarter, and GAAP EPS was a loss of $0.02 per share, compared to GAAP EPS of $0.02 in the third quarter of 2020. Included in the net loss for the third quarter was a tax provision of $5.7 million on income before taxes of $4.6 million, for an approximate 124% tax provision rate, which was primarily the result of nondeductible non-cash stock compensation expense and taxes related to international-based income. As a reminder, we have over $280 million of U.S. federal net operating losses, which substantially shield domestic-based federal income tax payments due. We generated adjusted EBITDA of $23.8 million for the third quarter, above the range of our expectation of $16 million-$20 million, primarily reflecting a more favorable mix of revenues in Kratos's space satellite and cyber and in our turbine technologies business. In the third quarter, our Unmanned Systems segment reported revenues of $61.3 million, up 14.6% from the third quarter of 2020 due primarily to ramps in production in target programs, including the 167, and work performed on the Valkyrie program. Unmanned Systems generated operating income of $2.6 million, down from $3.7 million in the third quarter of 2020, primarily reflecting an increased mix of development type programs and increased R&D investments of approximately $500,000 and increased SG&A costs of $1.6 million. Unmanned Systems generated adjusted EBITDA of $4.7 million, down from $5.6 million in the third quarter of 2020. KGS reported revenues of $139.3 million in the third quarter, down from $148.5 million in the third quarter of 2020, reflecting a reduction of legacy government services revenues of $6.2 million, down from $17.4 million in the third quarter of 2020 to $11.2 million in the third quarter of 2021, and a $5.5 million year-over-year decrease resulting from a previously disclosed reduction of certain international contracts in our training solutions business. On a pro forma basis, excluding these reductions, revenue grew organically 5.8% in the third quarter of 2021 as compared to the third quarter of 2020, reflecting a year-over-year reduction of $1.8 million from the ASC acquisition, offset by organic growth across our space satellite and cyber defense rocket and microwave products business. As discussed earlier, KGS third quarter revenues were negatively impacted by the delays in supply chain deliveries, resulting in revenues of approximately $8.3 million expected in the third quarter deferred to future periods. KGS reported operating income of $14.6 million, up from $14.1 million in the third quarter of 2020. KGS's adjusted EBITDA for the third quarter of 2021 was $19.1 million, up slightly from $19 million in the third quarter of 2020. Our consolidated adjusted EBITDA for the third quarter is from consolidated continuing operations, including net income or loss attributable to non-controlling interest and excludes non-cash stock-based compensation costs of $6.4 million, acquisition and restructuring related costs of $300,000, net income attributable to non-controlling interests of $500K, and a foreign transaction loss of $200K. Moving on to the balance sheet and liquidity. Our cash balance was $369 million at September 26. We had zero amounts outstanding in our bank line of credit and $6.6 million of letters of credit outstanding. Debt outstanding was $296.5 million at quarter end, and net cash at quarter end was $73.4 million. Cash flow generated from operations for the third quarter was $12.6 million, less CapEx of $12.9 million, or a use of free cash flow from operations of $300,000. Contract mix was 75% fixed price, 20% cost plus, and 5% time and materials. Revenues generated from contracts with the U.S. federal government during the quarter was 72%, including revenues generated from contracts with the DoD, non-DoD federal government agencies, and FMS contracts, which were approximately 0.4%. We generated 9% from commercial customers and 19% from foreign customers. Backlog at quarter end was $839.1 million down sequentially from 2Q 2021. Second quarter backlog of $865.6 million, with bookings of $174.2 million and a book-to-bill ratio of 0.9 to 1 for the third quarter of 2021. Our book-to-bill ratio for our unmanned systems business was 1.1-to-1 for the third quarter of 2021, with bookings of $70.4 million. Of the $374 million IDIQ award from the Air Force, of sole source target drones that Eric mentioned earlier, only the amount initially obligated of $30.4 million are included in our backlog and booking amounts for the quarter. As expected, we have continued to see contract awards in the fourth quarter. Since our third quarter end, we have booked over $50 million in additional awards in the month of October in our unmanned systems business. Funded backlog at quarter end was $618 million, with $221.1 million unfunded. For the last 12 months ended September 26, 2021, our book-to-bill ratio was 1: 1, with total bookings of $770.9 million. Our book-to-bill ratio for the last 12 months ended September 26, 2021, was 1.0 to 1 for Unmanned Systems, 1.1 to 1 for our Space Satellite and Cyber business, and 0.9 to 1 for our KGS segment. Now moving on to financial guidance. We are adjusting our 2021 revenue guidance range from $810 million-$850 million to $805 million-$815 million, primarily to reflect continued and increased supply chain and customer delays, COVID-related quarantine issues and restrictions, including where we are unable to enter certain countries to execute on or deliver systems for customers. The adjustment primarily reflects over $31 million of under contract revenues that has been deferred from our third and fourth quarter of 2021 revenues to future periods, including in our Satellite, Microwave, Electronics, and C5ISR businesses. We expect supply chain customer and COVID-related disruptions and delays to continue industry-wide as related to Kratos for the foreseeable future, which we are taking into consideration in our future forecasts. The adjustment also reflects a Kratos customer rebaselined execution plan and schedule on a greater than $150 million C5ISR under contract Kratos program, which shifted certain tasks approximating $14 million in revenues into future periods, including 2023. At the midpoint of this revenue range of $810 million, excluding the ASC acquisition and the international training contract, Kratos revenues are forecasted to grow organically over 8% year-over-year from 2020 to 2021. We are adjusting our full year 2021 EBITDA guidance range of $81 million-$87 million to $80 million-$84 million to reflect the impact of the revenue shifted from our third and fourth quarters to future periods. We are improving our 2021 free cash flow use from operations guidance of $30 million-$40 million to a use of $20 million-$30 million to reflect expected reductions in our day sales outstanding and increased collections, and lower than initially forecast capital and other investments as certain initiatives are ahead of schedule, under budget or reduced for other reasons. The full year 2021 estimated operating cash flow includes approximately $5 million-$6 million of planned investments in our rocket support systems and engine businesses for new products, including in the hypersonic area and efforts to increase Kratos's market share, as well as approximately $5 million of the required payback of the 2020 deferred employer-related payroll taxes. The 2021 capital expenditure forecast currently includes expected outlays of approximately $25 million associated with 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 capital expenditure outlays and the ultimate balance sheet classifications of these investments once expected customer orders and the nature of the contract terms can be determined. In addition, the capital expenditure forecast includes investments in the company's Space, Satellite and Cyber business, secure facilities, and the company owns Space Domain Awareness network, capital investments related to the recent GBSD award, and investments related to the company's turbine and rocket support businesses. Eric. Great. Thank you, Deanna. We'll now turn it back over to the moderator for questions. Ladies and gentlemen, if you want to ask a question at this time, please press star then the number one on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Once again, that's star one on your touchtone telephone. Your first question comes from the line of Sheila Kahyaoglu from Jefferies. Your line is open. Hey, good afternoon, guys. Thank you so much for the time. Maybe if we could think about a lot of these awards you won, like OBSS and Valkyrie moving forward. Eric, you know, lots of good things, but can you summarize it for us in terms of how we should be thinking about the growth outlook for next year? You know, it seems like, you know, we have a pretty robust double-digit growth outlook. You know, what programs are the biggest incremental drivers, and does anything go away as we think about 2022? Right. Nothing. In unmanned areas, nothing goes away that comes to mind at all. We are forecasting increases, and the biggest one is probably gonna be in the tactical area. This is gonna be Valkyrie related, Thanatos related, and we'll have to see if that additional phase for Gremlins gets awarded, that I mentioned. We're gonna get third-year full rate production in the next few months on SSAT. This is gonna be one of the top two target drone programs in the company. That's gonna be a significant adder for next year. I'm not gonna get into the percentages of growth because it's gonna be a lot of it's gonna be tied to the continuing resolution and the length of the continuing resolution because we got a number of programs in development that are gonna be transitioning to production. I got a number of production programs that are going to increased production, all of which are tied to the 2022 budget and timing. We are expecting significant organic growth in our unmanned systems business year- over- year, 2023 over 2022. Absolutely, we see it. Maybe on margins, if I could ask, one more. You know, profitability was really good this quarter, above our expectations. You know, how do we think about that mix heading into Q4 and what drove some of that big improvement? Driving the big improvement was primarily in the space area. There are a few military programs or national security programs we're on, and one in particular. It has phases. One of the phases was changed, which generated very positively for us. Which generated significant profit margins in Q3. We expect our profit margins to remain strong and potentially continuing to increase just depending on the mix. That's not just for Q4, Sheila, but probably for next year. The mix of business is improving. Let me tell you what I mean by that. Development programs typically bring a lower margin than the production programs or the later programs. You're going, sitting there going, "Okay, you just got OBSS. Yep, that's gonna carry a lower margin. In 2018, 2019, 2020, we won a number of programs in development that are now transitioning to production in the space and satellite area, in microwave and in unmanned. The weighting is moving more and more to the more mature programs, which is gonna be a natural lift on our margins. Which is also because our manufacturing facilities, including in Oklahoma, where we're building the tactical drones, we're filling them up with more products. For example, we're building a lot of Air Wolf right now, and that's spreading the fixed overhead over a greater number of units, which is also driving profitability. We have a few things that are working in our favor from an increased margin expansion area. Okay. Thanks a lot. Yep. Your next question comes from the line of Ken Herbert from RBC. Your line is open. Hi, good afternoon, Eric and Deanna. Good afternoon, sir. Hi, Ken. Hey, Eric. I wondered if you could just level set us on Valkyrie production. Of the, I believe it's still 12 you're producing this year, how many are under contract, and when do you expect all of them perhaps to be under contract? How should we think about production levels on that particular platform into 2022? We were with the customer set, all of them on the under contract vehicles in the past few weeks. We are still explicitly being told, Ken, we cannot talk about quantities yet. I think it might be for national security reasons. I'm not sure right now. I can't get into the specifics on that right now. Now to level set. Under the Skyborg program, which as we talked about today, the Air Force reiterated that they're looking for it to be a 2023 program of record, which would begin obviously in October of 2022. In a number of other areas that are lined in the marked NDAA, including adversary air, expeditionary air, and one other one that I'm not sure is publicly out there. We have line of sight on significant additional Valkyrie orders. The level set is once that FY 2022 budget is approved and becomes law, and we see exactly where this comes out, then we're going to be making some decisions, as I indicated, where we may have to accelerate and pull to the left some of the 12 that we're building to get them out there to the customer's hands quicker. We're probably gonna be making the decision to start ordering the long leads, especially in this environment for the next block. Right now, Ken, we're thinking about another 12. It'll be a spiral. I'm not gonna get into anything at all on what that spiral is because it's very, very competitive information against our competitors. Things are definitely firming up, and we're gonna know a lot more when that final budget is inked. Okay. That's helpful. If I could, maybe without getting into specifics, how is pricing trending for these aircraft? Obviously, you're the low-cost leader. They're attritable. But as you incorporate AI, as you incorporate other aspects into these aircraft, are you able to see a path to some better pricing, or how should we think about that? I would not look for better pricing above the ranges that we've put out there previously. This is gonna be one of the primary reasons why we are gonna win. We're not just gonna win with Valkyrie, we're gonna win, if not across the board, substantially across the board. Because your point is spot on. You know, we deliver a Valkyrie, depending on quantities for $3 million, $4 million, or $5 million each. The customer may have integrated into it $1 million, $2 million, or $3 million worth of sensors or payloads or something. So they still have a less than $10 million low-cost aircraft, which just as recently it was this week or last Friday, the Air Force PEO said that's the target, and that's one of the reasons, Ken, why we're where we are. Great. Tha1nks, Eric. I'll pass it back there. Yep. Your next question comes from the line of Mike Crawford from B. Riley Securities. Your line is open. Thank you. Regarding the OBSS, are there any different long-term implications for margin profile, if OBSS airframes hit production, given I think the government's gonna own some of the data rights to this airframe? There are not margin implications relative to that aspect, Mike, based on the way we see the program working out. However, there will be significant positive margin implications for us, and this tied into, and I'm not gonna get into specifics because of the competitiveness. Back to my comment, we're gonna have more tactical aircraft in our robot factories, which is gonna spread the fixed costs over greater units, which is gonna drive the cost down for the government, which is a win for them. It's gonna probably enable us to increase our margins somewhat while still giving the government a better deal. This is part of our plan on consolidating the tactical production where we can into light facilities to drive those costs down. As you also know, a significant greater than 50% of the bill of materials for the tactical drones is the same as the target drones. As our tactical drone portfolio is ramping up, we're getting additional leverage on that supply chain across both target and tactical drones, which also should lift margins. Okay. Thank you. Final question. Can you talk more about this runway independent Air Force cargo mission in the Pacific that you alluded to earlier, including how many times a reusable Valkyrie could actually be reused? I didn't allude to it, but I understand. I know exactly what you're talking about, of course. A Valkyrie can be used multiple times. It's not designed for one or five or 10 or 20 missions. It's designed for more than that. What you're referring to, what was disclosed, I couldn't have laid out or described certain of the Valkyrie's attributes better than the Air Force did. Again, Mike, this is why I think we're a winner and all the points are heading to this all happening soon. They need capability like the Valkyrie. They need capability like the Gremlins. They need capability like Air Wolf. We're first to market, and we've got the aircraft, and we all know budgets are gonna be constrained. We won OBSS. I don't see any other development programs on the horizon. None. You know, we'll see what happens with MQ-Next. This all ties into us winning and increasing margins. Okay. Thank you. Yep. Your next question comes from the line of Austin Moeller from Canaccord. Your line is open. Good afternoon. My first question is for Deanna. Is the $369 million in cash that you guys have sitting on the balance sheet enough to support the production ramp on all these new major program wins, be it Valkyrie, OBSS, Air Wolf, et cetera, or do you think you're gonna have to look at a potential capital raise? At this point in time, we believe that it is sufficient. Obviously, if there's multiple production runs going, depending on the size, we may have to revisit that. At this point in time, it is sufficient. Okay, great. Then, Eric, as you talk about that second batch of Valkyries you're planning, the second set of 12, is the plan to do what you did before and essentially pay for the initial production of those out of pocket, or are you planning to have that essentially be paid for via, you know, a production contract? And is that timing in 2022, or do you have to wait for Skyborg to be program of record for that? Right now, our plan is absolutely not to go and produce the spiral lot on 100% Kratos resources. That is not the plan right now. However, our line of sight with a number of customers is really clarifying. As I have said a couple times now, if the 2020 NDAA markup went through as it was today, we would probably be making the decision to start ordering the long leads. It's that good for us, especially coming out of the Senate. It looks great. We're gonna wait, and we're gonna see, but my plan today is not to do anything unless we're closely coordinated with the customer set. We have clear line of sight on sales or use because there may be a service model, use of any additional aircraft we build. That decision, I think we're gonna be making by Q1, Q2, depending on 2022 budget stuff next year. Okay. Just one quick follow-up. The Army's announcement about testing the Air Wolf, have they put a dollar amount on that contract yet or no? No. You saw that. No. They. Good job catching what the Army was saying about that. No, they have not put a dollar amount on it. It's a very low cost system. They have not to this point. Austin, I wanna go back to one other thing on your previous question. A key part of our strategy that we've been winning with is we make the investment to build the aircraft and have them as capital or inventory. This has also been a huge win for Air Wolf. This has been a huge win for Mako. Okay. Dynetics is an outstanding partner. I never wanna get ahead of them, but we do things like that with Dynetics, and it's a winner for us. This ties into what I said at the end. You know, instead of making large, gigantic acquisitions and things like that, you know, we're probably gonna build airplanes, which it gives us a competitive advantage, both in the tactical area and the target area, where customers can come, and they don't have to wait a year or 2 or 5. We can deliver them immediately. Okay, great. Thank you so much. Yep. Your next question comes from the line of Seth Seifman from JP Morgan. Your line is open. Hey, thanks very much, and good afternoon. Good afternoon. I was wondering, Eric, if you could give us an update on OpenSpace? Kind of, you know, to what degree have any of the delays that you were speaking about with regard to supply chain affecting OpenSpace rollout and sort of the plan to ramp up there from last quarter, how's that progressing? Right. OpenSpace is moving along. Right now, the number of military and national security programs we have that we've won, including in the classified area, we've been focusing a lot in that area right now, Seth, which is one of the reasons why you're seeing the organic growth in the space business, and it's gonna continue to go, and I ripped off the programs we're on, and they're ripping. We have reallocated some of our resources from the commercial OpenSpace area over to the DoD side, okay? Now, with that being said, if you take a look at what's going on with the standards board, I see DISA just joined it. This is on the open architecture standards board for virtualized ground systems, where Kratos is the chair. I think Space Command's there, Navy is there, DISA has now joined it. This is happening on the virtualization of the ground system area. We are demonstrating the products right now with multiple customers, and I've mentioned the number of customers in the past. This is definitely going to be one of our mid- and longer-term growth drivers as it rolls out. That's what's going on in that area right now, both from a business mix standpoint and a resource allocation. Okay. Great. Thank you. Maybe just a real quick follow-up. When we think about the CR, I know in the past sometimes it requires you guys to go out and start you know acquiring long lead items and build ahead. I know you talked about that with regard to the spiral on the Valkyries, but you know maybe even on some of the tactical programs where you're going to full rate production. Yes. You know, is that something we should be prepared for? Yes. As we head into 2022? Yes, sir. Yes, good point. Also on the target drone side too. Right. You know, 'cause, you know, we're sole source with Navy, Army, Air Force. We know what's coming. As you're indicating, there are budgetary things, and because the customer is our partner, we very well may make the decision, like in the engine area for tactical and target drones, to place them on order, so when the customer finally gets his budget and his funding, we haven't delayed their program. Right. Okay. Relatedly with, you know, it seems like the delays, you know, most of it is in the areas you pointed out within KGS. When we just think about all the different kind of supply chain exposures that are out there, on the unmanned side, are things contained enough within Kratos? I know you guys do a lot of your own work there. Are things contained enough within Kratos that the kind of supply chain risks in unmanned are much lower? We are, as you're indicating, substantially vertically integrated in the unmanned area. The only area where it might get us, and we've bought a significant amount of engines last year, a significant amount across all platforms. The current supply chain issue would really have to extend for it to impact us, in the unmanned area. If we got the inclination that it was gonna extend, we might make a decision to even lean forward and order additional engines two years in advance. Right. Great. Okay. Yeah. That's it. Thank you very much. Thank you. Your next question comes from the line of Pete Skibitski from Alembic Global. Your line is open. Hey, good evening, Eric and Deanna. Eric, I was wondering if you could give us some more color on the Air Force multiyear target award that you received back in August. I think Deanna mentioned you got the initial award under the IDIQ. So it sounds like you could start work immediately. I wasn't sure if you could recognize revenue until they're delivered. I would surmise 2022. But maybe you can clarify all that. Then, will there be additional payload-related contracts to go along with that? Just wanted some more color on that. Thanks. Yes. We can start immediately because as Deanna mentioned, we received the initial funding. $30 million. $30 million of funding. We can start immediately. Right now, we're finishing up previous production runs and lots. What this will do, it'll ensure that there are no breaks in production and no gaps in our financial performance. That's the significance of the initial funding. That contract came in much larger than we thought it was going to. For the obvious reasons, we know what's going on out there, and so lots and lots of target drones are being used to exercise systems. To your other question, yes, there are additional contracts expected related to things like payloads and ancillary equipment and things like that that go along with all of our target drone programs. This is the core program vehicle, though, this single award IDIQ. Got it. Okay. Just, I mean, between the Navy, and I think in the past, you've mentioned classified target opportunities in international. Are there still a few more pretty chunky target contracts out there for you over the next, I don't know, six months? Absolutely. There are two. One is an international one. It's as if the previous administration had won, I'm convinced we would have gotten it by now. I understand it's almost through the final review process, so hopefully we'll be announcing this in the next couple three months. We're gonna announce this. It's a biggie, and as you know, this is a brand-new customer. What that means, this includes all the ground equipment that's gonna go with the range to launch and recover the targets. Now we're at the razor and the razor blade model, where then in the future, we'll be selling significant additional targets to them. There is a confidential program we have. I'm not gonna talk about it much, but it is expected. It is in LRIP right now, and LRIP quantities are increasing. It is expected right now to go into full rate production either late next year or early 2023. We've got some good ones out there. Of course, there's a new biggie coming called NGAT, Next Generation Aerial Target, a very large new program that's coming that we believe is right in our bailiwick that we're gonna be going after. Just to add on to that, Pete, on the international target award that we're expecting, when that is awarded, due to the terms and conditions of the international contract and the revenue recognition guidance, there would not be any percent complete on that. So that would be recorded solely as targets are delivered, which we would not anticipate until 2023 to commence. Okay. Okay, that's great. That's three additional contracts plus you do have the Navy full rate out there also. Did I hear that wrong? No, you heard it correctly. Yeah. Navy full rate production. Yeah. Absolutely, which is why the operating capability that I talked about for full rate operating capability is very important. That's great. Just one last one. Just, Deanna, I think it was you that you kinda teased the October bookings in USD. I think you said $50 million just in October. That seems pretty strong. Any color on what programs that involves? Well, I can tell you the one because we announced it. It's OBSS, so that's one of them. Yeah. That was $16 million or so, something like that? It's just under 18, 17 and change. Okay. No, I appreciate it. I'll call her, guys. Okay. Thanks. Thank you. Your next question comes from the line of Joe Gomes from Noble Capital. Your line is open. Good afternoon, Eric and Deanna. Good afternoon. Good afternoon, sir. I just wanna clarify a little something here in KGS. You know, you mentioned how the revenues came down and overall, but you know, how the satellite fiber was so strong. What else, if I'm looking at that, you know, in some of your other product lines, was it all related to push out, or were some of the product lines coming a little bit weaker than expected? No. Nothing came in weaker than expected. We, as we said at the last call, virtually all of the revenue in our Q3 and Q4 was and is under contract, literally. Okay. There are countries, and I'm not gonna say them, but you know who they are. It's primarily in the Pacific Rim, where we cannot go into because of COVID quarantines. We can't go get satellite systems signed off on. Can't do it. In our microwave electronics areas, where we had firm commitment dates where suppliers had said, "We will have this stuff to you by this date," they call up and they say, "Sorry, we're out by two, three months." Those are the types of things that we've been seeing, we're continuing to see, which we've tried to incorporate into our forecast. Okay. Thanks for that clarification. The other day, I guess the Air Force kinda talked about eliminating at least three of their fighter families. Does that have any positive or negative impact on Kratos? The Air Force just the other day in Air Force Magazine, and I believe it was directly related to what you're referring to, talked about high-performance jet drones are gonna be a massive part of the force structure in the future. They went into the attritables. They went into their low-cost nature, their high performance. They went into not having to have the pilot survivability systems in the drones. They talked about, we know why this is, the sustainment tail and the logistics tail of maintaining them. The points are coming together as I said, so I believe what I just mentioned to you that the Air Force published just the other day, I think it's probably directly related to the planned reduction in legacy aircraft that would not be applicable for a peer-on-peer fight. Okay. One more if I may. Some of the news here recently has been, you know, with China and the hypersonics. Have you seen any response from your customers that would, you know, be a positive for Kratos based on the Chinese launch of hypersonics? I'm sorry, I cannot comment on that, and I apologize. No worries. Thanks, Eric. Okay, doke. Your next question comes from the line of Michael Ciarmoli from Truist Securities. Your line is open. Hey, good evening, guys. Thanks for taking the questions here. Eric, I know we mentioned supply chain a couple times. Just thinking about some of these programs you have, maybe even Valkyrie, you know, stuff that's very early development, maybe not ironclad on contract, how are you thinking about the raw material pricing environment? I mean, is that gonna apply any pressure to you or are there any contracts where, you know, you might be executing on an older IDIQ task award where you know, you're now seeing a little bit of, you know, inflationary pressure and you might have to wait for that next one to kind of readjust? Is that gonna be a headwind at all? We are absolutely seeing some of what you're talking about. You know, in certain areas like in the composite area and the wire harness area, we have long-term agreements on the pricing. In the engine area, which is number one in the bill of materials, we have a long-term agreement. I think we're, we just bolted in another three years or something like that. However, there are certain areas where we are absolutely seeing some price increases in the target and tactical drone area, where we've tried to incorporate them into our pricing. As you know, most of these are firm fixed price contracts with firm fixed price options, which we will have to figure out how to deal with. Okay. Got it. I think it came up before about the bookings in the quarter. You know, just given this environment, the CR, should we kind of calibrate our expectations for bookings to be challenged maybe at least the next two quarters? Maybe along with that, you know, what percent of your backlog is kind of shippable that you do have line of sight into now over the next twelve months that, you know, if you're trying to ring-fence risk or areas that are sliding out, you know, how are you looking at that backlog? Yep. I would definitely, because of the CR, and as I was talking about development programs going to production growth programs going to increased production, those are either directly or indirectly tied to the 2022 budget. My tummy tells me with no 2022 budget, there will be no contract award because they won't award it without the obligating funds. Definitely potentially for Q4, and even if it's resolved by the end of the quarter, you know how the government is in getting back to going again. Maybe it's like you said, it's Q1 or Q2. Okay. Yeah. The important thing that I try to look at, and you know me, Mike, I'm the most optimistic guy in the world, is most of these contracts I'm talking to you about, they're on multi-year, multi-decade programs that we're sole source on. So I know they're gonna come, but it's the timing that drives me nuts. Okay, you called out space and cyber and how strong it was, and I think you said it's currently $280 million at mid-teen margins. I mean, if we look at that as part of KGS, you know, that sort of implies it's maybe $40 million of EBITDA and, you know, the rest of KGS, $300 million ±, you know, only running around 6%-7% EBITDA margins. I would have thought, you know, the service is low, but I would have thought maybe microwave electronics, even some of the engine hardware would have been a little bit stronger on EBITDA. Am I thinking about that correctly, you know, based on those numbers you threw out? You are kind of, but here's the piece. It has to do with like our corporate G&A. Okay. That $40 million excludes corporate G&A. Because it's the biggest business with the biggest revenue and then the biggest number of employees, et cetera, it gets the biggest part of corporate G&A. Got it. Do you see what I'm saying? I got it. Yep. Yeah. Makes sense. All right, perfect. I'll jump back in the queue, guys. Thanks. Thank you. Your next question comes from the line of Peter Arment from Baird. Your line is open. Yeah. Good afternoon, Eric and Deanna. Good afternoon. Eric, question. I mean, you just talking about the target drone business and tactical. You know, your target drone business has been growing substantially, and I think now you're, you know, north of $200 million just on that business alone. But how should we think about or how do you view the pipeline on the tactical? You know, it seems like the opportunities there are eventually that it's gonna beat out in terms of the size of your target business. What needs to happen in terms of, you know, do we need to get to IOC on Valkyrie, other things? How are you thinking about that, you know, longer- term? Yeah. First part of your question, I absolutely believe that our tactical drone business is gonna be substantially larger than our target drone business in the future, substantially. Orders of magnitude, you know, maybe multiple times larger. The customer set has talked about acquiring reusable, disposable, attritable drones like cruise missiles. Buy them, put them on the shelf, get ready to use them when you need to use them. That's how our tactical drones are. They have the target drone legacy where they can be stored, clip the wings on, fuel it up, and off it goes. What needs to happen? We are absolutely peaking in the infamous DoD Valley of Death with a number of our tactical drones. The government talks about it. DARPA talks about it. The Air Force talks about it. We are doing everything we can. I'm really glad you asked this question. We are doing everything we can with the DoD customer set, the Pentagon customer set, and congressionally to encourage them because of the threat out there, in order to help the defense industrial base, in order to for STEM, science, technology, engineering, math, to move faster than the existing military DoD bureaucracy and infrastructure allows them to do. That's what we're doing. This is why I continue to reference to you all that, you know, we have a handful of jet drones in different classes flying today. Nobody else does. With OBSS, I think we're undefeated. I don't think we've ever lost a tactical drone solicitation that we've participated in. I don't think we've ever lost. I don't see any more future ones on the horizon coming that are funded from budgetary. That all tells me that with our existing family of aircraft, the ones that we've won, that we're developing, that this is gonna happen, and when it happens, we're the guy it's gonna happen with. That's how I see it. I appreciate the call. Thanks, Eric. Thanks for all you do. Yeah, you got it. Okay. This concludes our question and answer session. I would now like to turn the conference back to Mr. Eric DeMarco for the closing remarks. Thank you very much for joining us this afternoon. We really appreciate the opportunity to update you, and we truly look forward to updating you again when we report Q4 and we head into 2022. Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for your participation, and have a wonderful day. You may all disconnect.