COVER PAGE
COVER PAGE - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 29, 2019 | Feb. 20, 2020 | Jun. 28, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 001-34460 | ||
Entity Registrant Name | KRATOS DEFENSE & SECURITY SOLUTIONS, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 13-3818604 | ||
Entity Address, Address Line One | 10680 Treena St. | ||
Entity Address, Address Line Two | Suite 600 | ||
Entity Address, City or Town | San Diego | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92131 | ||
City Area Code | 858 | ||
Local Phone Number | 812-7300 | ||
Title of 12(b) Security | Common Stock, $0.001 par value | ||
Trading Symbol | KTOS | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2,061.5 | ||
Entity Common Stock, Shares Outstanding | 106,941,556 | ||
Entity Central Index Key | 0001069258 | ||
Current Fiscal Year End Date | --12-29 | ||
Document Period End Date | Dec. 29, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 29, 2019 | Dec. 30, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 172,600,000 | $ 182,700,000 |
Restricted cash | 0 | 300,000 |
Accounts receivable, net | 85,000,000 | 64,600,000 |
Unbilled receivables, net | 179,400,000 | 172,800,000 |
Inventoried costs | 61,100,000 | 46,800,000 |
Prepaid expenses | 9,400,000 | 8,900,000 |
Other current assets | 11,400,000 | 10,300,000 |
Current assets of discontinued operations | 3,300,000 | 8,300,000 |
Total current assets | 522,200,000 | 494,700,000 |
Property, plant and equipment, net | 116,900,000 | 67,100,000 |
Operating lease right-of-use assets | 42,100,000 | |
Goodwill | 455,600,000 | 425,700,000 |
Intangible assets, net | 39,500,000 | 16,100,000 |
Other assets | 9,700,000 | 6,500,000 |
Total assets | 1,186,000,000 | 1,010,100,000 |
Current liabilities: | ||
Accounts payable | 53,800,000 | 46,600,000 |
Accrued expenses | 32,700,000 | 38,100,000 |
Accrued compensation | 37,100,000 | 33,500,000 |
Accrued interest | 1,600,000 | 1,600,000 |
Billings in excess of costs and earnings on uncompleted contracts | 34,300,000 | 34,900,000 |
Current portion of operating lease liabilities | 9,900,000 | |
Other current liabilities | 10,000,000 | 4,700,000 |
Current liabilities of discontinued operations | 3,300,000 | 5,300,000 |
Total current liabilities | 182,700,000 | 164,700,000 |
Long-term debt | 295,100,000 | 294,200,000 |
Operating lease liabilities, net of current portion | 37,600,000 | |
Other long-term liabilities | 78,700,000 | 25,500,000 |
Long-term liabilities of discontinued operations | 2,800,000 | 6,400,000 |
Total liabilities | 596,900,000 | 490,800,000 |
Commitments and contingencies (Note 15) | ||
Redeemable noncontrolling interest | 15,000,000 | 0 |
Stockholders’ equity: | ||
Preferred stock, $0.001 par value, 5,000,000 authorized, 0 shares outstanding at December 29, 2019 and December 30, 2018 | 0 | 0 |
Common stock, $0.001 par value, 195,000,000 shares authorized; 106,635,508 and 103,766,899 shares issued and outstanding at December 29, 2019 and December 30, 2018, respectively | 0 | 0 |
Additional paid-in capital | 1,286,500,000 | 1,244,500,000 |
Accumulated other comprehensive loss | (400,000) | (700,000) |
Accumulated deficit | (712,000,000) | (724,500,000) |
Total stockholders’ equity | 574,100,000 | 519,300,000 |
Total liabilities and stockholders’ equity | $ 1,186,000,000 | $ 1,010,100,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 29, 2019 | Dec. 30, 2018 |
Preferred Stock: | ||
Shares authorized (in shares) | 5,000,000 | 5,000,000 |
Par value (usd per share) | $ 0.001 | $ 0.001 |
Shares outstanding (in shares) | 0 | 0 |
Common Stock: | ||
Par value (in dollars per share) | $ 0.001 | $ 0.001 |
Shares authorized (in shares) | 195,000,000 | 195,000,000 |
Shares issued (in shares) | 106,635,508 | 103,766,899 |
Shares outstanding (in shares) | 106,635,508 | 103,766,899 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Total revenues | $ 717.5 | $ 618 | $ 603.3 |
Total costs | 527.5 | 448.3 | 445.7 |
Gross profit | 190 | 169.7 | 157.6 |
Selling, general and administrative expenses | 130.8 | 119.8 | 127.3 |
Merger and acquisition related items | 2.3 | 0 | 0 |
Research and development expenses | 18 | 15.6 | 17.8 |
Impairment of goodwill | 0 | 0 | 24.2 |
Restructuring expenses and other | 0.9 | 3.8 | 0.3 |
Operating income (loss) | 38 | 30.5 | (12) |
Other income (expense): | |||
Interest expense, net | (21.6) | (20.8) | (28.6) |
Loss on extinguishment of debt | 0 | 0 | (17.3) |
Other income (expense), net | (0.7) | (1) | 0.8 |
Total other expense, net | (22.3) | (21.8) | (45.1) |
Income (loss) from continuing operations before income taxes | 15.7 | 8.7 | (57.1) |
Provision (benefit) for income taxes from continuing operations | 4.8 | 4.6 | (10.2) |
Income (loss) from continuing operations | 10.9 | 4.1 | (46.9) |
Income (loss) from operations of discontinued component (including gain on disposal of $0.0 million for the year ended December 30, 2018) | 1.9 | (9.4) | 6.3 |
Income tax expense (benefit) | 0.2 | (1.8) | 2.1 |
Income (loss) from discontinued operations | 1.7 | (7.6) | 4.2 |
Net income (loss) | 12.6 | (3.5) | (42.7) |
Less: Net income attributable to noncontrolling interest | 0.1 | 0 | 0 |
Net income (loss) attributable to Kratos | $ 12.5 | $ (3.5) | $ (42.7) |
Basic income and (loss) per common share attributable to Kratos: | |||
Income (loss) from continuing operations (in dollars per share) | $ 0.10 | $ 0.04 | $ (0.52) |
Income (loss) from discontinued operations (in dollars per share) | 0.02 | (0.07) | 0.04 |
Net income (loss) per common share (in dollars per share) | 0.12 | (0.03) | (0.48) |
Diluted income and (loss) per common share attributable to Kratos: | |||
Income (loss) from continuing operations (in dollars per share) | 0.10 | 0.04 | (0.52) |
Income (loss) from discontinued operations (in dollars per share) | 0.01 | (0.07) | 0.04 |
Net income (loss) per common share (in dollars per share) | $ 0.11 | $ (0.03) | $ (0.48) |
Weighted average common shares outstanding: | |||
Basic (in shares) | 106 | 103.8 | 89.5 |
Diluted (in shares) | 109.2 | 106.1 | 89.5 |
Service revenues | |||
Total revenues | $ 272.6 | $ 200.7 | $ 197.8 |
Total costs | 192 | 137.8 | 138.6 |
Product sales | |||
Total revenues | 444.9 | 417.3 | 405.5 |
Total costs | $ 335.5 | $ 310.5 | $ 307.1 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) $ in Millions | 12 Months Ended |
Dec. 30, 2018USD ($) | |
Income Statement [Abstract] | |
Gain on disposal | $ 0 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 12.6 | $ (3.5) | $ (42.7) |
Other comprehensive income: | |||
Change in cumulative translation adjustment | 0.1 | 0.4 | 0.1 |
Postretirement benefit reserve adjustment net of tax expense | 0.2 | 0.3 | 0.2 |
Other comprehensive income, net of tax | 0.3 | 0.7 | 0.3 |
Comprehensive income (loss) | 12.9 | (2.8) | (42.4) |
Less: Comprehensive income attributable to noncontrolling interest | 0.1 | 0 | 0 |
Comprehensive income (loss) attributable to Kratos | $ 12.8 | $ (2.8) | $ (42.4) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Total | Redeemable Noncontrolling Interest | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Balance, beginning of period (in shares) at Dec. 25, 2016 | 73,900,000 | |||||
Balance, beginning of period at Dec. 25, 2016 | $ 276.4 | $ 0 | $ 956.2 | $ (1.7) | $ (678.1) | |
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation | 7.8 | 7.8 | ||||
Issuance of common stock for cash (in shares) | 28,000,000 | |||||
Issuance of common stock for cash | 268.2 | 268.2 | ||||
Issuance of common stock for employee stock purchase plan, options and warrants (in shares) | 700,000 | |||||
Issuance of common stock for employee stock purchase plan, options and warrants | 3.5 | 3.5 | ||||
Restricted stock issued and related taxes (in shares) | 700,000 | |||||
Restricted stock issued and related taxes | (2) | (2) | ||||
Net income (loss) | (42.7) | (42.7) | ||||
Other comprehensive income (loss), net of tax | 0.3 | 0.3 | ||||
Balance, end of period (in shares) at Dec. 31, 2017 | 103,300,000 | |||||
Balance, end of period at Dec. 31, 2017 | 511.5 | $ 0 | 1,233.7 | (1.4) | (720.8) | |
Balance, beginning at Dec. 25, 2016 | $ 0 | |||||
Balance, ending at Dec. 31, 2017 | 0 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation | 7.2 | 7.2 | ||||
Issuance of common stock for employee stock purchase plan, options and warrants (in shares) | 400,000 | |||||
Issuance of common stock for employee stock purchase plan, options and warrants | 3.7 | 3.7 | ||||
Restricted stock issued and related taxes (in shares) | 100,000 | |||||
Restricted stock issued and related taxes | (0.1) | (0.1) | ||||
Net income (loss) | (3.5) | (3.5) | ||||
Other comprehensive income (loss), net of tax | $ 0.7 | 0.7 | ||||
Balance, end of period (in shares) at Dec. 30, 2018 | 103,766,899 | 103,800,000 | ||||
Balance, end of period at Dec. 30, 2018 | $ 519.3 | $ 0 | 1,244.5 | (0.7) | (724.5) | |
Balance, ending at Dec. 30, 2018 | 0 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock-based compensation | 11 | 11 | ||||
Issuance of common stock for employee stock purchase plan, options and warrants (in shares) | 800,000 | |||||
Issuance of common stock for employee stock purchase plan, options and warrants | 4.9 | 4.9 | ||||
Restricted stock issued and related taxes (in shares) | 200,000 | |||||
Restricted stock issued and related taxes | (0.9) | (0.9) | ||||
Issuance of common stock for acquisitions (in shares) | 1,800,000 | |||||
Issuance of common stock for acquisitions | 27 | 27 | ||||
Net income (loss) | 12.5 | 12.5 | ||||
Other comprehensive income (loss), net of tax | $ 0.3 | 0.3 | ||||
Balance, end of period (in shares) at Dec. 29, 2019 | 106,635,508 | 106,600,000 | ||||
Balance, end of period at Dec. 29, 2019 | $ 574.1 | $ 0 | $ 1,286.5 | $ (0.4) | $ (712) | |
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Net income | 0.1 | |||||
Changes in noncontrolling interest | 14.9 | |||||
Balance, ending at Dec. 29, 2019 | $ 15 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Millions | 12 Months Ended | ||
Dec. 29, 2019USD ($) | Dec. 30, 2018USD ($) | Dec. 31, 2017USD ($) | |
Operating activities: | |||
Net income (loss) | $ 12.6 | $ (3.5) | $ (42.7) |
Income (loss) from discontinued operations | 1.7 | (7.6) | 4.2 |
Income (loss) from continuing operations | 10.9 | 4.1 | (46.9) |
Adjustments to reconcile income (loss) from continuing operations to net cash provided by (used in) operating activities from continuing operations: | |||
Depreciation and amortization | 23.4 | 17.9 | 22.2 |
Deferred income taxes | (4.9) | (0.4) | (9.5) |
Amortization of lease right-of-use assets | 11.7 | 0 | 0 |
Stock-based compensation | 11 | 7.2 | 7.8 |
Goodwill impairment charge | 0 | 0 | 24.2 |
Loss on extinguishment of debt | 0 | 0 | 17.3 |
Amortization of deferred financing costs | 1 | 1 | 1.3 |
Amortization of premium and discount on Senior Secured Notes | 0 | 0 | 0.7 |
Provision for doubtful accounts | (0.2) | 1.8 | 0 |
Changes in assets and liabilities, net of acquisitions: | |||
Accounts receivable | (11.6) | 8.2 | 0.5 |
Unbilled receivables | (1.6) | (35.9) | (35.2) |
Inventoried costs | (4.6) | 2 | 7.2 |
Prepaid expenses | 0.3 | 2.2 | (3) |
Other assets | (0.9) | 1.2 | (2.7) |
Operating lease liabilities | (6.3) | 0 | 0 |
Accounts payable | 4.8 | 12.2 | (8.3) |
Accrued expenses | (6.4) | (1.7) | (3.8) |
Accrued compensation | 1.7 | 3.3 | (2.9) |
Accrued interest | (0.1) | (0.1) | (1.9) |
Billings in excess of costs and earnings on uncompleted contracts | (2.4) | (6.9) | 6.3 |
Income tax receivable and payable | 1.8 | 0.2 | 1.4 |
Other liabilities | 1.3 | 1.8 | (1.6) |
Net cash provided by (used in) operating activities from continuing operations | 28.9 | 18.1 | (26.9) |
Investing activities: | |||
Cash paid for acquisitions, net of cash acquired | (17.7) | (2.9) | 0 |
Proceeds from sale of assets | 0.3 | 66 | 0.7 |
Capital expenditures | (26.3) | (22.6) | (26.1) |
Net cash provided by (used in) investing activities from continuing operations | (43.7) | 40.5 | (25.4) |
Financing activities: | |||
Proceeds from the issuance of long-term debt | 0 | 0 | 300 |
Extinguishment of long-term debt | 0 | 0 | (448.8) |
Proceeds (expenses) from the issuance of common stock | 0 | 269.1 | |
Proceeds (expenses) from the issuance of common stock | (1.1) | ||
Repayment under credit facility and debt | 0 | (0.8) | (1) |
Debt issuance costs | 0 | (0.1) | (6.6) |
Payments under finance leases | (0.5) | 0 | 0 |
Proceeds from exercise of restricted stock units, employee stock options, and employee stock purchase plan | 4 | 3.7 | 1.5 |
Other | 0 | 0 | (0.8) |
Net cash provided by financing activities from continuing operations | 3.5 | 1.7 | 113.4 |
Net cash flows of continuing operations | (11.3) | 60.3 | 61.1 |
Net operating cash flows of discontinued operations | 1.1 | (7.7) | (0.8) |
Net investing cash flows of discontinued operations | 0 | 0 | (0.6) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (0.2) | (0.5) | 0.5 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (10.4) | 52.1 | 60.2 |
Cash, cash equivalents and restricted cash at beginning of year | 183 | 130.9 | 70.7 |
Cash, cash equivalents and restricted cash at end of year | 172.6 | 183 | 130.9 |
Supplemental disclosure of cash flow information: | |||
Cash paid during the year for interest | 19.9 | 20.5 | 28.3 |
Net cash paid during the year for income taxes | 0.6 | 1.5 | (0.6) |
Non-cash financing and investing activities: | |||
Capital expenditures included in accounts payable and accrued expenses | 1.4 | 1.3 | 1.6 |
Liability for contingent consideration and goodwill related to acquisition | $ 0 | $ 0 | $ 2.9 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 29, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Summary of Significant Accounting Policies | Organization and Summary of Significant Accounting Policies (a) Description of Business Kratos is a mid-tier government contractor at the forefront of the U.S. Department of Defense’s (the “DoD”) recapitalization of strategic weapon systems to address peer and near peer threats and its related Rapid Innovation Initiatives. Kratos is a leading technology, intellectual property, proprietary product and system company focused on the U.S. and its allies’ national security. Kratos is a recognized industry leader in the rapid development, demonstration and fielding of high technology systems and products at an affordable cost. Kratos’ primary focus areas are unmanned systems, space and satellite communications, training solutions, microwave electronics, cyber security/warfare, missile defense, and hypersonic systems, turbine technologies, and combat systems. The Company believes that its technology, intellectual property, proprietary products and designed-in positions on its customers’ programs, platforms and systems, and the ability to rapidly develop, demonstrate and field affordable leading technology systems is a competitive advantage and high barrier to entry to the markets in which it operates. The Company’s work force is primarily engineering and technically oriented, highly skilled with a significant number holding national security clearances. The Company’s entire organization is focused on executing its strategy of becoming the leading technology and intellectual property based company in its industry. The Company conducts most of its business with the U.S. Government (which includes foreign military sales) and performs work as the prime contractor, subcontractor, or preferred supplier. The Company also conducts business with local, state, and foreign governments and domestic and international commercial customers. The Company operates in two reportable segments. The Kratos Government Solutions (“KGS”) reportable segment is comprised of an aggregation of KGS operating segments, including its microwave electronic products, space, training and cybersecurity, C5ISR/modular systems, turbine technologies and defense and rocket support services operating segments. The Unmanned Systems (“US”) reportable segment consists of its unmanned aerial system and unmanned ground and seaborne system products. The Public Safety & Security (“PSS”) reportable segment (which was divested in June 2018 and has been classified as discontinued operations - see Note 9 of these notes to the consolidated financial statements) previously provided independent integrated solutions for advanced homeland security, public safety, critical infrastructure, and security and surveillance systems for government and commercial applications. The Company organizes its operating segments based primarily on the nature of the products, solutions and services offered. Transactions between segments are negotiated and accounted for under terms and conditions similar to other government and commercial contracts, and these intercompany transactions are eliminated in consolidation. For additional information regarding the Company’s operating segments, see Note 14 of these notes to consolidated financial statements. (b) Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of Kratos and its 100% owned subsidiaries, for which all intercompany transactions have been eliminated in consolidation. (c) Fiscal Year The Company has a 52/53 week fiscal year ending on the last Sunday of the calendar year, with interim fiscal periods ending on the last Sunday of each calendar quarter. There were 52 calendar weeks in the fiscal years ending on December 29, 2019 and December 30, 2018 and 53 calendar weeks in the fiscal year ended on December 31, 2017 . (d) Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the U.S. (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates include revenue recognition, valuation of long-lived assets including identifiable intangibles and goodwill, accounting for income taxes including the related valuation allowance on the deferred tax asset and uncertain tax positions, contingencies and litigation, contingent acquisition consideration, and stock-based compensation. In the future, the Company may realize actual results that differ from the current reported estimates and if the estimates that the Company has used change in the future, such changes could have a material impact on the Company’s consolidated financial position, results of operations and cash flows. (e) Revenue Recognition Effective January 1, 2018, the Company adopted the Financial Accounting Standards Board (“FASB”) ASU 2014-09, Revenue from Contracts with Customers, and the related amendments, which are codified into Accounting Standards Codification (“ASC”) 606 (“ASC 606”), which establishes a broad principle that requires entities to assess the products or services promised in contracts with customers at contract inception to determine the appropriate unit at which to record revenues, which is referred to as a performance obligation. Revenue is recognized when control of the promised products or services is transferred to customers, at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those products or services. The new standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted ASC 606 on January 1, 2018, using the modified retrospective method and recognized and recorded a decrease in opening equity of $0.2 million as of January 1, 2018 due to the cumulative impact of adopting ASC 606. The impact of adopting ASC 606 for the year ended December 30, 2018 was an increase of $30.0 million to revenues and a corresponding increase in cost of revenues of $21.9 million . Total net cash provided by operating activities from continuing operations, total net cash provided by investing activities from continuing operations and total net cash provided by financing activities on the Company’s consolidated statements of cash flows were not impacted by the adoption of ASC 606. Discontinued operations were not affected by the adoption of ASC 606. The reported results for 2018 and 2019 reflect the application of ASC 606 guidance while the reported results for periods prior to January 1, 2018 were prepared under the guidance of FASB ASC 605 . The adoption of ASC 606 represents a change in accounting principle. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. Once the contract is identified and determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account under ASC 606. The majority of the Company’s contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is the expected-cost-plus-margin approach, under which the Company forecasts the expected costs of satisfying a performance obligation and then adds an appropriate margin for that distinct good or service. Prior to the adoption of ASC 606, the Company recognized the majority of its revenues using the percentage-of completion method of accounting. Based on the nature of products provided or services performed, revenue was recorded as costs were incurred (the “percentage-of-completion cost-to-cost method”) or as units were delivered (the “percentage-of-completion units-of-delivery method”). For the majority of contracts, the Company satisfies the underlying performance obligations over time as the customer obtains control or receives benefits as work is performed on the contract. As a result, under ASC 606 revenue is recognized over a time using the cost-to-cost method (cost incurred relative to total estimated cost at completion). This change generally results in an acceleration of revenue for contracts that were historically accounted for using the percentage-of-completion units-of-delivery method as revenues are now recognized earlier in the performance period as costs are incurred rather than as units are delivered. Remaining Performance Obligations Since the Company’s adoption of ASC 606 on January 1, 2018, revenues from remaining performance obligations are now calculated as the dollar value of the remaining performance obligations on executed contracts. On December 29, 2019 , the Company had approximately $601.2 million of remaining performance obligations. The Company expects to recognize approximately 62.0% of the remaining performance obligations as revenue in 2020 , an additional 21.0% in 2021 , and the balance thereafter. Contract Estimates Due to the nature of the work required to be performed on many performance obligations, the estimation of total cost at completion is complex, subject to many variables and requires significant judgment. On a quarterly basis, the Company conducts its contract cost Estimate at Completion (“EAC”) process by reviewing the progress and execution of outstanding performance obligations within its contracts. As part of this process, management reviews information including, but not limited to, any outstanding key contract matters, progress towards completion and the related program schedule, identified risks and opportunities and the related changes in estimates of revenues and costs. The risks and opportunities include management’s judgment about the ability and cost to achieve the schedule (e.g., the number and type of milestone events), technical requirements (e.g., a newly-developed product versus a mature product) and other contract requirements. Management must make assumptions and estimates regarding labor productivity and availability, the complexity of the work to be performed, the availability of materials, the length of time to complete the performance obligation (e.g., to estimate increases in wages and prices for materials and related support cost allocations), execution by subcontractors, the availability and timing of funding from customers and overhead cost rates, among other variables. In addition, certain of the Company’s long-term contracts contain award fees, incentive fees, or other provisions that can either increase or decrease the transaction price. These variable amounts generally are awarded upon achievement of certain performance metrics, program milestones or cost targets and can be based upon customer discretion. Variable consideration is estimated at the most likely amount to which the Company is expected to be entitled. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available. Contracts are often modified to account for changes in contract specifications and requirements. Contract modifications are considered to exist when the modification either creates new or changes the existing enforceable rights and obligations. Most of the Company’s contract modifications are for goods or services that are not distinct from the existing contract due to the significant integration service provided in the context of the contract and are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price, and the measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis. As a result of the EAC process, any quarterly adjustments to revenues, cost of sales, and the related impact to operating income are recognized as necessary in the period they become known. These adjustments may result from positive program performance, and may result in an increase in operating income during the performance of individual performance obligations, if it is determined the Company will be successful in mitigating risks surrounding the technical, schedule and cost aspects of those performance obligations or realizing related opportunities. Likewise, these adjustments may result in a decrease in operating income if it is determined the Company will not be successful in mitigating these risks or realizing related opportunities. Changes in estimates of net sales, cost of sales and the related impact to operating income are recognized quarterly on a cumulative catch-up basis, which recognizes in the current period the cumulative effect of the changes on current and prior periods. A significant change in one or more of these estimates could affect the profitability of one or more of the Company’s contracts. When estimates of total costs to be incurred on a performance obligation exceed total estimates of revenue to be earned, a provision for the entire loss on the performance obligation is recognized in the period the loss is determined. No cumulative catch-up adjustment on any one contract was material to the Company’s consolidated financial statements for the years ended December 29, 2019 , December 30, 2018 and December 31, 2017 . Likewise, total cumulative catch-up adjustments were not material for the years ended December 29, 2019 , December 30, 2018 and December 31, 2017 . As of December 29, 2019 and December 30, 2018 , accrued expenses included the accrual for losses on contracts of $3.1 million and $5.1 million , respectively. Contract Assets and Liabilities For each of the Company’s contracts, the timing of revenue recognition, customer billings, and cash collections results in a net contract asset or liability at the end of each reporting period. Fixed-price contracts are typically billed to the customer either using progress payments, whereby amounts are billed monthly as costs are incurred or work is completed, or performance based payments, which are based upon the achievement of specific, measurable events or accomplishments defined and valued at contract inception. Cost-type contracts are typically billed to the customer on a monthly or semi-monthly basis. Contract assets consist of unbilled receivables, primarily related to long-term contracts where revenue recognized under the cost-to-cost method exceeds amounts billed to customers. Unbilled receivables are classified as current assets and, in accordance with industry practice, include amounts that may be billed and collected beyond one year due to the long term nature of many of the Company’s contracts. Accumulated contract costs in unbilled receivables include direct production costs, factory and engineering overhead, production tooling costs, and, for government contracts, recovery of allowable general and administrative expenses. Unbilled receivables also include certain estimates of variable consideration described above. The Company’s contracts that give rise to contract assets are not considered to include a significant financing component as the payment terms are intended to protect the customer in the event the Company does not perform on its obligations under the contract. Contract liabilities include advance payments and billings in excess of revenue recognized. Certain customers make advance payments prior to the satisfaction of the Company’s performance obligations on the contract. These amounts are recorded as contract liabilities until such performance obligations are satisfied, either over time as costs are incurred or at a point in time when deliveries are made. The Company’s contracts that give rise to contract liabilities do not include a significant financing component as the underlying advance payments received are generally utilized to pay for contract costs within a one-year period or are used to ensure the customer meets contractual requirements. Net contract assets and liabilities are as follows (in millions): December 29, 2019 December 30, 2018 Net Change Contract assets $ 179.4 $ 172.8 $ 6.6 Contract liabilities $ 34.3 $ 37.0 $ (2.7 ) Net contract assets $ 145.1 $ 135.8 $ 9.3 Contract assets increased $ 6.6 million during the year ended December 29, 2019 , primarily due to the recognition of revenue related to the satisfaction or partial satisfaction of performance obligations during the year ended December 29, 2019 for which the Company has not yet billed the customers. There were no significant impairment losses related to any receivables or contract assets arising from the Company’s contracts with customers during the year ended December 29, 2019 . Contract liabilities decreased $ 2.7 million during the year ended December 29, 2019 , primarily due to revenue recognized in excess of payments received on these performance obligations. For the years ended December 29, 2019 and December 30, 2018 , the Company recognized revenue of $30.5 million and $ 35.5 million , respectively, that was previously included in the beginning balance of contract liabilities. In November 2019, a large training solutions program was terminated for convenience (“T for C”) by the customer. Under a T for C, a contractor is entitled to seek specified costs through a termination settlement process including (1) the contract price for completed supplies and services accepted by the government but not previously paid for; (2) the cost incurred in the performance of work terminated plus a reasonable profit on those costs; and (3) its costs incurred in settling with subcontractors and preparing and settling the termination proposal. Under a T for C, the Company would not be able to collect the total withheld amounts until the settlement terms of the T for C have been negotiated and agreed to with the customer. At December 29, 2019, approximately $11.5 million in unbilled receivables is outstanding on this project. In addition, the Company is currently in dispute with an international customer in the US segment over approximately $10.0 million in unbilled receivables outstanding as of December 29, 2019 . The dispute concerns the completion of system requirements and contractual milestones. Although there could be a delay in billing and collecting amounts due to the Company under the aforementioned contracts, management has evaluated the present facts of the matters and performed a reassessment of the contractual amounts due and have determined that no adjustment to previously recognized revenue, or the corresponding unbilled receivables, is necessary at December 29, 2019 . Disaggregation of Revenue The following series of tables presents the Company’s revenue disaggregated by several categories. For the majority of contracts, revenue is recognized over time as work is performed on the contract. Revenue by contract type was as follows (in millions): Year Ended December 29, 2019 Year Ended December 30, 2018 Kratos Government Solutions Fixed price $ 469.4 $ 424.9 Cost plus fee 54.3 32.6 Time and materials 32.4 27.6 Total Kratos Government Solutions 556.1 485.1 Unmanned Systems Fixed price 126.2 104.8 Cost plus fee 33.8 26.5 Time and materials 1.4 1.6 Total Unmanned Systems 161.4 132.9 Total Revenues $ 717.5 $ 618.0 Revenue by customer was as follows (in millions): Year Ended December 29, 2019 Year Ended December 30, 2018 Kratos Government Solutions U.S. Government (1) $ 368.6 $ 333.5 International (2) 111.4 96.0 U.S. Commercial and other customers 76.1 55.6 Total Kratos Government Solutions 556.1 485.1 Unmanned Systems U.S. Government (1) 138.8 113.5 International (2) 21.1 18.3 U.S. Commercial and other customers 1.5 1.1 Total Unmanned Systems 161.4 132.9 Total Revenues $ 717.5 $ 618.0 (1) Sales to the U.S. Government include sales from contracts for which the Company is the prime contractor, as well as those for which the Company is a subcontractor and the ultimate customer is the U.S. Government. Each of the Company’s segments derives substantial revenue from the U.S. Government. These sales include foreign military sales contracted through the U.S. Government. (2) International sales include sales from contracts for which the Company is the prime contractor, as well as those for which the Company is a subcontractor and the ultimate customer is an international customer. These sales include direct sales with governments outside the U.S. and commercial sales with customers outside the U.S. For federal contracts, the Company follows U.S. Government procurement and accounting standards in assessing the allowability and the allocability of costs to contracts. Recurring evaluations of contract cost, scheduling and technical matters are performed by management. Costs incurred and allocated to contracts with the U.S. Government are scrutinized for compliance with regulatory standards by the Company’s personnel, and are subject to audit by the Defense Contract Audit Agency (“DCAA”). From time to time, the Company may proceed with work based on customer direction prior to the completion and signing of formal contract documents. The Company has a formal review process for approving any such work. Revenue associated with such work is recognized only when the criteria to establish a contract under ASC 606 are met and the obligations under the contract are legally enforceable. As of December 29, 2019 and December 30, 2018 , approximately $4.7 million and $3.8 million , respectively, of the Company’s unbilled accounts receivable balance were under an authorization to proceed or work order from its customers where a formal purchase order had not yet been received. (f) Inventoried costs Inventoried costs are stated at the lower of cost or estimated net realizable value. Cost is determined using the average cost or first-in, first-out methods and the applicable method is applied consistently within an operating entity. The Company capitalizes labor, material, subcontractor and overhead costs as work-in-process for contracts where control has not yet passed to the customer. In addition, the Company capitalizes costs incurred to fulfill a contract in advance of contract award in inventories as work-in-process if it is determined that contract award is probable. Pursuant to contract provisions of U.S. Government contracts, such customers may have title to, or a security interest in inventories related to such contracts as a result of advances, performance-based payments, and progress payments. The Company regularly reviews inventory quantities on hand, future purchase commitments with its suppliers, and the estimated utility of its inventory. If the Company’s review indicates a reduction in utility below carrying value, it reduces its inventory to a new cost basis. (g) Research and Development Costs incurred in research and development activities are expensed as incurred in accordance with FASB ASC Topic 730 , Research and Development. (h) Income Taxes The Company records deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company maintains a valuation allowance on the deferred tax assets for which it is more likely than not that the Company will not realize the benefits of these tax assets in future tax periods. The valuation allowance is based on estimates of future taxable income by tax jurisdiction in which the Company operates, the number of years over which the deferred tax assets will be recoverable, and scheduled reversals of deferred tax liabilities. In accordance with the recognition standards established by ASC Topic 740, Income Taxes, (“Topic 740”), the Company makes a comprehensive review of its portfolio of uncertain tax positions regularly. In this regard, an uncertain tax position represents the Company’s expected treatment of a tax position taken in a filed tax return, or planned to be taken in a future tax return or claim, which has not been reflected in measuring income tax expense for financial reporting purposes. Until these positions are sustained by the taxing authorities, the Company has not recognized the tax benefits resulting from such positions and reports the tax effects as a liability for uncertain tax positions in its consolidated balance sheets. (i) Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC Topic 718 , Compensation-Stock Compensation . All of the Company’s stock-based compensation plans are considered equity plans under Topic 718 , and compensation expense recognized is net of estimated forfeitures over the vesting period. The Company issues stock options and stock awards under its existing plans. The fair value of stock options is estimated on the date of grant using a Black-Scholes option-pricing model or a trinomial lattice options pricing model and is expensed on a straight-line basis over the remaining vesting period of the options, which is generally six or less years. The fair value of stock awards is determined based on the closing market price of the Company’s common stock on the grant date and is adjusted at each reporting date based on the amount of shares ultimately expected to vest. Compensation expense for stock awards is expensed over the vesting period, usually five to ten years . Compensation expense for stock issued under the Company’s employee stock purchase plan is estimated at the beginning date of the offering period using a Black-Scholes option-pricing model and is expensed on a straight-line basis over the period of the offering, which is generally six months . When tax deductions from stock options and awards are greater than the cumulative book compensation expense, the tax effect of the resulting difference is a windfall. For the year ended December 29, 2019 , an income tax benefit of $2.1 million was recorded for windfalls generated from stock options and awards exercised in 2019. For the tax years ended December 30, 2018 and December 31, 2017 , there were no incremental tax benefits from stock options exercised in the periods. The following table shows the amounts recognized in the consolidated financial statements for stock-based compensation expense related to stock options, stock awards and stock offered under the Company’s employee stock purchase plan (in millions, except per share amounts). Year ended December 29, 2019 Year ended December 30, 2018 Year ended December 31, 2017 Selling, general and administrative expenses $ 11.0 $ 7.2 $ 7.8 Total cost of employee stock-based compensation included in operating income (loss) from continuing operations $ 11.0 $ 7.2 $ 7.8 (j) Allowance for Doubtful Accounts The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments, which results in bad debt expense. Management determines the adequacy of this allowance by periodically evaluating the comprehensive risk profiles of all individual customer receivable balances including, but not limited to, the customer’s financial condition, credit agency reports, financial statements and overall current economic conditions. Additionally, on certain contracts whereby the Company performs services for a prime/general contractor, a specified percentage of the invoiced trade accounts receivable may be retained by the customer until the project is completed. The Company periodically reviews all retainages for collectability and records allowances for doubtful accounts when deemed appropriate, based on its assessment of the associated credit risks. Changes to estimates of contract value are recorded as adjustments to revenue and not as a component of the allowance for doubtful accounts. Individual accounts receivable are written off to the allowance for doubtful accounts when the Company becomes aware of a specific customer’s inability to meet its financial obligation, and all collection efforts are exhausted. The following table outlines the balance of the Company’s allowance for doubtful accounts for 2019 , 2018 and 2017 . The table identifies the additional provisions each year as well as the write-offs that utilized the allowance (in millions). Allowance for Doubtful Accounts Balance at Beginning of Year Provisions Write-offs/Recoveries Balance at End of Year Year ended December 31, 2017 $ 1.5 $ — $ (1.0 ) $ 0.5 Year ended December 30, 2018 $ 0.5 $ 1.8 $ — $ 2.3 Year ended December 29, 2019 $ 2.3 $ (0.2 ) $ (0.2 ) $ 1.9 (k) Cash and Cash Equivalents The Company’s cash equivalents consist of its highly liquid investments with an original maturity of three months or less when purchased by the Company. The Company had no restricted cash accounts at December 29, 2019 and approximately $0.3 million at December 30, 2018 . As of December 30, 2018 , restricted cash consisted primarily of a deposit securing foreign letters of credit related to payment and performance bonds on international contracts. (l) Property and Equipment, Net Property and equipment, net owned by the Company is depreciated over the estimated useful lives of individual assets. Equipment acquired under capital leases are amortized over the shorter of the lease term or the estimated useful life of the asset. Improvements, which significantly improve and extend the useful life of an asset, are capitalized and depreciated over the shorter of the lease period or the estimated useful life. Expenditures for maintenance and repairs are charged to operations as incurred. Assets are depreciated predominately using the straight-line method, with the following lives: Years Buildings and improvements 15 – 39 Machinery and equipment 3 – 10 Computer equipment and software 1 – 10 Vehicles, furniture, and office equipment 5 Leasehold improvements Shorter of useful life or length of lease (m) Leases In February 2016, the FASB issued ASU 2016-02 (“ASU 2016-02”), Leases , also referred to as “ASC 842”. ASC 842 requires that lessees recognize assets and liabilities for the rights and obligations underlying leases with a lease term of more than one year. The amendments in this ASU are effective for annual periods beginning after December 15, 2018. In July 2018, the FASB issued ASU 2018-11, Leases; Targeted Improvements , which, among other things, allowed the Company to elect an optional transition method that applies the new lease requirements through a cumulative-effect adjustment in the period of adoption. The Company adopted ASC 842 on December 31, 2018 using the optional transiti |
Acquisition
Acquisition | 12 Months Ended |
Dec. 29, 2019 | |
Business Combinations [Abstract] | |
Acquision | Acquisition On February 27, 2019, the Company acquired 80.1% of the issued and outstanding shares of capital stock of Florida Turbine Technologies Inc., a Florida corporation (“FTT Inc.”), and 80.1% of the membership interests in FTT CORE, LLC, a Delaware limited liability company (“FTT Core” and, together with FTT Inc. and their respective subsidiaries, “FTT”), for an aggregate purchase price of approximately $60 million . The purchase price was $33 million in cash, with approximately $17.7 million paid at close and approximately $15.3 million to be paid over a three-year period, subject to adjustments for transaction expenses, indebtedness, cash on hand, certain amounts payable or potentially payable to employees of FTT and post-closing working capital adjustments, and 1,825,406 shares of common stock (with a value of approximately $27 million ). FTT is a leading turbomachinery design and manufacturing company specializing in engineering, development, and testing of gas turbines, propulsion components, engine and other systems for military and commercial applications. FTT is now the KTT Division, which is focused on the development and production of small, affordable, high-performance jet engines for the next generation of tactical weapon systems and tactical jet UAS. The KTT Division is included in the KGS segment. The excess of the purchase price over the fair value of the tangible and identifiable intangible assets acquired and liabilities assumed in the acquisition was allocated to goodwill. The goodwill represents the value the Company expects to be created by enabling it to accelerate FTT’s small engine development programs, and facilitate integration of these leading-edge engine solutions with evolving Kratos tactical systems. Simultaneously with the execution of the Purchase Agreement among the Company and the Sellers (as defined in such agreement) (the “Purchase Agreement”) and completion of the acquisition, the Company, FTT Inc., FTT Core and the Sellers entered into an exchange agreement (the “Exchange Agreement”) pursuant to which, among other things, (i) FTT Core was converted into a Delaware corporation, (ii) beginning in January 2024, the Holders (as defined in the Exchange Agreement) will have an annual right (the “Put Right”) to sell all of the minority interests in FTT Inc. and FTT Core (the “Minority Interests”) to the Company at a purchase price based on a specified multiple of the trailing 12 months EBITDA of FTT Inc., FTT Core and each of their respective subsidiaries (the “Acquired Companies”) as set forth in the Exchange Agreement (the “Minority Interest Purchase Price”) (provided, however, that following certain events, including a change of control, the Put Right will be accelerated and the Minority Interest Purchase Price will be a specified increased multiple of of the trailing 12 months EBITDA of the Acquired Companies as set forth in th Exchange Agreement), and (iii) beginning in January 2025, the Company will have an annual right to purchase all of the Minority Interests from the Holders at the Minority Interest Purchase Price. The transaction has been accounted for using the acquisition method of accounting, which requires, among other things, that the assets acquired, the liabilities assumed, and the noncontrolling interest be recognized at their fair values as of the acquisition date. The fair value measurements are based primarily on significant inputs not observable in the marketplace and thus represent Level 3 measurements. The following table summarizes the allocation of the purchase price over the estimated fair values of the major assets acquired, liabilities assumed, and noncontrolling interest (in millions): Accounts receivable $ 8.1 Unbilled receivables 4.9 Inventoried costs 7.8 Other current assets 2.1 Property and equipment 5.7 Intangible assets 30.8 Goodwill 23.0 Total identifiable net assets acquired 82.4 Total identifiable net liabilities assumed (7.5 ) Net assets before noncontrolling interest 74.9 Noncontrolling interest (14.9 ) Net assets acquired, excluding cash $ 60.0 As of February 27, 2019, net liabilities include $7.5 million of current liabilities. There was no contingent purchase consideration associated with the acquisition of an 80.1% majority interest in FTT. The identifiable intangible assets include customer relationships of $19.7 million with a useful life of 13 years , in-process research and development of $8.5 million that will commence amortization at the completion of the development project, backlog of $2.1 million with a useful life of 2 years , and trade name of $0.5 million with a useful life of 2 years . The Company also established a deferred tax liability of $7.0 million for the increase in the financial statement basis of the acquired assets of FTT and a corresponding increase in goodwill. The goodwill recorded in this transaction is not expected to be tax-deductible. The value of customer relationships was estimated using the multi-period excess earnings method (“MPEEM”), an income approach (Level 3), which converts projected revenues and costs into cash flows. To reflect the fact that certain other assets contribute to the cash flows generated, the returns for these contributory assets were removed to arrive at estimated cash flows solely attributable to the acquired customer relationships, which were discounted at a rate of 12.5% to determine the fair value. The value of backlog was also valued using MPEEM. The value of in-process research and development was estimated using the relief-from-royalty method, an income approach (Level 3), which estimates the cost savings that accrue to the owner of the intangible asset that would otherwise be payable as royalties or license fees on revenues earned through the use of the asset. A royalty rate was applied to the projected revenues associated with the intangible asset to determine the amount of savings, which was at a rate of 10% to determine the fair value. The amounts of revenue and operating loss of FTT included in the Company's consolidated statement of operations for the year ended December 29, 2019 are $52.5 million and $0.7 million , respectively. Included in the merger and acquisition expenses for the year ended December 29, 2019 are transaction expenses of $1.4 million related to the acquisition of FTT. A summary of the consideration paid for the acquired ownership in FTT is as follow: Cash paid $ 20.7 Deferred purchase consideration 15.3 Common stock issued 27.0 63.0 Less: Cash acquired (3.0 ) Total consideration $ 60.0 Pro Forma Financial Information (Unaudited) The following table summarizes the supplemental condensed consolidated statement of operations information on an unaudited pro forma basis as if the acquisition of FTT occurred on December 31, 2018 and includes adjustments that were directly attributable to the foregoing transactions. There are no material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The pro forma results are for illustrative purposes only for the applicable period and do not purport to be indicative of the actual results that would have occurred had the transaction been completed as of the beginning of the period, nor are they indicative of results of operations that may occur in the future: For the year ended December 29, 2019 (all amounts, except per share amounts, are in millions): Pro forma revenues $ 725.6 Pro forma net income before tax $ 14.8 Pro forma net income $ 11.7 Pro forma net income attributable to Kratos $ 11.8 Basic pro forma income per share attributable to Kratos $ 0.11 Diluted pro forma income per share attributable to Kratos $ 0.11 The weighted average common shares used to calculate income per share also reflects the issuance of 1,825,406 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 29, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets (a) Goodwill The Company performs its annual impairment test for goodwill in accordance with Topic 350 as of the last day of its fiscal October or when evidence of potential impairment exists. The Company assesses goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a component. The Company determines its reporting units by first identifying its operating segments, and then assessing whether any components of these segments constitute a business for which discrete financial information is available and where segment management regularly reviews the operating results of that component. The Company aggregates components within an operating segment that have similar economic characteristics. The KGS reportable segment has five operating segments: Defense Rocket Support Services (“DRSS”), Microwave Electronics (“ME”), Space, Training and Cybersecurity Solutions (ST&C), Modular Systems (“MS”), and Kratos Turbine Technologies (“KTT”). All of the KGS operating segments provide technology based defense solutions, involving products and services, primarily for mission critical U.S. national security priorities, with the primary focus relating to the nation’s Command, Control, Communications, Computing, Combat Systems, Intelligence, Surveillance and Reconnaissance requirements. The US reportable segment consists of its unmanned aerial system, unmanned ground, and unmanned seaborne system products. The Company identified its reporting units to be the DRSS, ME, ST&C, MS, KTT and US operating segments. The Company tests goodwill for impairment by performing a qualitative assessment or using a two-step impairment process. If the Company chooses to perform a qualitative assessment and determines it is not more likely than not that the fair value of the reporting unit exceeds its carrying value, the two-step impairment process is then performed. For operations where the two-step process is used, the identification and measurement of impairment involves the estimation of the fair value of reporting units. If the fair value is determined to be less than the carrying value, a second step is performed to determine the amount of the impairment. When any impairment has occurred, a charge to operations is recorded. In order to test for potential impairment, the Company estimates the fair value of each of the reporting units based on a comparison and weighting of the income approach, specifically the discounted cash flow method and the market approach, which estimates the fair value of the reporting units based upon comparable market prices and recent transactions and also validates the reasonableness of the implied multiples from the income approach. In determining the fair value for the reporting units, where the two-step process is used, there are key assumptions relating to future expected cash flows, terminal growth rates, appropriate discount rates, market multiples, and the control premium a controlling shareholder could be expected to pay. During the fourth quarter of 2017, as a result of the Company’s annual impairment test of the carrying value of its goodwill balances, the Company recorded an impairment charge of $24.2 million of the carrying value of the goodwill of its DRSS business reported in its KGS segment, which majority of business and revenue at the time included the Company’s legacy government services business. In 2010, the Company changed its strategy to focus on being a system, product, technology and intellectual property based company and deemphasized its legacy government services businesses which are no longer considered a core business. Over the past several years, similar to other businesses operating in the federal government technical services space, this business has been adversely impacted by competitive pressures and commoditization resulting from lower priced technically acceptable awards rather than awards based on best value or that are technologically or performance differentiated. Specifically, the Company lost two sizable five -year contract opportunities where Kratos was underbid on cost, which significantly impacted the expected future financial performance of this business. There was no impairment recognized for the years ended December 29, 2019 and December 30, 2018 . The carrying amounts of goodwill as of December 29, 2019 and December 30, 2018 by reportable segment are as follows (in millions): As of December 29, 2019 US KGS Total Gross value $ 111.1 $ 597.8 $ 708.9 Less accumulated impairment 13.8 239.5 253.3 Net $ 97.3 $ 358.3 $ 455.6 As of December 30, 2018 US KGS Total Gross value $ 111.1 $ 567.9 $ 679.0 Less accumulated impairment 13.8 239.5 253.3 Net $ 97.3 $ 328.4 $ 425.7 (b) Purchased Intangible Assets The following table sets forth information for acquired finite-lived and indefinite-lived intangible assets (in millions): As of December 29, 2019 As of December 30, 2018 Gross Value Accumulated Amortization Net Value Gross Value Accumulated Amortization Net Value Acquired finite-lived intangible assets: Customer relationships $ 72.3 $ (53.3 ) $ 19.0 $ 52.6 $ (50.6 ) $ 2.0 Contracts and backlog 32.0 (28.4 ) 3.6 29.9 (26.4 ) 3.5 Developed technology and technical know-how 25.0 (23.8 ) 1.2 25.0 (21.3 ) 3.7 Trade names 1.9 (1.6 ) 0.3 1.4 (1.4 ) — In-process research and development 8.5 — 8.5 — — — Total finite-lived intangible assets 139.7 (107.1 ) 32.6 108.9 (99.7 ) 9.2 Indefinite-lived trade names 6.9 — 6.9 6.9 — 6.9 Total intangible assets $ 146.6 $ (107.1 ) $ 39.5 $ 115.8 $ (99.7 ) $ 16.1 The aggregate amortization expense for finite-lived intangible assets was $7.4 million , $5.9 million and $10.4 million , for the years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 , respectively. The Company records all amortization expense in selling, general and administrative expenses. The estimated future amortization expense of acquired intangible assets with finite lives as of December 29, 2019 is as follows (in millions): Fiscal Year Amount 2020 5.8 2021 3.7 2022 2.4 2023 2.4 2024 2.4 Thereafter 15.9 Total $ 32.6 |
Balance Sheet Details
Balance Sheet Details | 12 Months Ended |
Dec. 29, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Details | Balance Sheet Details The detail of certain assets in the consolidated balance sheets consists of the following: Cash and cash equivalents The Company’s cash equivalents consist of overnight cash sweep accounts that are invested on a daily basis. Cash and cash equivalents at December 29, 2019 and December 30, 2018 were $172.6 million and $182.7 million , respectively, and approximated their fair value. Accounts receivable, net and Unbilled Receivables, net Receivables including amounts due under long-term contracts are summarized as follows (in millions) : December 29, 2019 December 30, 2018 Billed, current $ 86.6 $ 66.5 Unbilled, current 179.7 173.2 Total current accounts receivable 266.3 239.7 Allowance for doubtful accounts (1.9 ) (2.3 ) Total accounts receivable and unbilled receivables, net $ 264.4 $ 237.4 Substantially all accounts receivable at December 29, 2019 , are expected to be collected in 2020 . The Company does not believe it has significant exposure to credit risk, as accounts receivable and the related unbilled amounts are primarily from contracts associated with the U.S. Government. U.S. Government contract receivables where the Company is the prime contractor included in accounts receivable, net (in millions): December 29, 2019 December 30, 2018 Billed $ 16.6 $ 16.5 Unbilled 86.4 83.1 Total U.S. Government contract receivables $ 103.0 $ 99.6 Inventoried costs, net of progress payments (in millions): December 29, December 30, Raw materials $ 39.1 $ 34.7 Work in process 20.3 10.3 Finished goods 1.7 1.8 Total inventoried costs $ 61.1 $ 46.8 Property, plant and equipment, net (in millions) December 29, 2019 December 30, 2018 Finance lease right of use assets $ 39.6 $ — Land and buildings $ 12.2 $ 11.9 Computer equipment and software 32.7 28.3 Machinery and equipment 78.7 56.8 Furniture and office equipment 7.1 6.3 Leasehold improvements 12.3 10.9 Construction in progress 16.0 21.5 Property and equipment 198.6 135.7 Accumulated depreciation and amortization (81.7 ) (68.6 ) Total property and equipment, net $ 116.9 $ 67.1 Depreciation expense was $16.0 million , $12.0 million and $11.8 million for the years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 , respectively. |
Debt
Debt | 12 Months Ended |
Dec. 29, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt (a) Issuance of 6.5% Senior Secured Notes due 2025 In November 2017, the Company issued and sold $300 million aggregate principal amount of 6.5% Senior Secured Notes due 2025 (the “6.5% Notes”) in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the “Act”). The Company incurred debt issuance costs of $6.6 million associated with the new 6.5% Notes. The Company utilized the net proceeds from the sale of the 6.5% Notes, as well as cash from its recent equity offering to extinguish the previously outstanding 7.00% Senior Secured Notes due 2019 (the “7% Notes”). The total reacquisition price of the 7% Notes was $385.2 million , including a $12.0 million call premium, and $0.3 million of accrued interest. The 6.5% Notes are governed by the Indenture, dated as of November 20, 2017 (the “Indenture”), among the Company, the Company’s existing and future domestic subsidiaries parties thereto (the “Subsidiary Guarantors”) and Wilmington Trust, National Association, as trustee and collateral agent (in such capacity, the “2017 Trustee and Collateral Agent”). A Subsidiary Guarantor can be released from its guarantee if (a) all of the capital stock issued by such Subsidiary Guarantor or all or substantially all of the assets of such Subsidiary Guarantor are sold or otherwise disposed of; (b) the Company designates such Subsidiary Guarantor as an Unrestricted Subsidiary; (c) the Company exercises its legal defeasance option or its covenant defeasance option; or (d) upon satisfaction and discharge of the Indenture or payment in full in cash of the principal of, premium, if any, and accrued and unpaid interest on the 6.5% Notes. The 6.5% Notes bear interest at a rate of 6.5% per year from the date of original issuance or from the most recent payment date on which interest has been paid or provided for. Interest on the 6.5% Notes is payable in arrears on May 30 and November 30 of each year, beginning on May 30, 2018. The 6.5% Notes are fully and unconditionally guaranteed by the Subsidiary Guarantors. The 6.5% Notes and the guarantees (as set forth in the Indenture, the “Guarantees”) are the Company’s senior secured obligations and are equal in right of payment with all other senior obligations of the Subsidiary Guarantors’ existing and future secured debt to the extent of the assets securing that secured debt. The Company’s obligations under the 6.5% Notes are secured by a first priority lien on substantially all of the Company’s assets and the assets of the Subsidiary Guarantors, except with respect to accounts receivable, inventory, deposit accounts, securities accounts, cash, securities and general intangibles (other than intellectual property), on which the holders of the 6.5% Notes have a second priority lien, junior to the lien securing the Company’s obligations under the Credit Agreement. The 6.5% Notes will be redeemable, in whole or in part, at any time on or after November 30, 2020 at the respective redemption prices specified in the Indenture. In addition, the Company may redeem up to 40% of the 6.5% Notes before November 30, 2020 with the net proceeds of certain equity offerings. The Company may also redeem some or all of the 6.5% Notes before November 30, 2020 at a redemption price of 100% of the principal amount thereof plus accrued and unpaid interest, to, but excluding, the redemption date, if any, plus a “make whole” premium. In addition, during each 12-month period commencing on the issue date and ending on or prior to November 30, 2020, the Company may redeem up to 10% of the original aggregate principal amount of the 6.5% Notes issued under the Indenture at a redemption price of 103.000% of the principal amount thereof, plus accrued and unpaid interest, to, but excluding, the date of redemption, if any. The Company may also be required to make an offer to purchase the 6.5% Notes upon a change of control and certain sales of its assets. The Indenture contains covenants limiting, among other things, the Company’s ability and the Subsidiary Guarantors’ ability to: (a) pay dividends on or make distributions or repurchase or redeem the Company’s capital stock or make other restricted payments; (b) incur additional debt and guarantee debt; (c) prepay, redeem or repurchase certain debt; (d) issue certain preferred stock or similar equity securities; (e) make loans and investments; (f) sell assets; (g) incur liens; (h) consolidate, merge, sell or otherwise dispose of all or substantially all of the Company’s assets; (i) enter into transactions with affiliates; and (j) enter into agreements restricting the Company’s ability and certain of its subsidiaries’ ability to pay dividends. These covenants are subject to a number of exceptions. As of December 29, 2019 , the Company was in compliance with the covenants contained in the Indenture governing the 6.5% Notes. The terms of the Indenture require that the net cash proceeds from asset dispositions be either utilized to (i) repay or prepay amounts outstanding under the Credit Agreement unless such amounts are reinvested in similar collateral, (ii) permanently reduce other indebtedness, (iii) make an investment in assets that replace the collateral of the 6.5% Notes or (iii) a combination of (i), (ii) and (iii). To the extent there are any remaining net proceeds from the asset disposition after application of (i), (ii) and (iii), such amounts are required to be utilized to repurchase 6.5% Notes at par. The Indenture also provides for events of default which, if any of them occurs, would permit or require the principal, premium, if any, interest, if any, and any other monetary obligations on all the then-outstanding 6.5% Notes to become or to be declared due and payable immediately. (b) Other Indebtedness Credit and Security Agreement On May 14, 2014, the Company entered into a $110.0 million Credit and Security Agreement, dated May 14, 2014 (as amended from time to time, the “Credit Agreement”), with the lenders from time to time party thereto, SunTrust Bank, as Agent (the “Agent”), PNC Bank, National Association, as Joint Lead Arranger and Documentation Agent, and SunTrust Robinson Humphrey, Inc., as Joint Lead Arranger and Sole Book Runner. The Credit Agreement established a five -year senior secured revolving credit facility in the maximum amount of $110.0 million (subject to a potential increase of the maximum principal amount to $135.0 million , subject to the Agent’s and applicable lenders’ approval as described therein), consisting of a subline for letters of credit in an amount not to exceed $50.0 million , as well as a swingline loan in an aggregate principal amount at any time outstanding not to exceed $10.0 million . The obligations under the Credit Agreement are secured by a first priority lien on the Company’s accounts receivable, inventory, deposit accounts, securities accounts, cash, securities and general intangibles (other than intellectual property). The obligations under the Credit Agreement are secured by a second priority lien, junior to the lien securing the Notes, on all of the Company’s other assets. On November 20, 2017, the Company entered into an amended and restated Credit Agreement with the lenders from time to time party thereto, the Agent, PNC Bank, National Association, as Joint Lead Arranger and Documentation Agent, and SunTrust Robinson Humphrey, Inc., as Joint Lead Arranger and Sole Book Runner. As amended and restated, the Credit Agreement establishes a five year senior secured revolving credit facility in the aggregate principal amount of $90.0 million (subject to a potential increase of the aggregate principal amount to $115.0 million , subject to SunTrust’s and applicable lenders’ approval), consisting of a subline for letters of credit in an amount not to exceed $50.0 million , as well as a swingline loan in an aggregate principal amount at any time outstanding not to exceed $10.0 million . Borrowings under the revolving credit facility may take the form of a base rate revolving loan, Eurodollar revolving loan or swingline loan. Base rate revolving loans and swingline loans will bear interest at a rate per annum equal to the sum of the Applicable Margin (as defined in the Credit Agreement) from time to time in effect plus the highest of (i) the Agent’s prime lending rate, as in effect at such time, (ii) the federal funds rate, as in effect at such time, plus 0.50% per annum and (iii) the Adjusted LIBOR Rate (as defined in the Credit Agreement) determined at such time for an interest period of one month, plus 1.00% per annum. Eurodollar revolving loans will bear interest a rate per annum equal to the sum of the Applicable Margin from time to time in effect plus the Adjusted LIBOR Rate. The Applicable Margin varies between 1.00% - 1.50% for base rate revolving loans and swingline loans and 2.00% - 2.50% for Eurodollar loans, and is based on several factors including the Company’s then-existing borrowing base and the lenders’ total commitment amount and revolving credit exposure. The calculation of the Company’s borrowing base takes into account several items relating to the Company and its subsidiaries, including amounts due and owing under billed and unbilled accounts receivables, then held eligible raw materials inventory, work-in-process inventory, and applicable reserves . The measurement of a minimum fixed charge coverage ratio is required to be measured if Excess Availability, as defined in the Credit Agreement, is less than fifty percent of the lesser of the Borrowing Base or the Total Commitment Amount, each as defined in the Credit Agreement. As of December 29, 2019 and December 30, 2018 , there were no borrowings outstanding on the Credit Agreement; there was $5.4 million outstanding on letters of credit, resulting in net borrowing base availability of $69.3 million as of December 29, 2019 . The Company was in compliance with the financial covenants of the Credit Agreement as of December 29, 2019 . Fair Value of Long-term Debt Carrying amounts and the related estimated fair values of the Company’s long-term debt financial instruments not measured at fair value on a recurring basis at December 29, 2019 and December 30, 2018 are presented in the following table: As of December 29, 2019 As of December 30, 2018 $ in millions Principal Carrying Amount Fair Value Principal Carrying Amount Fair Value Long-term debt $ 300.0 $ 295.1 $ 322.1 $ 300.0 $ 294.2 $ 305.3 The fair value of the Company’s long-term debt was based upon actual trading activity (Level 1, Observable inputs —quoted prices in active markets). As of December 29, 2019 , the difference between the carrying amount of $295.1 million and the principal amount of $300.0 million presented in the previous table, is the unamortized debt issuance costs of $4.9 million , which are being accreted to interest expense over the term of the related debt. As of December 30, 2018 , the difference between the carrying amount of $294.2 million and the principal amount of $300.0 million presented in the above table also related to the same unamortized debt issuance costs of $5.8 million . Future maturity of long-term debt is $300.0 million in 2025. |
Leases
Leases | 12 Months Ended |
Dec. 29, 2019 | |
Leases [Abstract] | |
Leases | Leases As a result of a lease modification for its expanded facilities in Colorado, in the first quarter of 2019, the Company was required to reassess the classification of the lease which previously had been accounted for as an operating lease. This reassessment resulted in the reclassification of the operating lease to a $39.3 million finance lease. The components of lease expense for the year ended December 29, 2019 were as follows (in millions): Amortization of right of use assets - finance leases $ 2.0 Interest expense on lease liabilities - finance leases 2.5 Operating lease cost (expense resulting from amortization of total lease payments) 13.2 Short-term lease cost 0.6 Variable lease cost (cost excluded from lease payments) 0.1 Sublease income (3.3 ) Total lease cost $ 15.1 The components of leases on the balance sheet were as follows (in millions): December 29, 2019 Operating Leases: Operating lease right-of-use assets $ 42.1 Current portion of operating lease liabilities $ 9.9 Operating lease liabilities, net of current portion $ 37.6 Finance leases: Property, plant and equipment, net $ 38.1 Other current liabilities $ 0.6 Other long-term liabilities $ 38.4 Cash paid for amounts included in the measurement of lease liabilities for the year ended December 29, 2019 was as follows (in millions): Finance lease - cash paid for interest $ 2.5 Finance lease - financing cash flows $ 0.5 Operating lease - operating cash flows (fixed payments) $ 14.8 Other supplemental noncash information (in millions): Operating lease liabilities arising from obtaining right-of-use assets, including impact of ASC 842 adoption $ 59.3 Finance lease liabilities arising from obtaining right-of-use assets, including impact of ASC 842 adoption $ 39.6 Weighted-average remaining lease term (in years): Operating leases 5.77 Finance leases 18.91 Weighted-average discount rate: Operating leases 6.50 % Finance leases 6.52 % The maturity of lease liabilities is (in millions): Operating Leases Finance Leases 2020 $ 12.6 $ 3.1 2021 10.0 3.2 2022 8.6 3.3 2023 8.2 3.3 2024 6.2 3.3 Thereafter 11.6 54.0 Total lease payments 57.2 70.2 Less: imputed interest (9.6 ) (31.2 ) Total present value of lease liabilities $ 47.6 $ 39.0 Rental expense for operating leases classified under ASC 840 for the years ended December 30, 2018 , and December 31, 2017 was $23.7 million , and $18.6 million , respectively. Total sublease income for the years ended December 30, 2018 , and December 31, 2017 , totaling $3.3 million , and $3.4 million , respectively, has been netted against rent expense. As of December 30, 2018, future minimum lease payments under ASC 840 for operating leases, which does not include $4.3 million in sublease income on the Company’s operating leases, were as follows (in millions): Year Operating Leases 2019 $ 16.5 2020 12.0 2021 9.6 2022 8.1 2023 7.9 Thereafter 63.1 Total minimum lease payments $ 117.2 |
Net Income (Loss) Per Common Sh
Net Income (Loss) Per Common Share | 12 Months Ended |
Dec. 29, 2019 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Common Share | Net Income (Loss) Per Common Share The Company calculates net income (loss) per share in accordance with FASB ASC Topic 260, Earnings per Share (“Topic 260”). Under Topic 260, basic net income (loss) per common share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the reporting period. Diluted net income (loss) per common share reflects the effects of potentially dilutive securities. The following shares were excluded from the calculation of diluted loss per share because their inclusion would have been anti-dilutive (in millions): Year Ended December 29, 2019 December 30, 2018 December 31, 2017 Shares from stock options and awards — 0.1 0.1 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 29, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes In December 2017, the Tax Cuts and Jobs Act (“TCJA”) was enacted, which included a number of changes to previous U.S. tax laws that impacted the Company, most notably a reduction of the U.S. corporate income tax rate from 35% to 21% for tax years beginning after December 31, 2017. Effective January 1, 2018, the TCJA requires the acceleration of certain types of revenue for tax purposes. The new rules prohibit the Company from deferring revenue on unbilled accounts receivable later than when the amounts are recognized as revenue for book purposes. This change impacts several accounting methods previously used by the Company and is expected to result in an acceleration of taxability of such revenue as compared with prior U.S. tax laws. Additionally, future interest deductions of the Company will be limited to 30% of tax adjusted EBITDA through 2021. Additionally, effective January 1, 2018, the TCJA imposes a U.S. tax on global intangible low taxed income (“GILTI”) that is earned by certain foreign affiliates owned by a U.S. shareholder each year. The computation of GILTI is generally intended to impose tax on the earnings of a foreign corporation that are deemed to exceed a certain threshold return relative to the underlying business investment. The Company has made a policy election to treat future taxes related to GILTI as a current period expense in the reporting period in which the tax is incurred. The components of income (loss) from continuing operations before income taxes are comprised of the following (in millions): December 29, 2019 December 30, 2018 December 31, 2017 Domestic $ 6.8 $ 2.2 $ (60.5 ) Foreign 8.9 6.5 3.4 Total $ 15.7 $ 8.7 $ (57.1 ) The provision (benefit) for income taxes from continuing operations are comprised of the following (in millions): Year Ended December 29, 2019 December 30, 2018 December 31, 2017 Federal income taxes: Current $ (0.2 ) $ (0.4 ) $ (2.9 ) Deferred (3.9 ) (1.8 ) (9.0 ) Total Federal (4.1 ) (2.2 ) (11.9 ) State and local income taxes: Current 1.0 0.4 0.5 Deferred (0.9 ) 1.4 (0.3 ) Total State and local 0.1 1.8 0.2 Foreign income taxes: Current 9.0 4.8 2.0 Deferred (0.2 ) 0.2 (0.5 ) Total Foreign 8.8 5.0 1.5 Total $ 4.8 $ 4.6 $ (10.2 ) A reconciliation of the total income tax provision (benefit) to the amount computed by applying the statutory federal income tax rate of 21% to the income from continuing operations before income taxes for the years ended December 29, 2019 and December 30, 2018 , and applying the statutory federal income tax rate of 35% to the loss from continuing operations before income taxes for the year ended December 31, 2017 is as follows (in millions): Year Ended December 29, 2019 December 30, 2018 December 31, 2017 Income tax (benefit) at federal statutory rate $ 3.3 $ 1.8 $ (20.0 ) State taxes, net of federal tax benefit and valuation allowance 0.6 0.9 0.5 Difference in tax rates between U.S. and foreign 1.9 0.7 — Increase (decrease) in valuation allowance (3.3 ) 4.7 (45.6 ) Nondeductible expense 1.0 0.6 1.1 Increase in reserve for uncertain tax positions 7.7 4.0 1.3 Changes to indefinite life items and separate state deferred taxes 0.4 (0.7 ) (1.8 ) One-time transition tax on previously undistributed foreign earnings — 2.2 6.2 Goodwill impairment — — 8.1 Decrease in deferred taxes related to disposition — (9.6 ) — Impact related to the 2017 Tax Cuts and Jobs Act — — 40.0 Release of valuation allowance due to FTT acquisition (5.2 ) — — Stock-based compensation (1.6 ) — — Total $ 4.8 $ 4.6 $ (10.2 ) The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities are as follows (in millions): December 29, 2019 December 30, 2018 Deferred tax assets: Allowance for doubtful accounts $ 0.6 $ 0.6 Sundry accruals 2.3 1.1 Vacation accrual 3.0 2.7 Stock-based compensation 5.3 4.2 Payroll related accruals 6.2 2.4 Lease accruals 22.1 2.0 Investments 1.3 1.3 Net operating loss carryforwards 75.1 81.7 Capital loss carryforwards 1.3 1.9 Tax credit carryforwards 11.2 9.9 Deferred revenue 1.1 1.5 Reserves and other 13.6 10.8 143.1 120.1 Valuation allowance (88.6 ) (92.2 ) Total deferred tax assets, net of valuation allowance 54.5 27.9 Deferred tax liabilities: Unearned revenue (19.0 ) (23.9 ) Operating lease right-of-use assets (20.2 ) Other intangibles (21.0 ) (8.9 ) Property and equipment, principally due to differences in depreciation (2.0 ) (0.9 ) Other (1.3 ) (1.2 ) Total deferred tax liabilities (63.5 ) (34.9 ) Net deferred tax liability $ (9.0 ) $ (7.0 ) In assessing the Company’s ability to realize deferred tax assets, management considers, on a periodic basis, whether it is more likely than not that some portion or all of its deferred tax assets will not be realized. In making this assessment, the Company has concluded that negative evidence, including cumulative losses in recent years, continues to outweigh the positive evidence. Accordingly, the Company has maintained a full valuation allowance against the Company’s U.S. federal, combined state and certain foreign net deferred tax assets. However, given the Company’s more recent earnings history, management believes that there is a reasonable possibility that within the next 12 months, sufficient positive evidence may become available to allow management to reach a conclusion that a significant portion of the valuation allowance will no longer be needed. Release of valuation allowance would result in the recognition of certain deferred tax assets with a corresponding decrease to income tax expense for the period the release is recorded. The exact timing and amount of the valuation allowance release will be predicated on the basis of the level of profitability that the Company is able to actually achieve. During fiscal 2019 , the Company recorded a net decrease in its valuation allowance of $3.6 million . At December 29, 2019 , the Company had federal tax loss carryforwards of $307.8 million and various state tax loss carryforwards of $266.9 million . The federal tax loss carryforwards will begin to expire in 2027 and state tax loss carryforwards will begin to expire in 2020 in certain states. Additionally, the state capital loss carryforward generated in 2018 will begin to expire in 2023. Federal and state income tax laws impose restrictions on the utilization of net operating losses (“NOLs”) and tax credit carryforwards in the event that an “ownership change” occurs for tax purposes, as defined by Section 382 of the Internal Revenue Code of 1986, as amended (“Section 382”). In general, an ownership change occurs when shareholders owning 5% or more of a “loss corporation” (a corporation entitled to use NOLs or other loss carryovers) have increased their ownership of stock in such corporation by more than 50 percentage points during any 3 -year period. The annual base Section 382 limitation is calculated by multiplying the loss corporation’s value at the time of the ownership change by the greater of the long-term tax-exempt rate determined by the Internal Revenue Service in the month of the ownership change or the two preceding months. This base limitation is subject to adjustments, including an increase for built-in gains recognized in the five year period after the ownership change. In tax years 2010 and 2011 the Company experienced a Section 382 “ownership change” that will limit the utilization of NOL carryforwards. Additionally, in prior years the Company acquired corporations with NOL carryforwards at the date of acquisition (“Acquired NOLs”). The Acquired NOLs are subject to separate limitations that may further restrict the use of Acquired NOLs. For the year ended December 29, 2019 , there was no impact of such Section 382 limitations on the income tax provision since the amount of taxable income did not exceed the annual limitation amount. However, future equity offerings or acquisitions that have equity as a component of the purchase price could also cause an “ownership change.” If and when any other “ownership change” occurs, utilization of the NOLs or other tax attributes may be further limited. As of December 31, 2017, all accumulated undistributed earnings of our foreign subsidiaries were subject to the one-time transition tax on foreign earnings required by the 2017 Tax Cuts and Jobs Act. It is the Company’s intention to permanently reinvest undistributed earnings of its foreign subsidiaries. As such, the Company has not provided deferred U.S. income taxes or foreign withholding taxes of approximately $9.4 million on temporary differences relating to the outside basis in its investment in foreign subsidiaries. As of December 29, 2019, the Company has $24.6 million of cash and cash equivalents available for distribution. The Company is subject to taxation in the U.S., various state tax jurisdictions and various foreign tax jurisdictions. The Company’s tax years for 2000 and later are subject to examination by the U.S. and state tax authorities due to the existence of NOL carryforwards. Generally, the Company’s tax years for 2002 and later are subject to examination by various foreign tax authorities, as well. During 2018 the Company was notified by the Internal Revenue Service that its federal income tax return for the calendar year ending December 27, 2015 had been selected for examination. The Company is currently awaiting a final determination letter from the Internal Revenue Service and does not anticipate any significant changes in tax liability to the year under audit. The following table summarizes the activity related to the Company’s unrecognized tax benefits (in millions): Balance as of December 25, 2016 $ 18.6 Increases related to prior periods 0.4 Increases related to current year tax positions 1.1 Expiration of applicable statutes of limitations (0.6 ) Decrease in federal tax rate (3.9 ) Balance as of December 31, 2017 15.6 Increases related to prior periods 0.5 Increases related to current year tax positions 4.0 Expiration of applicable statutes of limitations (0.4 ) Decreases related to prior year tax positions (0.3 ) Decreases related to disposition (1.7 ) Balance as of December 30, 2018 17.7 Increases related to prior periods 0.2 Increases related to current year tax positions 6.3 Expiration of applicable statutes of limitations (0.1 ) Decreases related to settlement with tax authorities (0.1 ) Balance as of December 29, 2019 $ 24.0 Included in the balance of unrecognized tax benefits at December 29, 2019 , are $24.0 million of tax benefits that, if recognized, would affect the effective tax rate. Included in this amount is $11.1 million that would become a deferred tax asset if the tax benefit were recognized. As such, this benefit may be impacted by a corresponding valuation allowance depending upon the Company’s assessment of the realizability of the deferred tax asset at the time the benefits are recognized. The Company recognizes interest and penalties related to unrecognized tax benefits in its provision for income taxes. For the years ended December 29, 2019 , December 30, 2018 and December 31, 2017 , the Company recorded $1.3 million , $0.6 million , and $0.5 million , respectively, in interest or penalty expenses. These amounts are netted by a benefit for interest and penalties related to the reversal of prior positions and the disposition of PSS in the prior year of $0.1 million , $1.1 million , and $0.2 million for the years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 , respectively. As of December 29, 2019 , December 30, 2018 , and December 31, 2017 , the Company had accrued total interest and penalties of $2.8 million , $1.6 million and $2.2 million , respectively. The Company believes that it is reasonably possible that as much as $0.1 million of the liabilities for uncertain tax positions will expire within 12 months of December 29, 2019 due to the expiration of various applicable statues of limitations. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 29, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations On February 28, 2018, the Company entered into a Stock Purchase Agreement to sell the operations of Kratos Public Safety & Security Solutions, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“PSS”), to Securitas Electronic Security, Inc., a Delaware corporation (“Buyer”). On June 11, 2018, the Company completed the sale of all of the issued and outstanding capital stock of PSS to Buyer for a purchase price of $69 million in cash, subject to a closing net working capital adjustment (the “Transaction”). The Company and the Buyer are currently in a dispute regarding the closing net working capital adjustment. The amount in dispute is approximately $8 million . To date, the Company has collected approximately $3.7 million of the retained net working capital. The Company currently expects that the remaining net working capital retained by the Company will be collected during 2020 once certain legacy projects are completed and the project close-out process has been completed. The Company currently expects to recognize a net break-even on the sale of the PSS business once the aggregate net proceeds described above have been collected excluding the impact of the final settlement and determination of the closing net working capital adjustment. Any changes or adjustments to the expected net proceeds will be reflected in future periods. In accordance with ASC 360-10-45-9, Property, Plant, and Equipment (Topic 360) and ASC 205-20-45-3 Presentation of Financial Statements (Topic 205), PSS and its subsidiaries have been reported in discontinued operations in the accompanying consolidated financial statements for all periods presented. The following table presents the results of discontinued operations (in millions): Year ended December 29, 2019 Year ended December 30, 2018 Year ended December 31, 2017 Revenue $ 0.3 $ 44.2 $ 149.9 Cost of sales 0.9 34.2 110.1 Selling, general and administrative expenses 1.1 16.7 33.6 Other (income) expense items that are not major (3.6 ) 2.7 (0.1 ) Income (loss) from discontinued operations before income taxes 1.9 (9.4 ) 6.3 Gain on disposal of discontinued operations before income taxes — — — Total gain (loss) of discontinued operations before income taxes 1.9 (9.4 ) 6.3 Income tax (benefit) expense 0.2 (1.8 ) 2.1 Income (loss) from discontinued operations $ 1.7 $ (7.6 ) $ 4.2 Revenue and operating results for the year ended December 29, 2019 reflect the performance on the contracts and working capital retained by the Company. Included in the year ended December 29, 2019, is a $3.6 million gain recorded as a result of the release of an indemnification liability following the lapse of the statute of limitations associated with a potential tax liability that was recorded in 2015 as part of the previous sale of our Electronic Products Division. Discontinued operations for year ended December 30, 2018 were impacted by approximately $2.0 million of cost adjustments on certain security system deployment projects for a mass transit authority. Transaction expenses of $2.7 million , primarily comprised of investment advisory fees, legal fees, and other direct transaction expenses related to the Transaction, were included in Other (income) expense items that are not major for the year ended December 30, 2018. Depreciation expense included in Selling, general and administrative expenses was $0.0 million , $0.1 million and $0.3 million for the years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 respectively. Intra-period tax allocation rules require the Company to allocate its provision for income taxes between continuing operations and other categories of earnings. Upon closing of the PSS sale, amounts historically carried as unrecognized tax benefits were reclassified to guarantor liability in accordance with ASC 460. As a result of the reclassification, the Company recorded a $2.1 million tax benefit in discontinued operations for the year ended December 30, 2018. The following is a summary of the assets and liabilities of discontinued operations as of December 29, 2019 and December 30, 2018 (in millions): December 29, 2019 December 30, 2018 Accounts receivable, net 3.3 8.2 Other current assets — 0.1 Current assets of discontinued operations $ 3.3 $ 8.3 Accounts payable $ 0.2 $ 0.3 Accrued expenses 0.3 0.4 Other current liabilities 2.8 4.6 Current liabilities of discontinued operations $ 3.3 $ 5.3 Other long-term liabilities of discontinued operations $ 2.8 $ 6.4 |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 29, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement ASC Topic 820 , Fair Value Measurement, establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 29, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stockholders' Equity | Stockholders’ Equity (a) Common Stock On March 7, 2017 and September 12, 2017, the Company sold approximately 11.9 million and 16.1 million , respectively, shares of common stock at a purchase price of $7.25 and $12.25 , respectively, per share in underwritten public offerings. The Company received gross proceeds of approximately $283.5 million . After deducting underwriting fees and other offering expenses, the Company received approximately $269.1 million in net proceeds. The Company used the net proceeds to repurchase and extinguish $135.5 million of its outstanding 7% Notes. (b) Stock Option Plans and Restricted Stock Unit Plans In March 2014 the Company’s board of directors (the “Board”) approved the 2014 Equity Incentive Plan (the “2014 Plan”). The 2014 Plan is the successor to the Kratos Defense & Security Solutions, Inc. 2011 Equity Incentive Plan, the Kratos Defense & Security Solutions, Inc. Amended and Restated 2005 Equity Incentive Plan, the Kratos Defense & Security Solutions, Inc. 2000 Nonstatutory Stock Option Plan, the Kratos Defense & Security Solutions, Inc. 1999 Equity Incentive Plan, the Amended and Restated Integral Systems, Inc. 2008 Stock Incentive Plan, the Amended and Restated Herley Industries, Inc. 2010 Stock Plan, the Herley Industries, Inc. 2003 Stock Option Plan, the Henry Bros. Electronics, Inc. 2007 Stock Option Plan, the Henry Bros. Electronics, Inc. 2006 Stock Option Plan, the Amended and Restated 2005 Digital Fusion, Inc. Equity Incentive Plan, the 2000 Digital Fusion, Inc. Stock Option Plan, the 1999 Digital Fusion, Inc. Stock Option Plan, and the 1998 Digital Fusion, Inc. Stock Option Plan (collectively, the “Prior Plans”). The 2014 Plan became effective May 14, 2014 and no additional stock awards will be granted under the Prior Plans as of April 1, 2014. All outstanding stock awards granted subject to the terms of the Prior Plans will continue to be subject to the terms and conditions as set forth in the agreements evidencing such stock awards and the terms of the respective Prior Plans. Any shares subject to outstanding stock awards granted under the Prior Plans or granted outside of a Prior Plan that, at any time after March 27, 2014, (i) expire or terminate for any reason prior to exercise or settlement; (ii) are forfeited, canceled or otherwise returned to the Company because of the failure to meet a contingency or condition required to vest such shares; or (iii) are reacquired, withheld (or not issued) to satisfy a tax withholding obligation in connection with an award or to satisfy the purchase price or exercise price of a stock award (collectively, the “Returning Shares”) will immediately be added to the share reserve of the 2014 Plan and become available for issuance pursuant to stock awards granted under the 2014 Plan. As of March 27, 2014 , there were 2,306,256 shares remaining available for issuance under the Prior Plans. The total number of awards outstanding under all of the Prior Plans and outside of any Prior Plan was 5,511,322 as of March 27, 2014 . The 2014 Plan decreased the number of shares remaining available for issuance under its equity compensation plans from 2,306,256 to 1,550,000 , although, per the 2014 Plan, up to 5,511,322 shares subject to outstanding awards under the Prior Plans and non-plan grants could potentially become Returning Shares available for issuance under the 2014 Plan. In May 2017, the Company’s shareholders approved an amendment to the 2014 Plan to increase the aggregate number of shares that may be issued under the plan by 2,500,000 shares. The Board may grant equity-based awards to selected employees, directors and consultants of the Company pursuant to its 2014 Plan. As of December 29, 2019 , there were 1,736,561 shares reserved for issuance for future grant under the 2014 Plan. The Board may amend or terminate the 2014 Plan at any time. Certain amendments, including an increase in the share reserve, require stockholder approval. Generally, options and restricted stock units outstanding vest over periods not exceeding ten years . When the Company grants stock options, they are granted with a per share exercise price not less than the fair market value of the Company’s common stock on the date of grant, and generally would be exercisable for up to ten years from the grant date. The Company records compensation expense for employee stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes option-pricing model or a trinomial lattice options pricing model with the weighted average assumptions (annualized percentages) included in the following table. Awards with graded vesting are recognized using the straight-line method with the following assumptions: 2019 2018 2017 Stock Options Expected life 10.0 10.0 10.0 Risk-free interest rate(1) 2.5% - 2.6% 2.9% - 3.2% 2.2% - 2.5% Volatility(2) 47.5% - 49.1% 52.9% - 53.4% 53.8% - 55.0% Forfeiture rate(3) 5.1% 5.1% 5.0% Dividend yield(4) —% —% —% (1) The risk-free interest rate is based on U.S. Treasury yields in effect at the time of grant with a term equal to the expected term of the options. (2) In 2019 , 2018 , and 2017 , the Company estimated implied volatility based upon trailing volatility. (3) Forfeitures are estimated at the time of grant based upon historical information. Forfeitures will be revised, if necessary, in subsequent periods if actual forfeitures differ from estimates. (4) The Company has no history or expectation of paying dividends on its common stock. A summary of the status of the Company’s stock option plan as of December 29, 2019 , and changes in options outstanding under the plan for the year ended December 29, 2019 , is as follows: Number of Shares Under Option Weighted-Average Exercise Price per Share Weighted- Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (000’s) (000’s) Options outstanding at December 30, 2018 768 $ 5.17 4.2 $ 6,587.5 Granted 2 $ 16.81 Exercised (619 ) $ 5.23 Forfeited or expired (5 ) $ 7.87 Options outstanding at December 29, 2019 146 $ 4.98 3.0 $ 1,866.3 Options exercisable at December 29, 2019 146 $ 4.98 3.0 $ 1,866.3 Upon exercise of an option, the Company issues new shares of common stock. During the years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 , the following values relate to the grants and exercises under the Company’s option plans: 2019 2018 2017 Weighted average grant date fair value of options granted $ 10.25 $ 7.54 $ 6.39 Total intrinsic value of options exercised (in thousands) $ 8,874.9 $ 40.6 $ 67.1 The following table summarizes the Company’s Restricted Stock Unit activity: Restricted Weighted-Average Grant Date Fair Value Nonvested balance at December 30, 2018 3,293 $ 8.22 Grants 1,147 $ 13.86 Vested (228 ) $ 15.22 Vested but not released (163 ) $ 9.29 Nonvested balance at December 29, 2019 4,049 $ 9.38 As of December 29, 2019 , there was $19.2 million of total unrecognized stock-based compensation expense related to nonvested restricted stock units which is expected to be recognized over a remaining weighted-average vesting period of 2.2 years. The fair value of restricted stock unit awards that vested in 2019 , 2018 , and 2017 was $3.5 million , $0.8 million , and $6.3 million , respectively. (c) Amended and Restated Employee Stock Purchase Plan In August 1999, the Board approved the 1999 Employee Stock Purchase Plan (as amended from time to time, the “Purchase Plan”). A total of 5,200,000 shares of common stock had been previously approved for reservation of the Company’s common stock for purchase by employees under the Purchase Plan. In May 2017, the Company’s shareholders approved an amendment to the Purchase Plan to increase the maximum number of shares of common stock that may be issued under the Purchase Plan by 3,000,000 shares. The Purchase Plan qualifies as an employee stock purchase plan within the meaning of Section 423 of the Internal Revenue Service Code. Unless otherwise determined by the Compensation Committee of the Board, all employees are eligible to participate in the Purchase Plan, so long as they are employed by the Company (or a subsidiary designated by the Board) for at least 20 hours per week and were customarily employed by the Company (or a subsidiary designated by the Board) for at least 5 months per calendar year. Employees who actively participate in the Purchase Plan are eligible to have up to 15% of their earnings for each purchase period withheld pursuant to the Purchase Plan. The amount that is withheld is used at various purchase dates within the offering period to purchase shares of common stock. The price paid for common stock at each such purchase date is equal to the lower of 85% of the fair market value of the common stock at the commencement date of that offering period or 85% of the fair market value of the common stock on the relevant purchase date. Employees are also able to end their participation in the offering at any time during the offering period, and participation ends automatically upon termination of employment. From the Purchase Plan’s inception through December 29, 2019 , the cumulative number of shares of common stock that have been issued under the Purchase Plan is 5.5 million and approximately 2.7 million shares are available for future issuance. During fiscal 2019 , approximately 356,000 shares were issued under the plan at an average price of $10.79 . The fair value of Kratos’ Purchase Plan shares for 2019 was estimated using the Black-Scholes option pricing model. The assumptions and resulting fair values of options granted for 2019 , 2018 and 2017 were as follows: Offering Periods January 1 to December 31 2019 Offering Periods January 1 to December 31, 2018 Offering Periods January 1 to December 31, 2017 Expected term (in years)(1) 0.5 0.5 0.5 Risk-free interest rate(2) 2.09% - 2.56% 1.53% - 2.11% 0.62% - 1.14% Expected volatility(3) 37.22% - 43.70% 40.24% - 44.83% 44.38% - 53.70% Expected dividend yield(4) —% —% —% Weighted average grant-date fair value per share $4.74 $3.03 $2.51 (1) The expected term is equivalent to the offering period. (2) The risk-free interest rate is based on U.S. Treasury yields in effect at the time of grant with a term equal to the expected term. (3) The Company estimated implied volatility based upon trailing volatility. (4) The Company has no history or expectation of paying dividends on its common stock. As of December 29, 2019 , there was no material unrecognized compensation expense related to the Purchase Plan. |
Retirement Plans
Retirement Plans | 12 Months Ended |
Dec. 29, 2019 | |
Retirement Benefits [Abstract] | |
Retirement Plans | Retirement Plans The Company provides eligible employees the opportunity to participate in defined-contribution savings plans (commonly known as 401(k) plans), which permit contributions on a before-tax basis. Generally, salaried employees and certain hourly employees are eligible to participate in the plans. Under most plans, the employee may contribute to various investment alternatives. In certain plans, the Company matches a portion of the employees’ contributions. The Company’s matching contributions to these defined-contribution savings plans totaled $4.4 million in 2019 , $3.9 million in 2018 , and $3.8 million in 2017 . |
Significant Customers
Significant Customers | 12 Months Ended |
Dec. 29, 2019 | |
Segment Reporting [Abstract] | |
Significant Customers | Significant Customers Revenue from the U.S. Government (which includes Foreign Military Sales) includes revenue from contracts for which the Company is the prime contractor as well as those for which the Company is a subcontractor and the ultimate customer is the U.S. Government. The KGS and US segments have substantial revenue from the U.S. Government. Sales to the U.S. Government amounted to approximately $507.4 million , $447.0 million , and $451.9 million or 71% , 72% , and 75% , of total revenue for the years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 |
Segment Information
Segment Information | 12 Months Ended |
Dec. 29, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company operates in two reportable segments. The KGS reportable segment is comprised of an aggregation of KGS operating segments, including DRSS, ME, TTS, MS, and KTT. The US reportable segment consists of the Company’s unmanned aerial, unmanned ground, unmanned seaborne and command, control and communications system business. The KGS and US segments provide products, solutions and services for mission critical national security programs. KGS and US customers primarily include national security related agencies, the DoD, intelligence agencies and classified agencies, and to a lesser degree, international government agencies and domestic and international commercial customers. The Company organizes its reportable segments based on the nature of the products, solutions and services offered. Transactions between segments are generally negotiated and accounted for under terms and conditions similar to other government and commercial contracts. In the following table total operating income (loss) from continuing operations of the reportable business segments is reconciled to the corresponding consolidated amount. The reconciling item “unallocated corporate expense, net” includes costs for certain stock-based compensation programs (including stock-based compensation costs for stock options, employee stock purchase plan and restricted stock units), the effects of items not considered part of management’s evaluation of segment operating performance, merger and acquisition expenses, corporate costs not allocated to the segments, and other miscellaneous corporate activities. As discussed in “Discontinued Operations” in Note 9 of these notes to consolidated financial statements, the Company began reporting the PSS business as discontinued operations effective in the first quarter of fiscal 2018. Prior to the decision to sell the PSS business, the Company reported their financial results in a separate PSS reportable segment. As certain overhead type costs previously allocated to the PSS business were not allocable to discontinued operations, prior period corporate costs have been reallocated amongst the continuing reportable segments. Revenues, operating income (loss) and assets disclosed below provided by the Company’s reportable segments for the years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 , are as follows (in millions): 2019 2018 2017 Revenues: Kratos Government Solutions Service revenues $ 272.6 $ 200.7 $ 197.8 Product sales 283.5 284.4 283.8 Total Kratos Government Solutions 556.1 485.1 481.6 Unmanned Systems Service revenues — — — Product sales 161.4 132.9 121.7 Total Unmanned Systems 161.4 132.9 121.7 Total revenues $ 717.5 $ 618.0 $ 603.3 Depreciation and amortization: Kratos Government Solutions $ 18.2 $ 13.2 $ 14.4 Unmanned Systems 5.2 4.7 7.8 Total depreciation and amortization $ 23.4 $ 17.9 $ 22.2 Operating income (loss): Kratos Government Solutions $ 45.2 $ 35.5 $ (0.1 ) Unmanned Systems 6.1 5.1 (3.6 ) Corporate activities (13.3 ) (10.1 ) (8.3 ) Total operating income (loss) $ 38.0 $ 30.5 $ (12.0 ) Revenues from foreign customers were approximately $132.5 million or 18% , $114.3 million or 19% and $84.7 million or 14% of total revenue for the years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 , respectively. Included in the 2017 operating loss for the KGS reportable segment is a $24.2 million impairment of the carrying value of the goodwill of the DRSS business within the KGS segment. Reportable segment assets are as follows (in millions): December 29, 2019 December 30, 2018 December 31, 2017 Assets: Kratos Government Solutions $ 777.6 $ 602.8 $ 597.9 Unmanned Systems 246.3 220.9 201.9 Discontinued operations 3.3 8.3 97.4 Corporate activities 158.8 178.1 126.8 Total assets $ 1,186.0 $ 1,010.1 $ 1,024.0 Assets of foreign subsidiaries in the KGS segment were $124.7 million , $126.7 million and $116.7 million as of December 29, 2019 , December 30, 2018 and December 31, 2017 , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 29, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In addition to commitments and obligations in the ordinary course of business, the Company is subject to various claims, pending and potential legal actions for damages, investigations relating to governmental laws and regulations and other matters arising out of the normal conduct of the Company’s business. The Company assesses contingencies to determine the degree of probability and range of possible loss for potential accrual in its consolidated financial statements. An estimated loss contingency is accrued in the Company’s consolidated financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because litigation is inherently unpredictable and unfavorable resolutions could occur, assessing litigation contingencies is highly subjective and requires judgments about future events. When evaluating contingencies, the Company may be unable to provide a meaningful estimate due to a number of factors, including but not limited to the procedural status of the matter in question, the presence of complex or novel legal theories, and the ongoing discovery and development of information important to the matters. In addition, damage amounts claimed in litigation against it may be unsupported, exaggerated or unrelated to possible outcomes, and as such are not meaningful indicators of its potential liability. The Company regularly reviews contingencies to determine the adequacy of its accruals and related disclosures. The amount of ultimate loss may differ from these estimates. It is possible that cash flows or results of operations could be materially affected in any particular period by the unfavorable resolution of one or more of these contingencies. Whether any losses finally determined in any claim, action, investigation or proceeding could reasonably have a material effect on the Company’s business, financial condition, results of operations or cash flows will depend on a number of variables, including: the timing and amount of such losses; the structure and type of any remedies; the monetary significance any such losses, damages or remedies may have on the consolidated financial statements; and the unique facts and circumstances of the particular matter that may give rise to additional factors. Legal and Regulatory Matters. U.S. Government Cost Claims The Company’s contracts with the DoD are subject to audit by the DCAA. As a result of these audits, from time to time the Company is advised of claims concerning potential disallowed, overstated or disputed costs. For example, during the course of recent audits of the Company’s contracts, the DCAA is closely examining and questioning certain of the established and disclosed practices that it had previously audited and accepted. Costs incurred and allocated to contracts with the U.S. Government are regularly scrutinized for compliance with regulatory standards by the Company’s personnel. For those Company subsidiaries and fiscal years which have not yet been audited by the DCAA or for those audits which are in process which have not been completed by the DCAA, the Company cannot reasonably estimate the range of loss, if any, that may result from audits and reviews in which it is currently involved given the inherent difficulty in predicting regulatory action, fines and penalties, if any, and the various remedies and levels of judicial review available to the Company in the event of an adverse finding. As a result, the Company has not recorded any liability related to these matters. Other Litigation Matters The Company is subject to normal and routine litigation arising from the ordinary course and conduct of business, and, at times, as a result of acquisitions and dispositions. Such disputes include, for example, commercial, employment, intellectual property, environmental and securities matters. The aggregate amounts accrued related to these matters are not material to the total liabilities of the Company. The Company intends to defend itself in any such matters and does not currently believe that the outcome of any such matters will have a material adverse impact on its financial condition, results of operations or cash flows. |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interest | 12 Months Ended |
Dec. 29, 2019 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interest | Redeemable Noncontrolling Interest As discussed in “Acquisition” in Note 2, in connection with the Company’s acquisition of FTT, (i) beginning in January 2024, the Holders will have an annual Put Right to sell all of the Minority Interests to the Company at a purchase price based on a specified multiple of the trailing 12 months EBITDA of the Acquired Companies, subject to adjustment as set forth in the Exchange Agreement (provided, however, that following certain events, including a change of control, the Put Right will be accelerated and the Minority Interest Purchase Price will be a specified increased multiple of the trailing 12 months EBITDA of the Acquired Companies); and (ii) beginning in January 2025, the Company will have an annual right to purchase all of the Minority Interests from the Holders at the Minority Interest Purchase Price. The Company adjusts the carrying value of such redeemable noncontrolling interest based on an allocation of subsidiary earnings based on ownership interest. Redeemable noncontrolling interest is recorded outside of permanent equity at the higher of its carrying value or management’s estimate of the amount (the “Redemption Amount”) that the Company could be required to pay in connection with the Put Rights. Adjustments to Redemption Amount will have a corresponding effect on net income per share attributable to Kratos shareholders. As of December 29, 2019 |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 29, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | Quarterly Financial Data (Unaudited) The following financial information reflects all normal and recurring adjustments that are, in the opinion of management, necessary for a fair statement of the results of the interim periods. As discussed in “Discontinued Operations” in Note 9 of these notes to consolidated financial statements, the Company began reporting the PSS business as discontinued operations effective in the first quarter of fiscal 2018. Accordingly, the financial results for the PSS business have been reported in discontinued operations for all periods presented. Summarized quarterly data for the years ended December 29, 2019 and December 30, 2018 , is as follows (in millions, except per share data): First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal year 2019 Revenues $ 160.4 $ 187.9 $ 184.1 $ 185.1 Gross profit 44.9 48.1 48.6 48.4 Operating income 8.2 9.0 11.5 9.3 Provision (benefit) for income taxes (1.5 ) 2.5 2.8 1.0 Income from continuing operations 3.7 1.3 2.6 3.3 Income (loss) from discontinued operations (0.6 ) 3.0 — (0.7 ) Net income $ 3.1 $ 4.3 $ 2.6 $ 2.6 Less: Net income (loss) attributable to noncontrolling interest — 0.4 0.1 (0.4 ) Net income attributable to Kratos 3.1 3.9 2.5 3.0 Basic income (loss) per common share attributable to Kratos: Income from continuing operations $ 0.04 $ 0.01 $ 0.02 $ 0.03 Income (loss) from discontinued operations $ (0.01 ) $ 0.03 $ — $ — Net income per common share $ 0.03 $ 0.04 $ 0.02 $ 0.03 Diluted income per common share attributable to Kratos: Income from continuing operations $ 0.03 $ 0.01 $ 0.02 $ 0.03 Income from discontinued operations $ — $ 0.03 $ — $ — Net income per common share $ 0.03 $ 0.04 $ 0.02 $ 0.03 First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal year 2018 Revenues $ 143.0 $ 151.2 $ 159.4 $ 164.4 Gross profit 40.8 39.3 44.1 45.5 Operating income 7.0 2.6 10.1 10.8 Provision for income taxes 0.9 0.1 3.4 0.2 Income (loss) from continuing operations 1.3 (3.8 ) 1.4 5.2 Income (loss) from discontinued operations (3.5 ) (3.9 ) 0.3 (0.5 ) Net income (loss) $ (2.2 ) $ (7.7 ) $ 1.7 $ 4.7 Basic income (loss) per common share: Income (loss) from continuing operations $ 0.01 $ (0.04 ) $ 0.01 $ 0.05 Income (loss) from discontinued operations $ (0.03 ) $ (0.03 ) $ 0.01 $ — Net income (loss) per common share $ (0.02 ) $ (0.07 ) $ 0.02 $ 0.05 Diluted income (loss) per common share: Income (loss) from continuing operations $ 0.01 $ (0.04 ) $ 0.01 $ 0.05 Income (loss) from discontinued operations $ (0.03 ) $ (0.03 ) $ 0.01 $ (0.01 ) Net income (loss) per common share $ (0.02 ) $ (0.07 ) $ 0.02 $ 0.04 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 29, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On February 24, 2020, the Company acquired a turbine technology company focused on tactical unmanned aerial drones and other systems for approximately $10.5 million in cash, subject to adjustments for transaction expenses, indebtedness, cash on hand, and post-closing working capital adjustments. |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 29, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The consolidated financial statements include the accounts of Kratos and its 100% owned subsidiaries, for which all intercompany transactions have been eliminated in consolidation. |
Fiscal Year | Fiscal Year The Company has a 52/53 week fiscal year ending on the last Sunday of the calendar year, with interim fiscal periods ending on the last Sunday of each calendar quarter. There were 52 calendar weeks in the fiscal years ending on December 29, 2019 and December 30, 2018 and 53 calendar weeks in the fiscal year ended on December 31, 2017 . |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the U.S. (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates include revenue recognition, valuation of long-lived assets including identifiable intangibles and goodwill, accounting for income taxes including the related valuation allowance on the deferred tax asset and uncertain tax positions, contingencies and litigation, contingent acquisition consideration, and stock-based compensation. In the future, the Company may realize actual results that differ from the current reported estimates and if the estimates that the Company has used change in the future, such changes could have a material impact on the Company’s consolidated financial position, results of operations and cash flows. |
Revenue Recognition | For federal contracts, the Company follows U.S. Government procurement and accounting standards in assessing the allowability and the allocability of costs to contracts. Recurring evaluations of contract cost, scheduling and technical matters are performed by management. Costs incurred and allocated to contracts with the U.S. Government are scrutinized for compliance with regulatory standards by the Company’s personnel, and are subject to audit by the Defense Contract Audit Agency (“DCAA”). From time to time, the Company may proceed with work based on customer direction prior to the completion and signing of formal contract documents. The Company has a formal review process for approving any such work. Revenue associated with such work is recognized only when the criteria to establish a contract under ASC 606 are met and the obligations under the contract are legally enforceable. As of December 29, 2019 and December 30, 2018 , approximately $4.7 million and $3.8 million , respectively, of the Company’s unbilled accounts receivable balance were under an authorization to proceed or work order from its customers where a formal purchase order had not yet been received. Revenue Recognition Effective January 1, 2018, the Company adopted the Financial Accounting Standards Board (“FASB”) ASU 2014-09, Revenue from Contracts with Customers, and the related amendments, which are codified into Accounting Standards Codification (“ASC”) 606 (“ASC 606”), which establishes a broad principle that requires entities to assess the products or services promised in contracts with customers at contract inception to determine the appropriate unit at which to record revenues, which is referred to as a performance obligation. Revenue is recognized when control of the promised products or services is transferred to customers, at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those products or services. The new standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted ASC 606 on January 1, 2018, using the modified retrospective method and recognized and recorded a decrease in opening equity of $0.2 million as of January 1, 2018 due to the cumulative impact of adopting ASC 606. The impact of adopting ASC 606 for the year ended December 30, 2018 was an increase of $30.0 million to revenues and a corresponding increase in cost of revenues of $21.9 million . Total net cash provided by operating activities from continuing operations, total net cash provided by investing activities from continuing operations and total net cash provided by financing activities on the Company’s consolidated statements of cash flows were not impacted by the adoption of ASC 606. Discontinued operations were not affected by the adoption of ASC 606. The reported results for 2018 and 2019 reflect the application of ASC 606 guidance while the reported results for periods prior to January 1, 2018 were prepared under the guidance of FASB ASC 605 . The adoption of ASC 606 represents a change in accounting principle. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. Once the contract is identified and determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account under ASC 606. The majority of the Company’s contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contracts and, therefore, not distinct. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is the expected-cost-plus-margin approach, under which the Company forecasts the expected costs of satisfying a performance obligation and then adds an appropriate margin for that distinct good or service. Prior to the adoption of ASC 606, the Company recognized the majority of its revenues using the percentage-of completion method of accounting. Based on the nature of products provided or services performed, revenue was recorded as costs were incurred (the “percentage-of-completion cost-to-cost method”) or as units were delivered (the “percentage-of-completion units-of-delivery method”). For the majority of contracts, the Company satisfies the underlying performance obligations over time as the customer obtains control or receives benefits as work is performed on the contract. As a result, under ASC 606 revenue is recognized over a time using the cost-to-cost method (cost incurred relative to total estimated cost at completion). This change generally results in an acceleration of revenue for contracts that were historically accounted for using the percentage-of-completion units-of-delivery method as revenues are now recognized earlier in the performance period as costs are incurred rather than as units are delivered. Remaining Performance Obligations Since the Company’s adoption of ASC 606 on January 1, 2018, revenues from remaining performance obligations are now calculated as the dollar value of the remaining performance obligations on executed contracts. On December 29, 2019 , the Company had approximately $601.2 million of remaining performance obligations. The Company expects to recognize approximately 62.0% of the remaining performance obligations as revenue in 2020 , an additional 21.0% in 2021 , and the balance thereafter. Contract Estimates Due to the nature of the work required to be performed on many performance obligations, the estimation of total cost at completion is complex, subject to many variables and requires significant judgment. On a quarterly basis, the Company conducts its contract cost Estimate at Completion (“EAC”) process by reviewing the progress and execution of outstanding performance obligations within its contracts. As part of this process, management reviews information including, but not limited to, any outstanding key contract matters, progress towards completion and the related program schedule, identified risks and opportunities and the related changes in estimates of revenues and costs. The risks and opportunities include management’s judgment about the ability and cost to achieve the schedule (e.g., the number and type of milestone events), technical requirements (e.g., a newly-developed product versus a mature product) and other contract requirements. Management must make assumptions and estimates regarding labor productivity and availability, the complexity of the work to be performed, the availability of materials, the length of time to complete the performance obligation (e.g., to estimate increases in wages and prices for materials and related support cost allocations), execution by subcontractors, the availability and timing of funding from customers and overhead cost rates, among other variables. In addition, certain of the Company’s long-term contracts contain award fees, incentive fees, or other provisions that can either increase or decrease the transaction price. These variable amounts generally are awarded upon achievement of certain performance metrics, program milestones or cost targets and can be based upon customer discretion. Variable consideration is estimated at the most likely amount to which the Company is expected to be entitled. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information (historical, current and forecasted) that is reasonably available. Contracts are often modified to account for changes in contract specifications and requirements. Contract modifications are considered to exist when the modification either creates new or changes the existing enforceable rights and obligations. Most of the Company’s contract modifications are for goods or services that are not distinct from the existing contract due to the significant integration service provided in the context of the contract and are accounted for as if they were part of that existing contract. The effect of a contract modification on the transaction price, and the measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis. As a result of the EAC process, any quarterly adjustments to revenues, cost of sales, and the related impact to operating income are recognized as necessary in the period they become known. These adjustments may result from positive program performance, and may result in an increase in operating income during the performance of individual performance obligations, if it is determined the Company will be successful in mitigating risks surrounding the technical, schedule and cost aspects of those performance obligations or realizing related opportunities. Likewise, these adjustments may result in a decrease in operating income if it is determined the Company will not be successful in mitigating these risks or realizing related opportunities. Changes in estimates of net sales, cost of sales and the related impact to operating income are recognized quarterly on a cumulative catch-up basis, which recognizes in the current period the cumulative effect of the changes on current and prior periods. A significant change in one or more of these estimates could affect the profitability of one or more of the Company’s contracts. When estimates of total costs to be incurred on a performance obligation exceed total estimates of revenue to be earned, a provision for the entire loss on the performance obligation is recognized in the period the loss is determined. No cumulative catch-up adjustment on any one contract was material to the Company’s consolidated financial statements for the years ended December 29, 2019 , December 30, 2018 and December 31, 2017 . Likewise, total cumulative catch-up adjustments were not material for the years ended December 29, 2019 , December 30, 2018 and December 31, 2017 . As of December 29, 2019 and December 30, 2018 , accrued expenses included the accrual for losses on contracts of $3.1 million and $5.1 million , respectively. Contract Assets and Liabilities For each of the Company’s contracts, the timing of revenue recognition, customer billings, and cash collections results in a net contract asset or liability at the end of each reporting period. Fixed-price contracts are typically billed to the customer either using progress payments, whereby amounts are billed monthly as costs are incurred or work is completed, or performance based payments, which are based upon the achievement of specific, measurable events or accomplishments defined and valued at contract inception. Cost-type contracts are typically billed to the customer on a monthly or semi-monthly basis. Contract assets consist of unbilled receivables, primarily related to long-term contracts where revenue recognized under the cost-to-cost method exceeds amounts billed to customers. Unbilled receivables are classified as current assets and, in accordance with industry practice, include amounts that may be billed and collected beyond one year due to the long term nature of many of the Company’s contracts. Accumulated contract costs in unbilled receivables include direct production costs, factory and engineering overhead, production tooling costs, and, for government contracts, recovery of allowable general and administrative expenses. Unbilled receivables also include certain estimates of variable consideration described above. The Company’s contracts that give rise to contract assets are not considered to include a significant financing component as the payment terms are intended to protect the customer in the event the Company does not perform on its obligations under the contract. Contract liabilities include advance payments and billings in excess of revenue recognized. Certain customers make advance payments prior to the satisfaction of the Company’s performance obligations on the contract. These amounts are recorded as contract liabilities until such performance obligations are satisfied, either over time as costs are incurred or at a point in time when deliveries are made. The Company’s contracts that give rise to contract liabilities do not include a significant financing component as the underlying advance payments received are generally utilized to pay for contract costs within a one-year period or are used to ensure the customer meets contractual requirements. |
Inventoried Costs | Inventoried costs Inventoried costs are stated at the lower of cost or estimated net realizable value. Cost is determined using the average cost or first-in, first-out methods and the applicable method is applied consistently within an operating entity. The Company capitalizes labor, material, subcontractor and overhead costs as work-in-process for contracts where control has not yet passed to the customer. In addition, the Company capitalizes costs incurred to fulfill a contract in advance of contract award in inventories as work-in-process if it is determined that contract award is probable. Pursuant to contract provisions of U.S. Government contracts, such customers may have title to, or a security interest in inventories related to such contracts as a result of advances, performance-based payments, and progress payments. The Company regularly reviews inventory quantities on hand, future purchase commitments with its suppliers, and the estimated utility of its inventory. If the Company’s review indicates a reduction in utility below carrying value, it reduces its inventory to a new cost basis. |
Research and Development | Research and Development Costs incurred in research and development activities are expensed as incurred in accordance with FASB ASC Topic 730 , Research and Development. |
Income Taxes | Income Taxes The Company records deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company maintains a valuation allowance on the deferred tax assets for which it is more likely than not that the Company will not realize the benefits of these tax assets in future tax periods. The valuation allowance is based on estimates of future taxable income by tax jurisdiction in which the Company operates, the number of years over which the deferred tax assets will be recoverable, and scheduled reversals of deferred tax liabilities. |
Income Taxes - Uncertain Tax Positions | In accordance with the recognition standards established by ASC Topic 740, Income Taxes, (“Topic 740”), the Company makes a comprehensive review of its portfolio of uncertain tax positions regularly. In this regard, an uncertain tax position represents the Company’s expected treatment of a tax position taken in a filed tax return, or planned to be taken in a future tax return or claim, which has not been reflected in measuring income tax expense for financial reporting purposes. Until these positions are sustained by the taxing authorities, the Company has not recognized the tax benefits resulting from such positions and reports the tax effects as a liability for uncertain tax positions in its consolidated balance sheets. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC Topic 718 , Compensation-Stock Compensation . All of the Company’s stock-based compensation plans are considered equity plans under Topic 718 , and compensation expense recognized is net of estimated forfeitures over the vesting period. The Company issues stock options and stock awards under its existing plans. The fair value of stock options is estimated on the date of grant using a Black-Scholes option-pricing model or a trinomial lattice options pricing model and is expensed on a straight-line basis over the remaining vesting period of the options, which is generally six or less years. The fair value of stock awards is determined based on the closing market price of the Company’s common stock on the grant date and is adjusted at each reporting date based on the amount of shares ultimately expected to vest. Compensation expense for stock awards is expensed over the vesting period, usually five to ten years . Compensation expense for stock issued under the Company’s employee stock purchase plan is estimated at the beginning date of the offering period using a Black-Scholes option-pricing model and is expensed on a straight-line basis over the period of the offering, which is generally six months . |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments, which results in bad debt expense. Management determines the adequacy of this allowance by periodically evaluating the comprehensive risk profiles of all individual customer receivable balances including, but not limited to, the customer’s financial condition, credit agency reports, financial statements and overall current economic conditions. Additionally, on certain contracts whereby the Company performs services for a prime/general contractor, a specified percentage of the invoiced trade accounts receivable may be retained by the customer until the project is completed. The Company periodically reviews all retainages for collectability and records allowances for doubtful accounts when deemed appropriate, based on its assessment of the associated credit risks. Changes to estimates of contract value are recorded as adjustments to revenue and not as a component of the allowance for doubtful accounts. Individual accounts receivable are written off to the allowance for doubtful accounts when the Company becomes aware of a specific customer’s inability to meet its financial obligation, and all collection efforts are exhausted. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company’s cash equivalents consist of its highly liquid investments with an original maturity of three months or less when purchased by the Company. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment, net owned by the Company is depreciated over the estimated useful lives of individual assets. Equipment acquired under capital leases are amortized over the shorter of the lease term or the estimated useful life of the asset. Improvements, which significantly improve and extend the useful life of an asset, are capitalized and depreciated over the shorter of the lease period or the estimated useful life. Expenditures for maintenance and repairs are charged to operations as incurred. Assets are depreciated predominately using the straight-line method, with the following lives: Years Buildings and improvements 15 – 39 Machinery and equipment 3 – 10 Computer equipment and software 1 – 10 Vehicles, furniture, and office equipment 5 Leasehold improvements Shorter of useful life or length of lease |
Leases | Leases In February 2016, the FASB issued ASU 2016-02 (“ASU 2016-02”), Leases , also referred to as “ASC 842”. ASC 842 requires that lessees recognize assets and liabilities for the rights and obligations underlying leases with a lease term of more than one year. The amendments in this ASU are effective for annual periods beginning after December 15, 2018. In July 2018, the FASB issued ASU 2018-11, Leases; Targeted Improvements , which, among other things, allowed the Company to elect an optional transition method that applies the new lease requirements through a cumulative-effect adjustment in the period of adoption. The Company adopted ASC 842 on December 31, 2018 using the optional transition method, and, as a result, did not recast prior period comparative financial statements. All prior period amounts and disclosures are presented under Accounting Standards Codification Topic 840, Leases (“ASC 840”). The Company has elected the package of practical expedients, which, among other things, allows carry-forward of prior lease classifications under the prior standard. However, the Company has not elected to adopt the hindsight practical expedient and is therefore maintaining the lease terms previously determined under the prior lease standard. For all new and modified leases after adoption of ASC 842, the Company has taken the component election allowing the Company to account for lease components together with non-lease components in the calculation of the lease asset and corresponding liability. Adoption of the new standard resulted in the recording of additional lease assets and lease liabilities on the consolidated balance sheet. No cumulative-effect adjustment was recognized as the amount was not material, and the impact on the Company’s results of operations and cash flows was also not material. The Company leases certain facilities, office space, vehicles and equipment. Lease assets and lease liabilities are recognized at the commencement of an arrangement where it is determined at inception that a lease exists. Lease assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are initially recognized based on the present value of lease payments over the lease term calculated using an incremental borrowing rate generally applicable to the location of the lease asset, unless the implicit rate is readily determinable. Lease assets also include any upfront lease payments made and exclude lease incentives. Lease terms include options to extend or terminate the lease when it is reasonably certain that those options will be exercised. The Company has operating lease arrangements with lease and non-lease components. The non-lease components in these arrangements are not significant when compared to the lease components. For all operating leases, the Company accounts for the lease and non-lease components as a single component. Variable lease payments are generally expensed as incurred. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and the expense for these short-term leases is recognized on a straight-line basis over the lease term. The depreciable life of lease assets and leasehold improvements is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. See Note 6 for additional disclosures related to the Company’s lease obligations. |
Goodwill and Other Intangible Assets, Net | Goodwill and Other Intangible Assets, Net In accordance with the provisions of ASC Topic 350, Intangibles-Goodwill and Other (“ Topic 350 ”), the Company performs impairment tests for goodwill and indefinite lived intangibles as of the last day of its fiscal October, or when evidence of potential impairment exists. When it is determined that impairment has occurred, a charge to operations is recorded. Goodwill and other purchased intangible asset balances are included in the identifiable assets of the operating segment to which they have been assigned. Any goodwill impairment, as well as the amortization of other purchased intangible assets, is charged against the respective segments’ operating income. In accordance with Topic 350 , the Company classifies intangible assets into two categories: (1) intangible assets with finite lives subject to amortization and (2) intangible assets with indefinite lives not subject to amortization. Separately, the Company tests intangible assets with finite lives for impairment if conditions exist that indicate the carrying value may not be recoverable. Such conditions may include an economic downturn in a geographic market or a change in the assessment of future operations. The Company records an impairment charge when the carrying value of the finite lived intangible asset is not recoverable by the cash flows generated from the use of the asset. The Company determines the useful lives of identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors considered when determining useful lives include the contractual term of any agreement, the history of the asset, the Company’s long-term strategy for the use of the asset, any laws or other local regulations which could impact the useful life of the asset, and other economic factors, including competition and specific market conditions. Intangible assets that are deemed to have finite lives are amortized, generally on a straight-line basis, over their useful lives, ranging from one to 15 years . |
Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of | Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of Long-lived assets are reviewed for impairment in accordance with ASC Topic 360, Property, Plant, and Equipment , whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to future net cash flows (undiscounted and without interest) expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC Topic 825 , Financial Instruments, requires that fair values be disclosed for the Company’s financial instruments. The carrying amounts of cash equivalents, accounts receivable, accounts payable, accrued expenses, billings in excess of costs and earnings on uncompleted contracts, and income taxes payable, approximate fair value due to the short-term nature of these instruments. The fair value of the Company’s long-term debt is based upon quoted market prices. |
Concentrations and Uncertainties | Concentrations and Uncertainties The Company maintains cash balances at various financial institutions and such balances commonly exceed the $250,000 insured amount by the Federal Deposit Insurance Corporation. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to any significant credit risk with respect to such cash and cash equivalents. Financial instruments, which subject the Company to potential concentrations of credit risk, consist principally of the Company’s billed and unbilled accounts receivable. The Company’s accounts receivable result from sales to customers within the U.S. Government, state and local agencies and with commercial customers in various industries. The Company performs ongoing credit evaluations of its commercial customers. Credit is extended based on evaluation of the customer’s financial condition and collateral is not required. Accounts receivable are recorded at the invoiced amount and do not bear interest. See Note 13 for a discussion of the Company’s significant customers. |
Debt Issuance Costs | Debt Issuance Costs Fees paid to obtain debt financing and revolving credit facilities or amendments under such debt financing and revolving credit facilities are treated as debt issuance costs and are capitalized and amortized over the expected term of the related debt or revolving credit facility and are shown as a financing activity in the consolidated statements of cash flows. Issuance costs related to debt are presented in the consolidated balance sheets as a direct deduction from the carrying amount of the associated debt liability. Issuance costs related to a revolving credit facility are included in other assets in the consolidated balance sheets. |
Foreign Currency | Foreign Currency For operations outside the U.S. that prepare financial statements in currencies other than the U.S. dollar, results of operations and cash flows are translated at average exchange rates during the period, and assets and liabilities are generally translated at end-of-period exchange rates. Translation adjustments are included as a separate component of accumulated other comprehensive loss. The Company transacts with foreign customers in currencies other than the U.S. dollar. It experiences realized and unrealized foreign currency gains or losses on foreign denominated receivables. In addition, certain intercompany transactions give rise to realized and unrealized foreign currency gains or losses. Also, any other transactions between the Company or its subsidiaries and a third-party, denominated in a currency different from the functional currency, are foreign currency transactions. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13 (“ASU 2016-13”), Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The main objective of this update is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company has adopted ASU 2016-13 effective December 30, 2019. The implementation of this guidance did not have a material impact on its consolidated financial statements. |
Goodwill | Goodwill The Company performs its annual impairment test for goodwill in accordance with Topic 350 as of the last day of its fiscal October or when evidence of potential impairment exists. The Company assesses goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a component. The Company determines its reporting units by first identifying its operating segments, and then assessing whether any components of these segments constitute a business for which discrete financial information is available and where segment management regularly reviews the operating results of that component. The Company aggregates components within an operating segment that have similar economic characteristics. The KGS reportable segment has five operating segments: Defense Rocket Support Services (“DRSS”), Microwave Electronics (“ME”), Space, Training and Cybersecurity Solutions (ST&C), Modular Systems (“MS”), and Kratos Turbine Technologies (“KTT”). All of the KGS operating segments provide technology based defense solutions, involving products and services, primarily for mission critical U.S. national security priorities, with the primary focus relating to the nation’s Command, Control, Communications, Computing, Combat Systems, Intelligence, Surveillance and Reconnaissance requirements. The US reportable segment consists of its unmanned aerial system, unmanned ground, and unmanned seaborne system products. The Company identified its reporting units to be the DRSS, ME, ST&C, MS, KTT and US operating segments. The Company tests goodwill for impairment by performing a qualitative assessment or using a two-step impairment process. If the Company chooses to perform a qualitative assessment and determines it is not more likely than not that the fair value of the reporting unit exceeds its carrying value, the two-step impairment process is then performed. For operations where the two-step process is used, the identification and measurement of impairment involves the estimation of the fair value of reporting units. If the fair value is determined to be less than the carrying value, a second step is performed to determine the amount of the impairment. When any impairment has occurred, a charge to operations is recorded. In order to test for potential impairment, the Company estimates the fair value of each of the reporting units based on a comparison and weighting of the income approach, specifically the discounted cash flow method and the market approach, which estimates the fair value of the reporting units based upon comparable market prices and recent transactions and also validates the reasonableness of the implied multiples from the income approach. |
Fair Value Measurement | Fair Value Measurement ASC Topic 820 , Fair Value Measurement, establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Net Contract Assets (Liabilities) | Net contract assets and liabilities are as follows (in millions): December 29, 2019 December 30, 2018 Net Change Contract assets $ 179.4 $ 172.8 $ 6.6 Contract liabilities $ 34.3 $ 37.0 $ (2.7 ) Net contract assets $ 145.1 $ 135.8 $ 9.3 |
Schedule of disaggregation of Revenue | The following series of tables presents the Company’s revenue disaggregated by several categories. For the majority of contracts, revenue is recognized over time as work is performed on the contract. Revenue by contract type was as follows (in millions): Year Ended December 29, 2019 Year Ended December 30, 2018 Kratos Government Solutions Fixed price $ 469.4 $ 424.9 Cost plus fee 54.3 32.6 Time and materials 32.4 27.6 Total Kratos Government Solutions 556.1 485.1 Unmanned Systems Fixed price 126.2 104.8 Cost plus fee 33.8 26.5 Time and materials 1.4 1.6 Total Unmanned Systems 161.4 132.9 Total Revenues $ 717.5 $ 618.0 Revenue by customer was as follows (in millions): Year Ended December 29, 2019 Year Ended December 30, 2018 Kratos Government Solutions U.S. Government (1) $ 368.6 $ 333.5 International (2) 111.4 96.0 U.S. Commercial and other customers 76.1 55.6 Total Kratos Government Solutions 556.1 485.1 Unmanned Systems U.S. Government (1) 138.8 113.5 International (2) 21.1 18.3 U.S. Commercial and other customers 1.5 1.1 Total Unmanned Systems 161.4 132.9 Total Revenues $ 717.5 $ 618.0 (1) Sales to the U.S. Government include sales from contracts for which the Company is the prime contractor, as well as those for which the Company is a subcontractor and the ultimate customer is the U.S. Government. Each of the Company’s segments derives substantial revenue from the U.S. Government. These sales include foreign military sales contracted through the U.S. Government. (2) International sales include sales from contracts for which the Company is the prime contractor, as well as those for which the Company is a subcontractor and the ultimate customer is an international customer. These sales include direct sales with governments outside the U.S. and commercial sales with customers outside the U.S. |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | The following table shows the amounts recognized in the consolidated financial statements for stock-based compensation expense related to stock options, stock awards and stock offered under the Company’s employee stock purchase plan (in millions, except per share amounts). Year ended December 29, 2019 Year ended December 30, 2018 Year ended December 31, 2017 Selling, general and administrative expenses $ 11.0 $ 7.2 $ 7.8 Total cost of employee stock-based compensation included in operating income (loss) from continuing operations $ 11.0 $ 7.2 $ 7.8 |
Schedule of Valuation and Qualifying Accounts Disclosure | The following table outlines the balance of the Company’s allowance for doubtful accounts for 2019 , 2018 and 2017 . The table identifies the additional provisions each year as well as the write-offs that utilized the allowance (in millions). Allowance for Doubtful Accounts Balance at Beginning of Year Provisions Write-offs/Recoveries Balance at End of Year Year ended December 31, 2017 $ 1.5 $ — $ (1.0 ) $ 0.5 Year ended December 30, 2018 $ 0.5 $ 1.8 $ — $ 2.3 Year ended December 29, 2019 $ 2.3 $ (0.2 ) $ (0.2 ) $ 1.9 |
Property, Plant and Equipment | Assets are depreciated predominately using the straight-line method, with the following lives: Years Buildings and improvements 15 – 39 Machinery and equipment 3 – 10 Computer equipment and software 1 – 10 Vehicles, furniture, and office equipment 5 Leasehold improvements Shorter of useful life or length of lease Property, plant and equipment, net (in millions) December 29, 2019 December 30, 2018 Finance lease right of use assets $ 39.6 $ — Land and buildings $ 12.2 $ 11.9 Computer equipment and software 32.7 28.3 Machinery and equipment 78.7 56.8 Furniture and office equipment 7.1 6.3 Leasehold improvements 12.3 10.9 Construction in progress 16.0 21.5 Property and equipment 198.6 135.7 Accumulated depreciation and amortization (81.7 ) (68.6 ) Total property and equipment, net $ 116.9 $ 67.1 |
Schedule of Interest Expense, Net | Interest expense, net is summarized in the following table (in millions): Year ended December 29, 2019 Year ended December 30, 2018 Year ended December 31, 2017 Interest expense incurred primarily on the Senior Secured Notes $ (23.5 ) $ (21.6 ) $ (29.1 ) Miscellaneous interest income 1.9 0.8 0.5 Interest expense, net $ (21.6 ) $ (20.8 ) $ (28.6 ) |
Acquisition Acquisition (Tables
Acquisition Acquisition (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the allocation of the purchase price over the estimated fair values of the major assets acquired, liabilities assumed, and noncontrolling interest (in millions): Accounts receivable $ 8.1 Unbilled receivables 4.9 Inventoried costs 7.8 Other current assets 2.1 Property and equipment 5.7 Intangible assets 30.8 Goodwill 23.0 Total identifiable net assets acquired 82.4 Total identifiable net liabilities assumed (7.5 ) Net assets before noncontrolling interest 74.9 Noncontrolling interest (14.9 ) Net assets acquired, excluding cash $ 60.0 |
Schedule of Business Acquisitions by Acquisition, Contingent Consideration | A summary of the consideration paid for the acquired ownership in FTT is as follow: Cash paid $ 20.7 Deferred purchase consideration 15.3 Common stock issued 27.0 63.0 Less: Cash acquired (3.0 ) Total consideration $ 60.0 |
Business Acquisition, Pro Forma Information | For the year ended December 29, 2019 (all amounts, except per share amounts, are in millions): Pro forma revenues $ 725.6 Pro forma net income before tax $ 14.8 Pro forma net income $ 11.7 Pro forma net income attributable to Kratos $ 11.8 Basic pro forma income per share attributable to Kratos $ 0.11 Diluted pro forma income per share attributable to Kratos $ 0.11 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The carrying amounts of goodwill as of December 29, 2019 and December 30, 2018 by reportable segment are as follows (in millions): As of December 29, 2019 US KGS Total Gross value $ 111.1 $ 597.8 $ 708.9 Less accumulated impairment 13.8 239.5 253.3 Net $ 97.3 $ 358.3 $ 455.6 As of December 30, 2018 US KGS Total Gross value $ 111.1 $ 567.9 $ 679.0 Less accumulated impairment 13.8 239.5 253.3 Net $ 97.3 $ 328.4 $ 425.7 |
Schedule of Acquired Finite-Lived Intangible Assets | The following table sets forth information for acquired finite-lived and indefinite-lived intangible assets (in millions): As of December 29, 2019 As of December 30, 2018 Gross Value Accumulated Amortization Net Value Gross Value Accumulated Amortization Net Value Acquired finite-lived intangible assets: Customer relationships $ 72.3 $ (53.3 ) $ 19.0 $ 52.6 $ (50.6 ) $ 2.0 Contracts and backlog 32.0 (28.4 ) 3.6 29.9 (26.4 ) 3.5 Developed technology and technical know-how 25.0 (23.8 ) 1.2 25.0 (21.3 ) 3.7 Trade names 1.9 (1.6 ) 0.3 1.4 (1.4 ) — In-process research and development 8.5 — 8.5 — — — Total finite-lived intangible assets 139.7 (107.1 ) 32.6 108.9 (99.7 ) 9.2 Indefinite-lived trade names 6.9 — 6.9 6.9 — 6.9 Total intangible assets $ 146.6 $ (107.1 ) $ 39.5 $ 115.8 $ (99.7 ) $ 16.1 |
Schedule of Future Amortization Expense of Finite-Lived Intangible Assets | The estimated future amortization expense of acquired intangible assets with finite lives as of December 29, 2019 is as follows (in millions): Fiscal Year Amount 2020 5.8 2021 3.7 2022 2.4 2023 2.4 2024 2.4 Thereafter 15.9 Total $ 32.6 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | Receivables including amounts due under long-term contracts are summarized as follows (in millions) : December 29, 2019 December 30, 2018 Billed, current $ 86.6 $ 66.5 Unbilled, current 179.7 173.2 Total current accounts receivable 266.3 239.7 Allowance for doubtful accounts (1.9 ) (2.3 ) Total accounts receivable and unbilled receivables, net $ 264.4 $ 237.4 U.S. Government contract receivables where the Company is the prime contractor included in accounts receivable, net (in millions): December 29, 2019 December 30, 2018 Billed $ 16.6 $ 16.5 Unbilled 86.4 83.1 Total U.S. Government contract receivables $ 103.0 $ 99.6 |
Schedule of Inventory, Current | Inventoried costs, net of progress payments (in millions): December 29, December 30, Raw materials $ 39.1 $ 34.7 Work in process 20.3 10.3 Finished goods 1.7 1.8 Total inventoried costs $ 61.1 $ 46.8 |
Property, Plant and Equipment | Assets are depreciated predominately using the straight-line method, with the following lives: Years Buildings and improvements 15 – 39 Machinery and equipment 3 – 10 Computer equipment and software 1 – 10 Vehicles, furniture, and office equipment 5 Leasehold improvements Shorter of useful life or length of lease Property, plant and equipment, net (in millions) December 29, 2019 December 30, 2018 Finance lease right of use assets $ 39.6 $ — Land and buildings $ 12.2 $ 11.9 Computer equipment and software 32.7 28.3 Machinery and equipment 78.7 56.8 Furniture and office equipment 7.1 6.3 Leasehold improvements 12.3 10.9 Construction in progress 16.0 21.5 Property and equipment 198.6 135.7 Accumulated depreciation and amortization (81.7 ) (68.6 ) Total property and equipment, net $ 116.9 $ 67.1 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Debt Disclosure [Abstract] | |
Fair value of long-term debt | Carrying amounts and the related estimated fair values of the Company’s long-term debt financial instruments not measured at fair value on a recurring basis at December 29, 2019 and December 30, 2018 are presented in the following table: As of December 29, 2019 As of December 30, 2018 $ in millions Principal Carrying Amount Fair Value Principal Carrying Amount Fair Value Long-term debt $ 300.0 $ 295.1 $ 322.1 $ 300.0 $ 294.2 $ 305.3 |
Leases Leases (Tables)
Leases Leases (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Leases [Abstract] | |
Schedule of Lease Cost | Cash paid for amounts included in the measurement of lease liabilities for the year ended December 29, 2019 was as follows (in millions): Finance lease - cash paid for interest $ 2.5 Finance lease - financing cash flows $ 0.5 Operating lease - operating cash flows (fixed payments) $ 14.8 Other supplemental noncash information (in millions): Operating lease liabilities arising from obtaining right-of-use assets, including impact of ASC 842 adoption $ 59.3 Finance lease liabilities arising from obtaining right-of-use assets, including impact of ASC 842 adoption $ 39.6 Weighted-average remaining lease term (in years): Operating leases 5.77 Finance leases 18.91 Weighted-average discount rate: Operating leases 6.50 % Finance leases 6.52 % The components of lease expense for the year ended December 29, 2019 were as follows (in millions): Amortization of right of use assets - finance leases $ 2.0 Interest expense on lease liabilities - finance leases 2.5 Operating lease cost (expense resulting from amortization of total lease payments) 13.2 Short-term lease cost 0.6 Variable lease cost (cost excluded from lease payments) 0.1 Sublease income (3.3 ) Total lease cost $ 15.1 |
Balance Sheet Information | The components of leases on the balance sheet were as follows (in millions): December 29, 2019 Operating Leases: Operating lease right-of-use assets $ 42.1 Current portion of operating lease liabilities $ 9.9 Operating lease liabilities, net of current portion $ 37.6 Finance leases: Property, plant and equipment, net $ 38.1 Other current liabilities $ 0.6 Other long-term liabilities $ 38.4 |
Maturities of Operating Lease Liabilities | The maturity of lease liabilities is (in millions): Operating Leases Finance Leases 2020 $ 12.6 $ 3.1 2021 10.0 3.2 2022 8.6 3.3 2023 8.2 3.3 2024 6.2 3.3 Thereafter 11.6 54.0 Total lease payments 57.2 70.2 Less: imputed interest (9.6 ) (31.2 ) Total present value of lease liabilities $ 47.6 $ 39.0 |
Maturities of Financing Lease Liabilities | The maturity of lease liabilities is (in millions): Operating Leases Finance Leases 2020 $ 12.6 $ 3.1 2021 10.0 3.2 2022 8.6 3.3 2023 8.2 3.3 2024 6.2 3.3 Thereafter 11.6 54.0 Total lease payments 57.2 70.2 Less: imputed interest (9.6 ) (31.2 ) Total present value of lease liabilities $ 47.6 $ 39.0 |
Schedule of Future Minimum Rental Payments for Operating Leases | As of December 30, 2018, future minimum lease payments under ASC 840 for operating leases, which does not include $4.3 million in sublease income on the Company’s operating leases, were as follows (in millions): Year Operating Leases 2019 $ 16.5 2020 12.0 2021 9.6 2022 8.1 2023 7.9 Thereafter 63.1 Total minimum lease payments $ 117.2 |
Net Income (Loss) Per Common _2
Net Income (Loss) Per Common Share (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following shares were excluded from the calculation of diluted loss per share because their inclusion would have been anti-dilutive (in millions): Year Ended December 29, 2019 December 30, 2018 December 31, 2017 Shares from stock options and awards — 0.1 0.1 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | The components of income (loss) from continuing operations before income taxes are comprised of the following (in millions): December 29, 2019 December 30, 2018 December 31, 2017 Domestic $ 6.8 $ 2.2 $ (60.5 ) Foreign 8.9 6.5 3.4 Total $ 15.7 $ 8.7 $ (57.1 ) |
Schedule of Components of Income Tax Expense (Benefit) | The provision (benefit) for income taxes from continuing operations are comprised of the following (in millions): Year Ended December 29, 2019 December 30, 2018 December 31, 2017 Federal income taxes: Current $ (0.2 ) $ (0.4 ) $ (2.9 ) Deferred (3.9 ) (1.8 ) (9.0 ) Total Federal (4.1 ) (2.2 ) (11.9 ) State and local income taxes: Current 1.0 0.4 0.5 Deferred (0.9 ) 1.4 (0.3 ) Total State and local 0.1 1.8 0.2 Foreign income taxes: Current 9.0 4.8 2.0 Deferred (0.2 ) 0.2 (0.5 ) Total Foreign 8.8 5.0 1.5 Total $ 4.8 $ 4.6 $ (10.2 ) |
Schedule of Income Tax Reconciliation | A reconciliation of the total income tax provision (benefit) to the amount computed by applying the statutory federal income tax rate of 21% to the income from continuing operations before income taxes for the years ended December 29, 2019 and December 30, 2018 , and applying the statutory federal income tax rate of 35% to the loss from continuing operations before income taxes for the year ended December 31, 2017 is as follows (in millions): Year Ended December 29, 2019 December 30, 2018 December 31, 2017 Income tax (benefit) at federal statutory rate $ 3.3 $ 1.8 $ (20.0 ) State taxes, net of federal tax benefit and valuation allowance 0.6 0.9 0.5 Difference in tax rates between U.S. and foreign 1.9 0.7 — Increase (decrease) in valuation allowance (3.3 ) 4.7 (45.6 ) Nondeductible expense 1.0 0.6 1.1 Increase in reserve for uncertain tax positions 7.7 4.0 1.3 Changes to indefinite life items and separate state deferred taxes 0.4 (0.7 ) (1.8 ) One-time transition tax on previously undistributed foreign earnings — 2.2 6.2 Goodwill impairment — — 8.1 Decrease in deferred taxes related to disposition — (9.6 ) — Impact related to the 2017 Tax Cuts and Jobs Act — — 40.0 Release of valuation allowance due to FTT acquisition (5.2 ) — — Stock-based compensation (1.6 ) — — Total $ 4.8 $ 4.6 $ (10.2 ) |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities are as follows (in millions): December 29, 2019 December 30, 2018 Deferred tax assets: Allowance for doubtful accounts $ 0.6 $ 0.6 Sundry accruals 2.3 1.1 Vacation accrual 3.0 2.7 Stock-based compensation 5.3 4.2 Payroll related accruals 6.2 2.4 Lease accruals 22.1 2.0 Investments 1.3 1.3 Net operating loss carryforwards 75.1 81.7 Capital loss carryforwards 1.3 1.9 Tax credit carryforwards 11.2 9.9 Deferred revenue 1.1 1.5 Reserves and other 13.6 10.8 143.1 120.1 Valuation allowance (88.6 ) (92.2 ) Total deferred tax assets, net of valuation allowance 54.5 27.9 Deferred tax liabilities: Unearned revenue (19.0 ) (23.9 ) Operating lease right-of-use assets (20.2 ) Other intangibles (21.0 ) (8.9 ) Property and equipment, principally due to differences in depreciation (2.0 ) (0.9 ) Other (1.3 ) (1.2 ) Total deferred tax liabilities (63.5 ) (34.9 ) Net deferred tax liability $ (9.0 ) $ (7.0 ) |
Schedule of Unrecognized Tax Benefits Roll Forward | The following table summarizes the activity related to the Company’s unrecognized tax benefits (in millions): Balance as of December 25, 2016 $ 18.6 Increases related to prior periods 0.4 Increases related to current year tax positions 1.1 Expiration of applicable statutes of limitations (0.6 ) Decrease in federal tax rate (3.9 ) Balance as of December 31, 2017 15.6 Increases related to prior periods 0.5 Increases related to current year tax positions 4.0 Expiration of applicable statutes of limitations (0.4 ) Decreases related to prior year tax positions (0.3 ) Decreases related to disposition (1.7 ) Balance as of December 30, 2018 17.7 Increases related to prior periods 0.2 Increases related to current year tax positions 6.3 Expiration of applicable statutes of limitations (0.1 ) Decreases related to settlement with tax authorities (0.1 ) Balance as of December 29, 2019 $ 24.0 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures | The following table presents the results of discontinued operations (in millions): Year ended December 29, 2019 Year ended December 30, 2018 Year ended December 31, 2017 Revenue $ 0.3 $ 44.2 $ 149.9 Cost of sales 0.9 34.2 110.1 Selling, general and administrative expenses 1.1 16.7 33.6 Other (income) expense items that are not major (3.6 ) 2.7 (0.1 ) Income (loss) from discontinued operations before income taxes 1.9 (9.4 ) 6.3 Gain on disposal of discontinued operations before income taxes — — — Total gain (loss) of discontinued operations before income taxes 1.9 (9.4 ) 6.3 Income tax (benefit) expense 0.2 (1.8 ) 2.1 Income (loss) from discontinued operations $ 1.7 $ (7.6 ) $ 4.2 The following is a summary of the assets and liabilities of discontinued operations as of December 29, 2019 and December 30, 2018 (in millions): December 29, 2019 December 30, 2018 Accounts receivable, net 3.3 8.2 Other current assets — 0.1 Current assets of discontinued operations $ 3.3 $ 8.3 Accounts payable $ 0.2 $ 0.3 Accrued expenses 0.3 0.4 Other current liabilities 2.8 4.6 Current liabilities of discontinued operations $ 3.3 $ 5.3 Other long-term liabilities of discontinued operations $ 2.8 $ 6.4 |
Stockholders' Equity Stockholde
Stockholders' Equity Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Option Valuation Assumptions | Awards with graded vesting are recognized using the straight-line method with the following assumptions: 2019 2018 2017 Stock Options Expected life 10.0 10.0 10.0 Risk-free interest rate(1) 2.5% - 2.6% 2.9% - 3.2% 2.2% - 2.5% Volatility(2) 47.5% - 49.1% 52.9% - 53.4% 53.8% - 55.0% Forfeiture rate(3) 5.1% 5.1% 5.0% Dividend yield(4) —% —% —% (1) The risk-free interest rate is based on U.S. Treasury yields in effect at the time of grant with a term equal to the expected term of the options. (2) In 2019 , 2018 , and 2017 , the Company estimated implied volatility based upon trailing volatility. (3) Forfeitures are estimated at the time of grant based upon historical information. Forfeitures will be revised, if necessary, in subsequent periods if actual forfeitures differ from estimates. (4) The Company has no history or expectation of paying dividends on its common stock. |
Stock Options Roll Forward | A summary of the status of the Company’s stock option plan as of December 29, 2019 , and changes in options outstanding under the plan for the year ended December 29, 2019 , is as follows: Number of Shares Under Option Weighted-Average Exercise Price per Share Weighted- Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (000’s) (000’s) Options outstanding at December 30, 2018 768 $ 5.17 4.2 $ 6,587.5 Granted 2 $ 16.81 Exercised (619 ) $ 5.23 Forfeited or expired (5 ) $ 7.87 Options outstanding at December 29, 2019 146 $ 4.98 3.0 $ 1,866.3 Options exercisable at December 29, 2019 146 $ 4.98 3.0 $ 1,866.3 |
Grants and Exercises Under the Company's Option Plans | During the years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 , the following values relate to the grants and exercises under the Company’s option plans: 2019 2018 2017 Weighted average grant date fair value of options granted $ 10.25 $ 7.54 $ 6.39 Total intrinsic value of options exercised (in thousands) $ 8,874.9 $ 40.6 $ 67.1 |
Restricted Stock Units Activity | The following table summarizes the Company’s Restricted Stock Unit activity: Restricted Weighted-Average Grant Date Fair Value Nonvested balance at December 30, 2018 3,293 $ 8.22 Grants 1,147 $ 13.86 Vested (228 ) $ 15.22 Vested but not released (163 ) $ 9.29 Nonvested balance at December 29, 2019 4,049 $ 9.38 |
Assumptions and Resulting Fair Values of Options Granted | The assumptions and resulting fair values of options granted for 2019 , 2018 and 2017 were as follows: Offering Periods January 1 to December 31 2019 Offering Periods January 1 to December 31, 2018 Offering Periods January 1 to December 31, 2017 Expected term (in years)(1) 0.5 0.5 0.5 Risk-free interest rate(2) 2.09% - 2.56% 1.53% - 2.11% 0.62% - 1.14% Expected volatility(3) 37.22% - 43.70% 40.24% - 44.83% 44.38% - 53.70% Expected dividend yield(4) —% —% —% Weighted average grant-date fair value per share $4.74 $3.03 $2.51 (1) The expected term is equivalent to the offering period. (2) The risk-free interest rate is based on U.S. Treasury yields in effect at the time of grant with a term equal to the expected term. (3) The Company estimated implied volatility based upon trailing volatility. (4) The Company has no history or expectation of paying dividends on its common stock. |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Reportable segment assets are as follows (in millions): December 29, 2019 December 30, 2018 December 31, 2017 Assets: Kratos Government Solutions $ 777.6 $ 602.8 $ 597.9 Unmanned Systems 246.3 220.9 201.9 Discontinued operations 3.3 8.3 97.4 Corporate activities 158.8 178.1 126.8 Total assets $ 1,186.0 $ 1,010.1 $ 1,024.0 Revenues, operating income (loss) and assets disclosed below provided by the Company’s reportable segments for the years ended December 29, 2019 , December 30, 2018 , and December 31, 2017 , are as follows (in millions): 2019 2018 2017 Revenues: Kratos Government Solutions Service revenues $ 272.6 $ 200.7 $ 197.8 Product sales 283.5 284.4 283.8 Total Kratos Government Solutions 556.1 485.1 481.6 Unmanned Systems Service revenues — — — Product sales 161.4 132.9 121.7 Total Unmanned Systems 161.4 132.9 121.7 Total revenues $ 717.5 $ 618.0 $ 603.3 Depreciation and amortization: Kratos Government Solutions $ 18.2 $ 13.2 $ 14.4 Unmanned Systems 5.2 4.7 7.8 Total depreciation and amortization $ 23.4 $ 17.9 $ 22.2 Operating income (loss): Kratos Government Solutions $ 45.2 $ 35.5 $ (0.1 ) Unmanned Systems 6.1 5.1 (3.6 ) Corporate activities (13.3 ) (10.1 ) (8.3 ) Total operating income (loss) $ 38.0 $ 30.5 $ (12.0 ) |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 29, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summarized Quarterly Financial Information | Summarized quarterly data for the years ended December 29, 2019 and December 30, 2018 , is as follows (in millions, except per share data): First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal year 2019 Revenues $ 160.4 $ 187.9 $ 184.1 $ 185.1 Gross profit 44.9 48.1 48.6 48.4 Operating income 8.2 9.0 11.5 9.3 Provision (benefit) for income taxes (1.5 ) 2.5 2.8 1.0 Income from continuing operations 3.7 1.3 2.6 3.3 Income (loss) from discontinued operations (0.6 ) 3.0 — (0.7 ) Net income $ 3.1 $ 4.3 $ 2.6 $ 2.6 Less: Net income (loss) attributable to noncontrolling interest — 0.4 0.1 (0.4 ) Net income attributable to Kratos 3.1 3.9 2.5 3.0 Basic income (loss) per common share attributable to Kratos: Income from continuing operations $ 0.04 $ 0.01 $ 0.02 $ 0.03 Income (loss) from discontinued operations $ (0.01 ) $ 0.03 $ — $ — Net income per common share $ 0.03 $ 0.04 $ 0.02 $ 0.03 Diluted income per common share attributable to Kratos: Income from continuing operations $ 0.03 $ 0.01 $ 0.02 $ 0.03 Income from discontinued operations $ — $ 0.03 $ — $ — Net income per common share $ 0.03 $ 0.04 $ 0.02 $ 0.03 First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal year 2018 Revenues $ 143.0 $ 151.2 $ 159.4 $ 164.4 Gross profit 40.8 39.3 44.1 45.5 Operating income 7.0 2.6 10.1 10.8 Provision for income taxes 0.9 0.1 3.4 0.2 Income (loss) from continuing operations 1.3 (3.8 ) 1.4 5.2 Income (loss) from discontinued operations (3.5 ) (3.9 ) 0.3 (0.5 ) Net income (loss) $ (2.2 ) $ (7.7 ) $ 1.7 $ 4.7 Basic income (loss) per common share: Income (loss) from continuing operations $ 0.01 $ (0.04 ) $ 0.01 $ 0.05 Income (loss) from discontinued operations $ (0.03 ) $ (0.03 ) $ 0.01 $ — Net income (loss) per common share $ (0.02 ) $ (0.07 ) $ 0.02 $ 0.05 Diluted income (loss) per common share: Income (loss) from continuing operations $ 0.01 $ (0.04 ) $ 0.01 $ 0.05 Income (loss) from discontinued operations $ (0.03 ) $ (0.03 ) $ 0.01 $ (0.01 ) Net income (loss) per common share $ (0.02 ) $ (0.07 ) $ 0.02 $ 0.04 |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies - (Details) | 12 Months Ended | |||
Dec. 29, 2019USD ($)Segment | Dec. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Jan. 01, 2018USD ($) | |
Significant Accounting Policies Disclosure [Line Items] | ||||
Number of reportable segments | Segment | 2 | |||
Share-based Compensation | ||||
Employee Stock Purchase Plan offering & expense recognition period | 6 months | |||
Deferred tax benefit from stock options exercised | $ 2,100,000 | |||
Allowance for Doubtful Accounts | ||||
Provisions | (200,000) | $ 1,800,000 | $ 0 | |
Cash and Cash Equivalents | ||||
Restricted cash | 0 | 300,000 | ||
Interest Expense, Net | ||||
Interest expense incurred primarily on the Senior Secured Notes | (23,500,000) | (21,600,000) | (29,100,000) | |
Miscellaneous interest income | 1,900,000 | 800,000 | 500,000 | |
Interest expense, net | (21,600,000) | (20,800,000) | (28,600,000) | |
Foreign Currency | ||||
Foreign currency transaction gain (loss) | (1,100,000) | (1,100,000) | 400,000 | |
Recent Accounting Pronouncements | ||||
Operating lease right-of-use assets | 42,100,000 | |||
Operating lease liability | 47,600,000 | |||
Accumulated deficit | $ 712,000,000 | 724,500,000 | ||
ASC 606 Adjustment | ASC 606 | ||||
Recent Accounting Pronouncements | ||||
Accumulated deficit | $ 200,000 | |||
Minimum | ||||
Significant Accounting Policies Disclosure [Line Items] | ||||
Useful life of finite-lived intangible assets | 1 year | |||
Share-based Compensation | ||||
Share-based incentive award vesting period | 5 years | |||
Maximum | ||||
Significant Accounting Policies Disclosure [Line Items] | ||||
Useful life of finite-lived intangible assets | 15 years | |||
Share-based Compensation | ||||
Share-based incentive award vesting period | 10 years | |||
Buildings and improvements | Minimum | ||||
Property and Equipment, Net | ||||
Useful life of property and equipment | 15 years | |||
Buildings and improvements | Maximum | ||||
Property and Equipment, Net | ||||
Useful life of property and equipment | 39 years | |||
Machinery and equipment | Minimum | ||||
Property and Equipment, Net | ||||
Useful life of property and equipment | 3 years | |||
Machinery and equipment | Maximum | ||||
Property and Equipment, Net | ||||
Useful life of property and equipment | 10 years | |||
Computer equipment and software | Minimum | ||||
Property and Equipment, Net | ||||
Useful life of property and equipment | 1 year | |||
Computer equipment and software | Maximum | ||||
Property and Equipment, Net | ||||
Useful life of property and equipment | 10 years | |||
Vehicles, furniture, and office equipment | Maximum | ||||
Property and Equipment, Net | ||||
Useful life of property and equipment | 5 years | |||
Allowance for Doubtful Accounts | ||||
Allowance for Doubtful Accounts | ||||
Balance at Beginning of Year | $ 2,300,000 | 500,000 | 1,500,000 | |
Provisions | (200,000) | 1,800,000 | 0 | |
Write-offs/Recoveries | (200,000) | 0 | (1,000,000) | |
Balance at End of Year | 1,900,000 | 2,300,000 | 500,000 | |
Continuing operations | ||||
Share-based Compensation | ||||
Stock-based compensation expense, amount recognized in the consolidated financial statements | 11,000,000 | 7,200,000 | 7,800,000 | |
Selling, general and administrative expenses | ||||
Share-based Compensation | ||||
Stock-based compensation expense, amount recognized in the consolidated financial statements | $ 11,000,000 | $ 7,200,000 | $ 7,800,000 | |
Stock options | Maximum | ||||
Share-based Compensation | ||||
Share-based incentive award vesting period | 6 years |
Organization and Summary of S_5
Organization and Summary of Significant Accounting Policies - Revenue Recognition - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | Jan. 01, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Accumulated deficit | $ 712 | $ 724.5 | $ 712 | $ 724.5 | |||||||||
Revenue | 185.1 | $ 184.1 | $ 187.9 | $ 160.4 | 164.4 | $ 159.4 | $ 151.2 | $ 143 | 717.5 | 618 | $ 603.3 | ||
Remaining performance obligation | 601.2 | 601.2 | |||||||||||
Provision for loss on contracts | 3.1 | 5.1 | 3.1 | 5.1 | |||||||||
Contract assets, Net change | 6.6 | ||||||||||||
Contract liabilities, Net change | (2.7) | ||||||||||||
Revenue recognized | 30.5 | 35.5 | |||||||||||
Contract assets | 179.4 | 179.4 | $ 172.8 | ||||||||||
Unbilled | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Accounts receivable | 4.7 | $ 3.8 | 4.7 | $ 3.8 | |||||||||
Unbilled | T for C | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Contract assets | 11.5 | 11.5 | |||||||||||
Unbilled | International Customer | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Contract assets | $ 10 | 10 | |||||||||||
Effect of Change Higher/(Lower) | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Revenue | 30 | ||||||||||||
Cost of revenue | $ 21.9 | ||||||||||||
ASC 606 Adjustment | ASC 606 | |||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||
Accumulated deficit | $ 0.2 |
Organization and Summary of S_6
Organization and Summary of Significant Accounting Policies - Remaining Performance Obligations (Details) | 12 Months Ended |
Dec. 29, 2019 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction, percentage | 62.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction, percentage | 21.00% |
Organization and Summary of S_7
Organization and Summary of Significant Accounting Policies - Contract Assets and Liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 29, 2019 | Jan. 01, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Contract assets | $ 179.4 | $ 172.8 |
Contract assets, Net change | 6.6 | |
Contract liabilities | 34.3 | 37 |
Contract liabilities, Net change | (2.7) | |
Net contract assets | 145.1 | $ 135.8 |
Net contract assets, Net change | $ 9.3 |
Organization and Summary of S_8
Organization and Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | $ 185.1 | $ 184.1 | $ 187.9 | $ 160.4 | $ 164.4 | $ 159.4 | $ 151.2 | $ 143 | $ 717.5 | $ 618 | $ 603.3 |
Kratos Government Solutions | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 556.1 | 485.1 | |||||||||
Kratos Government Solutions | U.S. Government | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 368.6 | 333.5 | |||||||||
Kratos Government Solutions | International | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 111.4 | 96 | |||||||||
Kratos Government Solutions | U.S. Commercial and other customers | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 76.1 | 55.6 | |||||||||
Kratos Government Solutions | Fixed price | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 469.4 | 424.9 | |||||||||
Kratos Government Solutions | Cost plus fee | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 54.3 | 32.6 | |||||||||
Kratos Government Solutions | Time and materials | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 32.4 | 27.6 | |||||||||
Unmanned Systems | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 161.4 | 132.9 | |||||||||
Unmanned Systems | U.S. Government | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 138.8 | 113.5 | |||||||||
Unmanned Systems | International | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 21.1 | 18.3 | |||||||||
Unmanned Systems | U.S. Commercial and other customers | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 1.5 | 1.1 | |||||||||
Unmanned Systems | Fixed price | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 126.2 | 104.8 | |||||||||
Unmanned Systems | Cost plus fee | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 33.8 | 26.5 | |||||||||
Unmanned Systems | Time and materials | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | $ 1.4 | $ 1.6 |
Acquisition - Narrative (Detail
Acquisition - Narrative (Details) $ in Millions | Feb. 28, 2019USD ($) | Feb. 27, 2019USD ($)shares | Dec. 29, 2019USD ($)shares | Dec. 30, 2018USD ($) | Dec. 31, 2017USD ($) |
Business Acquisition [Line Items] | |||||
Business acquisition, equity interest issued or issuable, value assigned | $ 27 | ||||
Deferred tax Liabilities, net | $ 9 | $ 7 | |||
Merger and acquisition related items | $ 2.3 | $ 0 | $ 0 | ||
Discount Rate | Income Approach | Level 3 | |||||
Business Acquisition [Line Items] | |||||
Discount rate | 0.125 | ||||
Royalty Rate | Income Approach | Level 3 | |||||
Business Acquisition [Line Items] | |||||
Discount rate | 0.10 | ||||
Florida Turbine Technologies, Inc. | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, percentage of voting Interests acquired | 80.10% | ||||
FTT Core, LLC | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, percentage of voting Interests acquired | 80.10% | ||||
FTT Inc | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, percentage of voting Interests acquired | 80.10% | ||||
Purchase price | $ 60 | ||||
Payments to acquire businesses, gross, including amounts to be paid | 33 | ||||
Cash paid | $ 17.7 | 20.7 | |||
Payments to acquire businesses, amount to be paid | $ 15.3 | ||||
Payment period | 3 years | ||||
Business combination, recognized identifiable assets acquired and liabilities assumed, current liabilities | $ 7.5 | ||||
Deferred tax Liabilities, net | 7 | ||||
Business combination, pro forma information, revenue of acquiree since acquisition date, actual | $ 52.5 | ||||
Business combination, pro forma information, earnings or loss of acquiree since acquisition date, actual | 0.7 | ||||
Merger and acquisition related items | $ 1.4 | ||||
FTT Inc | Customer relationships | |||||
Business Acquisition [Line Items] | |||||
Finite-lived lntangible assets acquired | $ 19.7 | ||||
Acquired finite-lived intangible assets, weighted average useful life | 13 years | ||||
FTT Inc | In orocess research and development | |||||
Business Acquisition [Line Items] | |||||
Finite-lived lntangible assets acquired | $ 8.5 | ||||
FTT Inc | Contracts and backlog | |||||
Business Acquisition [Line Items] | |||||
Finite-lived lntangible assets acquired | $ 2.1 | ||||
Acquired finite-lived intangible assets, weighted average useful life | 2 years | ||||
FTT Inc | Trade names | |||||
Business Acquisition [Line Items] | |||||
Finite-lived lntangible assets acquired | $ 0.5 | ||||
Acquired finite-lived intangible assets, weighted average useful life | 2 years | ||||
FTT Inc | Common Stock | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, equity interest issued or issuable, number of shares | shares | 1,825,406 | 1,825,406 |
Acquisition - Assets Acquired a
Acquisition - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Dec. 29, 2019 | Feb. 27, 2019 | Dec. 30, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 455.6 | $ 425.7 | |
FTT Inc | |||
Business Acquisition [Line Items] | |||
Accounts receivable | $ 8.1 | ||
Unbilled receivables | 4.9 | ||
Inventoried costs | 7.8 | ||
Other current assets | 2.1 | ||
Property and equipment | 5.7 | ||
Intangible assets | 30.8 | ||
Goodwill | 23 | ||
Total identifiable net assets acquired | 82.4 | ||
Total identifiable net liabilities assumed | (7.5) | ||
Net assets before noncontrolling interest | 74.9 | ||
Noncontrolling interest | (14.9) | ||
Net assets acquired, excluding cash | $ 60 |
Acquisition - Consideration Pai
Acquisition - Consideration Paid (Details) - FTT Inc - USD ($) $ in Millions | Feb. 28, 2019 | Feb. 27, 2019 |
Business Acquisition [Line Items] | ||
Cash paid | $ 17.7 | $ 20.7 |
Deferred purchase consideration | 15.3 | |
Common stock issued | 27 | |
Consideration transferred, gross | 63 | |
Less: Cash acquired | (3) | |
Total consideration | $ 60 |
Acquisition - Pro Forma Financi
Acquisition - Pro Forma Financial Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Business Acquisition [Line Items] | |||||||
Net income (loss) | $ 3 | $ 2.5 | $ 3.9 | $ 3.1 | $ 12.5 | $ (3.5) | $ (42.7) |
FTT Inc | |||||||
Business Acquisition [Line Items] | |||||||
Pro forma revenues | 725.6 | ||||||
Pro forma net income before tax | 14.8 | ||||||
Pro forma net income | 11.7 | ||||||
Net income (loss) | $ 11.8 | ||||||
Basic pro forma income per share attributable to Kratos (in shares) | $ 0.11 | ||||||
Diluted pro forma income per share attributable to Kratos (in shares) | $ 0.11 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 29, 2019USD ($)contract | Dec. 29, 2019USD ($)Segment | Dec. 31, 2017USD ($) | Dec. 30, 2018USD ($) | |
Goodwill [Line Items] | ||||
Number of operating segments | Segment | 5 | |||
Goodwill | $ 455.6 | $ 455.6 | $ 425.7 | |
Number of lost contract opportunities | contract | 2 | |||
Lost contract opportunities period | 5 years | |||
Carrying amounts of goodwill by reportable segment | ||||
Gross value | $ 708.9 | 708.9 | 679 | |
Less accumulated impairment | 253.3 | 253.3 | 253.3 | |
Net | 455.6 | 455.6 | 425.7 | |
Kratos Unmanned Systems (US) | ||||
Goodwill [Line Items] | ||||
Goodwill | 97.3 | 97.3 | 97.3 | |
Carrying amounts of goodwill by reportable segment | ||||
Gross value | 111.1 | 111.1 | 111.1 | |
Less accumulated impairment | 13.8 | 13.8 | 13.8 | |
Net | 97.3 | 97.3 | 97.3 | |
Kratos Government Solutions (KGS) | ||||
Goodwill [Line Items] | ||||
Goodwill | 358.3 | 358.3 | 328.4 | |
Impairment of goodwill | $ 24.2 | |||
Carrying amounts of goodwill by reportable segment | ||||
Gross value | 597.8 | 597.8 | 567.9 | |
Less accumulated impairment | 239.5 | 239.5 | 239.5 | |
Net | $ 358.3 | $ 358.3 | $ 328.4 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Purchased Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Acquired finite-lived intangible assets: | |||
Gross Value | $ 139.7 | $ 108.9 | |
Accumulated Amortization | (107.1) | (99.7) | |
Total | 32.6 | 9.2 | |
Total intangible assets, Gross Value | 146.6 | 115.8 | |
Total intangible assets, Net Value | 39.5 | 16.1 | |
Aggregate amortization expense for finite-live intangible assets | 7.4 | 5.9 | $ 10.4 |
Trade names | |||
Acquired finite-lived intangible assets: | |||
Indefinite-lived trade names | 6.9 | 6.9 | |
Customer relationships | |||
Acquired finite-lived intangible assets: | |||
Gross Value | 72.3 | 52.6 | |
Accumulated Amortization | (53.3) | (50.6) | |
Total | 19 | 2 | |
Contracts and backlog | |||
Acquired finite-lived intangible assets: | |||
Gross Value | 32 | 29.9 | |
Accumulated Amortization | (28.4) | (26.4) | |
Total | 3.6 | 3.5 | |
Developed technology and technical know-how | |||
Acquired finite-lived intangible assets: | |||
Gross Value | 25 | 25 | |
Accumulated Amortization | (23.8) | (21.3) | |
Total | 1.2 | 3.7 | |
Trade names | |||
Acquired finite-lived intangible assets: | |||
Gross Value | 1.9 | 1.4 | |
Accumulated Amortization | (1.6) | (1.4) | |
Total | 0.3 | 0 | |
Favorable Operating Lease [Member] | |||
Acquired finite-lived intangible assets: | |||
Gross Value | 8.5 | 0 | |
Accumulated Amortization | 0 | 0 | |
Total | $ 8.5 | $ 0 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Intangible Asset Amortization (Details) - USD ($) $ in Millions | Dec. 29, 2019 | Dec. 30, 2018 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2020 | $ 5.8 | |
2021 | 3.7 | |
2022 | 2.4 | |
2023 | 2.4 | |
2024 | 2.4 | |
Thereafter | 15.9 | |
Total | $ 32.6 | $ 9.2 |
Balance Sheet Details - Accoun
Balance Sheet Details - Accounts Receivable and Inventory (Details) - USD ($) $ in Millions | Dec. 29, 2019 | Dec. 30, 2018 |
Cash and Cash Equivalents | ||
Cash and cash equivalents | $ 172.6 | $ 182.7 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total current accounts receivable | 266.3 | 239.7 |
Allowance for doubtful accounts | (1.9) | (2.3) |
Total accounts receivable and unbilled receivables, net | 264.4 | 237.4 |
Inventory, Net of Allowances, Customer Advances and Progress Billings [Abstract] | ||
Raw materials | 39.1 | 34.7 |
Work in process | 20.3 | 10.3 |
Finished goods | 1.7 | 1.8 |
Total inventoried costs | 61.1 | 46.8 |
Billed | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total current accounts receivable | 86.6 | 66.5 |
Unbilled | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total current accounts receivable | 179.7 | 173.2 |
U.S. Government | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total U.S. Government contract receivables | 103 | 99.6 |
U.S. Government | Billed | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total U.S. Government contract receivables | 16.6 | 16.5 |
U.S. Government | Unbilled | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total U.S. Government contract receivables | $ 86.4 | $ 83.1 |
Balance Sheet Details - Propert
Balance Sheet Details - Property, Plant and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Finance lease right of use assets | $ 39.6 | ||
Property and equipment | $ 135.7 | ||
Property and equipment | 198.6 | ||
Accumulated depreciation and amortization | (81.7) | ||
Accumulated depreciation and amortization | (68.6) | ||
Total property and equipment, net | 116.9 | ||
Total property and equipment, net | 116.9 | 67.1 | |
Depreciation expense | 16 | 12 | $ 11.8 |
Land and buildings | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 12.2 | 11.9 | |
Computer equipment and software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 32.7 | 28.3 | |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 78.7 | 56.8 | |
Furniture and office equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 7.1 | 6.3 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 12.3 | 10.9 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | $ 16 | $ 21.5 |
Debt - Issuance of 6.5% Senior
Debt - Issuance of 6.5% Senior Secured Notes due 2025 (Details) - USD ($) | 1 Months Ended | |||
Nov. 30, 2017 | Dec. 29, 2019 | Dec. 30, 2018 | Sep. 12, 2017 | |
Debt Instrument [Line Items] | ||||
Principal | $ 300,000,000 | $ 300,000,000 | ||
Senior notes | 6.5% Notes | ||||
Debt Instrument [Line Items] | ||||
Principal | $ 300,000,000 | |||
Stated interest rate | 6.50% | |||
Debt issuance costs | $ 6,600,000 | |||
Senior notes | 6.5% Notes | On or after November 30, 2020 | ||||
Debt Instrument [Line Items] | ||||
Redemption percentage | 40.00% | |||
Percentage of principal amount | 100.00% | |||
Senior notes | 6.5% Notes | On or prior to November 30, 2020 | ||||
Debt Instrument [Line Items] | ||||
Redemption percentage | 10.00% | |||
Percentage of principal amount | 103.00% | |||
Senior notes | 7% Senior Notes due 2019 | ||||
Debt Instrument [Line Items] | ||||
Principal | $ 300,000,000 | |||
Stated interest rate | 7.00% | |||
Reacquisition price | $ 385,200,000 | $ 135,500,000 | ||
Premium | 12,000,000 | |||
Accrued interest | $ 300,000 |
Debt - Credit and Security Agr
Debt - Credit and Security Agreement (Details) - USD ($) | Nov. 20, 2017 | May 14, 2014 | Dec. 29, 2019 | Nov. 30, 2017 |
Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 110,000,000 | |||
Debt term | 5 years | |||
Potential maximum borrowing capacity, subject to Lender approval | $ 135,000,000 | |||
Outstanding borrowings | $ 0 | |||
Remaining borrowing capacity | $ 69,300,000 | |||
Revolving Credit Facility | Amendment Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 90,000,000 | |||
Debt term | 5 years | |||
Potential maximum borrowing capacity, subject to Lender approval | $ 115,000,000 | |||
Percentage of Borrowing Base or Total Commitment Amount, less than | 50.00% | |||
Revolving Credit Facility | Federal Funds Rate | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate (percent) | 0.50% | |||
Revolving Credit Facility | LIBOR Rate | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate (percent) | 1.00% | |||
Revolving Credit Facility | Base Rate | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate (percent) | 1.00% | |||
Revolving Credit Facility | Base Rate | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate (percent) | 1.50% | |||
Revolving Credit Facility | Eurodollar Rate | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate (percent) | 2.00% | |||
Revolving Credit Facility | Eurodollar Rate | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate (percent) | 2.50% | |||
Letter of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | 50,000,000 | |||
Outstanding borrowings | $ 5,400,000 | |||
Letter of Credit | Amendment Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | 50,000,000 | |||
Swing Line Loan | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 10,000,000 | |||
Swing Line Loan | Amendment Credit Agreement | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 10,000,000 |
Debt - Fair Value of Long-Term
Debt - Fair Value of Long-Term Debt (Details) - USD ($) | Dec. 29, 2019 | Dec. 30, 2018 |
Debt Disclosure [Abstract] | ||
Principal | $ 300,000,000 | $ 300,000,000 |
Carrying Amount | 295,100,000 | 294,200,000 |
Fair Value | 322,100,000 | 305,300,000 |
Debt issuance costs | $ 4,900,000 | $ 5,800,000 |
Leases - Lease Expense (Details
Leases - Lease Expense (Details) $ in Millions | 12 Months Ended |
Dec. 29, 2019USD ($) | |
Leases [Abstract] | |
Amortization of right of use assets - finance leases | $ 2 |
Interest expense on lease liabilities - finance leases | 2.5 |
Operating lease cost (expense resulting from amortization of total lease payments) | 13.2 |
Short-term lease cost | 0.6 |
Variable lease cost (cost excluded from lease payments) | 0.1 |
Sublease income | (3.3) |
Total lease cost | $ 15.1 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet (Details) $ in Millions | Dec. 29, 2019USD ($) |
Operating Leases: | |
Operating lease right-of-use assets | $ 42.1 |
Current portion of operating lease liabilities | 9.9 |
Operating lease liabilities, net of current portion | 37.6 |
Finance leases: | |
Property, plant and equipment, net | 38.1 |
Other current liabilities | 0.6 |
Other long-term liabilities | $ 38.4 |
Leases - Cash Paid (Details)
Leases - Cash Paid (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Leases [Abstract] | |||
Finance lease - cash paid for interest | $ 2.5 | ||
Finance lease - financing cash flows | 0.5 | $ 0 | $ 0 |
Operating lease - operating cash flows (fixed payments) | $ 14.8 |
Leases - Weighted Average (Deta
Leases - Weighted Average (Details) $ in Millions | 12 Months Ended |
Dec. 29, 2019USD ($) | |
Leases [Abstract] | |
Operating lease liabilities arising from obtaining right-of-use assets, including impact of ASC 842 adoption | $ 59.3 |
Finance lease liabilities arising from obtaining right-of-use assets, including impact of ASC 842 adoption | $ 39.6 |
Weighted Average Remaining Lease Term [Abstract] | |
Operating leases | 5 years 9 months 7 days |
Finance leases | 18 years 10 months 28 days |
Weighted Average Discount Rate, Percent [Abstract] | |
Operating leases | 6.50% |
Finance leases | 6.52% |
Leases - Maturities of Operatin
Leases - Maturities of Operating and Financing Lease Liabilities (Details) $ in Millions | Dec. 29, 2019USD ($) |
Operating Leases | |
2020 | $ 12.6 |
2021 | 10 |
2022 | 8.6 |
2023 | 8.2 |
2024 | 6.2 |
Thereafter | 11.6 |
Total lease payments | 57.2 |
Less: imputed interest | (9.6) |
Total present value of lease liabilities | 47.6 |
Finance Leases | |
2020 | 3.1 |
2021 | 3.2 |
2022 | 3.3 |
2023 | 3.3 |
2024 | 3.3 |
Thereafter | 54 |
Total lease payments | 70.2 |
Less: imputed interest | (31.2) |
Total present value of lease liabilities | $ 39 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 30, 2018 | Dec. 31, 2017 | Dec. 29, 2019 | Mar. 31, 2019 | |
Lessee, Lease, Description [Line Items] | ||||
Property, plant and equipment, net | $ 38.1 | |||
Operating leases, rent expense, minimum rentals | $ 23.7 | $ 18.6 | ||
Operating leases, rent expense, sublease rentals | 3.3 | $ 3.4 | ||
Sublease income | $ 4.3 | |||
COLORADO | ||||
Lessee, Lease, Description [Line Items] | ||||
Property, plant and equipment, net | $ 39.3 |
Leases - Operating Lease under
Leases - Operating Lease under ASC 840 (Details) $ in Millions | Dec. 30, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 16.5 |
2020 | 12 |
2021 | 9.6 |
2022 | 8.1 |
2023 | 7.9 |
Thereafter | 63.1 |
Total future minimum lease payments | $ 117.2 |
Net Income (Loss) Per Common _3
Net Income (Loss) Per Common Share - Antidilutive Securities (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Shares from stock options and awards | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of EPS (in shares) | 0 | 0.1 | 0.1 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Operating Loss Carryforwards [Line Items] | |||
Increase in valuation allowance | $ 3.6 | ||
Unrecognized deferred income taxes or foreign withholding taxes | 9.4 | ||
Unrecognized deferred income taxes or foreign withholding taxes, cash and cash equivalents available for distribution | 24.6 | ||
Unrecognized tax benefits that if recognized would affect effective tax rate | 24 | ||
Amount that would become a deferred tax asset included in unrecognized tax benefits that would impact the effective tax rate | 11.1 | ||
Income tax penalties and interest expense | 1.3 | $ 0.6 | $ 0.5 |
Benefit for income tax penalties and interest related to reversal of prior positions | 0.1 | 1.1 | 0.2 |
Total interest and penalties accrued | 2.8 | $ 1.6 | $ 2.2 |
Unrecognized tax benefits that will expire within the next 12 months | 0.1 | ||
Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 307.8 | ||
State | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | $ 266.9 |
Income Taxes - Components of I
Income Taxes - Components of Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Components of income (loss) from continuing operations before income taxes | |||||||||||
Domestic | $ 6.8 | $ 2.2 | $ (60.5) | ||||||||
Foreign | 8.9 | 6.5 | 3.4 | ||||||||
Income (loss) from continuing operations before income taxes | 15.7 | 8.7 | (57.1) | ||||||||
Federal income taxes: | |||||||||||
Current | (0.2) | (0.4) | (2.9) | ||||||||
Deferred | (3.9) | (1.8) | (9) | ||||||||
Total Federal | (4.1) | (2.2) | (11.9) | ||||||||
State and local income taxes | |||||||||||
Current | 1 | 0.4 | 0.5 | ||||||||
Deferred | (0.9) | 1.4 | (0.3) | ||||||||
Total State and local | 0.1 | 1.8 | 0.2 | ||||||||
Foreign income taxes: | |||||||||||
Current | 9 | 4.8 | 2 | ||||||||
Deferred | (0.2) | 0.2 | (0.5) | ||||||||
Total Foreign | 8.8 | 5 | 1.5 | ||||||||
Total | $ 1 | $ 2.8 | $ 2.5 | $ (1.5) | $ 0.2 | $ 3.4 | $ 0.1 | $ 0.9 | $ 4.8 | $ 4.6 | $ (10.2) |
Income Taxes - Reconciliation
Income Taxes - Reconciliation of Income Tax Provision (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||||||||
Income tax (benefit) at federal statutory rate | $ 3.3 | $ 1.8 | $ (20) | ||||||||
State taxes, net of federal tax benefit and valuation allowance | 0.6 | 0.9 | 0.5 | ||||||||
Difference in tax rates between U.S. and foreign | 1.9 | 0.7 | 0 | ||||||||
Increase (decrease) in valuation allowance | (3.3) | 4.7 | (45.6) | ||||||||
Nondeductible expense | 1 | 0.6 | 1.1 | ||||||||
Increase in reserve for uncertain tax positions | 7.7 | 4 | 1.3 | ||||||||
Changes to indefinite life items and separate state deferred taxes | 0.4 | (0.7) | (1.8) | ||||||||
One-time transition tax on previously undistributed foreign earnings | 0 | 2.2 | 6.2 | ||||||||
Goodwill impairment | 0 | 0 | 8.1 | ||||||||
Decrease in deferred taxes related to disposition | 0 | (9.6) | 0 | ||||||||
Impact related to the 2017 Tax Cuts and Jobs Act | 0 | 0 | 40 | ||||||||
Release of valuation allowance due to FTT acquisition | (5.2) | 0 | 0 | ||||||||
Stock-based compensation | (1.6) | 0 | 0 | ||||||||
Total | $ 1 | $ 2.8 | $ 2.5 | $ (1.5) | $ 0.2 | $ 3.4 | $ 0.1 | $ 0.9 | $ 4.8 | $ 4.6 | $ (10.2) |
Income Taxes - Deferred Taxes
Income Taxes - Deferred Taxes (Details) - USD ($) $ in Millions | Dec. 29, 2019 | Dec. 30, 2018 |
Deferred tax assets: | ||
Allowance for doubtful accounts | $ 0.6 | $ 0.6 |
Sundry accruals | 2.3 | 1.1 |
Vacation accrual | 3 | 2.7 |
Stock-based compensation | 5.3 | 4.2 |
Payroll related accruals | 6.2 | 2.4 |
Lease accruals | 22.1 | 2 |
Investments | 1.3 | 1.3 |
Net operating loss carryforwards | 75.1 | 81.7 |
Capital loss carryforwards | 1.3 | 1.9 |
Tax credit carryforwards | 11.2 | 9.9 |
Deferred revenue | 1.1 | 1.5 |
Reserves and other | 13.6 | 10.8 |
Gross deferred tax assets | 143.1 | 120.1 |
Valuation allowance | (88.6) | (92.2) |
Total deferred tax assets, net of valuation allowance | 54.5 | 27.9 |
Deferred tax liabilities: | ||
Unearned revenue | (19) | (23.9) |
Deferred Tax Liabilities, Operating Lease Right-of-use Assets | (20.2) | |
Other intangibles | (21) | (8.9) |
Property and equipment, principally due to differences in depreciation | (2) | (0.9) |
Other | (1.3) | (1.2) |
Total deferred tax liabilities | (63.5) | (34.9) |
Net deferred tax liability | $ (9) | $ (7) |
Income Taxes - Unrecognized Ta
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Unrecognized Tax Benefits | |||
Balance at the beginning of period | $ 17.7 | $ 15.6 | $ 18.6 |
Increases related to prior periods | 0.2 | 0.5 | 0.4 |
Increases related to current year tax positions | 6.3 | 4 | 1.1 |
Expiration of applicable statutes of limitations | (0.1) | (0.4) | (0.6) |
Decrease in federal tax rate | (0.1) | (0.3) | (3.9) |
Decrease in federal tax rate | (0.1) | (0.3) | (3.9) |
Decreases related to disposition | (1.7) | ||
Balance at the end of period | $ 24 | $ 17.7 | $ 15.6 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Millions | Jun. 11, 2018 | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | Nov. 30, 2017 |
Senior notes | 6.5% Notes | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Stated interest rate | 6.50% | ||||
Public Safety & Security | Disposal Group, Held-for-sale | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Purchase price, in cash | $ 69 | ||||
Working capital adjustments | $ 8 | ||||
Proceeds from divestiture | $ 3.7 | ||||
Herley | Discontinued Operations, Disposed of by Sale | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Gain from tax liability | 3.6 | ||||
Cost adjustments | 2 | ||||
Transaction-related costs | 2.7 | ||||
Income tax expense (benefit) reclassification | 2.1 | ||||
Herley | Discontinued Operations, Disposed of by Sale | Selling, general and administrative expenses | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Depreciation and amortization expense | $ 0 | $ 0.1 | $ 0.3 |
Discontinued Operations - Resul
Discontinued Operations - Results of Discontinued Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gain on disposal of discontinued operations before income taxes | $ 0 | ||
Total gain (loss) of discontinued operations before income taxes | $ 1.9 | (9.4) | $ 6.3 |
Income tax expense (benefit) | 0.2 | (1.8) | 2.1 |
Income (loss) from discontinued operations | 1.7 | (7.6) | 4.2 |
Herley | Discontinued Operations, Disposed of by Sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Revenue | 0.3 | 44.2 | 149.9 |
Cost of sales | 0.9 | 34.2 | 110.1 |
Selling, general and administrative expenses | 1.1 | 16.7 | 33.6 |
Other (income) expense items that are not major | (3.6) | 2.7 | (0.1) |
Income (loss) from discontinued operations before income taxes | 1.9 | (9.4) | 6.3 |
Gain on disposal of discontinued operations before income taxes | 0 | 0 | 0 |
Total gain (loss) of discontinued operations before income taxes | 1.9 | (9.4) | 6.3 |
Income tax expense (benefit) | 0.2 | (1.8) | 2.1 |
Income (loss) from discontinued operations | $ 1.7 | $ (7.6) | $ 4.2 |
Discontinued Operations - Summa
Discontinued Operations - Summary of Assets and Liabilities of Discontinued Operations (Details) - USD ($) $ in Millions | Dec. 29, 2019 | Dec. 30, 2018 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Current assets of discontinued operations | $ 3.3 | $ 8.3 |
Current liabilities of discontinued operations | 3.3 | 5.3 |
Herley | Discontinued Operations, Disposed of by Sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Accounts receivable, net | 3.3 | 8.2 |
Other current assets | 0 | 0.1 |
Current assets of discontinued operations | 3.3 | 8.3 |
Accounts payable | 0.2 | 0.3 |
Accrued expenses | 0.3 | 0.4 |
Other current liabilities | 2.8 | 4.6 |
Current liabilities of discontinued operations | 3.3 | 5.3 |
Other long-term liabilities of discontinued operations | $ 2.8 | $ 6.4 |
Stockholders' Equity - Common
Stockholders' Equity - Common Stock (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Sep. 12, 2017 | Mar. 07, 2017 | Dec. 29, 2019 | Dec. 31, 2017 | Nov. 30, 2017 |
Class of Stock [Line Items] | |||||
Proceeds (expenses) from the issuance of common stock | $ 0 | $ 269.1 | |||
Net proceeds used to pay-off debt | $ 269.1 | ||||
7% Senior Notes due 2019 | Senior notes | |||||
Class of Stock [Line Items] | |||||
Stated interest rate | 7.00% | ||||
Reacquisition price | $ 135.5 | $ 385.2 | |||
Common Stock | |||||
Class of Stock [Line Items] | |||||
Common stock sold (in shares) | 16.1 | 11.9 | 28 | ||
Purchase price of common stock sold (dollars per share) | $ 12.25 | $ 7.25 | |||
Gross proceeds from sell of stock | $ 283.5 |
Stockholders' Equity - Stock O
Stockholders' Equity - Stock Option Plans and Restricted Stock Units Plans (Details) - USD ($) $ in Millions | Apr. 01, 2014 | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | May 31, 2017 | Mar. 28, 2014 | Mar. 27, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock awards granted | 0 | 2,000 | |||||
Number of shares available for issuance (in shares) | 1,550,000 | 2,306,256 | |||||
Total number of awards outstanding (shares) | 5,511,322 | ||||||
Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based incentive award vesting period | 10 years | ||||||
Stock Options and Restricted Stock Units | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based incentive award vesting period | 10 years | ||||||
Stock options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized stock-based compensation expense, period for recognition | 6 months | ||||||
Stock options | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based incentive award vesting period | 6 years | ||||||
Award term or expiration period | 10 years | ||||||
Restricted Stock Units (RSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Total unrecognized stock-based compensation expense related to nonvested restricted stock units | $ 19.2 | ||||||
Unrecognized stock-based compensation expense, period for recognition | 2 years 2 months 12 days | ||||||
Fair value of vested awards | $ 3.5 | $ 0.8 | $ 6.3 | ||||
2014 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares available for issuance (in shares) | 1,736,561 | 2,500,000 | |||||
Total number of awards outstanding (shares) | 5,511,322 |
Stockholders' Equity - Stock_2
Stockholders' Equity - Stock Option Valuation Assumptions (Details) - Stock options | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected life | 10 years | 10 years | 10 years |
Risk-free interest rate, lower range (percent) | 2.50% | 2.90% | 2.20% |
Risk-free interest rate, upper range (percent) | 2.60% | 3.20% | 2.50% |
Volatility, lower range (percent) | 47.50% | 52.90% | 53.80% |
Volatility, upper range (percent) | 49.10% | 53.40% | 55.00% |
Forfeiture rate (percent) | 5.10% | 5.10% | 5.00% |
Dividend yield (percent) | 0.00% | 0.00% | 0.00% |
Stockholders' Equity - Stock_3
Stockholders' Equity - Stock Options Roll Forward (Details) - USD ($) | Apr. 01, 2014 | Dec. 29, 2019 | Dec. 30, 2018 |
Number of Shares Under Option | |||
Options outstanding at beginning of period, Number of Options (in shares) | 768,000 | ||
Granted, Number of Options (in shares) | 0 | 2,000 | |
Exercised, Number of Options (in shares) | (619,000) | ||
Forfeited or expired, Number of Options (in shares) | (5,000) | ||
Options outstanding at end of period, Number of Options (in shares) | 146,000 | 768,000 | |
Options exercisable, Number of Options (in shares) | 146,000 | ||
Weighted-Average Exercise Price per Share | |||
Options outstanding at beginning of period, Weighted-Average Exercise Price per Share (in dollars per share) | $ 5.17 | ||
Granted, Weighted-Average Exercise Price per Share (in dollars per share) | 16.81 | ||
Exercised, Weighted-Average Exercise Price per Share (in dollars per share) | 5.23 | ||
Forfeited or expired, Weighted-Average Exercise Price per Share (in dollars per share) | 7.87 | ||
Options outstanding at end of period, Weighted-Average Exercise Price per Share (in dollars per share) | 4.98 | $ 5.17 | |
Options exercisable, Weighted-Average Exercise Price per Share (in dollars per share) | $ 4.98 | ||
Weighted- Average Remaining Contractual Term and Aggregate Intrinsic Value | |||
Options outstanding, Weighted Average Remaining Contractual Term | 3 years | 4 years 2 months 12 days | |
Options exercisable, Weighted-Average Remaining Contractual Term | 3 years | ||
Options outstanding, Aggregate Intrinsic Value | $ 1,866,300 | $ 6,587,500 | |
Options exercisable, Aggregate Intrinsic Value | $ 1,866,300 |
Stockholders' Equity - Grants
Stockholders' Equity - Grants and Exercises Under Option Plans (Details) - USD ($) | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Share-based Payment Arrangement [Abstract] | |||
Weighted average grant date fair value of options granted (in dollars per share) | $ 10.25 | $ 7.54 | $ 6.39 |
Total intrinsic value of options exercised | $ 8,874,900 | $ 40,600 | $ 67,100 |
Stockholders' Equity - Restric
Stockholders' Equity - Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs) shares in Thousands | 12 Months Ended |
Dec. 29, 2019$ / sharesshares | |
Restricted Stock Units | |
Nonvested balance at beginning of period (in shares) | shares | 3,293 |
Grants (in shares) | shares | 1,147 |
Vested (in shares) | shares | (228) |
Vested but not released (in shares) | shares | (163) |
Nonvested balance at end of period (in shares) | shares | 4,049 |
Weighted-Average Grant Date Fair Value | |
Nonvested balance at beginning of period, Weighted-Average Grant Date Fair Value (in dollars per share) | $ / shares | $ 8.22 |
Grants, Weighted-Average Grant Date Fair Value (in dollars per share) | $ / shares | 13.86 |
Vested, Weighted-Average Grant Date Fair Value (in dollars per share) | $ / shares | 15.22 |
Vested but not released, Weighted-Average Grant Date Fair Value (in dollars per share) | $ / shares | 9.29 |
Nonvested balance at end of period, Weighted-Average Grant Date Fair Value (in dollars per share) | $ / shares | $ 9.38 |
Stockholders' Equity - Employe
Stockholders' Equity - Employee Stock Purchase Plan (Details) - $ / shares | 12 Months Ended | ||||||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | May 31, 2017 | Mar. 28, 2014 | Mar. 27, 2014 | Aug. 31, 1999 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares available for future issuance (in shares) | 1,550,000 | 2,306,256 | |||||
Number of shares issued under the plan (in shares) | 356,000 | ||||||
Employee Stock Purchase Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized (in shares) | 3,000,000 | 5,200,000 | |||||
Minimum weekly employment threshold to qualify for ESPP | 20 hours | ||||||
Minimum annual employment threshold to qualify for ESPP | 5 months | ||||||
Maximum percentage of employee compensation eligible to purchase shares under ESPP (percent) | 15.00% | ||||||
Purchase price of common stock as a percent of fair market value (percent) | 85.00% | ||||||
Cumulative number of shares issued under ESPP (in shares) | 5,500,000 | ||||||
Number of shares available for future issuance (in shares) | 2,700,000 | ||||||
Average share price of shares issued under the plan (dollars per share) | $ 10.79 | ||||||
Assumptions and resulting fair values of options granted | |||||||
Expected term (in years) | 15 days | 15 days | 15 days | ||||
Risk-free interest rate, lower range (percent) | 2.09% | 1.53% | 0.62% | ||||
Risk-free interest rate, upper range (percent) | 2.56% | 2.11% | 1.14% | ||||
Expected volatility, lower range (percent) | 37.22% | 40.24% | 44.38% | ||||
Expected volatility, upper range (percent) | 43.70% | 44.83% | 53.70% | ||||
Expected dividend yield (percent) | 0.00% | 0.00% | 0.00% | ||||
Weighted average grant-date fair value per share (in dollars per share) | $ 4.74 | $ 3.03 | $ 2.51 |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |||
Company's contributions to defined-contribution plans | $ 4.4 | $ 3.9 | $ 3.8 |
Significant Customers (Details)
Significant Customers (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Revenue, Major Customer [Line Items] | |||||||||||
Revenue | $ 185.1 | $ 184.1 | $ 187.9 | $ 160.4 | $ 164.4 | $ 159.4 | $ 151.2 | $ 143 | $ 717.5 | $ 618 | $ 603.3 |
Kratos Government Solutions (KGS) | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Revenue | 556.1 | 485.1 | |||||||||
U.S. Government | Kratos Government Solutions (KGS) | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Revenue | $ 507.4 | $ 447 | $ 451.9 | ||||||||
Sales to the U.S. Government - percentage of total revenue | 71.00% | 72.00% | 75.00% |
Segment Information - Narrativ
Segment Information - Narrative (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 29, 2019USD ($) | Sep. 29, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Jul. 01, 2018USD ($) | Apr. 01, 2018USD ($) | Dec. 29, 2019USD ($)Segment | Dec. 30, 2018USD ($) | Dec. 31, 2017USD ($) | |
Segment Reporting Information [Line Items] | |||||||||||
Number of reportable segments | Segment | 2 | ||||||||||
Total revenues | $ 185.1 | $ 184.1 | $ 187.9 | $ 160.4 | $ 164.4 | $ 159.4 | $ 151.2 | $ 143 | $ 717.5 | $ 618 | $ 603.3 |
Percentage of foreign revenue to total revenue (as a percent) | 18.00% | 19.00% | 14.00% | ||||||||
Unmanned Systems | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | $ 161.4 | $ 132.9 | |||||||||
Kratos Government Solutions | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 556.1 | 485.1 | |||||||||
Impairment of goodwill | $ 24.2 | ||||||||||
Assets of foreign subsidiaries | $ 124.7 | $ 126.7 | 124.7 | 126.7 | 116.7 | ||||||
Non-US | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | $ 132.5 | $ 114.3 | $ 84.7 |
Segment Information - Revenues,
Segment Information - Revenues, Operating Income (Loss) and Assets by Reportable Segments (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | $ 185.1 | $ 184.1 | $ 187.9 | $ 160.4 | $ 164.4 | $ 159.4 | $ 151.2 | $ 143 | $ 717.5 | $ 618 | $ 603.3 |
Depreciation and amortization | 23.4 | 17.9 | 22.2 | ||||||||
Total operating income (loss) | 9.3 | $ 11.5 | $ 9 | $ 8.2 | 10.8 | $ 10.1 | $ 2.6 | $ 7 | 38 | 30.5 | (12) |
Total assets | 1,186 | 1,010.1 | 1,186 | 1,010.1 | 1,024 | ||||||
Discontinued operations | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total assets | 3.3 | 8.3 | 3.3 | 8.3 | 97.4 | ||||||
Kratos Government Solutions | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 556.1 | 485.1 | |||||||||
Unmanned Systems | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 161.4 | 132.9 | |||||||||
Operating Segments | Kratos Government Solutions | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 556.1 | 485.1 | 481.6 | ||||||||
Depreciation and amortization | 18.2 | 13.2 | 14.4 | ||||||||
Total operating income (loss) | 45.2 | 35.5 | (0.1) | ||||||||
Total assets | 777.6 | 602.8 | 777.6 | 602.8 | 597.9 | ||||||
Operating Segments | Unmanned Systems | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 161.4 | 132.9 | 121.7 | ||||||||
Depreciation and amortization | 5.2 | 4.7 | 7.8 | ||||||||
Total operating income (loss) | 6.1 | 5.1 | (3.6) | ||||||||
Total assets | 246.3 | 220.9 | 246.3 | 220.9 | 201.9 | ||||||
Corporate activities | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total operating income (loss) | (13.3) | (10.1) | (8.3) | ||||||||
Total assets | $ 158.8 | $ 178.1 | 158.8 | 178.1 | 126.8 | ||||||
Service revenues | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 272.6 | 200.7 | 197.8 | ||||||||
Service revenues | Operating Segments | Kratos Government Solutions | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 272.6 | 200.7 | 197.8 | ||||||||
Service revenues | Operating Segments | Unmanned Systems | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 0 | 0 | 0 | ||||||||
Product sales | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 444.9 | 417.3 | 405.5 | ||||||||
Product sales | Operating Segments | Kratos Government Solutions | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 283.5 | 284.4 | 283.8 | ||||||||
Product sales | Operating Segments | Unmanned Systems | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | $ 161.4 | $ 132.9 | $ 121.7 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) Summarized Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 29, 2019 | Sep. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 29, 2019 | Dec. 30, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenues | $ 185.1 | $ 184.1 | $ 187.9 | $ 160.4 | $ 164.4 | $ 159.4 | $ 151.2 | $ 143 | $ 717.5 | $ 618 | $ 603.3 |
Gross profit | 48.4 | 48.6 | 48.1 | 44.9 | 45.5 | 44.1 | 39.3 | 40.8 | 190 | 169.7 | 157.6 |
Total operating income (loss) | 9.3 | 11.5 | 9 | 8.2 | 10.8 | 10.1 | 2.6 | 7 | 38 | 30.5 | (12) |
Provision (benefit) for income taxes from continuing operations | 1 | 2.8 | 2.5 | (1.5) | 0.2 | 3.4 | 0.1 | 0.9 | 4.8 | 4.6 | (10.2) |
Income from continuing operations | 3.3 | 2.6 | 1.3 | 3.7 | 5.2 | 1.4 | (3.8) | 1.3 | |||
Income (loss) from discontinued operations | (0.7) | 0 | 3 | (0.6) | (0.5) | 0.3 | (3.9) | (3.5) | |||
Net income (loss) | 2.6 | 2.6 | 4.3 | 3.1 | $ 4.7 | $ 1.7 | $ (7.7) | $ (2.2) | 12.6 | (3.5) | (42.7) |
Less: Net income attributable to noncontrolling interest | (0.4) | 0.1 | 0.4 | 0 | 0.1 | 0 | 0 | ||||
Net income (loss) attributable to Kratos | $ 3 | $ 2.5 | $ 3.9 | $ 3.1 | $ 12.5 | $ (3.5) | $ (42.7) | ||||
Basic income (loss) per common share: | |||||||||||
Income (loss) from continuing operations (in dollars per share) | $ 0.03 | $ 0.02 | $ 0.01 | $ 0.04 | $ 0.05 | $ 0.01 | $ (0.04) | $ 0.01 | $ 0.10 | $ 0.04 | $ (0.52) |
Income (loss) from discontinued operations (in dollars per share) | 0 | 0 | 0.03 | (0.01) | 0 | 0.01 | (0.03) | (0.03) | 0.02 | (0.07) | 0.04 |
Net income (loss) per common share (in dollars per share) | 0.03 | 0.02 | 0.04 | 0.03 | 0.05 | 0.02 | (0.07) | (0.02) | 0.12 | (0.03) | (0.48) |
Diluted income (loss) per common share: | |||||||||||
Income (loss) from continuing operations (in dollars per share) | 0.03 | 0.02 | 0.01 | 0.03 | 0.05 | 0.01 | (0.04) | 0.01 | 0.10 | 0.04 | (0.52) |
Income (loss) from discontinued operations (in dollars per share) | 0 | 0 | 0.03 | 0 | (0.01) | 0.01 | (0.03) | (0.03) | 0.01 | (0.07) | 0.04 |
Net income (loss) per common share (in dollars per share) | $ 0.03 | $ 0.02 | $ 0.04 | $ 0.03 | $ 0.04 | $ 0.02 | $ (0.07) | $ (0.02) | $ 0.11 | $ (0.03) | $ (0.48) |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Feb. 24, 2020USD ($) |
Subsequent Event | |
Subsequent Event [Line Items] | |
Cash paid | $ 10.5 |
Uncategorized Items - ktos20191
Label | Element | Value |
Accounting Standards Update 2014-09 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (200,000) |