Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 30, 2018 | Feb. 22, 2019 | Jun. 29, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | KRATOS DEFENSE & SECURITY SOLUTIONS, INC. | ||
Entity Central Index Key | 1,069,258 | ||
Current Fiscal Year End Date | --12-30 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 30, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 104,046,886 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 1,013.2 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 182.7 | $ 130.5 |
Restricted cash | 0.3 | 0.4 |
Accounts receivable, net | 64.6 | 74.2 |
Unbilled receivables, net | 172.8 | 138.1 |
Inventoried costs | 46.8 | 49 |
Prepaid expenses | 8.9 | 11.1 |
Other current assets | 10.3 | 9.5 |
Current assets of discontinued operations | 8.3 | 58.6 |
Total current assets | 494.7 | 471.4 |
Property, plant and equipment, net | 67.1 | 58 |
Goodwill | 425.7 | 425.7 |
Intangible assets, net | 16.1 | 22 |
Other assets | 6.5 | 8.1 |
Non-current assets of discontinued operations | 0 | 38.8 |
Total assets | 1,010.1 | 1,024 |
Current liabilities: | ||
Accounts payable | 46.6 | 34.7 |
Accrued expenses | 38.1 | 40.9 |
Accrued compensation | 33.5 | 30.2 |
Accrued interest | 1.6 | 1.7 |
Billings in excess of costs and earnings on uncompleted contracts | 34.9 | 42.8 |
Other current liabilities | 4.7 | 9.4 |
Current liabilities of discontinued operations | 5.3 | 29.2 |
Total current liabilities | 164.7 | 188.9 |
Long-term debt principal, net of current portion | 294.2 | 293.5 |
Other long-term liabilities | 25.5 | 24.1 |
Long-term liabilities of discontinued operations | 6.4 | 6 |
Total liabilities | 490.8 | 512.5 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value, 5,000,000 authorized, 0 shares outstanding at December 30, 2018 and December 31, 2017 | 0 | 0 |
Common stock, $0.001 par value, 195,000,000 shares authorized; 103,766,899 and 103,297,525 shares issued and outstanding at December 30, 2018 and December 31, 2017, respectively | 0 | 0 |
Additional paid-in capital | 1,244.5 | 1,233.7 |
Accumulated other comprehensive loss | (0.7) | (1.4) |
Accumulated deficit | (724.5) | (720.8) |
Total stockholders’ equity | 519.3 | 511.5 |
Total liabilities and stockholders’ equity | $ 1,010.1 | $ 1,024 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 30, 2018 | Dec. 31, 2017 |
Preferred Stock: | ||
Par value (usd per share) | $ 0.001 | $ 0.001 |
Shares authorized (in shares) | 5,000,000 | 5,000,000 |
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) | 103,766,899 | 103,297,525 |
Shares outstanding (in shares) | 103,766,899 | 103,297,525 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | |
Total revenues | $ 618 | $ 603.3 | $ 541.9 |
Total costs | 448.3 | 445.7 | 421.4 |
Gross profit | 169.7 | 157.6 | 120.5 |
Selling, general and administrative expenses | 119.8 | 127.3 | 114.6 |
Research and development expenses | 15.6 | 17.8 | 13.9 |
Impairment of goodwill | 0 | 24.2 | 0 |
Restructuring expenses and other | 3.8 | 0.3 | 10 |
Operating income (loss) from continuing operations | 30.5 | (12) | (18) |
Other income (expense): | |||
Interest expense, net | (20.8) | (28.6) | (34.7) |
Gain (loss) on extinguishment of debt | 0 | (17.3) | 0.2 |
Other income (loss), net | (1) | 0.8 | 0.7 |
Total other expense, net | (21.8) | (45.1) | (33.8) |
Income (loss) from continuing operations before income taxes | 8.7 | (57.1) | (51.8) |
Provision (benefit) for income taxes from continuing operations | 4.6 | (10.2) | 5.8 |
Income (loss) from continuing operations | 4.1 | (46.9) | (57.6) |
Income (loss) from operations of discontinued component (including gain on disposal of $0.0 million for the year ended December 30, 2018) | (9.4) | 6.3 | (0.6) |
Income tax expense (benefit) | (1.8) | 2.1 | 2.3 |
Income (loss) from discontinued operations | (7.6) | 4.2 | (2.9) |
Net loss | $ (3.5) | $ (42.7) | $ (60.5) |
Basic income and loss per common share: | |||
Income (loss) from continuing operations (in dollars per share) | $ 0.04 | $ (0.52) | $ (0.94) |
Income (loss) from discontinued operations (in dollars per share) | (0.07) | 0.04 | (0.05) |
Net income (loss) per common share (in dollars per share) | (0.03) | (0.48) | (0.99) |
Diluted income and loss per common share: | |||
Income (loss) from continuing operations (in dollars per share) | 0.04 | (0.52) | (0.94) |
Income (loss) from discontinued operations (in dollars per share) | (0.07) | 0.04 | (0.05) |
Net income (loss) per common share (in dollars per share) | $ (0.03) | $ (0.48) | $ (0.99) |
Weighted average common shares outstanding: | |||
Basic (in shares) | 103.8 | 89.5 | 61.3 |
Diluted (in shares) | 106.1 | 89.5 | 61.3 |
Comprehensive Loss | |||
Net income (loss) | $ (3.5) | $ (42.7) | $ (60.5) |
Other comprehensive income (loss): | |||
Change in cumulative translation adjustment | 0.4 | 0.1 | (0.5) |
Postretirement benefit reserve adjustment net of tax expense | 0.3 | 0.2 | 0.2 |
Other comprehensive income (loss), net of tax | 0.7 | 0.3 | (0.3) |
Comprehensive loss | (2.8) | (42.4) | (60.8) |
Service | |||
Total revenues | 200.7 | 197.8 | 221.3 |
Total costs | 137.8 | 138.6 | 162.1 |
Product | |||
Total revenues | 417.3 | 405.5 | 320.6 |
Total costs | $ 310.5 | $ 307.1 | $ 259.3 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Parenthetical) $ in Millions | 12 Months Ended |
Dec. 30, 2018USD ($) | |
Income Statement [Abstract] | |
Gain on disposal | $ 0 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Millions | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Balance, beginning of period (in shares) at Dec. 27, 2015 | 59,100,000 | ||||
Balance, beginning of period at Dec. 27, 2015 | $ 254.2 | $ 0 | $ 873.2 | $ (1.4) | $ (617.6) |
Increase (Decrease) in Stockholders' Equity | |||||
Stock-based compensation | 5.1 | 5.1 | |||
Issuance of common stock for cash (in shares) | 13,400,000 | ||||
Issuance of common stock for cash | 75.8 | 75.8 | |||
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 | 2.6 | 2.6 | |||
Restricted stock issued and related taxes (in shares) | 600,000 | ||||
Restricted stock issued and related taxes | (0.5) | (0.5) | |||
Net income (loss) | (60.5) | (60.5) | |||
Other comprehensive income (loss), net of tax | (0.3) | (0.3) | |||
Balance, end of period (in shares) at Dec. 25, 2016 | 73,900,000 | ||||
Balance, end 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 | 103,297,525 | 103,300,000 | |||
Balance, end of period at Dec. 31, 2017 | $ 511.5 | $ 0 | 1,233.7 | (1.4) | (720.8) |
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) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Millions | 12 Months Ended | ||
Dec. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 25, 2016USD ($) | |
Operating activities: | |||
Net loss | $ (3.5) | $ (42.7) | $ (60.5) |
Income (loss) from discontinued operations | (7.6) | 4.2 | (2.9) |
Income (loss) from continuing operations | 4.1 | (46.9) | (57.6) |
Adjustments to reconcile income (loss) from continuing operations to net cash provided by (used in) operating activities from continuing operations: | |||
Depreciation and amortization | 17.9 | 22.2 | 22.5 |
Deferred income taxes | (0.4) | (9.5) | 4.6 |
Stock-based compensation | 7.2 | 7.8 | 5.1 |
Goodwill impairment charge | 0 | 24.2 | 0 |
Loss (gain) on extinguishment of debt | 0 | 17.3 | (0.2) |
Amortization of deferred financing costs | 1 | 1.3 | 1.5 |
Amortization of premium and discount on Senior Secured Notes | 0 | 0.7 | 0.9 |
Provision for doubtful accounts | 1.8 | 0 | 0.1 |
Provision for non-cash restructuring charges | 0 | 0 | 9.1 |
Changes in assets and liabilities, net of acquisitions: | |||
Accounts receivable | 8.2 | 0.5 | (9.9) |
Unbilled receivables | (35.9) | (35.2) | (17.9) |
Inventoried costs | 2 | 7.2 | (2.5) |
Prepaid expenses | 2.2 | (3) | 1.7 |
Other assets | 1.2 | (2.7) | 2.8 |
Accounts payable | 12.2 | (8.3) | 1.7 |
Accrued expenses | (1.7) | (3.8) | 20.6 |
Accrued compensation | 3.3 | (2.9) | 2.5 |
Accrued interest | (0.1) | (1.9) | (0.3) |
Billings in excess of costs and earnings on uncompleted contracts | (6.9) | 6.3 | (0.6) |
Income tax receivable and payable | 0.2 | 1.4 | 1.2 |
Other liabilities | 1.8 | (1.6) | 0.1 |
Net cash provided by (used in) operating activities from continuing operations | 18.1 | (26.9) | (14.6) |
Investing activities: | |||
Cash paid for acquisitions, net of cash acquired | (2.9) | 0 | (5.1) |
Proceeds from sale of assets | 66 | 0.7 | 0 |
Capital expenditures | (22.6) | (26.1) | (9) |
Net cash provided by (used in) investing activities from continuing operations | 40.5 | (25.4) | (14.1) |
Financing activities: | |||
Proceeds from the issuance of long-term debt | 0 | 300 | 0 |
Extinguishment of long-term debt | 0 | (448.8) | (14.1) |
Proceeds (expenses) from the issuance of common stock | (1.1) | 269.1 | 76.2 |
Repayments under credit facility | (0.8) | (1) | (1) |
Debt issuance costs | (0.1) | (6.6) | 0 |
Proceeds from exercise of restricted stock units, employee stock options, and employee stock purchase plan | 3.7 | 1.5 | 2 |
Other | 0 | (0.8) | 0 |
Net cash provided by financing activities from continuing operations | 1.7 | 113.4 | 63.1 |
Net cash flows of continuing operations | 60.3 | 61.1 | 34.4 |
Net operating cash flows of discontinued operations | (7.7) | (0.8) | 1.5 |
Net investing cash flows of discontinued operations | 0 | (0.6) | 4 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (0.5) | 0.5 | (0.3) |
Net increase in cash, cash equivalents and restricted cash | 52.1 | 60.2 | 39.6 |
Cash, cash equivalents and restricted cash at beginning of year | 130.9 | 70.7 | 31.1 |
Cash, cash equivalents and restricted cash at end of year | 183 | 130.9 | 70.7 |
Supplemental disclosure of cash flow information: | |||
Cash paid during the year for interest | 20.5 | 28.3 | 32.4 |
Net cash paid during the year for income taxes | 1.5 | (0.6) | (0.1) |
Noncash Investing and Financing Items [Abstract] | |||
Capital expenditures included in accounts payable and accrued expenses | 1.3 | 1.6 | 2.1 |
Liability for contingent consideration and goodwill related to acquisition | $ 0 | $ 2.9 | $ 5.1 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 30, 2018 | |
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, microwave electronics, cyber security/warfare, missile defense 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 has historically operated in three reportable segments. The Kratos Government Solutions (“KGS”) reportable segment is comprised of an aggregation of operating segments, including its microwave electronic products, space and satellite communications, modular systems 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 businesses. The Public Safety & Security (“PSS”) reportable segment (which was divested in June 2018 and has been classified as discontinued operations - see Note 8 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 business 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 13 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 30, 2018 and December 25, 2016 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 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 supersedes GAAP guidance on revenue recognition and requires the use of more estimates and judgments than the present standards. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. ASC 606 may be applied either retrospectively or through the use of a modified-retrospective method. The full retrospective method requires companies to recast each prior reporting period presented as if the new guidance had always existed. Under the modified retrospective method, companies would recognize the cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings at the date of initial application. The Company adopted ASC 606 on January 1, 2018, using the modified retrospective method. The Company 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 implementation of ASC 606. The reported results for 2018 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, Revenue Recognition (“ASC 605”) . The adoption of ASC 606 represents a change in accounting principle. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised services and products. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to receive in exchange for these services and products. 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 customer obtains control or receives benefits as work is performed on the contract. As a result, under ASC 606 revenue is recognized over a period of time utilizing the percentage-of-completion cost-to-cost method, which better matches the progress on the contract. 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. 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. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is 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 in 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. 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 30, 2018 , the Company had approximately $620.7 million of remaining performance obligations. The Company expects to recognize approximately 66.7% of the remaining performance obligations as revenue in 2019, an additional 13.7% in 2020, 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 revenue and cost at completion is complex, subject to many variables and requires significant judgment. It is common for the Company’s long-term contracts to 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. There is a Company-wide standard and disciplined quarterly Estimate at Completion (EAC) process in which management reviews the progress and execution of outstanding performance obligations. 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. Based on this analysis, any quarterly adjustments to net sales, 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 based on a performance obligation’s percentage of completion. A significant change in one or more of these estimates could affect the profitability of one or more of the Company’s performance obligations. 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 adjustment on any one contract was material to the Company’s consolidated financial statements for the years ended December 30, 2018 , December 31, 2017 and December 25, 2016 . Total adjustments were not significant for the years ended December 30, 2018 , December 31, 2017 and December 25, 2016 . As of December 30, 2018 and December 31, 2017 , accrued expenses included the accrual for losses on contracts of $5.1 million and $10.3 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. These contract assets are not considered a significant financing component of the Company’s contracts 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. Contract liabilities are not a significant financing component as they 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 30, 2018 January 1, 2018 Net Change Contract assets $ 172.9 $ 139.4 $ 33.5 Contract liabilities $ 37.0 $ 46.8 $ (9.8 ) Net contract assets $ 135.9 $ 92.6 $ 43.3 Contract assets increased $ 33.5 million during the year ended December 30, 2018 , primarily due to the recognition of revenue related to the satisfaction or partial satisfaction of performance obligations during the year ended December 30, 2018 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 30, 2018 . Contract liabilities decreased $ 9.8 million during the year ended December 30, 2018 , primarily due to revenue recognized in excess of payments received on these performance obligations. For the year ended December 30, 2018 , the Company recognized revenue of $35.5 million that was previously included in the beginning balance of contract liabilities. Disaggregation of Revenue The following series of tables presents the Company’s revenue disaggregated by several categories. For the majority of contracts, the customer obtains control or receives benefits as work is performed on the contract. Revenue by contract type was as follows (in millions): Year Ended December 30, 2018 Kratos Government Solutions Fixed price $ 424.9 Cost plus fee 32.6 Time and materials 27.6 Total Kratos Government Solutions 485.1 Unmanned Systems Fixed price 104.8 Cost plus fee 26.5 Time and materials 1.6 Total Unmanned Systems 132.9 Total Revenues $ 618.0 Revenue by customer was as follows (in millions): Year Ended December 30, 2018 Kratos Government Solutions U.S. Government (1) $ 333.5 International (2) 96.0 U.S. Commercial and other customers 55.6 Total Kratos Government Solutions 485.1 Unmanned Systems U.S. Government (1) 113.5 International (2) 18.3 U.S. Commercial and other customers 1.1 Total Unmanned Systems 132.9 Total Revenues $ 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. Due to the significance of the judgments and estimation processes, it is likely that materially different amounts could be recorded if different assumptions were used or if the underlying circumstances were to change. The Company closely monitors the consistent application of its critical accounting policies and compliance with contract accounting. Business operations personnel conduct periodic contract status and performance reviews. When adjustments in estimated contract revenues or costs are required, any significant changes from prior estimates are included in earnings in the current period. Also, regular and recurring evaluations of contract cost, scheduling and technical matters are performed by management personnel who are independent from the business operations personnel performing work under the contract. 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. 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 it can be reliably estimated and realization is probable. The Company bases its estimates on previous experiences with the customer, communications with the customer regarding funding status, and its knowledge of available funding for the contract or program. As of December 30, 2018 and December 31, 2017 , approximately $3.8 million and $1.9 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. Costs incurred for shipping and handling are included in cost of product sales at the time the related revenue is recognized. Amounts billed to a customer for shipping and handling are reported as revenue. (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. For the years ended December 30, 2018 , December 31, 2017 and December 25, 2016 , 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 2018 , 2017 and 2016 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). 2018 2017 2016 Selling, general and administrative expenses $ 7.2 $ 7.8 $ 5.1 Total cost of employee stock-based compensation included in operating income (loss) from continuing operations $ 7.2 $ 7.8 $ 5.1 Impact on net loss per common share: Basic and diluted $ (0.07 ) $ (0.09 ) $ (0.08 ) (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 2018 , 2017 and 2016 . 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 25, 2016 $ 1.5 $ 0.1 $ (0.1 ) $ 1.5 Year ended December 31, 2017 $ 1.5 $ — $ (1.0 ) $ 0.5 Year ended December 30, 2018 $ 0.5 $ 1.8 $ — $ 2.3 (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 has restricted cash accounts of approximately $0.3 million at December 30, 2018 and $0.4 million at December 31, 2017 . As of December 30, 2018 and December 31, 2017 , restricted cash consists 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 The Company classifies assets and liabilities as held for sale (“disposal group”) when management, having the authority to approve the action, commits to a plan to sell the disposal group, the sale is probable within one year, and the disposal group is available for immediate sale in its present condition. The Company also considers whether an active program to locate a buyer has been initiated, whether the disposal group is marketed actively for sale at a price that is reasonable in relation to its current fair value, and whether actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or the plan will be withdrawn. At the time of classifying assets as held for sale and at |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 30, 2018 | |
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 four operating segments: Defense Rocket Support Services (“DRSS”), Microwave Electronics (“ME”), Technical and Training Solutions (“TTS”), and Modular Systems (“MS”). 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 businesses. The Company identified its reporting units to be the DRSS, ME, TTS, MS, and US operating segments. In order to test for potential impairment, the Company estimates the fair value of each of its 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 Company’s reporting units based upon comparable market prices and recent transactions and also validates the reasonableness of the implied multiples from the income approach. The Company reconciles the fair value of its reporting units to its market capitalization based upon the last business day of fiscal October and assumes a control premium. The Company uses this methodology to determine the fair value of its reporting units for comparison to their corresponding book values because there are no observable inputs available, a Level 3 measurement (See Note 9). If the book value exceeds the estimated fair value for a reporting unit a potential impairment is indicated, and Topic 350 prescribes the approach for determining the impairment amount, if any. The Company adopted ASU 2017-04 which amends the guidance to simplify the subsequent measurement of goodwill by removing Step 2 of the goodwill impairment test. This new guidance requires an entity to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. In determining the fair value for the reporting units, there are key assumptions relating to future operating performance and revenue growth. If the actual operating performance and financial results are not consistent with the Company’s assumptions, an impairment of the remaining balance in its $425.7 million goodwill could occur in future periods. Market factors that could impact the Company’s ability to successfully develop new products include the successful completion of certain unmanned system platforms and the successful acceptance of new unmanned system platforms, including from a political and budgetary standpoint. For example, the US reporting unit fair value includes assumptions that the development of the high performance Unmanned Combat Aerial System (“UCAS”) product is successful and the Company is awarded future contracts for the UCAS product and other new tactical aerial systems. Additionally, the US reporting unit fair value assumes that the Company will receive follow on orders for the Sub-Sonic Aerial Target, which is currently under contract with the U.S. Navy. 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 includes 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 year ended December 30, 2018 . The carrying amounts of goodwill as of December 30, 2018 and December 31, 2017 by reportable segment are as follows (in millions): 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 30, 2018 As of December 31, 2017 Gross Value Accumulated Amortization Net Value Gross Value Accumulated Amortization Net Value Acquired finite-lived intangible assets: Customer relationships $ 52.6 $ (50.6 ) $ 2.0 $ 52.6 $ (49.1 ) $ 3.5 Contracts and backlog 29.9 (26.4 ) 3.5 29.9 (24.8 ) 5.1 Developed technology and technical know-how 25.0 (21.3 ) 3.7 25.0 (18.6 ) 6.4 Trade names 1.4 (1.4 ) — 1.4 (1.3 ) 0.1 Total finite-lived intangible assets 108.9 (99.7 ) 9.2 108.9 (93.8 ) 15.1 Indefinite-lived trade names 6.9 — 6.9 6.9 — 6.9 Total intangible assets $ 115.8 $ (99.7 ) $ 16.1 $ 115.8 $ (93.8 ) $ 22.0 The aggregate amortization expense for finite-lived intangible assets was $5.9 million , $10.4 million and $10.5 million , for the years ended December 30, 2018 , December 31, 2017 , and December 25, 2016 , 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 30, 2018 is as follows (in millions): Fiscal Year Amount 2019 $ 5.1 2020 3.0 2021 1.1 Total $ 9.2 |
Balance Sheet Details
Balance Sheet Details | 12 Months Ended |
Dec. 30, 2018 | |
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 30, 2018 and December 31, 2017 were $182.7 million and $130.5 million , respectively, and approximated their fair value. Accounts receivable, net Receivables including amounts due under long-term contracts are summarized as follows (in millions) : December 30, 2018 December 31, 2017 Billed, current $ 66.5 $ 74.3 Unbilled, current 173.2 138.5 Total current accounts receivable 239.7 212.8 Allowance for doubtful accounts (2.3 ) (0.5 ) Total accounts receivable, net $ 237.4 $ 212.3 Unbilled receivables represent the balance of recoverable costs and accrued profit, composed principally of revenue recognized on contracts for which billings have not been presented to the customer because the amounts were earned but not contractually billable as of the balance sheet date. Substantially all accounts receivable at December 30, 2018 , are expected to be collected in 2019 . The Company does not believe it has significant exposure to credit risk, as accounts receivable and the related unbilled amounts are primarily from contracts where the end customer is the U.S. Government. U.S. Government contract receivables where the Company is the prime contractor included in accounts receivable, net (in millions): December 30, 2018 December 31, 2017 Billed $ 16.5 $ 16.9 Unbilled 83.1 55.1 Total U.S. Government contract receivables $ 99.6 $ 72.0 Inventoried costs, net of progress payments (in millions): December 30, December 31, Raw materials $ 34.7 $ 35.9 Work in process 10.3 11.4 Finished goods 1.8 2.3 Subtotal inventoried costs 46.8 49.6 Less customer advances and progress payments — (0.6 ) Total inventoried costs $ 46.8 $ 49.0 Property, plant and equipment, net (in millions) December 30, 2018 December 31, 2017 Land and buildings $ 11.9 $ 12.1 Computer equipment and software 28.3 27.3 Machinery and equipment 56.8 49.7 Furniture and office equipment 6.3 5.1 Leasehold improvements 10.9 10.1 Construction in progress 21.5 17.3 Property and equipment 135.7 121.6 Accumulated depreciation and amortization (68.6 ) (63.6 ) Total property and equipment, net $ 67.1 $ 58.0 Depreciation expense was $12.0 million , $11.8 million and $12.0 million for the years ended December 30, 2018 , December 31, 2017 , and December 25, 2016 , respectively. |
Debt
Debt | 12 Months Ended |
Dec. 30, 2018 | |
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 outstanding 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 30, 2018 , 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) Issuance of 7.00% Senior Secured Notes due 2019 In May 2014, the Company refinanced its $625.0 million 10% Senior Secured Notes due in 2017 (the “ 10% Notes ”) with $625.0 million of newly issued 7.00% Senior Secured Notes due in 2019 (the “ 7% Notes ”). The net proceeds from the issuance of the 7% Notes was $618.5 million after an original issue discount of $6.5 million . The Company incurred debt issuance costs of $8.8 million associated with the new 7% Notes . The Company utilized the net proceeds from the 7% Notes , a $41.0 million draw on the Credit Agreement discussed below, as well as cash from operations to extinguish the 10% Notes . The total reacquisition price of the 10% Notes was $661.5 million including a $31.2 million early termination fee, the write-off of $15.5 million of unamortized issue costs, $12.9 million of unamortized premium, along with $5.3 million of additional interest while in escrow, which resulted in a loss on extinguishment of $39.1 million . On October 16, 2014, the Company exchanged the outstanding 7% Notes for an equal amount of 7% Notes that had been registered under the Act. The 7% Notes were governed by an Indenture dated May 14, 2014 among the Company, certain of the Company’s subsidiaries and Wilmington Trust, National Association, as Trustee and Collateral Agent. The Company paid interest on the 7% Notes semi-annually, in arrears, on May 15 and November 15 of each year. The 7% Notes included customary covenants and events of default as well as a consolidated fixed charge ratio of 2.0 :1 for the incurrence of additional indebtedness. During the year ended December 27, 2015, paid down the $41.0 million outstanding on the $110.0 million Credit Agreement and repurchased $175.0 million of the 7% Notes at par, in accordance with the Indenture. In connection with the $175.0 million repurchase of 7% Notes, the Company wrote off $1.8 million of unamortized issue costs, $1.4 million of unamortized discount, and incurred $0.2 million of legal fees, which resulted in a loss on extinguishment of debt of $3.4 million . During the year ended December 25, 2016, the Company repurchased and extinguished $14.5 million of the outstanding 7% Notes, which resulted in a gain of $0.4 million offset by $0.1 million of unamortized issuance cost and $0.1 million of unamortized discount resulting in a net gain of $0.2 million . During the year ended December 31, 2017, the Company redeemed and extinguished the remaining $435.5 million of outstanding 7% Notes as of December 25, 2016, which resulted in a loss on extinguishment of debt of $13.4 million and the realization of $2.3 million of unamortized issuance cost and $1.6 million of unamortized discount resulting in a loss on extinguishment of debt of $17.3 million . (c) 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. The Credit Agreement contains certain covenants, which include, but are not limited to, restrictions on indebtedness, liens, and investments, and limits on other various payments, as well as a financial covenant relating to a minimum fixed charge coverage ratio. Events of default under the terms of the Credit Agreement include, but are not limited to: failure of the Company to pay any principal of any loans in full when due and payable; failure of the Company to pay any interest on any loan or any fee or other amount payable under the Credit Agreement within three business days after the date when due and payable; failure of the Company or any of its subsidiaries to comply with certain covenants and agreements, subject to applicable grace periods and/or notice requirements; any representation, warranty or statement made in or pursuant to the Credit Agreement or any related writing or any other material information furnished by the Company or any of its subsidiaries to the Agent or the lenders proving to be false or erroneous; and the occurrence of an event or condition having or reasonably likely to have a material adverse effect, which includes a material adverse effect on the business, operations, condition (financial or otherwise) or prospects of the Company or the ability of the Company to repay its obligations. Where an event of default arises from certain bankruptcy events, the commitments will automatically and immediately terminate and the principal of, and interest then outstanding on, all of the loans will become immediately due and payable. Subject to certain notice requirements and other conditions, upon the occurrence of an event of default, including the occurrence of a condition having or reasonably likely to have a material adverse effect, commitments may be terminated and the principal of, and interest then outstanding on, all of the loans may become immediately due and payable. As of December 30, 2018 , no event of default had occurred and the Company believes that events or conditions having a material adverse effect, giving rise to an acceleration of any amounts outstanding under the Credit Agreement, have not occurred and the likelihood of such events or conditions occurring is remote. On May 31, 2015, the Company entered into a third amendment (the “Third Amendment”) to the Credit Agreement. Under the terms of the Third Amendment, the definitions of certain terms of the Credit Agreement were modified, the disposition of the Herley Entities was approved by the lenders, a minimum $175.0 million repurchase of the 7% Notes by the Company was required, and the payment in full of the outstanding balance of the Credit Agreement was required upon consummation of the sale of the Herley Entities. Additionally, the measurement of the fixed charge coverage ratio of 1.15 :1 was modified as follows: (i) the fixed charge coverage ratio will not be measured as of the end of any quarterly reporting period ending after June 30, 2015, if on such date (a) there are no outstanding revolving loans or swingline loans and (b) the aggregate amount outstanding under letters of credit is less than or equal to $17.0 million , and (ii) as to any subsequent quarterly reporting period ending after June 30, 2015, and not covered by (i) above, a fixed charge coverage ratio of at least 1.05 :1 must be maintained if the percentage of (a) outstanding revolving loans plus the sum of the outstanding swingline loans and outstanding letters of credit that are in excess of $17.0 million , to (b) the revolving credit commitment, minus the Herley Disposition Proceeds Reinvestment Reserve, as defined below, is greater than 0.00% but less than 15.00% or a fixed charge coverage ratio of at least 1.10 :1 must be maintained if the aforementioned percentage is equal to or greater than 15.00% but less than 25.00% . In all other instances, a fixed charge coverage ratio of at least 1.15 :1 must be maintained. For purposes of computing the fixed charge coverage ratio, the associated reduction in consolidated interest expense in connection with the repurchase of 7% Notes with proceeds from the sale of the Herley Entities shall be deemed to have occurred on the first day of the most recently completed four quarterly reporting periods prior to the sale. On August 20, 2015, the Company entered into a fourth amendment (the “Fourth Amendment”) to the Credit Agreement. Among other things, the Fourth Amendment provides for a modification of the Third Amendment as it relates to when the minimum fixed charge coverage ratio will be measured based upon the Company’s outstanding borrowings. Outstanding borrowings for purposes of computing the applicable minimum fixed charge coverage ratio exclude any letter of credit exposure outstanding of $17.0 million plus the amount of letters of credit outstanding for the divested Herley Entities for which a cash deposit was placed in escrow by the Buyer to cover the amount of such outstanding letters of credit, should the letters of credit be pulled. 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 was modified in the November 2017 amended and restated Credit Agreement to be 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 30, 2018 , there were no borrowings outstanding on the Credit Agreement; there was $9.7 million outstanding on letters of credit, resulting in net borrowing base availability of $51.4 million . The Company was in compliance with the financial covenants of the Credit Agreement as of December 30, 2018 . Debt Acquired in Acquisition The Company has a $10.0 million 10 -year term loan with a bank in Israel entered into on September 16, 2008 in connection with the acquisition of one of its wholly owned subsidiaries. The term loan was paid in full in the year ended December 30, 2018 . 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 30, 2018 and December 31, 2017 are presented in the following table: As of December 30, 2018 As of December 31, 2017 $ in millions Principal Carrying Amount Fair Value Principal Carrying Amount Fair Value Long-term debt $ 300.0 $ 294.2 $ 305.3 $ 300.8 $ 294.3 $ 312.7 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 30, 2018 , the difference between the carrying amount of $294.2 million and the principal amount of $300.0 million presented in the previous table, is the unamortized debt issuance costs of $5.8 million , which are being accreted to interest expense over the term of the related debt. As of December 31, 2017 , the difference between the carrying amount of $294.3 million and the principal amount of $300.8 million presented in the above table is the unamortized debt issuance costs of $6.5 million , which are being accreted to interest expense over the term of the related debt. Future maturity of long-term debt is $300.0 million in 2025. |
Lease Commitments
Lease Commitments | 12 Months Ended |
Dec. 30, 2018 | |
Leases [Abstract] | |
Lease Commitments | Lease Commitments The Company leases certain facilities and equipment under operating leases having terms expiring at various dates through 2033. Future minimum lease payments under operating leases as of December 30, 2018 , which does not include $4.3 million in sublease income on the Company’s operating leases, are 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 future minimum lease payments $ 117.2 Gross rent expense under operating leases for the years ended December 30, 2018 , December 31, 2017 , and December 25, 2016 was $23.7 million , $18.6 million , and $18.7 million , respectively. Total sublease income for the years ended December 30, 2018 , December 31, 2017 , and December 25, 2016 , totaling $3.3 million , $3.4 million , and $3.3 million , respectively, has been netted against rent expense. The Company’s accrual for excess facilities was $2.4 million and $3.3 million , as of December 30, 2018 and December 31, 2017 , respectively. The accruals are included in other current liabilities and other long-term liabilities on the consolidated balance sheets. The Company estimates that the remaining accrual will be paid through 2020. The accrual for excess facilities is as follows (in millions): Excess Facilities Balance as of December 25, 2016 $ 4.0 Adjustment of excess facility accrual — Cash payments (0.7 ) Balance as of December 31, 2017 3.3 Adjustment of excess facility accrual — Cash payments (0.9 ) Balance as of December 30, 2018 $ 2.4 The lease on certain office facilities includes scheduled base rent increases over the term of the lease. The total amount of the base rent payments is being charged to expense on the straight-line method over the term of the lease. In addition to the base rent payment, the Company pays a monthly allocation of the building’s operating expenses. The Company has recorded deferred rent, included in accrued expenses and other long-term liabilities, of $4.4 million , and $3.0 million , at December 30, 2018 and December 31, 2017 , respectively, to reflect the excess of rent expense over cash payments since inception of the respective leases. |
Net Loss Per Common Share
Net Loss Per Common Share | 12 Months Ended |
Dec. 30, 2018 | |
Earnings Per Share [Abstract] | |
Net Loss Per Common Share | Net Loss Per Common Share The Company calculates net loss per share in accordance with FASB ASC Topic 260 , Earnings per Share (“ Topic 260 ”) . Under Topic 260 , basic net loss per common share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the reporting period. Diluted net 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): December 30, 2018 December 31, 2017 December 25, 2016 Shares from stock options and awards 0.1 0.1 1.4 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes In December 2017, the 2017 Tax Act was enacted. The 2017 Tax Act includes a number of changes to existing U.S. tax laws that impact 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. The 2017 Tax Act also provides for a one-time transition tax on certain foreign earnings and the acceleration of depreciation for certain assets placed into service after September 27, 2017 as well as prospective changes beginning in 2018, including repeal of the domestic manufacturing deduction, acceleration of tax revenue recognition, modification of NOL carryforwards, capitalization of research and development expenditures (starting in 2022), additional limitations on executive compensation deductions and limitations on the deductibility of interest. Also on December 22, 2017, the Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provided companies with additional guidance on how to account for the 2017 Tax Act in their financial statements, allowing companies to use a measurement period. As of December 31, 2017, we made a reasonable estimate of the effects on our existing deferred tax balances and the one-time transition tax on previously undistributed foreign earnings in accordance with SAB 118. Deferred Tax Assets and Liabilities At the date of enactment, the Company had a net deferred tax asset for the difference between the tax basis and the book basis of the U.S. assets and liabilities. A significant portion of this deferred tax asset balance was subject to a valuation allowance. Due to the 2017 Tax Act, the future impact associated with the reversal of the net deferred tax asset will be subject to tax at a lower corporate tax rate. Consequently in 2017, the Company recorded a $40 million reduction to the its deferred tax asset due to the remeasurement of the U.S. deferred tax assets and liabilities for the reduction in the corporate tax rate from 35% to 21%. At December 30, 2018 , the Company has finalized its provisional estimate for the remeasurement of existing deferred tax balances with no additional adjustment. Transition Tax The one-time transition tax is based on the Company’s total post-1986 earnings and profit (“E&P”) for which they had previously deferred U.S. income taxes. In 2017, the Company recorded a provisional amount for a one-time transition tax, resulting in a $6.2 million decrease to deferred tax assets due to the reduction in net operating loss carryforwards. The decrease to deferred tax assets was offset by a corresponding decrease to the valuation allowance. In 2018, the Company recorded a $2.2 million decrease to deferred tax assets to finalize the provisional calculation for the one-time transition tax for foreign E&P. This refinement was a result of completing the data gathering and analysis based on the 2017 Tax Act and guidance issued to date in 2018, including IRS Notices 2018-07, 2018-13 and 2018-26. No provision has been made for deferred taxes related to any remaining historical outside basis differences in the Company’s non-U.S. subsidiaries as it continues to assert indefinite reinvestment on outside basis differences not related to amounts that have been previously taxed in the U.S. or undistributed earnings generated after December 31, 2017. In addition to the changes described above, the 2017 Act 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. 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. Effective January 1, 2018, the 2017 Tax Act requires the acceleration of revenue for tax purposes for certain types of revenue. The new rules require the Company to not defer 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 in 2018 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. The components of income (loss) from continuing operations before income taxes for the years ended December 30, 2018 , December 31, 2017 , and December 25, 2016 are comprised of the following (in millions): 2018 2017 2016 Domestic $ 2.2 $ (60.5 ) $ (61.3 ) Foreign 6.5 3.4 9.5 Total $ 8.7 $ (57.1 ) $ (51.8 ) The provision (benefit) for income taxes from continuing operations for the years ended December 30, 2018 , December 31, 2017 , and December 25, 2016 are comprised of the following (in millions): 2018 2017 2016 Federal income taxes: Current $ (0.4 ) $ (2.9 ) $ (0.5 ) Deferred (1.8 ) (9.0 ) 3.8 Total Federal (2.2 ) (11.9 ) 3.3 State and local income taxes Current 0.4 0.5 0.2 Deferred 1.4 (0.3 ) 0.7 Total State and local 1.8 0.2 0.9 Foreign income taxes: Current 4.8 2.0 1.5 Deferred 0.2 (0.5 ) 0.1 Total Foreign 5.0 1.5 1.6 Total $ 4.6 $ (10.2 ) $ 5.8 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 year ended December 30, 2018 , and applying the statutory federal income tax rate of 35% to the loss from continuing operations before income taxes for the years ended December 31, 2017 and December 25, 2016 is as follows (in millions): 2018 2017 2016 Income tax (benefit) at federal statutory rate $ 1.8 $ (20.0 ) $ (18.1 ) State taxes, net of federal tax benefit and valuation allowance 0.9 0.5 0.1 Difference in tax rates between U.S. and foreign 0.7 — 0.1 Increase (decrease) in valuation allowance 4.7 (45.6 ) 18.9 Nondeductible expense 0.6 1.1 0.7 Increase in reserve for uncertain tax positions 4.0 1.3 0.1 Changes to indefinite life items and separate state deferred taxes (0.7 ) (1.8 ) 4.0 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 Act — 40.0 — Total $ 4.6 $ (10.2 ) $ 5.8 The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities as of December 30, 2018 and December 31, 2017 are as follows (in millions): 2018 2017 Deferred tax assets: Allowance for doubtful accounts $ 0.6 $ 0.2 Sundry accruals 1.1 1.5 Vacation accrual 2.7 3.2 Stock-based compensation 4.2 3.1 Payroll related accruals 2.4 2.1 Lease accruals 2.0 2.5 Investments 1.3 1.3 Net operating loss carryforwards 81.7 95.7 Capital loss carryforwards 1.9 — Tax credit carryforwards 9.9 9.5 Deferred revenue 1.5 1.9 Reserves and other 10.8 6.1 120.1 127.1 Valuation allowance (92.2 ) (87.5 ) Total deferred tax assets, net of valuation allowance 27.9 39.6 Deferred tax liabilities: Unearned revenue (23.9 ) (38.8 ) Other intangibles (8.9 ) (5.4 ) Property and equipment, principally due to differences in depreciation (0.9 ) (0.7 ) Other (1.2 ) (1.7 ) Total deferred tax liabilities (34.9 ) (46.6 ) Net deferred tax liability $ (7.0 ) $ (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 the deferred tax assets will not be realized. As such, management has determined that it is appropriate to maintain a full valuation allowance against the Company’s deferred tax assets, with the exception of an amount equal to its deferred tax liabilities, which can be expected to reverse over a definite life and certain foreign and separate state deferred tax assets. Management will continue to evaluate the necessity to maintain a valuation allowance against the Company’s net deferred tax assets. During fiscal 2018 , the Company recorded a net increase in its valuation allowance of $4.7 million . At December 30, 2018 , the Company had federal tax loss carryforwards of $346.9 million and various state tax loss carryforwards of $263.1 million . The federal tax loss carryforwards will begin to expire in 2020 and state tax loss carryforwards will begin to expire in 2019 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 March 2010 , an “ownership change” occurred that will limit the utilization of NOL carryforwards. In July 2011 , another “ownership change” occurred. The March 2010 ownership change limitation is more restrictive. 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. As a result, the Company’s federal annual utilization of NOL carryforwards was limited to at least $27.0 million a year for the five years succeeding the March 2010 ownership change and at least $ 11.6 million for each year thereafter subject to separate limitations for Acquired NOLs. If the entire limitation amount is not utilized in a year, the excess can be carried forward and utilized in future years. For the year ended December 30, 2018 , there was no impact of such 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 discussed elsewhere, deferred tax assets relating to the NOLs and credit carryforwards are offset by a full valuation allowance. In addition, utilization of state tax loss carryforwards is dependent upon sufficient taxable income apportioned to the states. The Company has not provided deferred U.S. income taxes or foreign withholding taxes of approximately $8.4 million on temporary differences relating to the outside basis in its investment in foreign subsidiaries, which are essentially permanent in duration. 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 Act. It is the Company’s intention to permanently reinvest undistributed earnings of its foreign subsidiaries. As of December 30, 2018 , the Company has $12.0 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 has been selected for examination. The Company is currently in the process of responding to the information requested. Additionally, the Company had previously been notified by the New York State Department of Taxation and Finance that it had been selected for examination for the calendar years income tax returns ending December 28, 2014, December 27, 2015, and December 25, 2016. As of December 30, 2018 , the New York State examination has been finalized with no significant impact to the tax years identified above. The following table summarizes the activity related to the Company’s unrecognized tax benefits (in millions): Balance as of December 27, 2015 $ 17.2 Increases related to prior periods 1.4 Increases related to current year tax positions 0.2 Decreases related to disposition (0.2 ) 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 Included in the balance of unrecognized tax benefits at December 30, 2018 , are $17.7 million of tax benefits that, if recognized, would affect the effective tax rate. Included in this amount is $11.2 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 consolidated financial position 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 30, 2018 , December 31, 2017 and December 25, 2016 , the Company recorded $0.6 million , $0.5 million , and $0.9 million , respectively, in interest or penalties. These amounts are netted by a benefit for interest and penalties related to the reversal of prior positions and the disposition of PSS as noted above, of $1.1 million , $0.2 million , and $0.0 million for the years ended December 30, 2018 , December 31, 2017 , and December 25, 2016 , respectively. As of December 30, 2018 , December 31, 2017 , and December 25, 2016 , the Company had recorded total interest and penalties of $1.6 million , $2.2 million and $1.9 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 30, 2018 due to the expiration of various applicable statues of limitations. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 30, 2018 | |
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 . The Company currently expects to receive approximately $70 million of aggregate net cash proceeds from the Transaction, after taking into account amounts to be paid by the Company pursuant to a negotiated transaction services agreement between the Company and Buyer, receipt by the Company of approximately $7.0 million in net working capital retained by the Company, and associated transaction fees and expenses, excluding the impact of the final settlement and determination of the closing working capital adjustment. The Company currently expects that the net working capital retained by the Company will be collected by the first half of 2019 once certain legacy projects are completed and the project close-out process has been completed. The Company incurred approximately $2.7 million of transaction related costs, which has been reflected in the loss from discontinued operations in the periods incurred. 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. The terms of the Indenture (as defined below) for the Company’s 6.5% Notes (as defined below) require that the net cash proceeds from asset dispositions (within 360 days from the date of any such sale) be either utilized to (i) repay or prepay amounts outstanding under the Credit Agreement (as defined below) unless such amounts are reinvested in similar collateral, (ii) permanently reduce other secured indebtedness and equally and ratably reduce obligations under the 6.5% Notes through open market purchases of 6.5% Notes at or above par, (iii) make an investment in assets that replace the collateral for the 6.5% Notes or (iv) a combination of (i), (ii) and (iii). To the extent there are any remaining net proceeds from such asset disposition after application of (i), (ii) and (iii), such amounts are required to be utilized to repurchase the 6.5% Notes at par. The Company currently intends to utilize the net proceeds from the Transaction to fund growth initiatives by making investments in similar collateral in accordance with the terms of the Indenture. 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 30, 2018 Year ended December 31, 2017 Year ended December 25, 2016 Revenue $ 44.2 $ 149.9 $ 127.1 Cost of sales 34.2 110.1 93.9 Selling, general and administrative expenses 16.7 33.6 33.8 Other net income (expense) items that are not major 2.7 (0.1 ) — Income (loss) from discontinued operations before income taxes (9.4 ) 6.3 (0.6 ) Gain on disposal of discontinued operations before income taxes — — — Total gain (loss) of discontinued operations before income taxes (9.4 ) 6.3 (0.6 ) Income tax (benefit) expense (1.8 ) 2.1 2.3 Income (loss) from discontinued operations $ (7.6 ) $ 4.2 $ (2.9 ) Operating results for 2018 are through the date of divestiture of June 11, 2018. Revenue and operating results for the year ended December 30, 2018 reflect the performance on the contracts and working capital retained by the Company. Revenue and operating results 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, net for the year ended December 30, 2018 . Depreciation expense included in Selling, general and administrative expenses was $0.1 million , $0.3 million and $0.3 million for the years ended December 30, 2018 , December 31, 2017 , and December 25, 2016 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 30, 2018 and December 31, 2017 (in millions): December 30, 2018 December 31, 2017 Cash and cash equivalents $ — $ (0.9 ) Accounts receivable, net 8.2 56.0 Inventoried costs — 1.5 Other current assets 0.1 2.0 Current assets of discontinued operations $ 8.3 $ 58.6 Property, plant and equipment, net $ — $ 3.0 Goodwill — 35.6 Other assets — 0.2 Non-current assets of discontinued operations $ — $ 38.8 Accounts payable $ 0.3 $ 14.2 Accrued expenses 0.4 4.7 Accrued compensation $ — $ 4.6 Billings in excess of cost and earnings on uncompleted contracts — 4.3 Other current liabilities 4.6 1.4 Current liabilities of discontinued operations $ 5.3 $ 29.2 Other long-term liabilities of discontinued operations $ 6.4 $ 6.0 |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 30, 2018 | |
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. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stockholders' Equity | Stockholders’ Equity (a) Common Stock On November 23, 2016, the Company sold approximately 13.4 million shares of its common stock at a purchase price of $6.00 per share in an underwritten public offering. The Company received gross proceeds of approximately $80.5 million . After deducting underwriting fees and other offering expenses, the Company received approximately $76.2 million in net proceeds. The Company used $14.1 million of the net proceeds from this transaction to redeem approximately $14.5 million of its Notes. 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. The remainder of the funds will be used for general corporate purposes, including funding expected growth and strategic investments in the Company’s high performance unmanned aerial vehicle business area and other new programs under contract. (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 30, 2018 , there were 2,864,476 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: 2018 2017 2016 Stock Options Expected life 10.0 10.0 10.0 Risk-free interest rate(1) 2.9% - 3.2% 2.2% - 2.5% 1.8% - 2.4% Volatility(2) 52.9% - 53.4% 53.8% - 55.0% 55.2% - 55.8% Forfeiture rate(3) 5.1% 5.0% 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 2018 , 2017 , and 2016 , 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 30, 2018 , and changes in options outstanding under the plan for the year ended December 30, 2018 , 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 31, 2017 899 $ 7.82 4.4 $ 4,224.8 Granted 5 $ 11.78 Exercised (10 ) $ 8.71 Forfeited or expired (126 ) $ 24.01 Options outstanding at December 30, 2018 768 $ 5.17 4.2 6,587.5 Options exercisable at December 30, 2018 767 $ 5.16 4.1 $ 6,586.5 As of December 30, 2018 , there was $0.0 of total unrecognized stock-based compensation expense related to nonvested options. Upon exercise of an option, the Company issues new shares of common stock. During the years ended December 30, 2018 , December 31, 2017 , and December 25, 2016 , the following values relate to the grants and exercises under the Company’s option plans: 2018 2017 2016 Weighted average grant date fair value of options granted $ 7.54 $ 6.39 $ 3.36 Total intrinsic value of options exercised (in thousands) $ 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 31, 2017 2,258 $ 6.83 Grants 1,119 $ 11.08 Vested (84 ) $ 9.03 Forfeitures — $ — Vested but not released — $ — Nonvested balance at December 30, 2018 3,293 $ 8.22 As of December 30, 2018 , there was $13.1 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 2.4 years. The fair value of restricted stock unit awards that vested in 2018 , 2017 , and 2016 was $0.8 million , $6.3 million , and $4.7 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 30, 2018 , the cumulative number of shares of common stock that have been issued under the Purchase Plan is 5.4 million and approximately 2.8 million shares are available for future issuance. During fiscal 2018 , approximately 371,000 shares were issued under the plan at an average price of $9.54 . The fair value of Kratos’ Purchase Plan shares for 2018 was estimated using the Black-Scholes option pricing model. The assumptions and resulting fair values of options granted for 2018 , 2017 and 2016 were as follows: Offering Periods January 1 to December 31 2018 Offering Periods January 1 to December 31, 2017 Offering Periods January 1 to December 31, 2016 Expected term (in years)(1) 0.5 0.5 0.5 Risk-free interest rate(2) 1.53% - 2.11% 0.62% - 1.14% 0.36% - 0.49% Expected volatility(3) 40.24% - 44.83% 44.38% - 53.70% 53.00% - 55.55% Expected dividend yield(4) —% —% —% Weighted average grant-date fair value per share $3.03 $2.51 $1.23 (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 30, 2018 , there was no material unrecognized compensation expense related to the Purchase Plan. |
Retirement Plans
Retirement Plans | 12 Months Ended |
Dec. 30, 2018 | |
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 $3.9 million in 2018 , $3.8 million in 2017 , and $3.5 million in 2016 . |
Significant Customers
Significant Customers | 12 Months Ended |
Dec. 30, 2018 | |
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 $447.0 million , $451.9 million , and $396.7 million or 72% , 75% , and 73% , of total revenue for the years ended December 30, 2018 , December 31, 2017 , and December 25, 2016 , respectively. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 30, 2018 | |
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, and MS. 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 8 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 30, 2018 , December 31, 2017 , and December 25, 2016 , are as follows (in millions): 2018 2017 2016 Revenues: Kratos Government Solutions Service revenues $ 200.7 $ 197.8 $ 221.3 Product sales 284.4 283.8 244.8 Total Kratos Government Solutions 485.1 481.6 466.1 Unmanned Systems Service revenues — — — Product sales 132.9 121.7 75.8 Total Unmanned Systems 132.9 121.7 75.8 Total revenues $ 618.0 $ 603.3 $ 541.9 Depreciation and amortization: Kratos Government Solutions $ 13.2 $ 14.4 $ 15.0 Unmanned Systems 4.7 7.8 7.5 Total depreciation and amortization $ 17.9 $ 22.2 $ 22.5 Operating income (loss) from continuing operations: Kratos Government Solutions $ 35.5 $ (0.1 ) $ 15.5 Unmanned Systems 5.1 (3.6 ) (28.3 ) Corporate activities (10.1 ) (8.3 ) (5.2 ) Total operating income (loss) from continuing operations $ 30.5 $ (12.0 ) $ (18.0 ) Revenues from foreign customers were approximately $114.3 million or 19% , $84.7 million or 14% and $80.1 million or 15% of total revenue for the years ended December 30, 2018 , December 31, 2017 , and December 25, 2016 , respectively. Included in the 2016 operating losses for the US reportable segment is an $18.7 million loss accrual recorded on the Air Force Research Laboratory (“AFRL”) Low-Cost Attritable Strike UAS Demonstration (“LCASD”) cost share contract awarded in July 2016. 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. Included in the 2016 operating income for the KGS reportable segment is a $9.2 million charge that was recorded in the Company’s MS business as a result of the closure of one of its manufacturing facilities, and the exit from certain lower margin product business lines. Reportable segment assets are as follows (in millions): December 30, 2018 December 31, 2017 December 25, 2016 Assets: Kratos Government Solutions $ 602.8 $ 597.9 $ 609.8 Unmanned Systems 220.9 201.9 172.1 Discontinued operations 8.3 97.4 92.0 Corporate activities 178.1 126.8 74.7 Total assets $ 1,010.1 $ 1,024.0 $ 948.6 Assets of foreign subsidiaries in the KGS segment were $126.7 million , $116.7 million and $113.7 million as of December 30, 2018 , December 31, 2017 and December 25, 2016 , respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 30, 2018 | |
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 Defense Contract Audit Agency (“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. On July 28, 2015, the Company received a determination letter from the Defense Contract Management Agency (“DCMA”) regarding what DCMA believed were certain unallowable costs for one of the Company’s subsidiaries with respect to fiscal year 2007. In April 2016, the Company reached agreement with the DCAA to settle matters related to unallowable costs for this subsidiary for fiscal years 2007 and 2008 for approximately $0.2 million . 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. |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 30, 2018 | |
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 8 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 30, 2018 and December 31, 2017 , is as follows (in millions, except per share data): 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 from continuing operations 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 First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal year 2017 Revenues $ 132.0 $ 147.9 $ 157.1 $ 166.3 Gross profit 36.1 37.5 37.2 46.8 Operating income (loss) from continuing operations 1.4 1.5 0.1 (15.0 ) Provision (benefit) for income taxes 1.4 1.3 (1.1 ) (11.8 ) Loss from continuing operations (10.1 ) (6.9 ) (5.9 ) (24.0 ) Income from discontinued operations 0.1 0.7 1.6 1.8 Net loss $ (10.0 ) $ (6.2 ) $ (4.3 ) $ (22.2 ) Basic loss per common share: Loss from continuing operations $ (0.13 ) $ (0.08 ) $ (0.07 ) $ (0.23 ) Income from discontinued operations $ — $ 0.01 $ 0.02 $ 0.02 Net loss per common share $ (0.13 ) $ (0.07 ) $ (0.05 ) $ (0.21 ) Diluted loss per common share: Loss from continuing operations $ (0.13 ) $ (0.08 ) $ (0.07 ) $ (0.23 ) Income from discontinued operations $ — $ 0.01 $ 0.02 $ 0.02 Net loss per common share $ (0.13 ) $ (0.07 ) $ (0.05 ) $ (0.21 ) In the fourth quarter of 2017 , the Company recorded an impairment of $24.2 million of the carrying value of the goodwill related to its DRSS reporting unit within its KGS reportable segment. The Company also recorded a $15.2 million loss on extinguishment of debt in the fourth quarter of 2017 related to the redemption and extinguishment of the Company’s 7% Notes. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On February 27, 2019, the Company entered into a Purchase Agreement to acquire 80.1% of the issued and outstanding membership interests of FTT Core, LLC, a Delaware limited liability company, and 80.1% of the issued and outstanding shares of Florida Turbine Technologies, Inc., a Florida corporation for a total purchase price of $60 million consisting of cash of $33 million and Kratos common stock valued at approximately $27 million . The acquisition was completed on February 27, 2019. |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 30, 2018 | |
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 30, 2018 and December 25, 2016 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. Due to the significance of the judgments and estimation processes, it is likely that materially different amounts could be recorded if different assumptions were used or if the underlying circumstances were to change. The Company closely monitors the consistent application of its critical accounting policies and compliance with contract accounting. Business operations personnel conduct periodic contract status and performance reviews. When adjustments in estimated contract revenues or costs are required, any significant changes from prior estimates are included in earnings in the current period. Also, regular and recurring evaluations of contract cost, scheduling and technical matters are performed by management personnel who are independent from the business operations personnel performing work under the contract. 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. 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 it can be reliably estimated and realization is probable. The Company bases its estimates on previous experiences with the customer, communications with the customer regarding funding status, and its knowledge of available funding for the contract or program. As of December 30, 2018 and December 31, 2017 , approximately $3.8 million and $1.9 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. Costs incurred for shipping and handling are included in cost of product sales at the time the related revenue is recognized. Amounts billed to a customer for shipping and handling are reported as revenue. Revenue Recognition Effective January 1, 2018, the Company adopted 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 supersedes GAAP guidance on revenue recognition and requires the use of more estimates and judgments than the present standards. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. ASC 606 may be applied either retrospectively or through the use of a modified-retrospective method. The full retrospective method requires companies to recast each prior reporting period presented as if the new guidance had always existed. Under the modified retrospective method, companies would recognize the cumulative effect of initially applying the standard as an adjustment to the opening balance of retained earnings at the date of initial application. The Company adopted ASC 606 on January 1, 2018, using the modified retrospective method. The Company 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 implementation of ASC 606. The reported results for 2018 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, Revenue Recognition (“ASC 605”) . The adoption of ASC 606 represents a change in accounting principle. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised services and products. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to receive in exchange for these services and products. 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 customer obtains control or receives benefits as work is performed on the contract. As a result, under ASC 606 revenue is recognized over a period of time utilizing the percentage-of-completion cost-to-cost method, which better matches the progress on the contract. 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. 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. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is 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 in 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. 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 30, 2018 , the Company had approximately $620.7 million of remaining performance obligations. The Company expects to recognize approximately 66.7% of the remaining performance obligations as revenue in 2019, an additional 13.7% in 2020, 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 revenue and cost at completion is complex, subject to many variables and requires significant judgment. It is common for the Company’s long-term contracts to 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. There is a Company-wide standard and disciplined quarterly Estimate at Completion (EAC) process in which management reviews the progress and execution of outstanding performance obligations. 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. Based on this analysis, any quarterly adjustments to net sales, 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 based on a performance obligation’s percentage of completion. A significant change in one or more of these estimates could affect the profitability of one or more of the Company’s performance obligations. 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 adjustment on any one contract was material to the Company’s consolidated financial statements for the years ended December 30, 2018 , December 31, 2017 and December 25, 2016 . Total adjustments were not significant for the years ended December 30, 2018 , December 31, 2017 and December 25, 2016 . As of December 30, 2018 and December 31, 2017 , accrued expenses included the accrual for losses on contracts of $5.1 million and $10.3 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. These contract assets are not considered a significant financing component of the Company’s contracts 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. Contract liabilities are not a significant financing component as they 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. |
Impairment or Disposal of Long-Lived Assets | The Company classifies assets and liabilities as held for sale (“disposal group”) when management, having the authority to approve the action, commits to a plan to sell the disposal group, the sale is probable within one year, and the disposal group is available for immediate sale in its present condition. The Company also considers whether an active program to locate a buyer has been initiated, whether the disposal group is marketed actively for sale at a price that is reasonable in relation to its current fair value, and whether actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or the plan will be withdrawn. At the time of classifying assets as held for sale and at the end of each reporting period, the Company compares the carrying value of these assets to estimates of fair value to assess for impairment. The Company compares the carrying value to estimates of fair value utilizing the assistance of third-party broker opinions of value to assist in its fair value estimates. |
Leases | Leases The Company uses its incremental borrowing rate in the assessment of lease classification as capital or operating and defines the initial lease term to include renewal options determined to be reasonably assured. The Company conducts operations primarily under operating leases. Most lease agreements for real property contain incentives for tenant improvements, rent holidays, or rent escalation clauses. For incentives for tenant improvements, the Company capitalizes the leasehold improvements which are depreciated over the shorter of the lease term or their estimated useful life and records a deferred rent liability which is amortized over the term of the lease as a reduction to rent expense. For rent holidays and rent escalation clauses during the lease term, the Company records minimum rental expenses on a straight-line basis over the term of the lease. For purposes of recognizing lease incentives, the Company uses the date of initial possession as the commencement date, which is generally when the Company is given the right of access to the space and begins to make improvements in preparation for intended use. |
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 actual trading activity. The fair value of capital lease obligations is estimated based on quoted market prices for the same or similar obligations with the same remaining maturities. |
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 12 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 February 2016, the FASB issued ASU 2016-02 (“ASU 2016-02”), Leases. ASU 2016-02 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, allows a 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 the standard on January 1, 2019 using the optional transition method. The Company has made substantial progress in executing its implementation plan. The Company has revised controls and processes to address the lease standard and has completed the implementation and data input for our lease accounting software tool. The Company is electing the package of practical expedients, which, among other things, allows carry-forward of prior lease classifications under the prior standard. However, the Company is not electing to adopt the hindsight practical expedient and is therefore maintaining the lease terms previously determined under the prior lease standard. Adoption of the standard is expected to have an estimated impact of approximately $68 million on the consolidated balance sheet for the addition of lease assets and liabilities. ASU 2016-02 also requires expanded disclosure regarding the amounts, timing and uncertainties of cash flows related to a company’s lease portfolio. The Company is evaluating these disclosure requirements and is incorporating the collection of relevant data into its processes in preparation for disclosure in 2019. As noted in (e) Revenue Recognition above, effective January 1, 2018, the Company adopted ASC 606, through the use of the modified-retrospective method. The cumulative effects of applying the new guidance to all contracts with customers that were not completed as of January 1, 2018 was recorded as a decrease in opening equity of $0.2 million . Additional disclosures have been included in (e) Revenue Recognition above in accordance with the ASU. |
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 four operating segments: Defense Rocket Support Services (“DRSS”), Microwave Electronics (“ME”), Technical and Training Solutions (“TTS”), and Modular Systems (“MS”). 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 businesses. The Company identified its reporting units to be the DRSS, ME, TTS, MS, and US operating segments. In order to test for potential impairment, the Company estimates the fair value of each of its 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 Company’s reporting units based upon comparable market prices and recent transactions and also validates the reasonableness of the implied multiples from the income approach. The Company reconciles the fair value of its reporting units to its market capitalization based upon the last business day of fiscal October and assumes a control premium. The Company uses this methodology to determine the fair value of its reporting units for comparison to their corresponding book values because there are no observable inputs available, a Level 3 measurement (See Note 9). If the book value exceeds the estimated fair value for a reporting unit a potential impairment is indicated, and Topic 350 prescribes the approach for determining the impairment amount, if any. |
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. 30, 2018 | |
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 30, 2018 January 1, 2018 Net Change Contract assets $ 172.9 $ 139.4 $ 33.5 Contract liabilities $ 37.0 $ 46.8 $ (9.8 ) Net contract assets $ 135.9 $ 92.6 $ 43.3 |
Schedule of disaggregation of Revenue | The following series of tables presents the Company’s revenue disaggregated by several categories. For the majority of contracts, the customer obtains control or receives benefits as work is performed on the contract. Revenue by contract type was as follows (in millions): Year Ended December 30, 2018 Kratos Government Solutions Fixed price $ 424.9 Cost plus fee 32.6 Time and materials 27.6 Total Kratos Government Solutions 485.1 Unmanned Systems Fixed price 104.8 Cost plus fee 26.5 Time and materials 1.6 Total Unmanned Systems 132.9 Total Revenues $ 618.0 Revenue by customer was as follows (in millions): Year Ended December 30, 2018 Kratos Government Solutions U.S. Government (1) $ 333.5 International (2) 96.0 U.S. Commercial and other customers 55.6 Total Kratos Government Solutions 485.1 Unmanned Systems U.S. Government (1) 113.5 International (2) 18.3 U.S. Commercial and other customers 1.1 Total Unmanned Systems 132.9 Total Revenues $ 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 2018 , 2017 and 2016 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). 2018 2017 2016 Selling, general and administrative expenses $ 7.2 $ 7.8 $ 5.1 Total cost of employee stock-based compensation included in operating income (loss) from continuing operations $ 7.2 $ 7.8 $ 5.1 Impact on net loss per common share: Basic and diluted $ (0.07 ) $ (0.09 ) $ (0.08 ) |
Schedule of Valuation and Qualifying Accounts Disclosure | The following table outlines the balance of the Company’s allowance for doubtful accounts for 2018 , 2017 and 2016 . 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 25, 2016 $ 1.5 $ 0.1 $ (0.1 ) $ 1.5 Year ended December 31, 2017 $ 1.5 $ — $ (1.0 ) $ 0.5 Year ended December 30, 2018 $ 0.5 $ 1.8 $ — $ 2.3 |
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 30, 2018 December 31, 2017 Land and buildings $ 11.9 $ 12.1 Computer equipment and software 28.3 27.3 Machinery and equipment 56.8 49.7 Furniture and office equipment 6.3 5.1 Leasehold improvements 10.9 10.1 Construction in progress 21.5 17.3 Property and equipment 135.7 121.6 Accumulated depreciation and amortization (68.6 ) (63.6 ) Total property and equipment, net $ 67.1 $ 58.0 |
Schedule of Interest Expense, Net | Interest expense, net is summarized in the following table (in millions): 2018 2017 2016 Interest expense incurred primarily on the Company’s Senior Secured Notes $ (21.6 ) $ (29.1 ) $ (34.7 ) Miscellaneous interest income 0.8 0.5 — Interest expense, net $ (20.8 ) $ (28.6 ) $ (34.7 ) |
Schedule of New Accounting Pronouncements | The following changes were made to the Company’s consolidated balance sheet on January 1, 2018 as a result of the adoption of ASC 606 (in millions): Balance at January 1, 2018 ASC 606 Adjustment Adjusted Balance at January 1, 2018 Assets Unbilled receivables, net $ 138.1 $ 1.3 $ 139.4 Inventoried costs 49.0 (0.3 ) 48.7 Liabilities Accrued expenses $ 40.9 $ (0.6 ) $ 40.3 Billings in excess of costs and earnings on uncompleted contracts 42.8 1.8 44.6 Stockholders’ equity Accumulated deficit $ (720.8 ) $ (0.2 ) $ (721.0 ) The following table summarizes the impacts of ASC 606 adoption on the Company’s operating income from continuing operations for the year ended December 30, 2018 (in millions): December 30, 2018 As Reported Balances Without Adoption of ASC 606 Effect of Change Higher/(Lower) Service revenues $ 200.7 $ 200.7 $ — Product sales 417.3 387.3 30.0 Total revenues 618.0 588.0 30.0 Cost of service revenue 137.8 137.8 — Cost of product sales 310.5 288.6 21.9 Total costs 448.3 426.4 21.9 Gross profit 169.7 161.6 8.1 Selling, general and administrative expenses 119.8 119.8 — Operating income from continuing operations $ 30.5 $ 22.4 $ 8.1 The following table summarizes the impacts of ASC 606 adoption on the Company’s consolidated balance sheet as of December 30, 2018 (in millions): December 30, 2018 As Reported Balances Without Adoption of ASC 606 Effect of Change Higher/(Lower) Assets Accounts receivable, net $ 64.6 $ 66.5 $ (1.9 ) Unbilled receivables, net 172.8 148.1 24.7 Inventoried costs 46.8 68.7 (21.9 ) Liabilities Billings in excess of costs and earnings on uncompleted contracts 34.9 42.1 (7.2 ) Stockholders’ equity Accumulated deficit $ (724.5 ) $ (732.6 ) $ 8.1 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The carrying amounts of goodwill as of December 30, 2018 and December 31, 2017 by reportable segment are as follows (in millions): 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 30, 2018 As of December 31, 2017 Gross Value Accumulated Amortization Net Value Gross Value Accumulated Amortization Net Value Acquired finite-lived intangible assets: Customer relationships $ 52.6 $ (50.6 ) $ 2.0 $ 52.6 $ (49.1 ) $ 3.5 Contracts and backlog 29.9 (26.4 ) 3.5 29.9 (24.8 ) 5.1 Developed technology and technical know-how 25.0 (21.3 ) 3.7 25.0 (18.6 ) 6.4 Trade names 1.4 (1.4 ) — 1.4 (1.3 ) 0.1 Total finite-lived intangible assets 108.9 (99.7 ) 9.2 108.9 (93.8 ) 15.1 Indefinite-lived trade names 6.9 — 6.9 6.9 — 6.9 Total intangible assets $ 115.8 $ (99.7 ) $ 16.1 $ 115.8 $ (93.8 ) $ 22.0 |
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 30, 2018 is as follows (in millions): Fiscal Year Amount 2019 $ 5.1 2020 3.0 2021 1.1 Total $ 9.2 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 12 Months Ended |
Dec. 30, 2018 | |
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 30, 2018 December 31, 2017 Billed, current $ 66.5 $ 74.3 Unbilled, current 173.2 138.5 Total current accounts receivable 239.7 212.8 Allowance for doubtful accounts (2.3 ) (0.5 ) Total accounts receivable, net $ 237.4 $ 212.3 U.S. Government contract receivables where the Company is the prime contractor included in accounts receivable, net (in millions): December 30, 2018 December 31, 2017 Billed $ 16.5 $ 16.9 Unbilled 83.1 55.1 Total U.S. Government contract receivables $ 99.6 $ 72.0 |
Schedule of Inventory, Current | Inventoried costs, net of progress payments (in millions): December 30, December 31, Raw materials $ 34.7 $ 35.9 Work in process 10.3 11.4 Finished goods 1.8 2.3 Subtotal inventoried costs 46.8 49.6 Less customer advances and progress payments — (0.6 ) Total inventoried costs $ 46.8 $ 49.0 |
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 30, 2018 December 31, 2017 Land and buildings $ 11.9 $ 12.1 Computer equipment and software 28.3 27.3 Machinery and equipment 56.8 49.7 Furniture and office equipment 6.3 5.1 Leasehold improvements 10.9 10.1 Construction in progress 21.5 17.3 Property and equipment 135.7 121.6 Accumulated depreciation and amortization (68.6 ) (63.6 ) Total property and equipment, net $ 67.1 $ 58.0 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 30, 2018 | |
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 30, 2018 and December 31, 2017 are presented in the following table: As of December 30, 2018 As of December 31, 2017 $ in millions Principal Carrying Amount Fair Value Principal Carrying Amount Fair Value Long-term debt $ 300.0 $ 294.2 $ 305.3 $ 300.8 $ 294.3 $ 312.7 |
Lease Commitments (Tables)
Lease Commitments (Tables) | 12 Months Ended |
Dec. 30, 2018 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Payments, Capital and Operating Leases | Future minimum lease payments under operating leases as of December 30, 2018 , which does not include $4.3 million in sublease income on the Company’s operating leases, are 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 future minimum lease payments $ 117.2 |
Schedule of Unused Facilities Accrual Roll-forward | The accrual for excess facilities is as follows (in millions): Excess Facilities Balance as of December 25, 2016 $ 4.0 Adjustment of excess facility accrual — Cash payments (0.7 ) Balance as of December 31, 2017 3.3 Adjustment of excess facility accrual — Cash payments (0.9 ) Balance as of December 30, 2018 $ 2.4 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 12 Months Ended |
Dec. 30, 2018 | |
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): December 30, 2018 December 31, 2017 December 25, 2016 Shares from stock options and awards 0.1 0.1 1.4 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | The components of income (loss) from continuing operations before income taxes for the years ended December 30, 2018 , December 31, 2017 , and December 25, 2016 are comprised of the following (in millions): 2018 2017 2016 Domestic $ 2.2 $ (60.5 ) $ (61.3 ) Foreign 6.5 3.4 9.5 Total $ 8.7 $ (57.1 ) $ (51.8 ) |
Schedule of Components of Income Tax Expense (Benefit) | The provision (benefit) for income taxes from continuing operations for the years ended December 30, 2018 , December 31, 2017 , and December 25, 2016 are comprised of the following (in millions): 2018 2017 2016 Federal income taxes: Current $ (0.4 ) $ (2.9 ) $ (0.5 ) Deferred (1.8 ) (9.0 ) 3.8 Total Federal (2.2 ) (11.9 ) 3.3 State and local income taxes Current 0.4 0.5 0.2 Deferred 1.4 (0.3 ) 0.7 Total State and local 1.8 0.2 0.9 Foreign income taxes: Current 4.8 2.0 1.5 Deferred 0.2 (0.5 ) 0.1 Total Foreign 5.0 1.5 1.6 Total $ 4.6 $ (10.2 ) $ 5.8 |
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 year ended December 30, 2018 , and applying the statutory federal income tax rate of 35% to the loss from continuing operations before income taxes for the years ended December 31, 2017 and December 25, 2016 is as follows (in millions): 2018 2017 2016 Income tax (benefit) at federal statutory rate $ 1.8 $ (20.0 ) $ (18.1 ) State taxes, net of federal tax benefit and valuation allowance 0.9 0.5 0.1 Difference in tax rates between U.S. and foreign 0.7 — 0.1 Increase (decrease) in valuation allowance 4.7 (45.6 ) 18.9 Nondeductible expense 0.6 1.1 0.7 Increase in reserve for uncertain tax positions 4.0 1.3 0.1 Changes to indefinite life items and separate state deferred taxes (0.7 ) (1.8 ) 4.0 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 Act — 40.0 — Total $ 4.6 $ (10.2 ) $ 5.8 |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to deferred tax assets and deferred tax liabilities as of December 30, 2018 and December 31, 2017 are as follows (in millions): 2018 2017 Deferred tax assets: Allowance for doubtful accounts $ 0.6 $ 0.2 Sundry accruals 1.1 1.5 Vacation accrual 2.7 3.2 Stock-based compensation 4.2 3.1 Payroll related accruals 2.4 2.1 Lease accruals 2.0 2.5 Investments 1.3 1.3 Net operating loss carryforwards 81.7 95.7 Capital loss carryforwards 1.9 — Tax credit carryforwards 9.9 9.5 Deferred revenue 1.5 1.9 Reserves and other 10.8 6.1 120.1 127.1 Valuation allowance (92.2 ) (87.5 ) Total deferred tax assets, net of valuation allowance 27.9 39.6 Deferred tax liabilities: Unearned revenue (23.9 ) (38.8 ) Other intangibles (8.9 ) (5.4 ) Property and equipment, principally due to differences in depreciation (0.9 ) (0.7 ) Other (1.2 ) (1.7 ) Total deferred tax liabilities (34.9 ) (46.6 ) Net deferred tax liability $ (7.0 ) $ (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 27, 2015 $ 17.2 Increases related to prior periods 1.4 Increases related to current year tax positions 0.2 Decreases related to disposition (0.2 ) 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 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures | The following is a summary of the assets and liabilities of discontinued operations as of December 30, 2018 and December 31, 2017 (in millions): December 30, 2018 December 31, 2017 Cash and cash equivalents $ — $ (0.9 ) Accounts receivable, net 8.2 56.0 Inventoried costs — 1.5 Other current assets 0.1 2.0 Current assets of discontinued operations $ 8.3 $ 58.6 Property, plant and equipment, net $ — $ 3.0 Goodwill — 35.6 Other assets — 0.2 Non-current assets of discontinued operations $ — $ 38.8 Accounts payable $ 0.3 $ 14.2 Accrued expenses 0.4 4.7 Accrued compensation $ — $ 4.6 Billings in excess of cost and earnings on uncompleted contracts — 4.3 Other current liabilities 4.6 1.4 Current liabilities of discontinued operations $ 5.3 $ 29.2 Other long-term liabilities of discontinued operations $ 6.4 $ 6.0 The following table presents the results of discontinued operations (in millions): Year ended December 30, 2018 Year ended December 31, 2017 Year ended December 25, 2016 Revenue $ 44.2 $ 149.9 $ 127.1 Cost of sales 34.2 110.1 93.9 Selling, general and administrative expenses 16.7 33.6 33.8 Other net income (expense) items that are not major 2.7 (0.1 ) — Income (loss) from discontinued operations before income taxes (9.4 ) 6.3 (0.6 ) Gain on disposal of discontinued operations before income taxes — — — Total gain (loss) of discontinued operations before income taxes (9.4 ) 6.3 (0.6 ) Income tax (benefit) expense (1.8 ) 2.1 2.3 Income (loss) from discontinued operations $ (7.6 ) $ 4.2 $ (2.9 ) |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Option Valuation Assumptions | Awards with graded vesting are recognized using the straight-line method with the following assumptions: 2018 2017 2016 Stock Options Expected life 10.0 10.0 10.0 Risk-free interest rate(1) 2.9% - 3.2% 2.2% - 2.5% 1.8% - 2.4% Volatility(2) 52.9% - 53.4% 53.8% - 55.0% 55.2% - 55.8% Forfeiture rate(3) 5.1% 5.0% 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 2018 , 2017 , and 2016 , 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 30, 2018 , and changes in options outstanding under the plan for the year ended December 30, 2018 , 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 31, 2017 899 $ 7.82 4.4 $ 4,224.8 Granted 5 $ 11.78 Exercised (10 ) $ 8.71 Forfeited or expired (126 ) $ 24.01 Options outstanding at December 30, 2018 768 $ 5.17 4.2 6,587.5 Options exercisable at December 30, 2018 767 $ 5.16 4.1 $ 6,586.5 |
Grants and Exercises Under the Company's Option Plans | During the years ended December 30, 2018 , December 31, 2017 , and December 25, 2016 , the following values relate to the grants and exercises under the Company’s option plans: 2018 2017 2016 Weighted average grant date fair value of options granted $ 7.54 $ 6.39 $ 3.36 Total intrinsic value of options exercised (in thousands) $ 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 31, 2017 2,258 $ 6.83 Grants 1,119 $ 11.08 Vested (84 ) $ 9.03 Forfeitures — $ — Vested but not released — $ — Nonvested balance at December 30, 2018 3,293 $ 8.22 |
Assumptions and Resulting Fair Values of Options Granted | The assumptions and resulting fair values of options granted for 2018 , 2017 and 2016 were as follows: Offering Periods January 1 to December 31 2018 Offering Periods January 1 to December 31, 2017 Offering Periods January 1 to December 31, 2016 Expected term (in years)(1) 0.5 0.5 0.5 Risk-free interest rate(2) 1.53% - 2.11% 0.62% - 1.14% 0.36% - 0.49% Expected volatility(3) 40.24% - 44.83% 44.38% - 53.70% 53.00% - 55.55% Expected dividend yield(4) —% —% —% Weighted average grant-date fair value per share $3.03 $2.51 $1.23 (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. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Revenues, operating income (loss) and assets disclosed below provided by the Company’s reportable segments for the years ended December 30, 2018 , December 31, 2017 , and December 25, 2016 , are as follows (in millions): 2018 2017 2016 Revenues: Kratos Government Solutions Service revenues $ 200.7 $ 197.8 $ 221.3 Product sales 284.4 283.8 244.8 Total Kratos Government Solutions 485.1 481.6 466.1 Unmanned Systems Service revenues — — — Product sales 132.9 121.7 75.8 Total Unmanned Systems 132.9 121.7 75.8 Total revenues $ 618.0 $ 603.3 $ 541.9 Depreciation and amortization: Kratos Government Solutions $ 13.2 $ 14.4 $ 15.0 Unmanned Systems 4.7 7.8 7.5 Total depreciation and amortization $ 17.9 $ 22.2 $ 22.5 Operating income (loss) from continuing operations: Kratos Government Solutions $ 35.5 $ (0.1 ) $ 15.5 Unmanned Systems 5.1 (3.6 ) (28.3 ) Corporate activities (10.1 ) (8.3 ) (5.2 ) Total operating income (loss) from continuing operations $ 30.5 $ (12.0 ) $ (18.0 ) Reportable segment assets are as follows (in millions): December 30, 2018 December 31, 2017 December 25, 2016 Assets: Kratos Government Solutions $ 602.8 $ 597.9 $ 609.8 Unmanned Systems 220.9 201.9 172.1 Discontinued operations 8.3 97.4 92.0 Corporate activities 178.1 126.8 74.7 Total assets $ 1,010.1 $ 1,024.0 $ 948.6 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 30, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summarized Quarterly Financial Information | Summarized quarterly data for the years ended December 30, 2018 and December 31, 2017 , is as follows (in millions, except per share data): 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 from continuing operations 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 First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal year 2017 Revenues $ 132.0 $ 147.9 $ 157.1 $ 166.3 Gross profit 36.1 37.5 37.2 46.8 Operating income (loss) from continuing operations 1.4 1.5 0.1 (15.0 ) Provision (benefit) for income taxes 1.4 1.3 (1.1 ) (11.8 ) Loss from continuing operations (10.1 ) (6.9 ) (5.9 ) (24.0 ) Income from discontinued operations 0.1 0.7 1.6 1.8 Net loss $ (10.0 ) $ (6.2 ) $ (4.3 ) $ (22.2 ) Basic loss per common share: Loss from continuing operations $ (0.13 ) $ (0.08 ) $ (0.07 ) $ (0.23 ) Income from discontinued operations $ — $ 0.01 $ 0.02 $ 0.02 Net loss per common share $ (0.13 ) $ (0.07 ) $ (0.05 ) $ (0.21 ) Diluted loss per common share: Loss from continuing operations $ (0.13 ) $ (0.08 ) $ (0.07 ) $ (0.23 ) Income from discontinued operations $ — $ 0.01 $ 0.02 $ 0.02 Net loss per common share $ (0.13 ) $ (0.07 ) $ (0.05 ) $ (0.21 ) |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies - (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |||||
Oct. 01, 2017USD ($)Segment | Dec. 30, 2018USD ($)Segment$ / shares | Dec. 31, 2017USD ($)$ / shares | Dec. 25, 2016USD ($)$ / shares | Jan. 01, 2019USD ($) | Jan. 01, 2018USD ($) | Sep. 25, 2016USD ($) | |
Significant Accounting Policies Disclosure [Line Items] | |||||||
Number of reportable segments | Segment | 2 | 3 | |||||
Share-based Compensation | |||||||
Employee Stock Purchase Plan offering & expense recognition period | 6 months | ||||||
Impact on net loss per common share, basic and diluted (in dollars per share) | $ / shares | $ (0.07) | $ (0.09) | $ (0.08) | ||||
Allowance for Doubtful Accounts | |||||||
Provisions | $ 1,800 | $ 0 | $ 100 | ||||
Cash and Cash Equivalents | |||||||
Restricted cash | 300 | 400 | |||||
Interest Expense, Net | |||||||
Interest expense incurred primarily on the Company’s Senior Secured Notes | (21,600) | (29,100) | (34,700) | ||||
Miscellaneous interest income | 800 | 500 | 0 | ||||
Interest expense, net | (20,800) | (28,600) | (34,700) | ||||
Foreign Currency | |||||||
Foreign currency transaction gain (loss) | (1,100) | 400 | 400 | ||||
Recent Accounting Pronouncements | |||||||
Accumulated deficit | $ 724,500 | 720,800 | |||||
ASC 606 | |||||||
Recent Accounting Pronouncements | |||||||
Accumulated deficit | $ 721,000 | ||||||
ASC 840 | Subsequent Event | |||||||
Recent Accounting Pronouncements | |||||||
Operating lease asset | $ 68,000 | ||||||
Operating lease liability | $ 68,000 | ||||||
ASC 606 Adjustment | ASC 606 | |||||||
Recent Accounting Pronouncements | |||||||
Accumulated deficit | $ 200 | ||||||
Minimum | |||||||
Share-based Compensation | |||||||
Share-based incentive award vesting period | 5 years | ||||||
Goodwill and Other Intangible Assets, Net | |||||||
Useful life of finite-lived intangible assets | 1 year | ||||||
Maximum | |||||||
Share-based Compensation | |||||||
Share-based incentive award vesting period | 10 years | ||||||
Goodwill and Other Intangible Assets, Net | |||||||
Useful life of finite-lived intangible assets | 15 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 | $ 1,500 | $ 500 | 1,500 | 1,500 | |||
Provisions | 1,800 | 0 | 100 | ||||
Write-offs/Recoveries | 0 | (1,000) | (100) | ||||
Balance at End of Year | 2,300 | 500 | 1,500 | ||||
Continuing operations | |||||||
Share-based Compensation | |||||||
Stock-based compensation expense, amount recognized in the consolidated financial statements | 7,200 | 7,800 | 5,100 | ||||
Selling, general and administrative expenses | |||||||
Share-based Compensation | |||||||
Stock-based compensation expense, amount recognized in the consolidated financial statements | $ 7,200 | 7,800 | $ 5,100 | ||||
Kratos Government Solutions (KGS) | Building facility | |||||||
Property and Equipment, Net | |||||||
Carrying value of building held-for-sale | $ 1,900 | ||||||
Remeasured fair value of building held-for-sale | 500 | ||||||
Impairment loss on building reclassified from held-for-sale to held | $ 1,400 | ||||||
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. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 31, 2017 | Oct. 01, 2017 | Jun. 25, 2017 | Mar. 26, 2017 | Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | Jan. 01, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Accumulated deficit | $ 724.5 | $ 720.8 | $ 724.5 | $ 720.8 | ||||||||
Revenue | 164.4 | $ 159.4 | $ 151.2 | $ 143 | 166.3 | $ 157.1 | $ 147.9 | $ 132 | 618 | 603.3 | $ 541.9 | |
Remaining performance obligation | 620.7 | 620.7 | ||||||||||
Provision for loss on contracts | 5.1 | 10.3 | 5.1 | 10.3 | ||||||||
Contract assets, Net change | 33.5 | |||||||||||
Contract liabilities, Net change | (9.8) | |||||||||||
Revenue recognized | 35.5 | |||||||||||
Unbilled | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Accounts receivable | 3.8 | $ 1.9 | 3.8 | $ 1.9 | ||||||||
Effect of Change Higher/(Lower) | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Revenue | 30 | |||||||||||
Cost of revenue | 21.9 | |||||||||||
ASC 606 | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Accumulated deficit | $ 721 | |||||||||||
ASC 606 | Effect of Change Higher/(Lower) | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Accumulated deficit | $ (8.1) | (8.1) | ||||||||||
Revenue | $ 30 | |||||||||||
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. 30, 2018 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction, percentage | 66.70% |
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 | 13.70% |
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. 30, 2018 | Jan. 01, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Contract assets | $ 172.9 | $ 139.4 |
Contract assets, Net change | 33.5 | |
Contract liabilities | 37 | 46.8 |
Contract liabilities, Net change | (9.8) | |
Net contract assets | 135.9 | $ 92.6 |
Net contract assets, Net change | $ 43.3 |
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. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 31, 2017 | Oct. 01, 2017 | Jun. 25, 2017 | Mar. 26, 2017 | Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | $ 164.4 | $ 159.4 | $ 151.2 | $ 143 | $ 166.3 | $ 157.1 | $ 147.9 | $ 132 | $ 618 | $ 603.3 | $ 541.9 |
Kratos Government Solutions | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 485.1 | ||||||||||
Kratos Government Solutions | U.S. Government | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 333.5 | ||||||||||
Kratos Government Solutions | International | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 96 | ||||||||||
Kratos Government Solutions | U.S. Commercial and other customers | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 55.6 | ||||||||||
Kratos Government Solutions | Fixed price | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 424.9 | ||||||||||
Kratos Government Solutions | Cost plus fee | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 32.6 | ||||||||||
Kratos Government Solutions | Time and materials | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 27.6 | ||||||||||
Unmanned Systems | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 132.9 | ||||||||||
Unmanned Systems | U.S. Government | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 113.5 | ||||||||||
Unmanned Systems | International | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 18.3 | ||||||||||
Unmanned Systems | U.S. Commercial and other customers | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 1.1 | ||||||||||
Unmanned Systems | Fixed price | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 104.8 | ||||||||||
Unmanned Systems | Cost plus fee | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | 26.5 | ||||||||||
Unmanned Systems | Time and materials | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Total revenues | $ 1.6 |
Organization and Summary of S_9
Organization and Summary of Significant Accounting Policies - Balance Sheet (Details) - USD ($) $ in Millions | Dec. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Assets | |||
Accounts receivable, net | $ 64.6 | $ 74.2 | |
Unbilled receivables, net | 172.8 | 138.1 | |
Inventoried costs | 46.8 | 49 | |
Liabilities | |||
Accrued expenses | 38.1 | 40.9 | |
Billings in excess of costs and earnings on uncompleted contracts | 34.9 | 42.8 | |
Stockholders’ equity: | |||
Accumulated deficit | 724.5 | $ 720.8 | |
ASC 606 | |||
Assets | |||
Unbilled receivables, net | $ 139.4 | ||
Inventoried costs | 48.7 | ||
Liabilities | |||
Accrued expenses | 40.3 | ||
Billings in excess of costs and earnings on uncompleted contracts | 44.6 | ||
Stockholders’ equity: | |||
Accumulated deficit | 721 | ||
ASC 606 | Balances Without Adoption of ASC 606 | |||
Assets | |||
Accounts receivable, net | 66.5 | ||
Unbilled receivables, net | 148.1 | ||
Inventoried costs | 68.7 | ||
Liabilities | |||
Billings in excess of costs and earnings on uncompleted contracts | 42.1 | ||
Stockholders’ equity: | |||
Accumulated deficit | 732.6 | ||
ASC 606 | Effect of Change Higher/(Lower) | |||
Assets | |||
Accounts receivable, net | (1.9) | ||
Unbilled receivables, net | 24.7 | ||
Inventoried costs | (21.9) | ||
Liabilities | |||
Billings in excess of costs and earnings on uncompleted contracts | (7.2) | ||
Stockholders’ equity: | |||
Accumulated deficit | $ (8.1) | ||
Balance at January 1, 2018 | ASC 606 | |||
Assets | |||
Unbilled receivables, net | 138.1 | ||
Inventoried costs | 49 | ||
Liabilities | |||
Accrued expenses | 40.9 | ||
Billings in excess of costs and earnings on uncompleted contracts | 42.8 | ||
Stockholders’ equity: | |||
Accumulated deficit | 720.8 | ||
ASC 606 Adjustment | ASC 606 | |||
Assets | |||
Unbilled receivables, net | 1.3 | ||
Inventoried costs | (0.3) | ||
Liabilities | |||
Accrued expenses | (0.6) | ||
Billings in excess of costs and earnings on uncompleted contracts | 1.8 | ||
Stockholders’ equity: | |||
Accumulated deficit | $ 0.2 |
Organization and Summary of _10
Organization and Summary of Significant Accounting Policies - Operating Income from Continuing Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 31, 2017 | Oct. 01, 2017 | Jun. 25, 2017 | Mar. 26, 2017 | Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Total revenues | $ 164.4 | $ 159.4 | $ 151.2 | $ 143 | $ 166.3 | $ 157.1 | $ 147.9 | $ 132 | $ 618 | $ 603.3 | $ 541.9 |
Total costs | 448.3 | 445.7 | 421.4 | ||||||||
Gross profit | 45.5 | 44.1 | 39.3 | 40.8 | 46.8 | 37.2 | 37.5 | 36.1 | 169.7 | 157.6 | 120.5 |
Selling, general and administrative expenses | 119.8 | 127.3 | 114.6 | ||||||||
Operating income from continuing operations | $ 10.8 | $ 10.1 | $ 2.6 | $ 7 | $ (15) | $ 0.1 | $ 1.5 | $ 1.4 | 30.5 | (12) | (18) |
Service | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Total revenues | 200.7 | 197.8 | 221.3 | ||||||||
Total costs | 137.8 | 138.6 | 162.1 | ||||||||
Product | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Total revenues | 417.3 | 405.5 | 320.6 | ||||||||
Total costs | 310.5 | $ 307.1 | $ 259.3 | ||||||||
Balances Without Adoption of ASC 606 | ASC 606 | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Total revenues | 588 | ||||||||||
Total costs | 426.4 | ||||||||||
Gross profit | 161.6 | ||||||||||
Selling, general and administrative expenses | 119.8 | ||||||||||
Operating income from continuing operations | 22.4 | ||||||||||
Balances Without Adoption of ASC 606 | ASC 606 | Service | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Total revenues | 200.7 | ||||||||||
Total costs | 137.8 | ||||||||||
Balances Without Adoption of ASC 606 | ASC 606 | Product | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Total revenues | 387.3 | ||||||||||
Total costs | 288.6 | ||||||||||
Effect of Change Higher/(Lower) | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Total revenues | 30 | ||||||||||
Effect of Change Higher/(Lower) | ASC 606 | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Total revenues | 30 | ||||||||||
Total costs | 21.9 | ||||||||||
Gross profit | 8.1 | ||||||||||
Selling, general and administrative expenses | 0 | ||||||||||
Operating income from continuing operations | 8.1 | ||||||||||
Effect of Change Higher/(Lower) | ASC 606 | Service | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Total revenues | 0 | ||||||||||
Total costs | 0 | ||||||||||
Effect of Change Higher/(Lower) | ASC 606 | Product | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Total revenues | 30 | ||||||||||
Total costs | $ 21.9 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 30, 2018USD ($)contract | Dec. 31, 2017USD ($) | Dec. 30, 2018USD ($)Segment | Dec. 31, 2017USD ($) | |
Goodwill [Line Items] | ||||
Number of operating segments | Segment | 4 | |||
Goodwill | $ 425.7 | $ 425.7 | $ 425.7 | $ 425.7 |
Number of lost contract opportunities | contract | 2 | |||
Lost contract opportunities period | 5 years | |||
Carrying amounts of goodwill by reportable segment | ||||
Gross value | $ 679 | 679 | ||
Less accumulated impairment | 253.3 | 253.3 | ||
Net | 425.7 | 425.7 | 425.7 | 425.7 |
Kratos Unmanned Systems (US) | ||||
Goodwill [Line Items] | ||||
Goodwill | 97.3 | 97.3 | ||
Carrying amounts of goodwill by reportable segment | ||||
Gross value | 111.1 | 111.1 | ||
Less accumulated impairment | 13.8 | 13.8 | ||
Net | 97.3 | 97.3 | ||
Kratos Government Solutions (KGS) | ||||
Goodwill [Line Items] | ||||
Goodwill | 328.4 | 328.4 | ||
Impairment of goodwill | $ 24.2 | $ 24.2 | ||
Carrying amounts of goodwill by reportable segment | ||||
Gross value | 567.9 | 567.9 | ||
Less accumulated impairment | 239.5 | 239.5 | ||
Net | $ 328.4 | $ 328.4 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Purchased Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | |
Acquired finite-lived intangible assets: | |||
Gross Value | $ 108.9 | $ 108.9 | |
Accumulated Amortization | (99.7) | (93.8) | |
Total | 9.2 | 15.1 | |
Total intangible assets, Gross Value | 115.8 | 115.8 | |
Total intangible assets, Net Value | 16.1 | 22 | |
Aggregate amortization expense for finite-live intangible assets | 5.9 | 10.4 | $ 10.5 |
Trade names | |||
Acquired finite-lived intangible assets: | |||
Indefinite-lived trade names | 6.9 | 6.9 | |
Customer relationships | |||
Acquired finite-lived intangible assets: | |||
Gross Value | 52.6 | 52.6 | |
Accumulated Amortization | (50.6) | (49.1) | |
Total | 2 | 3.5 | |
Contracts and backlog | |||
Acquired finite-lived intangible assets: | |||
Gross Value | 29.9 | 29.9 | |
Accumulated Amortization | (26.4) | (24.8) | |
Total | 3.5 | 5.1 | |
Developed technology and technical know-how | |||
Acquired finite-lived intangible assets: | |||
Gross Value | 25 | 25 | |
Accumulated Amortization | (21.3) | (18.6) | |
Total | 3.7 | 6.4 | |
Trade names | |||
Acquired finite-lived intangible assets: | |||
Gross Value | 1.4 | 1.4 | |
Accumulated Amortization | (1.4) | (1.3) | |
Total | $ 0 | $ 0.1 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Intangible Asset Amortization (Details) - USD ($) $ in Millions | Dec. 30, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2,019 | $ 5.1 | |
2,020 | 3 | |
2,021 | 1.1 | |
Total | $ 9.2 | $ 15.1 |
Balance Sheet Details - Accoun
Balance Sheet Details - Accounts Receivable and Inventory (Details) - USD ($) $ in Millions | Dec. 30, 2018 | Dec. 31, 2017 |
Cash and Cash Equivalents | ||
Cash and cash equivalents | $ 182.7 | $ 130.5 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total current accounts receivable | 239.7 | 212.8 |
Allowance for doubtful accounts | (2.3) | (0.5) |
Total accounts receivable, net | 237.4 | 212.3 |
Inventory, Net of Allowances, Customer Advances and Progress Billings [Abstract] | ||
Raw materials | 34.7 | 35.9 |
Work in process | 10.3 | 11.4 |
Finished goods | 1.8 | 2.3 |
Subtotal inventoried costs | 46.8 | 49.6 |
Less customer advances and progress payments | 0 | (0.6) |
Total inventoried costs | 46.8 | 49 |
Billed | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total current accounts receivable | 66.5 | 74.3 |
Unbilled | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total current accounts receivable | 173.2 | 138.5 |
U.S. Government | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total U.S. Government contract receivables | 99.6 | 72 |
U.S. Government | Billed | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total U.S. Government contract receivables | 16.5 | 16.9 |
U.S. Government | Unbilled | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total U.S. Government contract receivables | $ 83.1 | $ 55.1 |
Balance Sheet Details - Propert
Balance Sheet Details - Property, Plant and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment | $ 135.7 | $ 121.6 | |
Accumulated depreciation and amortization | (68.6) | (63.6) | |
Total property and equipment, net | 67.1 | 58 | |
Depreciation expense | 12 | 11.8 | $ 12 |
Land and buildings | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 11.9 | 12.1 | |
Computer equipment and software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 28.3 | 27.3 | |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 56.8 | 49.7 | |
Furniture and office equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 6.3 | 5.1 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | 10.9 | 10.1 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment | $ 21.5 | $ 17.3 |
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. 30, 2018 | Dec. 31, 2017 | Sep. 12, 2017 | Sep. 22, 2015 | May 31, 2014 | May 14, 2014 | |
Debt Instrument [Line Items] | |||||||
Principal | $ 300,000,000 | $ 300,800,000 | |||||
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 | $ 625,000,000 | |||||
Stated interest rate | 7.00% | 7.00% | |||||
Debt issuance costs | $ 8,800,000 | ||||||
Reacquisition price | $ 385,200,000 | $ 135,500,000 | $ 175,000,000 | ||||
Premium | 12,000,000 | ||||||
Accrued interest | $ 300,000 |
Debt - Issuance of 7.00% Senio
Debt - Issuance of 7.00% Senior Secured Notes due 2019 (Details) | Nov. 23, 2016USD ($) | Sep. 22, 2015USD ($) | May 14, 2014USD ($) | May 31, 2014USD ($) | Dec. 31, 2017USD ($) | Dec. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 25, 2016USD ($) | Nov. 30, 2017USD ($) | Sep. 12, 2017USD ($) | Aug. 21, 2015USD ($) |
Debt Instrument [Line Items] | |||||||||||
Principal | $ 300,800,000 | $ 300,000,000 | $ 300,800,000 | ||||||||
Proceeds from the issuance of long-term debt, net of issuance costs | 0 | 300,000,000 | $ 0 | ||||||||
Gain (loss) on extinguishment of debt | 0 | (17,300,000) | 200,000 | ||||||||
Revolving Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit agreement borrowings | $ 41,000,000 | ||||||||||
Outstanding borrowings | $ 0 | $ 41,000,000 | |||||||||
Maximum borrowing capacity | $ 110,000,000 | $ 110,000,000 | |||||||||
Senior notes | 7% Senior Notes due 2019 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Stated interest rate | 7.00% | 7.00% | |||||||||
Principal | $ 625,000,000 | $ 300,000,000 | |||||||||
Proceeds from the issuance of long-term debt, net of issuance costs | 618,500,000 | ||||||||||
Original issue discount | $ 1,400,000 | 6,500,000 | 1,600,000 | 1,600,000 | 100,000 | ||||||
Debt issuance costs | $ 8,800,000 | ||||||||||
Reacquisition price | 175,000,000 | $ 385,200,000 | $ 135,500,000 | ||||||||
Write off of unamortized issue costs | 1,800,000 | 2,300,000 | 100,000 | ||||||||
Unamortized premium | $ 12,000,000 | ||||||||||
Gain (loss) on extinguishment of debt | (3,400,000) | $ (15,200,000) | (17,300,000) | 200,000 | |||||||
Fixed charge coverage ratio | 2 | ||||||||||
Legal fees | $ 200,000 | ||||||||||
Debt repurchased and extinguished | $ 14,500,000 | 435,500,000 | 14,500,000 | ||||||||
Gain (loss) on extinguishment of debt before amortization of issuance cost and discount | $ (13,400,000) | $ 400,000 | |||||||||
Senior notes | 10% Senior Notes due June 2017 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Stated interest rate | 10.00% | ||||||||||
Principal | $ 625,000,000 | ||||||||||
Reacquisition price | 661,500,000 | ||||||||||
Early termination fee | 31,200,000 | ||||||||||
Write off of unamortized issue costs | 15,500,000 | ||||||||||
Unamortized premium | 12,900,000 | ||||||||||
Interest accrued in escrow | 5,300,000 | ||||||||||
Gain (loss) on extinguishment of debt | $ (39,100,000) |
Debt - Credit and Security Agr
Debt - Credit and Security Agreement (Details) | Nov. 20, 2017USD ($) | May 14, 2014USD ($) | Dec. 30, 2018USD ($) | Nov. 30, 2017 | Aug. 21, 2015USD ($) | Aug. 20, 2015USD ($) | May 31, 2015USD ($) |
2014 Credit Agreement, Third Amendment | Fixed charge coverage ratio of at least 1.10 | |||||||
Line of Credit Facility [Line Items] | |||||||
Fixed charge coverage ratio | 1.10 | ||||||
2014 Credit Agreement, Third Amendment | Fixed charge coverage ratio remains at 1.15 | |||||||
Line of Credit Facility [Line Items] | |||||||
Fixed charge coverage ratio | 1.15 | ||||||
2014 Credit Agreement, Fourth Amendment | |||||||
Line of Credit Facility [Line Items] | |||||||
Letter of credit exposure outstanding | $ 17,000,000 | ||||||
Minimum | 2014 Credit Agreement, Third Amendment | Herley disposition proceeds reinvestment reserve, as defined in the amendment | |||||||
Line of Credit Facility [Line Items] | |||||||
Covenant terms, percentage of reinvestment in excess of loans and credit (percent) | 0.00% | ||||||
Minimum | 2014 Credit Agreement, Third Amendment | Fixed charge coverage ratio of at least 1.10 | |||||||
Line of Credit Facility [Line Items] | |||||||
Covenant terms, percentage of reinvestment in excess of loans and credit (percent) | 15.00% | ||||||
Maximum | 2014 Credit Agreement, Third Amendment | Herley disposition proceeds reinvestment reserve, as defined in the amendment | |||||||
Line of Credit Facility [Line Items] | |||||||
Covenant terms, percentage of reinvestment in excess of loans and credit (percent) | 15.00% | ||||||
Maximum | 2014 Credit Agreement, Third Amendment | Fixed charge coverage ratio of at least 1.10 | |||||||
Line of Credit Facility [Line Items] | |||||||
Covenant terms, percentage of reinvestment in excess of loans and credit (percent) | 25.00% | ||||||
Revolving Credit Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum borrowing capacity | $ 110,000,000 | $ 110,000,000 | |||||
Debt term | 5 years | ||||||
Potential maximum borrowing capacity, subject to Lender approval | $ 135,000,000 | ||||||
Outstanding borrowings | $ 0 | $ 41,000,000 | |||||
Remaining borrowing capacity | $ 51,400,000 | ||||||
Revolving Credit Facility | 2014 Credit Agreement, Third Amendment | |||||||
Line of Credit Facility [Line Items] | |||||||
Fixed charge coverage ratio | 1.15 | ||||||
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 | Minimum | 2014 Credit Agreement, Third Amendment | Herley | |||||||
Line of Credit Facility [Line Items] | |||||||
Minimum amount required to repurchase | $ 175,000,000 | ||||||
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 | $ 9,700,000 | ||||||
Letter of Credit | 2014 Credit Agreement, Third Amendment | Fixed charge coverage ratio not measured | |||||||
Line of Credit Facility [Line Items] | |||||||
Covenant terms, capacity of outstanding loans of credit | $ 17,000,000 | ||||||
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 | ||||||
Revolving Loans plus outstanding Swingline Loans plus Letters of Credit | 2014 Credit Agreement, Third Amendment | Fixed charge coverage ratio of at least 1.05 | |||||||
Line of Credit Facility [Line Items] | |||||||
Fixed charge coverage ratio | 1.05 | ||||||
Covenant terms, capacity of outstanding loans of credit | $ 17,000,000 |
Debt - Debt Acquired in Acquis
Debt - Debt Acquired in Acquisition (Details) | Sep. 16, 2008USD ($)subsidiary | Dec. 30, 2018USD ($) | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | |||
Principal | $ 300,000,000 | $ 300,800,000 | |
10-year term loan | |||
Debt Instrument [Line Items] | |||
Principal | $ 10,000,000 | ||
Maturity period (in years) | 10 years | ||
Number of subsidiary owned | subsidiary | 1 |
Debt - Fair Value of Long-Term
Debt - Fair Value of Long-Term Debt (Details) - USD ($) | Dec. 30, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
Principal | $ 300,000,000 | $ 300,800,000 |
Carrying Amount | 294,200,000 | 294,300,000 |
Fair Value | 305,300,000 | 312,700,000 |
Debt issuance costs | $ 5,800,000 | $ 6,500,000 |
Lease Commitments (Details)
Lease Commitments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | |
Leases [Abstract] | |||
Sublease income on operating leases | $ 4.3 | ||
Operating Leases | |||
2,019 | 16.5 | ||
2,020 | 12 | ||
2,021 | 9.6 | ||
2,022 | 8.1 | ||
2,023 | 7.9 | ||
Thereafter | 63.1 | ||
Total future minimum lease payments | 117.2 | ||
Gross rent expense under operating leases | 23.7 | $ 18.6 | $ 18.7 |
Sublease income | 3.3 | 3.4 | 3.3 |
Accrual for excess facilities | |||
Accrual for excess facilities - beginning balance | 3.3 | 4 | |
Adjustment of excess facility accrual | 0 | 0 | |
Cash payments | (0.9) | (0.7) | |
Accrual for excess facilities - ending balance | 2.4 | 3.3 | $ 4 |
Deferred rent | $ 4.4 | $ 3 |
Net Loss Per Common Share - An
Net Loss Per Common Share - Antidilutive Securities (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | |
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) | 0.1 | 0.1 | 1.4 |
Income Taxes - Narrative (Deta
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | |
Operating Loss Carryforwards [Line Items] | |||
Reduction to deferred tax asset | $ 40 | ||
Transition tax | $ 2.2 | 6.2 | |
Increase in valuation allowance | 4.7 | ||
Federal annual utilization of NOL carryforwards limit, next five years | $ 27 | ||
Threshold period for change in allowed annual amount of NOL to be recognized | 5 years | ||
Federal annual utilization of NOL carryforwards limit, after year five | $ 11.6 | ||
Unrecognized deferred income taxes or foreign withholding taxes | 8.4 | ||
Unrecognized deferred income taxes or foreign withholding taxes, cash and cash equivalents available for distribution | 12 | ||
Unrecognized tax benefits that if recognized would affect effective tax rate | 17.7 | ||
Amount that would become a deferred tax asset included in unrecognized tax benefits that would impact the effective tax rate | 11.2 | ||
Income tax penalties and interest expense | 0.6 | 0.5 | $ 0.9 |
Benefit for income tax penalties and interest related to reversal of prior positions | 1.1 | 0.2 | 0 |
Total interest and penalties accrued | 1.6 | $ 2.2 | $ 1.9 |
Unrecognized tax benefits that will expire within the next 12 months | 0.1 | ||
Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 346.9 | ||
State | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | $ 263.1 |
Income Taxes - Components of I
Income Taxes - Components of Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 31, 2017 | Oct. 01, 2017 | Jun. 25, 2017 | Mar. 26, 2017 | Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | |
Components of income (loss) from continuing operations before income taxes | |||||||||||
Domestic | $ 2.2 | $ (60.5) | $ (61.3) | ||||||||
Foreign | 6.5 | 3.4 | 9.5 | ||||||||
Income (loss) from continuing operations before income taxes | 8.7 | (57.1) | (51.8) | ||||||||
Federal income taxes: | |||||||||||
Current | (0.4) | (2.9) | (0.5) | ||||||||
Deferred | (1.8) | (9) | 3.8 | ||||||||
Total Federal | (2.2) | (11.9) | 3.3 | ||||||||
State and local income taxes | |||||||||||
Current | 0.4 | 0.5 | 0.2 | ||||||||
Deferred | 1.4 | (0.3) | 0.7 | ||||||||
Total State and local | 1.8 | 0.2 | 0.9 | ||||||||
Foreign income taxes: | |||||||||||
Current | 4.8 | 2 | 1.5 | ||||||||
Deferred | 0.2 | (0.5) | 0.1 | ||||||||
Total Foreign | 5 | 1.5 | 1.6 | ||||||||
Total | $ 0.2 | $ 3.4 | $ 0.1 | $ 0.9 | $ (11.8) | $ (1.1) | $ 1.3 | $ 1.4 | $ 4.6 | $ (10.2) | $ 5.8 |
Income Taxes - Reconciliation
Income Taxes - Reconciliation of Income Tax Provision (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 31, 2017 | Oct. 01, 2017 | Jun. 25, 2017 | Mar. 26, 2017 | Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | |
Income Tax Disclosure [Abstract] | |||||||||||
Income tax (benefit) at federal statutory rate | $ 1.8 | $ (20) | $ (18.1) | ||||||||
State taxes, net of federal tax benefit and valuation allowance | 0.9 | 0.5 | 0.1 | ||||||||
Difference in tax rates between U.S. and foreign | 0.7 | 0 | 0.1 | ||||||||
Increase (decrease) in valuation allowance | 4.7 | (45.6) | 18.9 | ||||||||
Nondeductible expense | 0.6 | 1.1 | 0.7 | ||||||||
Increase in reserve for uncertain tax positions | 4 | 1.3 | 0.1 | ||||||||
Changes to indefinite life items and separate state deferred taxes | (0.7) | (1.8) | 4 | ||||||||
One-time transition tax on previously undistributed foreign earnings | 2.2 | 6.2 | 0 | ||||||||
Goodwill impairment | 0 | 8.1 | 0 | ||||||||
Decrease in deferred taxes related to disposition | (9.6) | 0 | 0 | ||||||||
Impact related to the 2017 Tax Act | 0 | 40 | 0 | ||||||||
Total | $ 0.2 | $ 3.4 | $ 0.1 | $ 0.9 | $ (11.8) | $ (1.1) | $ 1.3 | $ 1.4 | $ 4.6 | $ (10.2) | $ 5.8 |
Income Taxes - Deferred Taxes
Income Taxes - Deferred Taxes (Details) - USD ($) $ in Millions | Dec. 30, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Allowance for doubtful accounts | $ 0.6 | $ 0.2 |
Sundry accruals | 1.1 | 1.5 |
Vacation accrual | 2.7 | 3.2 |
Stock-based compensation | 4.2 | 3.1 |
Payroll related accruals | 2.4 | 2.1 |
Lease accruals | 2 | 2.5 |
Investments | 1.3 | 1.3 |
Net operating loss carryforwards | 81.7 | 95.7 |
Capital loss carryforwards | 0 | 1.9 |
Tax credit carryforwards | 9.9 | 9.5 |
Deferred revenue | 1.5 | 1.9 |
Reserves and other | 10.8 | 6.1 |
Gross deferred tax assets | 120.1 | 127.1 |
Valuation allowance | (92.2) | (87.5) |
Total deferred tax assets, net of valuation allowance | 27.9 | 39.6 |
Deferred tax liabilities: | ||
Unearned revenue | (23.9) | (38.8) |
Other intangibles | (8.9) | (5.4) |
Property and equipment, principally due to differences in depreciation | (0.9) | (0.7) |
Other | (1.2) | (1.7) |
Total deferred tax liabilities | (34.9) | (46.6) |
Net deferred tax liability | $ (7) | $ (7) |
Income Taxes - Unrecognized Ta
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | |
Unrecognized Tax Benefits | |||
Balance at the beginning of period | $ 15.6 | $ 18.6 | $ 17.2 |
Increases related to prior periods | 0.5 | 0.4 | 1.4 |
Increases related to current year tax positions | 4 | 1.1 | 0.2 |
Expiration of applicable statutes of limitations | (0.4) | (0.6) | |
Decrease in federal tax rate | (0.3) | (3.9) | |
Decreases related to disposition | (1.7) | (0.2) | |
Balance at the end of period | $ 17.7 | $ 15.6 | $ 18.6 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Millions | Jun. 11, 2018 | Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | 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 | 70 | ||||
Working capital retained | 7 | ||||
Transaction costs | $ 2.7 | ||||
Herley | Discontinued Operations, Disposed of by Sale | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
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 | $ 0.1 | $ 0.3 | $ 0.3 |
Discontinued Operations - Resul
Discontinued Operations - Results of Discontinued Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | |
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 | (9.4) | $ 6.3 | $ (0.6) |
Income tax expense (benefit) | (1.8) | 2.1 | 2.3 |
Income (loss) from discontinued operations | (7.6) | 4.2 | (2.9) |
Herley | Discontinued Operations, Disposed of by Sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Revenue | 44.2 | 149.9 | 127.1 |
Cost of sales | 34.2 | 110.1 | 93.9 |
Selling, general and administrative expenses | 16.7 | 33.6 | 33.8 |
Other net income (expense) items that are not major | 2.7 | (0.1) | 0 |
Income (loss) from discontinued operations before income taxes | (9.4) | 6.3 | (0.6) |
Gain on disposal of discontinued operations before income taxes | 0 | 0 | 0 |
Total gain (loss) of discontinued operations before income taxes | (9.4) | 6.3 | (0.6) |
Income tax expense (benefit) | (1.8) | 2.1 | 2.3 |
Income (loss) from discontinued operations | $ (7.6) | $ 4.2 | $ (2.9) |
Discontinued Operations - Summa
Discontinued Operations - Summary of Assets and Liabilities of Discontinued Operations (Details) - USD ($) $ in Millions | Dec. 30, 2018 | Dec. 31, 2017 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Current assets of discontinued operations | $ 8.3 | $ 58.6 |
Non-current assets of discontinued operations | 0 | 38.8 |
Current liabilities of discontinued operations | 5.3 | 29.2 |
Herley | Discontinued Operations, Disposed of by Sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Cash and cash equivalents | 0 | (0.9) |
Accounts receivable, net | 8.2 | 56 |
Inventoried costs | 0 | 1.5 |
Other current assets | 0.1 | 2 |
Current assets of discontinued operations | 8.3 | 58.6 |
Property, plant and equipment, net | 0 | 3 |
Goodwill | 0 | 35.6 |
Other assets | 0 | 0.2 |
Non-current assets of discontinued operations | 0 | 38.8 |
Accounts payable | 0.3 | 14.2 |
Accrued expenses | 0.4 | 4.7 |
Accrued compensation | 0 | 4.6 |
Billings in excess of cost and earnings on uncompleted contracts | 0 | 4.3 |
Other current liabilities | 4.6 | 1.4 |
Current liabilities of discontinued operations | 5.3 | 29.2 |
Other long-term liabilities of discontinued operations | $ 6.4 | $ 6 |
Stockholders' Equity - Common
Stockholders' Equity - Common Stock (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Sep. 12, 2017 | Mar. 07, 2017 | Nov. 23, 2016 | Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | Nov. 30, 2017 | Sep. 22, 2015 | May 31, 2014 |
Class of Stock [Line Items] | |||||||||
Proceeds (expenses) from the issuance of common stock | $ 76.2 | $ (1.1) | $ 269.1 | $ 76.2 | |||||
Net proceeds used to pay-off debt | $ 269.1 | 14.1 | |||||||
7% Senior Notes due 2019 | Senior notes | |||||||||
Class of Stock [Line Items] | |||||||||
Stated interest rate | 7.00% | 7.00% | |||||||
Approximate amount of debt paid-off | $ 14.5 | $ 435.5 | $ 14.5 | ||||||
Reacquisition price | $ 135.5 | $ 385.2 | $ 175 | ||||||
Common Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Common stock sold (in shares) | 16.1 | 11.9 | 13.4 | 28 | 13.4 | ||||
Purchase price of common stock sold (dollars per share) | $ 12.25 | $ 7.25 | $ 6 | ||||||
Gross proceeds from sell of stock | $ 283.5 | $ 80.5 |
Stockholders' Equity - Stock O
Stockholders' Equity - Stock Option Plans and Restricted Stock Units Plans (Details) - USD ($) $ in Millions | Apr. 01, 2014 | Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | May 31, 2017 | Mar. 28, 2014 | Mar. 27, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock awards granted | 0 | 5,000 | |||||
Number of shares available for issuance (in shares) | 1,550,000 | 2,306,256 | |||||
Total number of awards outstanding (shares) | 5,511,322 | ||||||
Total unrecognized stock-based compensation expense related to nonvested options | $ 0 | ||||||
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 | $ 13.1 | ||||||
Unrecognized stock-based compensation expense, period for recognition | 2 years 4 months 24 days | ||||||
Fair value of vested awards | $ 0.8 | $ 6.3 | $ 4.7 | ||||
2014 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares available for issuance (in shares) | 2,864,476 | 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. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | |
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) | 2.90% | 2.20% | 1.80% |
Risk-free interest rate, upper range (percent) | 3.20% | 2.50% | 2.40% |
Volatility, lower range (percent) | 52.90% | 53.80% | 55.20% |
Volatility, upper range (percent) | 53.40% | 55.00% | 55.80% |
Forfeiture rate (percent) | 5.10% | 5.00% | 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. 30, 2018 | Dec. 31, 2017 |
Number of Shares Under Option | |||
Options outstanding at beginning of period, Number of Options (in shares) | 899,000 | ||
Granted, Number of Options (in shares) | 0 | 5,000 | |
Exercised, Number of Options (in shares) | (10,000) | ||
Forfeited or expired, Number of Options (in shares) | (126,000) | ||
Options outstanding at end of period, Number of Options (in shares) | 768,000 | 899,000 | |
Options exercisable, Number of Options (in shares) | 767,000 | ||
Weighted-Average Exercise Price per Share | |||
Options outstanding at beginning of period, Weighted-Average Exercise Price per Share (in dollars per share) | $ 7.82 | ||
Granted, Weighted-Average Exercise Price per Share (in dollars per share) | 11.78 | ||
Exercised, Weighted-Average Exercise Price per Share (in dollars per share) | 8.71 | ||
Forfeited or expired, Weighted-Average Exercise Price per Share (in dollars per share) | 24.01 | ||
Options outstanding at end of period, Weighted-Average Exercise Price per Share (in dollars per share) | 5.17 | $ 7.82 | |
Options exercisable, Weighted-Average Exercise Price per Share (in dollars per share) | $ 5.16 | ||
Weighted- Average Remaining Contractual Term and Aggregate Intrinsic Value | |||
Options outstanding, Weighted Average Remaining Contractual Term | 4 years 2 months 12 days | 4 years 4 months 24 days | |
Options exercisable, Weighted-Average Remaining Contractual Term | 4 years 1 month 6 days | ||
Options outstanding, Aggregate Intrinsic Value | $ 6,587,500 | $ 4,224,800 | |
Options exercisable, Aggregate Intrinsic Value | $ 6,586,500 |
Stockholders' Equity - Grants
Stockholders' Equity - Grants and Exercises Under Option Plans (Details) - USD ($) | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Weighted average grant date fair value of options granted (in dollars per share) | $ 7.54 | $ 6.39 | $ 3.36 |
Total intrinsic value of options exercised | $ 40,600 | $ 67,100 | $ 0 |
Stockholders' Equity - Restric
Stockholders' Equity - Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs) shares in Thousands | 12 Months Ended |
Dec. 30, 2018$ / sharesshares | |
Restricted Stock Units | |
Nonvested balance at beginning of period (in shares) | shares | 2,258 |
Grants (in shares) | shares | 1,119 |
Vested (in shares) | shares | (84) |
Forfeitures (in shares) | shares | 0 |
Vested but not released (in shares) | shares | 0 |
Nonvested balance at end of period (in shares) | shares | 3,293 |
Weighted-Average Grant Date Fair Value | |
Nonvested balance at beginning of period, Weighted-Average Grant Date Fair Value (in dollars per share) | $ / shares | $ 6.83 |
Grants, Weighted-Average Grant Date Fair Value (in dollars per share) | $ / shares | 11.08 |
Vested, Weighted-Average Grant Date Fair Value (in dollars per share) | $ / shares | 9.03 |
Forfeitures, Weighted-Average Grant Date Fair Value (in dollars per share) | $ / shares | 0 |
Vested but not released, Weighted-Average Grant Date Fair Value (in dollars per share) | $ / shares | 0 |
Nonvested balance at end of period, Weighted-Average Grant Date Fair Value (in dollars per share) | $ / shares | $ 8.22 |
Stockholders' Equity - Employe
Stockholders' Equity - Employee Stock Purchase Plan (Details) - $ / shares | 12 Months Ended | ||||||
Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | 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) | 371,000 | ||||||
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) | 5,400,000 | ||||||
Number of shares available for future issuance (in shares) | 2,800,000 | ||||||
Average share price of shares issued under the plan (dollars per share) | $ 9.54 | ||||||
Assumptions and resulting fair values of options granted | |||||||
Expected term (in years) | 6 months | 6 months | 6 months | ||||
Risk-free interest rate, lower range (percent) | 1.53% | 0.62% | 0.36% | ||||
Risk-free interest rate, upper range (percent) | 2.11% | 1.14% | 0.49% | ||||
Expected volatility, lower range (percent) | 40.24% | 44.38% | 53.00% | ||||
Expected volatility, upper range (percent) | 44.83% | 53.70% | 55.55% | ||||
Expected dividend yield (percent) | 0.00% | 0.00% | 0.00% | ||||
Weighted average grant-date fair value per share (in dollars per share) | $ 3.03 | $ 2.51 | $ 1.23 |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | |
Retirement Benefits [Abstract] | |||
Company's contributions to defined-contribution plans | $ 3.9 | $ 3.8 | $ 3.5 |
Significant Customers (Details)
Significant Customers (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 31, 2017 | Oct. 01, 2017 | Jun. 25, 2017 | Mar. 26, 2017 | Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | |
Revenue, Major Customer [Line Items] | |||||||||||
Revenue | $ 164.4 | $ 159.4 | $ 151.2 | $ 143 | $ 166.3 | $ 157.1 | $ 147.9 | $ 132 | $ 618 | $ 603.3 | $ 541.9 |
Kratos Government Solutions (KGS) | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Revenue | 485.1 | ||||||||||
U.S. Government | Kratos Government Solutions (KGS) | |||||||||||
Revenue, Major Customer [Line Items] | |||||||||||
Revenue | $ 447 | $ 451.9 | $ 396.7 | ||||||||
Sales to the U.S. Government - percentage of total revenue | 72.00% | 75.00% | 73.00% |
Segment Information - Narrativ
Segment Information - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Dec. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Jul. 01, 2018USD ($) | Apr. 01, 2018USD ($) | Dec. 31, 2017USD ($) | Oct. 01, 2017USD ($) | Jun. 25, 2017USD ($) | Mar. 26, 2017USD ($) | Oct. 01, 2017Segment | Dec. 30, 2018USD ($)Segment | Dec. 31, 2017USD ($) | Dec. 25, 2016USD ($) | |
Segment Reporting Information [Line Items] | ||||||||||||
Number of reportable segments | Segment | 2 | 3 | ||||||||||
Total revenues | $ 164.4 | $ 159.4 | $ 151.2 | $ 143 | $ 166.3 | $ 157.1 | $ 147.9 | $ 132 | $ 618 | $ 603.3 | $ 541.9 | |
Percentage of foreign revenue to total revenue (as a percent) | 19.00% | 14.00% | 15.00% | |||||||||
Unmanned Systems | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Total revenues | $ 132.9 | |||||||||||
Loss accrual | $ 18.7 | |||||||||||
Kratos Government Solutions | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Total revenues | 485.1 | |||||||||||
Impairment of goodwill | 24.2 | $ 24.2 | ||||||||||
Business exit costs | 9.2 | |||||||||||
Assets of foreign subsidiaries | $ 126.7 | $ 116.7 | 126.7 | 116.7 | 113.7 | |||||||
Non-US | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Total revenues | $ 114.3 | $ 84.7 | $ 80.1 |
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. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 31, 2017 | Oct. 01, 2017 | Jun. 25, 2017 | Mar. 26, 2017 | Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | |
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | $ 164.4 | $ 159.4 | $ 151.2 | $ 143 | $ 166.3 | $ 157.1 | $ 147.9 | $ 132 | $ 618 | $ 603.3 | $ 541.9 |
Depreciation and amortization | 17.9 | 22.2 | 22.5 | ||||||||
Total operating income (loss) from continuing operations | 10.8 | $ 10.1 | $ 2.6 | $ 7 | (15) | $ 0.1 | $ 1.5 | $ 1.4 | 30.5 | (12) | (18) |
Total assets | 1,010.1 | 1,024 | 1,010.1 | 1,024 | 948.6 | ||||||
Discontinued Operations [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total assets | 8.3 | 97.4 | 8.3 | 97.4 | 92 | ||||||
Kratos Government Solutions | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 485.1 | ||||||||||
Unmanned Systems | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 132.9 | ||||||||||
Operating Segments | Kratos Government Solutions | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 485.1 | 481.6 | 466.1 | ||||||||
Depreciation and amortization | 13.2 | 14.4 | 15 | ||||||||
Total operating income (loss) from continuing operations | 35.5 | (0.1) | 15.5 | ||||||||
Total assets | 602.8 | 597.9 | 602.8 | 597.9 | 609.8 | ||||||
Operating Segments | Unmanned Systems | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 132.9 | 121.7 | 75.8 | ||||||||
Depreciation and amortization | 4.7 | 7.8 | 7.5 | ||||||||
Total operating income (loss) from continuing operations | 5.1 | (3.6) | (28.3) | ||||||||
Total assets | 220.9 | 201.9 | 220.9 | 201.9 | 172.1 | ||||||
Corporate activities | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total operating income (loss) from continuing operations | (10.1) | (8.3) | (5.2) | ||||||||
Total assets | $ 178.1 | $ 126.8 | 178.1 | 126.8 | 74.7 | ||||||
Service | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 200.7 | 197.8 | 221.3 | ||||||||
Service | Operating Segments | Kratos Government Solutions | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 200.7 | 197.8 | 221.3 | ||||||||
Service | Operating Segments | Unmanned Systems | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 0 | 0 | 0 | ||||||||
Product | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 417.3 | 405.5 | 320.6 | ||||||||
Product | Operating Segments | Kratos Government Solutions | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | 284.4 | 283.8 | 244.8 | ||||||||
Product | Operating Segments | Unmanned Systems | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total revenues | $ 132.9 | $ 121.7 | $ 75.8 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Millions | 1 Months Ended |
Apr. 30, 2016USD ($) | |
US. Government Cost Claims | |
Loss Contingencies [Line Items] | |
Settlement on matters related to unallowable costs | $ 0.2 |
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. 30, 2018 | Sep. 30, 2018 | Jul. 01, 2018 | Apr. 01, 2018 | Dec. 31, 2017 | Oct. 01, 2017 | Jun. 25, 2017 | Mar. 26, 2017 | Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenues | $ 164.4 | $ 159.4 | $ 151.2 | $ 143 | $ 166.3 | $ 157.1 | $ 147.9 | $ 132 | $ 618 | $ 603.3 | $ 541.9 |
Gross profit | 45.5 | 44.1 | 39.3 | 40.8 | 46.8 | 37.2 | 37.5 | 36.1 | 169.7 | 157.6 | 120.5 |
Total operating income (loss) from continuing operations | 10.8 | 10.1 | 2.6 | 7 | (15) | 0.1 | 1.5 | 1.4 | 30.5 | (12) | (18) |
Provision (benefit) for income taxes from continuing operations | 0.2 | 3.4 | 0.1 | 0.9 | (11.8) | (1.1) | 1.3 | 1.4 | 4.6 | (10.2) | 5.8 |
Income (loss) from continuing operations | 5.2 | 1.4 | (3.8) | 1.3 | (24) | (5.9) | (6.9) | (10.1) | |||
Income (loss) from discontinued operations | (0.5) | 0.3 | (3.9) | (3.5) | 1.8 | 1.6 | 0.7 | 0.1 | |||
Net income (loss) | $ 4.7 | $ 1.7 | $ (7.7) | $ (2.2) | $ (22.2) | $ (4.3) | $ (6.2) | $ (10) | $ (3.5) | $ (42.7) | $ (60.5) |
Basic income (loss) per common share: | |||||||||||
Income (loss) from continuing operations (in dollars per share) | $ 0.05 | $ 0.01 | $ (0.04) | $ 0.01 | $ (0.23) | $ (0.07) | $ (0.08) | $ (0.13) | $ 0.04 | $ (0.52) | $ (0.94) |
Income (loss) from discontinued operations (in dollars per share) | 0 | 0.01 | (0.03) | (0.03) | 0.02 | 0.02 | 0.01 | 0 | (0.07) | 0.04 | (0.05) |
Net income (loss) per common share (in dollars per share) | 0.05 | 0.02 | (0.07) | (0.02) | (0.21) | (0.05) | (0.07) | (0.13) | (0.03) | (0.48) | (0.99) |
Diluted income (loss) per common share: | |||||||||||
Income (loss) from continuing operations (in dollars per share) | 0.05 | 0.01 | (0.04) | 0.01 | (0.23) | (0.07) | (0.08) | (0.13) | 0.04 | (0.52) | (0.94) |
Income (loss) from discontinued operations (in dollars per share) | (0.01) | 0.01 | (0.03) | (0.03) | 0.02 | 0.02 | 0.01 | 0 | (0.07) | 0.04 | (0.05) |
Net income (loss) per common share (in dollars per share) | $ 0.04 | $ 0.02 | $ (0.07) | $ (0.02) | $ (0.21) | $ (0.05) | $ (0.07) | $ (0.13) | $ (0.03) | $ (0.48) | $ (0.99) |
Quarterly Financial Data (Una_4
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ in Millions | Sep. 22, 2015 | Dec. 31, 2017 | Dec. 30, 2018 | Dec. 31, 2017 | Dec. 25, 2016 | May 31, 2014 |
Effect of Fourth Quarter Events [Line Items] | ||||||
Loss (gain) on extinguishment of debt | $ 0 | $ 17.3 | $ (0.2) | |||
Senior notes | 7% Senior Notes due 2019 | ||||||
Effect of Fourth Quarter Events [Line Items] | ||||||
Loss (gain) on extinguishment of debt | $ 3.4 | $ 15.2 | 17.3 | $ (0.2) | ||
Stated interest rate | 7.00% | 7.00% | ||||
Kratos Government Solutions (KGS) | ||||||
Effect of Fourth Quarter Events [Line Items] | ||||||
Impairment of goodwill | $ 24.2 | $ 24.2 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event $ in Millions | Feb. 28, 2019USD ($) |
Subsequent Event [Line Items] | |
Purchase price | $ 60 |
Cash | 33 |
Common stock value | $ 27 |
FTT Core, LLC | |
Subsequent Event [Line Items] | |
Percentage of voting interests acquired | 80.10% |
Florida Turbine Technologies, Inc. | |
Subsequent Event [Line Items] | |
Percentage of voting interests acquired | 80.10% |
Uncategorized Items - ktos-2018
Label | Element | Value |
Accounting Standards Update 2014-09 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (200,000) |
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (200,000) |