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Organization and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 29, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Net Contract Assets (Liabilities)

Net contract assets and liabilities are as follows (in millions):



	December 29, 2019		December 30, 2018		Net Change
Contract assets	$	179.4	$	172.8	$	6.6
Contract liabilities	$	34.3	$	37.0	$	(2.7	)
Net contract assets	$	145.1	$	135.8	$	9.3

Schedule of disaggregation of Revenue

The following series of tables presents the Company’s revenue disaggregated by several categories. For the majority of contracts, revenue is recognized over time as work is performed on the contract. Revenue by contract type was as follows (in millions):



	Year Ended December 29, 2019		Year Ended December 30, 2018
Kratos Government Solutions
Fixed price	$	469.4	$	424.9
Cost plus fee	54.3		32.6
Time and materials	32.4		27.6
Total Kratos Government Solutions	556.1		485.1
Unmanned Systems
Fixed price	126.2		104.8
Cost plus fee	33.8		26.5
Time and materials	1.4		1.6
Total Unmanned Systems	161.4		132.9
Total Revenues	$	717.5	$	618.0

Revenue by customer was as follows (in millions):



	Year Ended December 29, 2019		Year Ended December 30, 2018
Kratos Government Solutions
U.S. Government ⁽¹⁾	$	368.6	$	333.5
International ⁽²⁾	111.4		96.0
U.S. Commercial and other customers	76.1		55.6
Total Kratos Government Solutions	556.1		485.1
Unmanned Systems
U.S. Government ⁽¹⁾	138.8		113.5
International ⁽²⁾	21.1		18.3
U.S. Commercial and other customers	1.5		1.1
Total Unmanned Systems	161.4		132.9
Total Revenues	$	717.5	$	618.0

⁽¹⁾ Sales to the U.S. Government include sales from contracts for which the Company is the prime contractor, as well as those for which the Company is a subcontractor and the ultimate customer is the U.S. Government. Each of the Company’s segments derives substantial revenue from the U.S. Government. These sales include foreign military sales contracted through the U.S. Government.

⁽²⁾International sales include sales from contracts for which the Company is the prime contractor, as well as those for which the Company is a subcontractor and the ultimate customer is an international customer. These sales include direct sales with governments outside the U.S. and commercial sales with customers outside the U.S.

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs

The following table shows the amounts recognized in the consolidated financial statements for stock-based compensation expense related to stock options, stock awards and stock offered under the Company’s employee stock purchase plan (in millions, except per share amounts).



	Year ended December 29, 2019		Year ended December 30, 2018		Year ended December 31, 2017
Selling, general and administrative expenses	$	11.0	$	7.2	$	7.8
Total cost of employee stock-based compensation included in operating income (loss) from continuing operations	$	11.0	$	7.2	$	7.8

Schedule of Valuation and Qualifying Accounts Disclosure

The following table outlines the balance of the Company’s allowance for doubtful accounts for 2019, 2018 and 2017. The table identifies the additional provisions each year as well as the write-offs that utilized the allowance (in millions).



Allowance for Doubtful Accounts	Balance at Beginning of Year		Provisions			Write-offs/Recoveries			Balance at End of Year
Year ended December 31, 2017	$	1.5	$	—		$	(1.0	)	$	0.5
Year ended December 30, 2018	$	0.5	$	1.8		$	—		$	2.3
Year ended December 29, 2019	$	2.3	$	(0.2	)	$	(0.2	)	$	1.9

Property, Plant and Equipment

Assets are depreciated predominately using the straight-line method, with the following lives:



	Years
Buildings and improvements	15 – 39
Machinery and equipment	3 – 10
Computer equipment and software	1 – 10
Vehicles, furniture, and office equipment	5
Leasehold improvements	Shorter of useful life or length of lease

Property, plant and equipment, net (in millions)



	December 29, 2019			December 30, 2018
Finance lease right of use assets	$	39.6		$	—
Land and buildings	$	12.2		$	11.9
Computer equipment and software	32.7			28.3
Machinery and equipment	78.7			56.8
Furniture and office equipment	7.1			6.3
Leasehold improvements	12.3			10.9
Construction in progress	16.0			21.5
Property and equipment	198.6			135.7
Accumulated depreciation and amortization	(81.7		)	(68.6		)
Total property and equipment, net	$	116.9		$	67.1

Schedule of Interest Expense, Net

Interest expense, net is summarized in the following table (in millions):



	Year ended December 29, 2019			Year ended December 30, 2018			Year ended December 31, 2017
Interest expense incurred primarily on the Senior Secured Notes	$	(23.5	)	$	(21.6	)	$	(29.1	)
Miscellaneous interest income	1.9			0.8			0.5
Interest expense, net	$	(21.6	)	$	(20.8	)	$	(28.6	)