Discontinued Operations

12 Months Ended

Dec. 31, 2023

Discontinued Operations and Disposal Groups [Abstract]

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 received approximately $68.7 million of aggregate net cash proceeds from the Transaction, after taking into account amounts that were paid by the Company pursuant to a negotiated

transaction services agreement between the Company and the Buyer, receipt of approximately $7.3 million in net working capital retained by the Company, and associated transaction fees and expenses and including the impact of the final settlement and determination of the closing net working capital adjustment which was settled with the Buyer in the fourth quarter of 2021. Included in the year ended December 26, 2021 is approximately $1.1 million of loss from discontinued operations related to the final working capital settlement. Included in the year ended December 25, 2022 is an approximate $0.9 million gain as a result of the release of an indemnification liability following the lapse of the statute of limitations associated with a potential tax liability that was recorded in 2019 as part of the sale of PSS. Included in the year ended December 31, 2023 is an approximate $0.2 million gain as a result of the release of an indemnification liability following the lapse of the statute of limitations associated with a potential tax liability that was recorded in 2019 as part of the sale of PSS.

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 31, 2023		Year ended December 25, 2022		Year ended December 26, 2021
Revenue	$	—	$	—	$	0.1
Cost of sales	—		—		—
Selling, general and administrative expenses	—		0.3		2.4


Loss from discontinued operations before income taxes	—		(0.3)		(2.3)
Gain on disposal of discontinued operations before income taxes	—		—		—
Total loss of discontinued operations before income taxes	—		(0.3)		(2.3)
Income tax benefit	(0.2)		(1.2)		(0.2)
Income (loss) from discontinued operations	$	0.2	$	0.9	$	(2.1)

Revenue and operating results for the year ended December 26, 2021 reflect the final settlement of the working capital dispute with the Buyer which resulted in expenses of approximately $1.1 million, and related legal fees as well as performance on the contracts and working capital retained by the Company.

The following is a summary of the assets and liabilities of discontinued operations as of December 31, 2023 and December 25, 2022 (in millions):


	December 31, 2023		December 25, 2022














Other current liabilities	0.9		0.9
Current liabilities of discontinued operations	$	0.9	$	0.9
Other long-term liabilities of discontinued operations	$	1.1	$	1.4