Significant Customers

9 Months Ended

Sep. 25, 2011

Significant Customers

Significant Customers

Note 12. 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 segment has substantial revenue from the U.S. Government. Sales to the U.S. Government amounted to approximately $106.5 million and $157.9 million, or 89% and 75%, of total revenue for the three months ended September 26, 2010 and September 25, 2011, respectively, and approximately $250.7 million and $374.4 million, or 87% and 74%, of total revenue for the nine months ended September 26, 2010 and September 25, 2011, respectively.

In August 2011, Congress and the Administration enacted the Budget Control Act of 2011 (the “Budget Act”).  The Budget Act set a target reduction of net government spending of 1.2 trillion over the next ten years.  Under the Budget Act, 50% of any failure to achieve the $1.2 trillion target reduction would automatically be applied as a reduction to discretionary appropriations for national defense programs.  Any automatic reductions in national defense programs could impact our significant customers.