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