XML 39 R10.htm IDEA: XBRL DOCUMENT
v3.19.3

Discontinued Operations | 9 Months Ended
--- | ---
Sep. 29, 2019
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. Including amounts received to date, 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 net working capital adjustment. The Company currently expects that the net working capital retained by the Company will be settled in 2019 once certain legacy projects are completed and the project close-out process has been completed. Through September 29, 2019, approximately $2.4 million has been collected related to these legacy projects. The Company incurred approximately $2.7 million of transaction related costs, which was 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 following table presents the results of discontinued operations (in millions):
| Three Months Ended |  | Nine Months Ended
| September 29, 2019 |  | September 30, 2018 |  | September 29, 2019 |  | September 30, 2018
Revenue | $ | 0.2 |  |  | $ | 0.9 |  |  | $ | 0.3 |  |  | $ | 44.0 |
Cost of sales | — |  |  | 0.4 |  |  | 0.7 |  |  | 33.8 |
Selling, general and administrative expenses | 0.1 |  |  | — |  |  | 0.7 |  |  | 16.6 |
Other (income) expense | 0.1 |  |  | — |  |  | (3.5 | ) |  | 2.7 |
Income (loss) from discontinued operations before income taxes | — |  |  | 0.5 |  |  | 2.4 |  |  | (9.1 | )
Income tax benefit (expense) | — |  |  | (0.2 | ) |  | — |  |  | 2.0 |
Income (loss) from discontinued operations | $ | — |  |  | $ | 0.3 |  |  | $ | 2.4 |  |  | $ | (7.1 | )
Revenue and operating results for the three and nine months ended September 29, 2019 reflected the work performed in relation to tasks on the legacy projects retained by the Company. Operating results for 2018 are through the date of divestiture of June 11, 2018. Revenue and operating results for the nine months ended September 30, 2018 were impacted by approximately $1.8 million and $2.0 million, respectively, of cost adjustments on certain security system deployment projects for a mass transit authority. Transaction expenses of $0.0 million and $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 for the three and nine months ended September 30, 2018, respectively. Other (income) expense for the nine months ended September 29, 2019 includes a $3.6 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 2015 as part of the sale of the Company’s Electronics Products Division. The following is a summary of the assets and liabilities of discontinued operations in the accompanying condensed consolidated balance sheets as of September 29, 2019 and December 30, 2018 (in millions):
| September 29, 2019 |  | December 30, 2018
Accounts receivable, net and unbilled receivables, net | $ | 4.6 |  |  | $ | 8.2 |
Other current assets | — |  |  | 0.1 |
Current assets of discontinued operations | $ | 4.6 |  |  | $ | 8.3 |
Accounts payable | $ | 0.3 |  |  | $ | 0.3 |
Accrued expenses | 0.3 |  |  | 0.4 |
Other current liabilities | 3.0 |  |  | 4.6 |
Current liabilities of discontinued operations | $ | 3.6 |  |  | $ | 5.3 |
Other long-term liabilities of discontinued operations | $ | 2.8 |  |  | $ | 6.4 |

X
- References No definition available. + Details
Name: | us-gaap_DiscontinuedOperationsAndDisposalGroupsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
Name: | us-gaap_DisposalGroupsIncludingDiscontinuedOperationsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration