Kratos Reports Third Quarter Financial Results

Kratos Defense & Security Solutions, Inc.
Unaudited Condensed Consolidated Balance Sheets
(in millions)


	September 26,			December 27,
		2021			2020
Assets
Current assets:
Cash and cash equivalents	$	369.9		$	380.8
Restricted cash		-			0.7
Accounts receivable, net		274.7			272.3
Inventoried costs		90.9			81.2
Prepaid expenses		11.7			12.0
Other current assets		25.4			17.8
Total current assets		772.6			764.8
Property, plant and equipment, net		158.8			143.8
Operating lease right-of-use assets		38.8			42.9
Goodwill		483.7			483.9
Intangible assets, net		39.3			43.0
Other assets		84.6			84.4
Total assets	$	1,577.8		$	1,562.8
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	43.6		$	55.4
Accrued expenses		28.7			34.7
Accrued compensation		51.3			48.1
Accrued interest		6.4			1.5
Billings in excess of costs and earnings on uncompleted contracts		57.7			34.0
Current portion of operating lease liabilities		9.2			8.9
Other current liabilities		10.6			11.9
Other current liabilities of discontinued operations		3.1			3.1
Total current liabilities		210.6			197.6
Long-term debt		296.5			301.0
Operating lease liabilities, net of current portion		34.0			38.6
Other long-term liabilities		77.3			83.0
Other long-term liabilities of discontinued operations		2.5			2.5
Total liabilities		620.9			622.7
Commitments and contingencies
Redeemable noncontrolling interest		15.1			14.8
Stockholders’ equity:
Additional paid-in capital		1,572.3			1,556.3
Accumulated other comprehensive loss		1.3			1.4
Accumulated deficit		(631.8	)		(632.4	)
Total Kratos stockholders’ equity		941.8			925.3
Total liabilities and stockholders’ equity	$	1,577.8		$	1,562.8



Kratos Defense & Security Solutions, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(in millions)

	Nine Months Ended
	September 26,			September 27,
		2021			2020
Operating activities:
Net income	$	0.9		$	1.4
Less: loss from discontinued operations		(1.1	)		(0.8	)
Income from continuing operations		2.0			2.2
Adjustments to reconcile income from continuing operations to net cash provided by operating activities from continuing operations:
Depreciation and amortization		19.4			18.5
Amortization of lease right-of-use assets		6.7			7.3
Deferred income taxes		(0.7	)		(0.3	)
Stock-based compensation		19.2			14.5
Amortization of deferred financing costs		0.7			0.7
Provision for (recovery of) doubtful accounts		(0.2	)		0.2
Changes in assets and liabilities, net of acquisitions:
Accounts receivable		10.1			6.4
Unbilled receivables		(12.2	)		(12.3	)
Inventoried costs		(6.8	)		(4.8	)
Prepaid expenses and other assets		(5.1	)		(15.8	)
Operating lease liabilities		(6.7	)		(8.0	)
Accounts payable		(10.5	)		(1.7	)
Accrued compensation		3.3			6.5
Accrued expenses		(6.0	)		(4.9	)
Accrued interest		4.8			4.8
Billings in excess of costs and earnings on uncompleted contracts		23.8			(2.7	)
Income tax receivable and payable		(2.5	)		(1.4	)
Other liabilities		(4.7	)		9.9
Net cash provided by operating activities from continuing operations		34.6			19.1
Investing activities:
Cash paid for acquisitions, net of cash acquired		(6.2	)		(43.9	)
Capital expenditures		(33.4	)		(23.0	)
Proceeds from insurance		4.5			-
Proceeds from sale of assets		-			0.1
Net cash used in investing activities from continuing operations		(35.1	)		(66.8	)
Financing activities:
Proceeds from the issuance of long-term debt		-			4.8
Payment of long-term debt		(5.1	)		(0.7	)
Proceeds from the issuance of common stock, net of issuance costs		-			240.4
Payment under finance leases		(0.7	)		(0.5	)
Payments of employee taxes withheld from share-based awards		(9.1	)		(1.3	)
Proceeds from shares issued under equity plans		5.9			5.3
Net cash provided by (used in) financing activities from continuing operations		(9.0	)		248.0
Net cash flows from continuing operations		(9.5	)		200.3
Net operating cash flows of discontinued operations		(1.1	)		2.1
Effect of exchange rate changes on cash and cash equivalents		(1.0	)		0.4
Net increase (decrease) in cash, cash equivalents and restricted cash		(11.6	)		202.8
Cash, cash equivalents and restricted cash at beginning of period		381.5			172.6
Cash, cash equivalents and restricted cash at end of period	$	369.9		$	375.4

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