{
  "docId": "019dd923-622c-750b-8b98-64474d65435b",
  "docSlug": "68bd393edc75",
  "documentTitle": "Kratos Defense & Security Solutions (KTOS)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2018-03-16 00:00:00",
  "orientation": "landscape",
  "aspectRatio": 1.3333334,
  "pageNumber": 15,
  "pageCount": 49,
  "prevPage": 14,
  "nextPage": 16,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "dense",
  "nDataPoints": 66,
  "notes": "The slide uses a heatmap-style color coding (yellow to red) to emphasize the worsening credit metrics.",
  "elementsJson": [
    "headline_text",
    "paragraph",
    "data_table",
    "footnote"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b98-64474d65435b/15",
  "deckHref": "/decks/019dd923-622c-750b-8b98-64474d65435b",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b98-64474d65435b.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-64474d65435b#slide-15",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "The Company’s financial condition was deteriorating significantly with Net Debt / EBITDA > 10x and EBITDA interest coverage hovering around 1x.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd953-0935-737e-8dc0-d717b378c428",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "metric",
      "text": "Net Debt / EBITDA: 12.1x",
      "attrs": null,
      "subkind": "primary",
      "toolName": "Quantification",
      "toolSlug": "quantification",
      "confidence": null,
      "componentId": "019dd953-0935-737e-8dc0-d92ad49d1b0f",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.12,
        "w": 0.9,
        "x": 0.05,
        "y": 0.18
      },
      "kind": "paragraph",
      "text": "Before Kratos' magic stock rally began in 2016, and it divested its Electronics Products Division to Ultra Electronics in June 2015, the Board hired an investment bank to assist in a formal review of Kratos' strategic alternatives. (1) The Company's financial condition was deteriorating significantly with Net Debt / EBITDA > 10x and EBITDA interest coverage hovering around 1x. Kratos' financial condition even caught the attention of the SEC, which started issuing comment letters about its line of credit and conditions of default in the event of a material adverse change. (2)",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "3d63165a-a744-4a7f-a9bf-6fff21d3a56f",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.4,
        "x": 0.05,
        "y": 0.89
      },
      "kind": "source-note",
      "text": "Source: Kratos Financial results 1) 2014 10-K, p.23 2) SEC Comment Letter re: FY 2014 10-K filed March 13, 2015",
      "attrs": null,
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "adf551ba-e1fb-4d73-a746-6864c8a660a5",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.52,
        "w": 0.78,
        "x": 0.11,
        "y": 0.34
      },
      "kind": "table",
      "text": "Financial and credit metrics table from 2010 to June 2015",
      "attrs": null,
      "subkind": "data",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "a2264ee7-0094-4ec1-9b71-65cf08871bcf",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.65,
        "x": 0.31,
        "y": 0.03
      },
      "kind": "title",
      "text": "Kratos Appeared To Be Teetering on Financial Destruction Prior To Its Recent \"Success\"",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "c6297cff-c2da-4e43-9c7e-1a2003e04ba3",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [
    {
      "name": "fraud-exposure",
      "slug": null,
      "matchId": "d45a77ec-a036-4869-9862-d22789241368",
      "evidence": "The slide uses historical financial data to expose a contradiction between the company's 'success' and its actual deteriorating financial health.",
      "confidence": 0.9
    }
  ],
  "arcBeats": [
    {
      "to": 31,
      "from": 15,
      "beatId": "d2657ee3-5da5-4b6a-bc86-c3bb2e7a8906",
      "arcName": "Problem-Agitate-Solution",
      "arcSlug": "problem-agitate-solution",
      "beatName": "Agitate",
      "beatSlug": "problem-agitate-solution-agitate-make-it-worse",
      "evidence": "The deck highlights Kratos' management problems, overhyped business segments, and poor valuation.",
      "position": 1,
      "confidence": 0.8,
      "parentBeatName": "Development",
      "parentBeatSlug": "development"
    }
  ],
  "loops": [],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}