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  "documentTitle": "Kratos Defense & Security Solutions (KTOS)",
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  "authorName": "Ben Axler",
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  "presentationDate": "2018-03-16 00:00:00",
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  "notes": "The slide uses a 'before-after' framing to contrast management's 2013 forward-looking statement with the 2013-2017 historical data.",
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      "kind": "callout",
      "text": "On a pro forma cash adjusted basis, SG&A margin is +320 bps",
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      "text": "470 bps EBITDA margin contraction. On the surface, SG&A margin is only +90 bps from 2013-2017 using Kratos reported figures",
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      "kind": "callout",
      "text": "From Kratos in 2013: \"Capitalize on Corporate Infrastructure Investments... We therefore anticipate that, to the extent our revenue grows, we will be able to leverage this infrastructure base and increase our operating margins.\"",
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      "text": "Cash SG&A per employee +8.8% p.a.",
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      "text": "EBITDA margins have contracted 470 bps with cash SG&A margin up 320 bps.",
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      "text": "EBITDA margin: 470 bps",
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      "text": "Kratos has been touting for years that its investment in corporate infrastructure will provide leverage to expand margins. In fact, the exact opposite has happened. EBITDA margins have contracted 470 bps with cash SG&A margin up 320 bps.",
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      "text": "Capitalize on Corporate Infrastructure Investments. In recent periods, we have made significant investments in our senior management and corporate infrastructure in anticipation of future revenue growth... We therefore anticipate that, to the extent our revenue grows, we will be able to leverage this infrastructure base and increase our operating margins. — Kratos 2013 10-K, p. 9",
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      "text": "Source: 2013 10-K, p. 9; Kratos Financial results.",
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      "text": "Negative Operating Leverage",
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