{
  "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": 24,
  "pageCount": 49,
  "prevPage": 23,
  "nextPage": 25,
  "slideType": "villain_critique",
  "function": "name_villain",
  "density": "overcrowded",
  "nDataPoints": 36,
  "notes": "The slide uses a 'Red Flags' list to discredit the company's growth narrative.",
  "elementsJson": [
    "headline_text",
    "paragraph",
    "bullet_list",
    "kpi_table",
    "footnote"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b98-64474d65435b/24",
  "deckHref": "/decks/019dd923-622c-750b-8b98-64474d65435b",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b98-64474d65435b.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-64474d65435b#slide-24",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "We remind investors that segment revenues are still below 2013 levels, and operating profits (still negative).",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd953-0935-737e-8dc2-2206a76cd4cf",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.04,
        "w": 0.9,
        "x": 0.05,
        "y": 0.22
      },
      "kind": "list",
      "text": "Kratos Unmanned Systems segment: consists of its unmanned aerial system and unmanned ground and seaborne system businesses.",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "489a8381-6ace-4602-9417-3b9d3652f243",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.15,
        "w": 0.9,
        "x": 0.05,
        "y": 0.37
      },
      "kind": "list",
      "text": "Red Flags: 1) CEI was touted as generating 25% organic growth in 2011... 2) At least one CEI founder Amy Fournier has left the firm... 3) CEI spent nothing on R&D... 4) Recent reviews suggest CEI's problems... 4) CEI settled with the Dept. of Justice...",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "669d6163-56df-4eaa-a0a5-c28e37a83d70",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.9,
        "x": 0.05,
        "y": 0.27
      },
      "kind": "list",
      "text": "Growth by Acquisitions, Business Failure Evident: We believe the majority of the US segment reflect the acquisition of Composite Engineering Inc...",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "afa07bda-4b60-4433-a83b-384cff9714d8",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "metric",
      "text": "Operating Income: ($27.7)",
      "attrs": null,
      "subkind": "primary",
      "toolName": "Quantification",
      "toolSlug": "quantification",
      "confidence": null,
      "componentId": "019dd953-0935-737e-8dc2-28c2b85b5721",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.07,
        "w": 0.9,
        "x": 0.05,
        "y": 0.13
      },
      "kind": "paragraph",
      "text": "There is ample evidence to suggest that Kratos' Unmanned System (\"US\" or \"UAV\") segment is a mediocre combination of acquired businesses. We remind investors that segment revenues are still below 2013 levels, and operating profits (still negative).",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "e652258e-d677-4340-9bf5-efba107f3e55",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "quote",
      "text": "\"They have even been known to sell technology that has not been invented yet\" — Recent reviews; \"Sometimes programs are underbid and understaffed\" — Recent reviews; \"We often find ourselves out of depth (agreeing to contracts with not enough time or money to execute, planning, etc.)\" — Recent reviews.",
      "attrs": null,
      "subkind": null,
      "toolName": "Authority citation",
      "toolSlug": "authority-citation",
      "confidence": null,
      "componentId": "019dd953-0935-737e-8dc2-26bccea25352",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.06,
        "w": 0.9,
        "x": 0.05,
        "y": 0.88
      },
      "kind": "source-note",
      "text": "1) Included in the 2016 operating losses... 2) 2014 assets revised down from $173.2m to $166.1m without explanation",
      "attrs": {
        "numbered": true
      },
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "3c5ccb22-088a-43bf-a62f-4cb21857b737",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.32,
        "w": 0.9,
        "x": 0.05,
        "y": 0.55
      },
      "kind": "table",
      "text": "Kratos US Segment Results table showing Sales, % growth, Operating Income, % margin, Segment Assets, and Operating Inc. / Avg Assets from 2012-2017.",
      "attrs": null,
      "subkind": "data",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "dd428f89-7946-4221-a9bd-10e4311debb1",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.65,
        "x": 0.31,
        "y": 0.03
      },
      "kind": "title",
      "text": "Kratos Unmanned Systems (Drone) Business Hyped Despite Abysmal Results",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "dc0c1986-9020-4f11-a3fe-1de169524c09",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [
    {
      "name": "fraud-exposure",
      "slug": null,
      "matchId": "e6d03fea-8ffb-4706-b123-cc1d459b974e",
      "evidence": "The slide explicitly lists 'Red Flags' and cites DOJ settlements to undermine company credibility.",
      "confidence": 0.95
    }
  ],
  "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
}