Revenue during the quarter went up marginally by 2.59 percent to $182.10 million from $177.50 million in the previous year period. Gross margin for the quarter expanded 182 basis points over the previous year period to 25.59 percent. Total expenses were 97.47 percent of quarterly revenues, down from 99.15 percent for the same period last year. This has led to an improvement of 168 basis points in operating margin to 2.53 percent.

Operating income for the quarter was $4.60 million, compared with $1.50 million in the previous year period.

However, the adjusted EBITDA for the quarter was almost stable at $13.40 million, when compared with the prior year period. At the same time, adjusted EBITDA margin contracted 19 basis points in the quarter to 7.36 percent from 7.55 percent in the last year period.

Eric DeMarco, Kratos’ president and chief executive officer, said, “Kratos finished 2016 exceeding our expectations, as our primary market space, U.S. DoD government contracting and National Security, continued to improve. Importantly, in addition to our strong fourth quarter 2016 financial performance, Kratos’ bookings and backlog in our largest business unit, which includes our satellite communications, cybersecurity and training businesses, was 1.2 to 1 in the fourth quarter and for 2016, positioning the Company for an even better 2017.”

Kratos Defense & Security Solutions, Inc projects revenue to be in the range of $700 million to $720 million for financial year 2017.

The company has spent $13.90 million cash to meet investing activities during the year as against cash outgo of $5.70 million in the last year. It has incurred net capital expenditure of $9.10 million on net basis during the year, down 12.50 percent or $1.30 million from year ago.

Cash flow from financing activities was $63.10 million for the year as against cash outgo of $214.70 million in the last year period.

Cash and cash equivalents stood at $69.10 million as on Dec. 25, 2016, up 142.46 percent or $40.60 million from $28.50 million on Dec. 27, 2015.

Working capital increases
Kratos Defense & Security Solutions, Inc has recorded an increase in the working capital over the last year. It stood at $176.60 million as at Dec. 25, 2016, up 19.32 percent or $28.60 million from $148 million on Dec. 27, 2015. Current ratio was at 1.90 as on Dec. 25, 2016, up from 1.86 on Dec. 27, 2015.

Cash conversion cycle (CCC) has increased to 58 days for the quarter from 55 days for the last year period. Days sales outstanding went up to 57 days for the quarter compared with 53 days for the same period last year.

Days inventory outstanding was almost stable at 19 days for the quarter, when compared with the last year period. At the same time, days payable outstanding went up to 18 days for the quarter from 16 for the same period last year.