x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended June 30, 2017 or | |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 20-5961564 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
860 N. McCarthy Blvd., Suite 200, Milpitas, California | 95035 | |
(Address of principal executive offices) | (Zip Code) | |
Registrant’s telephone number, including area code: (408) 941-7100 Securities registered pursuant to Section 12(b) of the Act: | ||
Title of Each Class | Name of Each Exchange on Which Registered | |
Common Stock, par value $0.01 per share Preferred Shares Purchase Rights | NASDAQ Stock Market LLC (NASDAQ Global Select Market) |
Large accelerated filer | o | Accelerated filer | o | |
Non-accelerated filer | x (Do not check if a smaller reporting company) | Smaller reporting company | o | |
Emerging growth company | o |
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• | continued price and margin erosion as a result of increased competition in the microwave transmission industry; |
• | the impact of the volume, timing and customer, product and geographic mix of our product orders; |
• | our ability to meet financial covenant requirements which could impact, among other things, our liquidity; |
• | the timing of our receipt of payment for products or services from our customers; |
• | our ability to meet projected new product development dates or anticipated cost reductions of new products; |
• | our suppliers’ inability to perform and deliver on time as a result of their financial condition, component shortages or other supply chain constraints; |
• | customer acceptance of new products; |
• | the ability of our subcontractors to timely perform; |
• | continued weakness in the global economy affecting customer spending; |
• | retention of our key personnel; |
• | our ability to manage and maintain key customer relationships; |
• | uncertain economic conditions in the telecommunications sector combined with operator and supplier consolidation; |
• | our failure to protect our intellectual property rights or defend against intellectual property infringement claims by others; |
• | the results of our restructuring efforts; |
• | the ability to preserve and use our net operating loss carryforwards; |
• | the effects of currency and interest rate risks; |
• | the conduct of unethical business practices in developing countries; and |
• | the impact of political turmoil in countries where we have significant business. |
• | New RAN Technologies. Mobile Radio Access Network (“RAN”) technologies are continually evolving. With evolution from 2G to 3G (HSPA), 4G (HSPA+ and LTE), and next 5G standards, technology is |
• | Subscriber Growth. Traffic on the backhaul infrastructure increases as the number of unique subscribers grows. |
• | Connected Devices. The number of devices such as smart phones and tablets connected to the mobile network is far greater than the number of unique subscribers and is continuing to grow as consumers adopt multiple mobile device types. There is also rapid growth in the number and type of wireless enabled sensors and machines being connected to the mobile network creating new revenue streams for network operators in healthcare, agriculture, transportation and education. As a result, the data traffic crossing the backhaul infrastructure continues to grow rapidly. |
• | IoT. The Internet of Things (“IoT”) brings the potential of massive deployment of wireless end points for sensing and reporting data and remotely controlling machines and devices. The increase of data volume drives investment in network infrastructure. |
• | RAN Capacity. RAN frequency spectrum is a limited resource and shared between all of the devices and users within the coverage area of each base station. Meeting the combined demand of increasing subscribers and devices will require the deployment of much higher densities of base stations with smaller and smaller range (small cells) each requiring backhaul. |
• | Geographic Coverage. Expanding the geographic area covered by a mobile network requires the deployment of additional Cellular Base Station sites. Each additional base station site also needs to be connected to the core of the mobile network through expansion of the backhaul system. |
• | License Mandates. Mobile Operators are licensed telecommunications service providers. Licenses will typically mandate a minimum geographic footprint within a specific period of time and/or a minimum proportion of a national or regional population served. This can pace backhaul infrastructure investment and cause periodic spikes in demand. |
• | Evolution to IP. Network Infrastructure capacity, efficiency and flexibility is greatly enhanced by transitioning from legacy SDH (synchronous digital hierarchy) / SONET (synchronous optical network) / TDM (time division multiplexing) to IP (internet protocol) infrastructure. Our products offer integrated IP transport and routing functionality increasing the value they bring in the backhaul network. |
• | Expansion of Offered Services. Mobile network operators especially in emerging markets now own and operate the most modern communications networks within their respective regions. These network assets can be further leveraged to provide high speed broadband services to fixed locations such as small, medium and large business enterprises, airports, hotels, hospitals, and educational institutions. Microwave and millimeter wave backhaul is ideally suited to providing high speed broadband connections to these end points due to the lack of fiber infrastructure. |
• | Many utility companies around the world are actively investing in Smart Grid solutions and energy demand management, which drive the need for network modernization and increased capacity of networks. |
• | The investments in network modernization in the public safety market can significantly enhance the capabilities of security agencies. Improving border patrol effectiveness, enabling inter-operable emergency communications services for local or state police, providing access to timely information from centralized databases, or utilizing video and imaging devices at the scene of an incident requires a high bandwidth and reliable network. The mission critical nature of Public Safety and National security networks can require that these networks are built, operated and maintained independently of other public network infrastructure and microwave is very well suited to this environment because it is a cost-effective alternative to fiber. |
• | Microwave technology can be used to engineer long distance and more direct connections than Optical Cable. Microwave signals also travel through the air much faster than light through glass and the combined effect of shorter distance and higher speed reduces latency, which is valued for trading applications in the financial industry. Our products have already been used to create low latency connections between major centers in the United States (“U.S.”), Europe and Asia and we see long-term interest in the creation of further low latency routes in various geographies around the world. |
• | The enhancement of Border Security and Surveillance networks to counter terrorism and insurgency is aided by the use of wireless technologies including microwave backhaul. |
• | Broad product and solution portfolio. We offer a comprehensive suite of wireless transmission networking systems for microwave and millimeter wave networking applications. Our solution consists of tailored offerings of our own wireless products and our own integrated ancillary equipment or that of other manufacturers and providers of element and network management systems and professional services. These solutions address a wide range of transmission frequencies, ranging from 2.4 GHz to 90 GHz, and a wide range of transmission capacities, ranging up to over 10 Gbps. The major product families included in these solutions are CTR 8000, WTM 4000 and AviatCloud. Our CTR 8000 platform merges the functionality of an indoor microwave modem unit and a cell site router into a single integrated solution, simplifying IP/MPLS deployments and creating a better performing network. The newest addition to our product portfolio is the WTM 4000, the highest capacity microwave radio ever produced and purpose built for SDN. To address the issues of operational complexity in our customers’ networks, AviatCloud is an app-based platform to automate and virtualize networks and their operations. |
• | Low total cost of ownership. Our wireless-based solutions are focused on low total cost of ownership, including savings on the combined costs of initial acquisition, installation and ongoing operation and maintenance. Our latest generation system designs reduce rack space requirements, require less power, are software-configurable to reduce spare parts requirements, and are simple to install, operate, upgrade and maintain. Our advanced wireless features can also enable operators to save on related costs, including spectrum fees and tower rental fees. |
• | Futureproof network. Our solutions are designed to protect the network operator’s investment by incorporating software-configurable capacity upgrades and plug-in modules that provide a smooth migration path to Carrier Ethernet and IP/MPLS (multiprotocol label switching)-based networking, without the need for costly equipment substitutions and additions. Our products include key technologies we believe will be needed by operators for their network evolution to support new broadband services. |
• | Flexible, easily configurable products. We use flexible architectures with a high level of software configurable features. This design approach produces high-performance products with reusable components while at the same time allowing for a manufacturing strategy with a high degree of flexibility, improved cost and reduced time-to-market. The software features of our products offer our customers a greater degree of flexibility in installing, operating and maintaining their networks. |
• | Comprehensive network management. We offer a range of flexible network management solutions, from element management to enterprise-wide network management and service assurance that we can optimize to work with our wireless systems. |
• | Complete professional services. In addition to our product offerings, we provide network planning and design, site surveys and builds, systems integration, installation, maintenance, network monitoring, training, customer service and many other professional services. Our services cover the entire evaluation, purchase, deployment and operational cycle and enable us to be one of the few complete turnkey solution providers in the industry. |
(In thousands) | June 30, 2017 | July 1, 2016 | |||||
North America | $ | 102,971 | $ | 97,360 | |||
International | 56,775 | 56,271 | |||||
Total backlog | $ | 159,746 | $ | 153,631 |
Name and Age | Position Currently Held and Past Business Experience | |
Michael A. Pangia, 56 | Mr. Pangia has been our President and Chief Executive Officer and a member of our board of directors (the “Board”) since July 18, 2011. From March 2009 to July 2011, he served as our Chief Sales Officer responsible for company-wide operations of the global sales and services organization. Prior to joining Aviat Networks, from 2008 to 2009, Mr. Pangia served as Senior Vice President, global sales operations and strategy at Nortel, where he was responsible for all operational aspects of the global sales function. From 2006 to 2008, he was President of Nortel’s Asia region where his key responsibilities included sales and overall business management for all countries where Nortel did business in the region. | |
Ralph Marimon, 60 | Mr. Marimon joined Aviat Networks in May 2015 as our Senior Vice President, Finance and Chief Financial Officer and is responsible for the finance and IT organizations. Before joining Aviat, Mr. Marimon served as Vice President, Finance and Chief Financial Officer of QuickLogic, a provider of ultra-low power, customizable semiconductor solutions for smartphone, tablet, wearable, and mobile enterprise OEMs, since 2008. Prior to QuickLogic, Mr. Marimon served as Chief Financial Officer within a variety of organizations including Anchor Bay Technologies, Inc., Tymphany Corporation, and Scientific Technologies Incorporated. From 1999 to 2003, he served at Com21 Corporation as Chief Financial Officer. Prior to Com21, Mr. Marimon was at KLA-Tencor Corporation for 11 years in a variety of senior executive financial management positions. | |
Meena Elliott, 54 | Ms. Elliott was appointed Senior Vice President, Chief Legal and Administrative Officer, Corporate Secretary in February 2015 and is responsible for the global legal and human resources organizations. From September 2011 to February 2015, she served as Senior Vice President, General Counsel, Secretary and had responsibilities for the global legal organization and took on responsibilities for global human resources organizations in 2014. From July 2009 to August 2011, she served as Vice President, General Counsel and Secretary. She joined our company as Associate General Counsel and Assistant Secretary in January 2007 when Harris Corporation’s MCD and Stratex Networks merged. Ms. Elliott joined MCD as Division Counsel in March 2006. Prior to joining MCD, she was Chief Counsel at the Department of Commerce from 2002 to 2006. | |
Heinz H. Stumpe, 62 | Mr. Stumpe was appointed Chief Sales Officer on June 25, 2012. Before his appointment as Chief Sales Officer, Mr. Stumpe was our Senior Vice President and Chief Operation Officer since June 30, 2008. Previously, he was Vice President, Global Operations for Aviat Networks and Stratex Networks. He joined Stratex Networks as Director of Marketing in 1996. He was promoted to Vice President, Global Accounts in 1999, Vice President, Strategic Accounts in 2002 and Vice President, Global Operations in April 2006. | |
Shaun McFall, 57 | Mr. McFall was appointed Chief Strategy Officer in 2015. He was our Chief Marketing Officer since July 2008. Previously, from 2000 to 2008, he served as Vice President, Marketing for Aviat Networks and Stratex Networks. He has been with us since 1989. |
• | unexpected changes in regulatory requirements; |
• | fluctuations in international currency exchange rates including its impact on unhedgeable currencies and our forecast variations for hedgeable currencies; |
• | imposition of tariffs and other barriers and restrictions; |
• | management and operation of an enterprise spread over various countries; |
• | the burden of complying with a variety of laws and regulations in various countries; |
• | application of the income tax laws and regulations of multiple jurisdictions, including relatively low-rate and relatively high-rate jurisdictions, to our sales and other transactions, which results in additional complexity and uncertainty; |
• | the conduct of unethical business practices in developing countries; |
• | general economic and geopolitical conditions, including inflation and trade relationships; |
• | war and acts of terrorism; |
• | kidnapping and high crime rate; |
• | natural disasters; |
• | availability of U.S. dollars especially in countries with economies highly dependent on resource exports, particularly oil; and |
• | changes in export regulations. |
• | seasonality in the purchasing habits of our customers; |
• | the volume and timing of product orders and the timing of completion of our product deliveries and installations; |
• | our ability and the ability of our key suppliers to respond to changes on demand as needed; |
• | margin variability based on geographic and product mix; |
• | our suppliers’ inability to perform and deliver on time as a result of their financial condition, component shortages or other supply chain constraints; |
• | retention of key personnel; |
• | the length of our sales cycle; |
• | litigation costs and expenses; |
• | continued timely rollout of new product functionality and features; |
• | increased competition resulting in downward pressure on the price of our products and services; |
• | unexpected delays in the schedule for shipments of existing products and new generations of the existing platforms; |
• | failure to realize expected cost improvement throughout our supply chain; |
• | order cancellations or postponements in product deliveries resulting in delayed revenue recognition; |
• | restructuring and streamlining of our operations; |
• | war and acts of terrorism; |
• | natural disasters; |
• | the ability of our customers to obtain financing to enable their purchase of our products; |
• | fluctuations in international currency exchange rates; |
• | regulatory developments including denial of export and import licenses; |
• | general economic conditions worldwide that affect demand and financing for microwave and millimeter wave telecommunications networks; and |
• | the timing and size of future restructuring plans and write-offs. |
• | rapid technological change in the wireless telecommunications industry resulting in frequent product changes; |
• | the need of our contract manufacturers to order raw materials that have long lead times and our inability to estimate exact amounts and types of items thus needed, especially with regard to the frequencies in which the final products ordered will operate; and |
• | cost reduction initiatives resulting in component changes within the products. |
• | the jurisdictions in which profits are determined to be earned and taxed; |
• | adjustments to estimated taxes upon finalization of various tax returns; |
• | increases in expenses not deductible for tax purposes, including write-offs of acquired in-process research and development and impairment of goodwill in connection with acquisitions; |
• | ability to utilize net operating loss; |
• | changes in available tax credits; |
• | changes in share-based compensation expense; |
• | changes in the valuation of our deferred tax assets and liabilities; |
• | changes in domestic or international tax laws or the interpretation of such tax laws; |
• | the resolution of issues arising from tax audits with various tax authorities; |
• | the tax effects of purchase accounting for acquisitions and restructuring charges that may cause fluctuations between reporting periods; and |
• | taxes that may be incurred upon a repatriation of cash from foreign operations. |
• | difficulties in integrating the operations, systems, technologies, products, and personnel of the combined companies, particularly companies with large and widespread operations and/or complex products; |
• | diversion of management’s attention from normal daily operations of the business and the challenges of managing larger and more widespread operations resulting from business combinations, sales, divestitures and /or restructurings; |
• | potential difficulties in completing projects associated with in-process research and development intangibles; |
• | difficulties in entering markets in which we have no or limited direct prior experience and where competitors in each market have stronger market positions; |
• | initial dependence on unfamiliar supply chains or relatively small supply partners; |
• | insufficient revenue to offset increased expenses associated with acquisitions; and |
• | the potential loss of key employees, customers, resellers, vendors and other business partners of our company or the companies with which we engage in strategic transactions following and continuing after announcement of an anticipated strategic transaction. |
• | issue common stock that would dilute our current stockholders or cause a change in control of the combined company; |
• | use a substantial portion of our cash resources, or incur debt; |
• | significantly increase our interest expense, leverage and debt service requirements if we incur additional debt to pay for an acquisition; |
• | assume material liabilities; |
• | record goodwill and non-amortizable intangible assets that are subject to impairment testing on a regular basis and potential periodic impairment charges; |
• | incur amortization expenses related to certain intangible assets; |
• | incur tax expenses related to the effect of acquisitions on our intercompany R&D cost sharing arrangement and legal structure; |
• | incur large and immediate write-offs and restructuring and other related expenses; and |
• | become subject to intellectual property or other litigation. |
Fiscal 2017 | Fiscal 2016 | ||||||||||||||
High | Low | High | Low | ||||||||||||
First Quarter | $ | 9.93 | $ | 7.39 | $ | 15.96 | $ | 12.48 | |||||||
Second Quarter | $ | 14.94 | $ | 8.43 | $ | 14.04 | $ | 8.92 | |||||||
Third Quarter | $ | 15.86 | $ | 10.35 | $ | 9.57 | $ | 6.60 | |||||||
Fourth Quarter | $ | 23.55 | $ | 14.30 | $ | 9.31 | $ | 6.18 |
6/29/2012 | 6/28/2013 | 6/27/2014 | 7/3/2015 | 7/1/2016 | 6/30/2017 | ||||||||||||||||||
Aviat Networks, Inc. | $ | 100.00 | $ | 93.57 | $ | 44.66 | $ | 46.98 | $ | 23.95 | $ | 51.77 | |||||||||||
NASDAQ Composite | $ | 100.00 | $ | 117.60 | $ | 153.88 | $ | 177.34 | $ | 174.29 | $ | 222.67 | |||||||||||
NASDAQ Telecommunications | $ | 100.00 | $ | 128.44 | $ | 149.22 | $ | 156.24 | $ | 158.51 | $ | 184.31 |
* | Assumes (i) $100 invested on June 29, 2012 in Aviat Networks, Inc. common stock, the Total Return Index for The NASDAQ Composite Market (U.S. companies) and the NASDAQ Telecommunications Index; and (ii) immediate reinvestment of all dividends. |
Fiscal Year Ended | |||||||||||||||||||
(In thousands, except per share amounts) | June 30, 2017 | July 1, 2016 | July 3, 2015 | June 27, 2014(1) | June 28, 2013(1) | ||||||||||||||
Revenue from product sales and services | $ | 241,874 | $ | 268,690 | $ | 335,878 | $ | 346,032 | $ | 471,255 | |||||||||
Cost of product sales and services | 166,402 | 206,973 | 255,188 | 260,844 | 332,913 | ||||||||||||||
Loss from continuing operations (2) (3) | (621 | ) | (30,178 | ) | (24,648 | ) | (52,018 | ) | (12,647 | ) | |||||||||
Net loss (2) (3) | (621 | ) | (29,637 | ) | (24,554 | ) | (51,100 | ) | (16,725 | ) | |||||||||
Net income attributable to noncontrolling interests, net of tax | 202 | 270 | 71 | — | — | ||||||||||||||
Net loss attributable to Aviat Networks (2) (3) | (823 | ) | (29,907 | ) | (24,625 | ) | (51,100 | ) | (16,725 | ) | |||||||||
Basic and diluted loss per common share: | |||||||||||||||||||
Loss from continuing operations | $ | (0.16 | ) | $ | (5.81 | ) | $ | (4.77 | ) | $ | (10.13 | ) | $ | (2.53 | ) | ||||
Net loss | (0.16 | ) | (5.71 | ) | (4.75 | ) | (9.95 | ) | (3.34 | ) |
(1) | As revised, during the fourth quarter of fiscal 2015, these amounts have been revised as we identified and corrected errors around our accrued liability related to cost of services revenue. |
(2) | Include share-based compensation expense $2.1 million, $1.8 million, $2.2 million, $3.4 million and $6.4 million for fiscal 2017, 2016, 2015, 2014 and 2013 respectively. |
(3) | Include restructuring charges of $0.6 million, $2.5 million, $4.9 million, $11.2 million and $3.1 million for fiscal 2017, 2016, 2015, 2014 and 2013 respectively. |
As of | |||||||||||||||||||
(In thousands) | June 30, 2017 | July 1, 2016 | July 3, 2015 | June 27, 2014(1) | June 28, 2013(1) | ||||||||||||||
Total assets | $ | 152,576 | $ | 166,111 | $ | 224,715 | $ | 253,184 | $ | 305,816 | |||||||||
Long-term liabilities | 12,218 | 12,707 | 18,198 | 19,574 | 24,825 |
(1) | As revised, during the fourth quarter of fiscal 2015, these amounts have been revised as we identified and corrected errors around our accrued liability related to cost of services revenue. |
Fiscal Year | $ Change | % Change | |||||||||||||||||||||||
(In thousands, except percentages) | 2017 | 2016 | 2015 | 2017/2016 | 2016/2015 | 2017/2016 | 2016/2015 | ||||||||||||||||||
North America | $ | 132,078 | $ | 125,482 | $ | 153,239 | $ | 6,596 | $ | (27,757 | ) | 5.3 | % | (18.1 | )% | ||||||||||
Africa and Middle East | 60,150 | 82,742 | 97,112 | (22,592 | ) | (14,370 | ) | (27.3 | )% | (14.8 | )% | ||||||||||||||
Europe and Russia | 14,128 | 20,539 | 35,990 | (6,411 | ) | (15,451 | ) | (31.2 | )% | (42.9 | )% | ||||||||||||||
Latin America and Asia Pacific | 35,518 | 39,927 | 49,537 | (4,409 | ) | (9,610 | ) | (11.0 | )% | (19.4 | )% | ||||||||||||||
Total Revenue | $ | 241,874 | $ | 268,690 | $ | 335,878 | $ | (26,816 | ) | $ | (67,188 | ) | (10.0 | )% | (20.0 | )% |
Fiscal Year | $ Change | % Change | |||||||||||||||||||||||
(In thousands, except percentages) | 2017 | 2016 | 2015 | 2017/2016 | 2016/2015 | 2017/2016 | 2016/2015 | ||||||||||||||||||
Product sales | $ | 153,517 | $ | 167,827 | $ | 214,874 | $ | (14,310 | ) | $ | (47,047 | ) | (8.5 | )% | (21.9 | )% | |||||||||
Services | 88,357 | 100,863 | 121,004 | (12,506 | ) | (20,141 | ) | (12.4 | )% | (16.6 | )% | ||||||||||||||
Total Revenue | $ | 241,874 | $ | 268,690 | $ | 335,878 | $ | (26,816 | ) | $ | (67,188 | ) | (10.0 | )% | (20.0 | )% |
Fiscal Year | $ Change | % Change | |||||||||||||||||||||||
(In thousands, except percentages) | 2017 | 2016 | 2015 | 2017/2016 | 2016/2015 | 2017/2016 | 2016/2015 | ||||||||||||||||||
Revenue | $ | 241,874 | $ | 268,690 | $ | 335,878 | $ | (26,816 | ) | $ | (67,188 | ) | (10.0 | )% | (20.0 | )% | |||||||||
Cost of revenue | 166,402 | 206,973 | 255,188 | (40,571 | ) | (48,215 | ) | (19.6 | )% | (18.9 | )% | ||||||||||||||
Gross margin | $ | 75,472 | $ | 61,717 | $ | 80,690 | $ | 13,755 | $ | (18,973 | ) | 22.3 | % | (23.5 | )% | ||||||||||
% of revenue | 31.2 | % | 23.0 | % | 24.0 | % | |||||||||||||||||||
Product margin % | 31.5 | % | 23.3 | % | 23.7 | % | |||||||||||||||||||
Service margin % | 30.7 | % | 22.4 | % | 24.5 | % |
Fiscal Year | $ Change | % Change | |||||||||||||||||||||||
(In thousands, except percentages) | 2017 | 2016 | 2015 | 2017/2016 | 2016/2015 | 2017/2016 | 2016/2015 | ||||||||||||||||||
Research and development expenses | $ | 18,684 | $ | 20,806 | $ | 25,368 | $ | (2,122 | ) | $ | (4,562 | ) | (10.2 | )% | (18.0 | )% | |||||||||
% of revenue | 7.7 | % | 7.7 | % | 7.6 | % |
Fiscal Year | $ Change | % Change | |||||||||||||||||||||||
(In thousands, except percentages) | 2017 | 2016 | 2015 | 2017/2016 | 2016/2015 | 2017/2016 | 2016/2015 | ||||||||||||||||||
Selling and administrative expenses | $ | 57,184 | $ | 65,902 | $ | 76,005 | $ | (8,718 | ) | $ | (10,103 | ) | (13.2 | )% | (13.3 | )% | |||||||||
% of revenue | 23.6 | % | 24.5 | % | 22.6 | % |
Fiscal Year | $ Change | % Change | |||||||||||||||||||||||
(In thousands, except percentages) | 2017 | 2016 | 2015 | 2017/2016 | 2016/2015 | 2017/2016 | 2016/2015 | ||||||||||||||||||
Fiscal 2016-2017 Plan | $ | 345 | $ | 2,210 | $ | — | $ | (1,865 | ) | $ | 2,210 | (84.4 | )% | N/A | |||||||||||
Fiscal 2015-2016 Plan | 36 | 282 | 3,503 | (246 | ) | (3,221 | ) | (87.2 | )% | (91.9 | )% | ||||||||||||||
Fiscal 2014-2015 Plan | 162 | 77 | 1,277 | 85 | (1,200 | ) | 110.4 | % | (94.0 | )% | |||||||||||||||
Fiscal 2013-2014 Plan | 46 | (114 | ) | 87 | 160 | (201 | ) | (140.4 | )% | (231.0 | )% | ||||||||||||||
Total | $ | 589 | $ | 2,455 | $ | 4,867 | $ | (1,866 | ) | $ | (2,412 | ) | (76.0 | )% | (49.6 | )% |
Fiscal Year | $ Change | % Change | |||||||||||||||||||||||
(In thousands, except percentages) | 2017 | 2016 | 2015 | 2017/2016 | 2016/2015 | 2017/2016 | 2016/2015 | ||||||||||||||||||
Interest income | $ | 261 | $ | 252 | $ | 360 | $ | 9 | $ | (108 | ) | 4 | % | (30 | )% | ||||||||||
Interest expense | (50 | ) | (104 | ) | (388 | ) | 54 | 284 | (52 | )% | (73 | )% | |||||||||||||
Other income (expense) | 169 | (1,245 | ) | — | 1,414 | (1,245 | ) | (114 | )% | N/A |
Fiscal Year | $ Change | ||||||||||||||||||
(In thousands, except percentages) | 2017 | 2016 | 2015 | 2017/2016 | 2016/2015 | ||||||||||||||
Loss from continuing operations before income taxes | $ | (605 | ) | $ | (28,543 | ) | $ | (25,958 | ) | $ | 27,938 | $ | (2,585 | ) | |||||
Provision for (benefit from) income taxes | 16 | 1,635 | (1,310 | ) | (1,619 | ) | 2,945 | ||||||||||||
As % of loss from continuing operations before income taxes | (2.6 | )% | (5.7 | )% | 5.0 | % |
Fiscal Year | $ Change | ||||||||||||||||||
(In thousands) | 2017 | 2016 | 2015 | 2017/2016 | 2016/2015 | ||||||||||||||
Income from discontinued operations, net of tax | $ | — | $ | 541 | $ | 94 | $ | (541 | ) | $ | 447 |
Obligations Due by Fiscal Year | |||||||||||||||||||||||
(In thousands) | Total | < 1 year | 1 - 3 years | 3 - 5 years | > 5 years | Other | |||||||||||||||||
Borrowings under credit facility | $ | 9,000 | $ | 9,000 | $ | — | $ | — | $ | — | $ | — | |||||||||||
Purchase obligations (1)(4) | 17,846 | 17,529 | 137 | 72 | 108 | — | |||||||||||||||||
Other purchase obligations (3)(4) | 1,364 | 1,364 | — | — | — | ||||||||||||||||||
Operating lease commitments (4) | 7,555 | 1,997 | 2,419 | 1,116 | 2,023 | — | |||||||||||||||||
Reserve for uncertain tax positions (2) | 2,453 | — | — | — | — | 2,453 | |||||||||||||||||
Total contractual cash obligations | $ | 38,218 | $ | 29,890 | $ | 2,556 | $ | 1,188 | $ | 2,131 | $ | 2,453 |
(1) | From time to time in the normal course of business we may enter into purchasing agreements with our suppliers that require us to accept delivery of, and remit full payment for, finished products that we have ordered, finished products that we requested be held as safety stock, and work in process started on our behalf in the event we cancel or terminate the purchasing agreement. Because these agreements do not specify fixed or minimum quantities, do not specify minimum or variable price provisions, and do not specify the approximate timing of the transaction, and we have no present intention to cancel or terminate any of these agreements, we currently do not believe that we have any future liability under these agreements. |
(2) | Liabilities for uncertain tax positions of $2.5 million were included in long-term liabilities in the consolidated balance sheets. At this time, we are unable to make a reasonably reliable estimate of the timing of payments related to this amount due to uncertainties in the timing of tax audit outcomes. |
(3) | Contractual obligation related to software licenses. |
(4) | These items are not recorded on our consolidated balance sheets. |
Expiration of Commitments by Fiscal Year | |||||||||||||||||||
(In thousands) | Total | 2018 | 2019 | 2020 | After 2021 | ||||||||||||||
Standby letters of credit used for: | |||||||||||||||||||
Payment guarantees | $ | 267 | $ | 158 | $ | — | $ | — | $ | 109 | |||||||||
Performance | 6,226 | 3,635 | 2,577 | 14 | — | ||||||||||||||
Tax bonds | 14 | 9 | — | 5 | — | ||||||||||||||
6,507 | 3,802 | 2,577 | 19 | 109 | |||||||||||||||
Surety bonds used for: | |||||||||||||||||||
Bids | 100 | 100 | — | — | — | ||||||||||||||
Performance | 23,984 | 13,354 | 10,630 | — | — | ||||||||||||||
Payment guarantees | 760 | 725 | 35 | — | — | ||||||||||||||
Tax bonds | 3,390 | 13 | — | 3,377 | — | ||||||||||||||
28,234 | 14,192 | 10,665 | 3,377 | — | |||||||||||||||
Total commercial commitments | $ | 34,741 | $ | 17,994 | $ | 13,242 | $ | 3,396 | $ | 109 |
• | any obligation under certain guarantee contracts; |
• | a retained or contingent interest in assets transferred to an unconsolidated entity or similar entity or similar arrangement that serves as credit, liquidity or market risk support to that entity for such assets; |
• | any obligation, including a contingent obligation, under certain derivative instruments; and |
• | any obligation, including a contingent obligation, under a material variable interest held by the registrant in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to the registrant, or engages in leasing, hedging or research and development services with the registrant. |
Currency | Notional Contract Amount (Local Currency) | Notional Contract Amount (USD) | |||||
(In thousands) | |||||||
South African Rand | 6,687 | $ | 511 |
Fiscal Year | |||||||||||
(In thousands) | 2017 | 2016 | 2015 | ||||||||
Amount included in costs of revenues | $ | (847 | ) | $ | (556 | ) | $ | (3,308 | ) | ||
Amount included in other income (expense) | 135 | (1,245 | ) | — | |||||||
Total foreign exchange loss, net | $ | (712 | ) | $ | (1,801 | ) | $ | (3,308 | ) |
• | revenue recognition and valuation of accounts receivable; |
• | inventory valuation and provision for excess and obsolete inventory losses; |
• | impairment of long-lived assets; and |
• | income taxes valuation. |
Page | |
/s/ BDO USA, LLP |
Fiscal Year Ended | |||||||||||
(In thousands, except per share amounts) | June 30, 2017 | July 1, 2016 | July 3, 2015 | ||||||||
Revenues: | |||||||||||
Revenue from product sales | $ | 153,517 | $ | 167,827 | $ | 214,874 | |||||
Revenue from services | 88,357 | 100,863 | 121,004 | ||||||||
Total revenues | 241,874 | 268,690 | 335,878 | ||||||||
Cost of revenues: | |||||||||||
Cost of product sales | 105,183 | 128,727 | 163,890 | ||||||||
Cost of services | 61,219 | 78,246 | 91,298 | ||||||||
Total cost of revenues | 166,402 | 206,973 | 255,188 | ||||||||
Gross margin | 75,472 | 61,717 | 80,690 | ||||||||
Operating expenses: | |||||||||||
Research and development expenses | 18,684 | 20,806 | 25,368 | ||||||||
Selling and administrative expenses | 57,184 | 65,902 | 76,005 | ||||||||
Amortization of identifiable intangible assets | — | — | 380 | ||||||||
Restructuring charges | 589 | 2,455 | 4,867 | ||||||||
Total operating expenses | 76,457 | 89,163 | 106,620 | ||||||||
Operating loss | (985 | ) | (27,446 | ) | (25,930 | ) | |||||
Interest income | 261 | 252 | 360 | ||||||||
Interest expense | (50 | ) | (104 | ) | (388 | ) | |||||
Other income (expense) | 169 | (1,245 | ) | — | |||||||
Loss from continuing operations before income taxes | (605 | ) | (28,543 | ) | (25,958 | ) | |||||
Provision for (benefit from) income taxes | 16 | 1,635 | (1,310 | ) | |||||||
Loss from continuing operations | (621 | ) | (30,178 | ) | (24,648 | ) | |||||
Income from discontinued operations, net of tax | — | 541 | 94 | ||||||||
Net loss | (621 | ) | (29,637 | ) | (24,554 | ) | |||||
Less: Net income attributable to noncontrolling interests, net of tax | 202 | 270 | 71 | ||||||||
Net loss attributable to Aviat Networks | $ | (823 | ) | $ | (29,907 | ) | $ | (24,625 | ) | ||
Amount attributable to Aviat Networks | |||||||||||
Net loss from continuing operations, net of tax | $ | (823 | ) | $ | (30,448 | ) | $ | (24,719 | ) | ||
Net income from discontinued operations, net of tax | $ | — | $ | 541 | $ | 94 | |||||
Basic and diluted loss per share attributable to Aviat Networks’ common stockholders: | |||||||||||
Continuing operations | $ | (0.16 | ) | $ | (5.81 | ) | $ | (4.77 | ) | ||
Discontinued operations | $ | — | $ | 0.10 | $ | 0.02 | |||||
Net loss | $ | (0.16 | ) | $ | (5.71 | ) | $ | (4.75 | ) | ||
Weighted average shares outstanding, basic and diluted | 5,292 | 5,238 | 5,184 |
Fiscal Year Ended | |||||||||||
(In thousands) | June 30, 2017 | July 1, 2016 | July 3, 2015 | ||||||||
Net loss | $ | (621 | ) | $ | (29,637 | ) | $ | (24,554 | ) | ||
Other comprehensive income (loss): | |||||||||||
Cash flow hedges: | |||||||||||
Change in unrealized loss on cash flow hedges | — | — | (314 | ) | |||||||
Reclassification adjustments for (gain) loss included in net loss | — | (41 | ) | 321 | |||||||
Net change in unrealized (loss) gain on hedging activities | — | (41 | ) | 7 | |||||||
Foreign currency translation: | |||||||||||
Loss arising during period | (279 | ) | (2,488 | ) | (5,672 | ) | |||||
Reclassification of gain on liquidation of subsidiary | (349 | ) | — | — | |||||||
Net change in cumulative translation adjustment | (628 | ) | (2,488 | ) | (5,672 | ) | |||||
Other comprehensive loss | (628 | ) | (2,529 | ) | (5,665 | ) | |||||
Comprehensive loss | (1,249 | ) | (32,166 | ) | (30,219 | ) | |||||
Comprehensive income attributable to noncontrolling interests, net of tax | 202 | 270 | 71 | ||||||||
Comprehensive loss attributable to Aviat Networks | $ | (1,451 | ) | $ | (32,436 | ) | $ | (30,290 | ) |
(In thousands, except share and par value amounts) | June 30, 2017 | July 1, 2016 | |||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 35,658 | $ | 30,479 | |||
Restricted cash | 541 | 558 | |||||
Short-term investments | 264 | 222 | |||||
Accounts receivable, net | 45,945 | 63,449 | |||||
Unbilled receivables | 12,110 | 5,117 | |||||
Inventories | 21,794 | 27,293 | |||||
Customer service inventories | 1,871 | 3,064 | |||||
Other current assets | 6,402 | 10,232 | |||||
Total current assets | 124,585 | 140,414 | |||||
Property, plant and equipment, net | 16,406 | 18,162 | |||||
Deferred income taxes | 6,178 | 6,068 | |||||
Other assets | 5,407 | 1,467 | |||||
Total long-term assets | 27,991 | 25,697 | |||||
TOTAL ASSETS | $ | 152,576 | $ | 166,111 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities: | |||||||
Short-term debt | $ | 9,000 | $ | 9,000 | |||
Accounts payable | 33,606 | 33,217 | |||||
Accrued expenses | 21,933 | 23,205 | |||||
Advance payments and unearned income | 20,004 | 30,615 | |||||
Restructuring liabilities | 1,475 | 3,910 | |||||
Total current liabilities | 86,018 | 99,947 | |||||
Unearned income | 7,062 | 8,387 | |||||
Other long-term liabilities | 1,022 | 1,409 | |||||
Reserve for uncertain tax positions | 2,453 | 1,414 | |||||
Deferred income taxes | 1,681 | 1,497 | |||||
Total liabilities | 98,236 | 112,654 | |||||
Commitments and contingencies (Note 12) | |||||||
Equity: | |||||||
Preferred stock, $0.01 par value; 50,000,000 shares authorized; none issued | — | — | |||||
Common stock, $0.01 par value; 300,000,000 shares authorized; 5,317,766 and 5,261,041 shares issued and outstanding as of as of June 30, 2017 and July 1, 2016, respectively | 53 | 53 | |||||
Additional paid-in-capital | 813,733 | 811,601 | |||||
Accumulated deficit | (748,204 | ) | (747,381 | ) | |||
Accumulated other comprehensive loss | (11,785 | ) | (11,157 | ) | |||
Total Aviat Networks stockholders’ equity | 53,797 | 53,116 | |||||
Noncontrolling interests | 543 | 341 | |||||
Total equity | 54,340 | 53,457 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 152,576 | $ | 166,111 |
Fiscal Year Ended | |||||||||||
(In thousands) | June 30, 2017 | July 1, 2016 | July 3, 2015 | ||||||||
Operating Activities | |||||||||||
Net loss | $ | (621 | ) | $ | (29,637 | ) | $ | (24,554 | ) | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||||||
Amortization of identifiable intangible assets | — | — | 380 | ||||||||
Depreciation and amortization of property, plant and equipment | 5,840 | 6,648 | 7,242 | ||||||||
(Recovery) provision for uncollectible receivables | (580 | ) | 1,532 | 880 | |||||||
Share-based compensation | 2,111 | 1,836 | 2,187 | ||||||||
Deferred tax assets, net | 75 | (334 | ) | (4,711 | ) | ||||||
Charges for inventory and customer service inventory write-downs | 1,137 | 9,868 | 8,043 | ||||||||
Gain on disposition of WiMAX business | — | — | (85 | ) | |||||||
Loss on disposition of property, plant and equipment, net | 153 | 827 | 384 | ||||||||
Gain on liquidation of subsidiary | (349 | ) | — | — | |||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | 18,178 | 17,023 | (8,816 | ) | |||||||
Unbilled receivables | (6,986 | ) | 12,041 | 6,125 | |||||||
Inventories | 6,383 | (4,995 | ) | (663 | ) | ||||||
Customer service inventories | 90 | 2,419 | 2,285 | ||||||||
Accounts payable | 608 | (13,976 | ) | 1,562 | |||||||
Accrued expenses | (1,310 | ) | (599 | ) | (4,140 | ) | |||||
Advance payments and unearned income | (13,099 | ) | (4,425 | ) | 4,666 | ||||||
Income taxes payable or receivable | 1,415 | 2 | 1,450 | ||||||||
Other assets and liabilities | (3,640 | ) | 2,126 | (1,833 | ) | ||||||
Net cash provided by (used in) operating activities | 9,405 | 356 | (9,598 | ) | |||||||
Investing Activities | |||||||||||
Payments for acquisition of property, plant and equipment | (4,021 | ) | (1,574 | ) | (3,693 | ) | |||||
Purchase of short-term investments | (139 | ) | (222 | ) | — | ||||||
Maturities of short-term investments | 122 | — | — | ||||||||
Net cash used in investing activities | (4,038 | ) | (1,796 | ) | (3,693 | ) | |||||
Financing Activities | |||||||||||
Proceeds from borrowings | 33,000 | 36,000 | 54,000 | ||||||||
Repayments of borrowings | (33,000 | ) | (36,000 | ) | (51,000 | ) | |||||
Proceeds from issuance of common stock under employee stock plans | 21 | 13 | 13 | ||||||||
Payments on capital lease obligations | — | — | (140 | ) | |||||||
Net cash provided by financing activities | 21 | 13 | 2,873 | ||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (244 | ) | (2,347 | ) | (4,246 | ) | |||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 5,144 | (3,774 | ) | (14,664 | ) | ||||||
Cash, cash equivalents and restricted cash, beginning of year | 31,425 | 35,199 | 49,863 | ||||||||
Cash, cash equivalents and restricted cash, end of year | $ | 36,569 | $ | 31,425 | $ | 35,199 | |||||
Fiscal Year Ended | |||||||||||
(In thousands) | June 30, 2017 | July 1, 2016 | July 3, 2015 | ||||||||
Non-cash investing activities | |||||||||||
Reclassification of property, plant and equipment to inventory | $ | — | $ | 1,094 | $ | — | |||||
Unpaid property, plant and equipment | $ | 1,219 | $ | 1,261 | $ | 319 | |||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid for interest | $ | 94 | $ | 111 | $ | 387 | |||||
Cash (refunded) paid for income taxes, net | $ | (313 | ) | $ | 1,964 | $ | 2,042 |
Aviat Networks Stockholders’ Equity | ||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total Aviat Networks Stockholders’ Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||
(In thousands, except share amounts) | Shares | $ Amount | ||||||||||||||||||||||||||||
Balance as of June 27, 2014 | 5,184,852 | $ | 52 | $ | 807,588 | $ | (692,849 | ) | $ | (2,963 | ) | $ | 111,828 | $ | — | $ | 111,828 | |||||||||||||
Net (loss) income | (24,625 | ) | (24,625 | ) | 71 | (24,554 | ) | |||||||||||||||||||||||
Other comprehensive loss, net of tax | (5,665 | ) | (5,665 | ) | (5,665 | ) | ||||||||||||||||||||||||
Issuance of common stock under employee stock plans | 23,348 | — | 13 | 13 | 13 | |||||||||||||||||||||||||
Share-based compensation | 2,187 | 2,187 | 2,187 | |||||||||||||||||||||||||||
Balance as of July 3, 2015 | 5,208,200 | 52 | 809,788 | (717,474 | ) | (8,628 | ) | 83,738 | 71 | 83,809 | ||||||||||||||||||||
Net (loss) income | (29,907 | ) | (29,907 | ) | 270 | (29,637 | ) | |||||||||||||||||||||||
Other comprehensive loss, net of tax | (2,529 | ) | (2,529 | ) | (2,529 | ) | ||||||||||||||||||||||||
Issuance of common stock under employee stock plans | 54,498 | 1 | 12 | 13 | 13 | |||||||||||||||||||||||||
Fractional shares buyback and other | (1,657 | ) | (35 | ) | (35 | ) | (35 | ) | ||||||||||||||||||||||
Share-based compensation | 1,836 | 1,836 | 1,836 | |||||||||||||||||||||||||||
Balance as of July 1, 2016 | 5,261,041 | 53 | 811,601 | (747,381 | ) | (11,157 | ) | 53,116 | 341 | 53,457 | ||||||||||||||||||||
Net (loss) income | (823 | ) | (823 | ) | 202 | (621 | ) | |||||||||||||||||||||||
Other comprehensive loss, net of tax | (628 | ) | (628 | ) | (628 | ) | ||||||||||||||||||||||||
Issuance of common stock under employee stock plans | 56,725 | — | 21 | 21 | 21 | |||||||||||||||||||||||||
Share-based compensation | 2,111 | 2,111 | 2,111 | |||||||||||||||||||||||||||
Balance as of June 30, 2017 | 5,317,766 | $ | 53 | $ | 813,733 | $ | (748,204 | ) | $ | (11,785 | ) | $ | 53,797 | $ | 543 | $ | 54,340 |
Buildings | 40 years |
Leasehold improvements | 2 to 10 years |
Software | 3 to 5 years |
Machinery and equipment | 2 to 5 years |
Fiscal Year | |||||||||||
(In thousands) | 2017 | 2016 | 2015 | ||||||||
Amount included in costs of revenues | $ | (847 | ) | $ | (556 | ) | $ | (3,308 | ) | ||
Amount included in other income (expense) | 135 | (1,245 | ) | — | |||||||
Total foreign exchange loss, net | $ | (712 | ) | $ | (1,801 | ) | $ | (3,308 | ) |
(In thousands) | Foreign Currency Translation Adjustment (“CTA”) | Hedging Derivatives | Total Accumulated Other Comprehensive Income (Loss) | ||||||||
Balance as of June 27, 2014 | $ | (2,997 | ) | $ | 34 | $ | (2,963 | ) | |||
Other comprehensive loss before reclassification | (5,672 | ) | (314 | ) | (5,986 | ) | |||||
Less: reclassification for amounts included in net loss | — | 321 | 321 | ||||||||
Balance as of July 3, 2015 | (8,669 | ) | 41 | (8,628 | ) | ||||||
Other comprehensive loss before reclassification | (2,488 | ) | — | (2,488 | ) | ||||||
Less: reclassification for amounts included in net loss | — | (41 | ) | (41 | ) | ||||||
Balance as of July 1, 2016 | (11,157 | ) | — | (11,157 | ) | ||||||
Other comprehensive loss before reclassification | (279 | ) | — | (279 | ) | ||||||
Less: reclassification for amounts included in net loss | (349 | ) | — | (349 | ) | ||||||
Balance as of June 30, 2017 | $ | (11,785 | ) | $ | — | $ | (11,785 | ) |
Fiscal Year | |||||||||||
(In thousands) | 2017 | 2016 | 2015 | ||||||||
Revenues | $ | — | $ | — | $ | (378 | ) | ||||
Cost of revenues | — | 41 | 57 | ||||||||
Other income (expense) | 349 | — | — | ||||||||
$ | 349 | $ | 41 | $ | (321 | ) |
Fiscal Year | ||||||||
(In thousands) | 2017 | 2016 | 2015 | |||||
Stock options | 410 | 538 | 613 | |||||
Restricted stock awards and units and performance share awards and units | 403 | 258 | 42 | |||||
Total potential shares of common stock excluded | 813 | 796 | 655 |
(In thousands) | June 30, 2017 | July 1, 2016 | |||||
Cash and cash equivalents | $ | 35,658 | $ | 30,479 | |||
Restricted cash | 541 | 558 | |||||
Restricted cash included in Other assets | 370 | 388 | |||||
Total cash, cash equivalents, and restricted cash in the Statements of Cash Flows | $ | 36,569 | $ | 31,425 |
(In thousands) | June 30, 2017 | July 1, 2016 | |||||
Accounts receivable | $ | 49,864 | $ | 71,416 | |||
Less: allowances for collection losses | (3,919 | ) | (7,967 | ) | |||
$ | 45,945 | $ | 63,449 |
(In thousands) | June 30, 2017 | July 1, 2016 | |||||
Finished products | $ | 16,619 | $ | 20,044 | |||
Work in process | 3,088 | 5,104 | |||||
Raw materials and supplies | 2,087 | 2,145 | |||||
Total inventories | $ | 21,794 | $ | 27,293 | |||
Deferred cost of revenue included within finished goods | $ | 7,120 | $ | 5,984 | |||
Consigned inventories included within raw materials | $ | 1,268 | $ | 2,035 |
Fiscal Year | |||||||||||
(In thousands) | 2017 | 2016 | 2015 | ||||||||
Excess and obsolete inventory charges | $ | 39 | $ | 9,175 | $ | 6,291 | |||||
Customer service inventory write-downs | 1,098 | 693 | 1,752 | ||||||||
$ | 1,137 | $ | 9,868 | $ | 8,043 | ||||||
As % of revenue | 0.5 | % | 3.7 | % | 2.4 | % |
(In thousands) | June 30, 2017 | July 1, 2016 | |||||
Land | $ | 710 | $ | 710 | |||
Buildings and leasehold improvements | 11,442 | 11,714 | |||||
Software | 14,803 | 14,620 | |||||
Machinery and equipment | 43,174 | 42,960 | |||||
70,129 | 70,004 | ||||||
Less accumulated depreciation and amortization | (53,723 | ) | (51,842 | ) | |||
$ | 16,406 | $ | 18,162 |
(In thousands) | June 30, 2017 | July 1, 2016 | |||||
Accrued compensation and benefits | $ | 8,317 | $ | 7,161 | |||
Accrued agent commissions | 1,911 | 3,551 | |||||
Accrued warranties | 3,056 | 3,944 | |||||
Other | 8,649 | 8,549 | |||||
$ | 21,933 | $ | 23,205 |
Fiscal Year | |||||||||||
(In thousands) | 2017 | 2016 | 2015 | ||||||||
Balance as of the beginning of the fiscal year | $ | 3,944 | $ | 4,221 | $ | 3,777 | |||||
Warranty provision recorded during the period | 1,604 | 3,462 | 5,595 | ||||||||
Consumption during the period | (2,492 | ) | (3,739 | ) | (5,151 | ) | |||||
Balance as of the end of the period | $ | 3,056 | $ | 3,944 | $ | 4,221 |
(In thousands) | June 30, 2017 | July 1, 2016 | |||||
Advanced payments | $ | 8,760 | $ | 12,124 | |||
Unearned income | 11,244 | 18,491 | |||||
$ | 20,004 | $ | 30,615 |
• | Level 1 — Observable inputs such as quoted prices in active markets for identical assets or liabilities; |
• | Level 2 — Observable market-based inputs or observable inputs that are corroborated by market data; and |
• | Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
June 30, 2017 | July 1, 2016 | ||||||||||||||||
(In thousands) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | Valuation Inputs | ||||||||||||
Assets: | |||||||||||||||||
Cash and cash equivalents: | |||||||||||||||||
Money market funds | $ | 22,059 | $ | 22,059 | $ | 18,800 | $ | 18,800 | Level 1 | ||||||||
Bank certificates of deposit | $ | 66 | $ | 66 | $ | 11 | $ | 11 | Level 2 | ||||||||
Short-term investments: | |||||||||||||||||
Bank certificates of deposit | $ | 264 | $ | 264 | $ | 222 | $ | 222 | Level 2 | ||||||||
Other current assets: | |||||||||||||||||
Foreign exchange forward contracts | $ | — | $ | — | $ | 5 | $ | 5 | Level 2 | ||||||||
Liabilities: | |||||||||||||||||
Other accrued expenses: | |||||||||||||||||
Foreign exchange forward contracts | $ | 5 | $ | 5 | $ | 9 | $ | 9 | Level 2 |
(In thousands) | Severance and Benefits | ||||||||||||||||||
Fiscal 2016-2017 Plan | Fiscal 2015-2016 Plan | Fiscal 2014-2015 Plan | Fiscal 2013-2014 Plan | Total | |||||||||||||||
Balance as of June 27, 2014 | $ | — | $ | — | $ | 1,290 | $ | 214 | $ | 1,504 | |||||||||
Charges, net | — | 2,862 | (29 | ) | (43 | ) | 2,790 | ||||||||||||
Cash payments | — | (2,212 | ) | (1,261 | ) | (65 | ) | (3,538 | ) | ||||||||||
Balance as of July 3, 2015 | — | 650 | — | 106 | 756 | ||||||||||||||
Charges, net | 2,210 | 344 | — | (6 | ) | 2,548 | |||||||||||||
Cash payments | (698 | ) | (637 | ) | — | (32 | ) | (1,367 | ) | ||||||||||
Balance as of July 1, 2016 | 1,512 | 357 | — | 68 | 1,937 | ||||||||||||||
Charges, net | 345 | 36 | — | — | 381 | ||||||||||||||
Cash payments | (1,542 | ) | (294 | ) | — | (4 | ) | (1,840 | ) | ||||||||||
Balance as of June 30, 2017 | $ | 315 | $ | 99 | $ | — | $ | 64 | $ | 478 |
(In thousands) | Facilities and Other | ||||||||||||||
Fiscal 2015-2016 Plan | Fiscal 2014-2015 Plan | Fiscal 2013-2014 Plan | Total | ||||||||||||
Balance as of June 27, 2014 | $ | — | $ | 92 | $ | 3,572 | $ | 3,664 | |||||||
Charges, net | 641 | 1,306 | 130 | 2,077 | |||||||||||
Cash payments | (8 | ) | (608 | ) | (1,371 | ) | (1,987 | ) | |||||||
Balance as of July 3, 2015 | 633 | 790 | 2,331 | 3,754 | |||||||||||
Charges, net | (62 | ) | 77 | (108 | ) | (93 | ) | ||||||||
Cash payments | (21 | ) | (584 | ) | (1,373 | ) | (1,978 | ) | |||||||
Noncash adjustments | — | 299 | 896 | 1,195 | |||||||||||
Balance as of July 1, 2016 | 550 | 582 | 1,746 | 2,878 | |||||||||||
Charges, net | — | 162 | 46 | 208 | |||||||||||
Cash payments | 13 | (576 | ) | (1,287 | ) | (1,850 | ) | ||||||||
Balance as of June 30, 2017 | $ | 563 | $ | 168 | $ | 505 | $ | 1,236 |
Fiscal Year | |||||||||||
(In thousands) | 2017 | 2016 | 2015 | ||||||||
By Expense Category: | |||||||||||
Cost of product sales and services | $ | 208 | $ | 154 | $ | 151 | |||||
Research and development | 138 | 110 | 108 | ||||||||
Selling and administrative | 1,765 | 1,572 | 1,928 | ||||||||
Total share-based compensation expense | $ | 2,111 | $ | 1,836 | $ | 2,187 | |||||
By Types of Award: | |||||||||||
Options | $ | 260 | $ | 837 | $ | 1,459 | |||||
Restricted stock awards and units | 1,473 | 933 | 688 | ||||||||
Performance share awards and units and market-based stock units | 378 | 66 | 40 | ||||||||
Total share-based compensation expense | $ | 2,111 | $ | 1,836 | $ | 2,187 |
June 30, 2017 | ||||||
Unamortized Expense | Weighted Average Remaining Recognition Period | |||||
(In thousands) | (Years) | |||||
Options | $ | 152 | 1.09 | |||
Restricted stock awards and units | $ | 2,485 | 1.79 | |||
Performance share awards and units and market-based stock units | $ | 900 | 1.50 |
Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life | Aggregate Intrinsic Value | |||||||||
(Years) | (In thousands) | |||||||||||
Options outstanding as of July 1, 2016 | 448,359 | $ | 32.95 | 3.37 | ||||||||
Granted | — | N/A | ||||||||||
Exercised | (573 | ) | $ | 14.88 | ||||||||
Forfeited | (34,282 | ) | $ | 33.50 | ||||||||
Expired | (40,799 | ) | $ | 74.40 | ||||||||
Options outstanding as of June 30, 2017 | 372,705 | $ | 28.39 | 2.72 | $ | 167 | ||||||
Options vested and expected to vest as of June 30, 2017 | 372,705 | $ | 28.39 | 2.72 | $ | 167 | ||||||
Options exercisable as of June 30, 2017 | 348,506 | $ | 29.30 | 2.59 | $ | 118 |
Fiscal Year | |||
2015 | |||
Expected dividends | — | % | |
Expected volatility | 53.9 | % | |
Risk-free interest rate | 1.13 | % | |
Expected term (years) | 4.25 | ||
Weighted average grant date fair value per share granted | $ | 6.60 |
Options Outstanding | Options Exercisable | ||||||||||||||||
Actual Range of Exercise Prices | Number Outstanding | Weighted Average Remaining Contractual Life | Weighted Average Exercise Price | Number Exercisable | Weighted Average Exercise Price | ||||||||||||
(Years) | |||||||||||||||||
$14.88 | — | $15.60 | 82,615 | 4.59 | $ | 15.38 | 58,416 | $ | 15.38 | ||||||||
$20.64 | — | $27.36 | 83,863 | 2.56 | $ | 26.17 | 83,863 | $ | 26.17 | ||||||||
$27.72 | — | $30.72 | 70,725 | 1.64 | $ | 29.28 | 70,725 | $ | 29.28 | ||||||||
$31.20 | — | $31.20 | 74,462 | 3.19 | $ | 31.20 | 74,462 | $ | 31.20 | ||||||||
$32.52 | — | $62.16 | 56,222 | 1.10 | $ | 42.33 | 56,222 | $ | 42.33 | ||||||||
$71.04 | — | $71.04 | 4,818 | 0.69 | $ | 71.04 | 4,818 | $ | 71.04 | ||||||||
$14.88 | — | $71.04 | 372,705 | 2.72 | $ | 28.39 | 348,506 | $ | 29.30 |
Fiscal Year | |||||||||||
(In thousands) | 2017 | 2016 | 2015 | ||||||||
Intrinsic value of options exercised | $ | 3 | $ | — | $ | — | |||||
Fair value of options vested | $ | 654 | $ | 1,395 | $ | 1,990 |
Shares | Weighted Average Grant Date Fair Value | |||||
Restricted stock outstanding as of July 1, 2016 | 210,596 | $ | 12.01 | |||
Granted | 237,874 | $ | 9.66 | |||
Vested and released | (55,178 | ) | $ | 9.40 | ||
Forfeited | (14,277 | ) | $ | 12.29 | ||
Restricted stock outstanding as of June 30, 2017 | 379,015 | $ | 10.91 |
Shares | Weighted Average Grant Date Fair Value | |||||
Market-based stock units outstanding as of July 1, 2016 | 149,169 | $ | 2.56 | |||
Granted | 50,000 | $ | 6.83 | |||
Forfeited | (55,845 | ) | $ | 2.56 | ||
Market-based stock units outstanding as of June 30, 2017 | 143,324 | $ | 4.05 |
Fiscal Year | |||||||||
2017 | 2016 | 2015 | |||||||
Expected Dividends | — | % | — | % | N/A | ||||
Expected volatility | 58.1 | % | 52.4 | % | N/A | ||||
Risk-free interest rate | 1.20 | % | 1.21 | % | N/A | ||||
Weighted average grant date fair value per share granted | $ | 6.83 | $ | 2.56 | N/A |
Shares | Weighted Average Grant Date Fair Value | |||||
Performance share awards and units outstanding as of July 1, 2016 | — | N/A | ||||
Granted | 72,941 | $ | 9.18 | |||
Forfeited | — | N/A | ||||
Performance share awards and units outstanding as of June 30, 2017 | 72,941 | $ | 9.18 |
Fiscal Year | |||||||||||
(In thousands) | 2017 | 2016 | 2015 | ||||||||
North America | $ | 132,078 | $ | 125,482 | $ | 153,239 | |||||
Africa and Middle East | 60,150 | 82,742 | 97,112 | ||||||||
Europe and Russia | 14,128 | 20,539 | 35,990 | ||||||||
Latin America and Asia Pacific | 35,518 | 39,927 | 49,537 | ||||||||
Total Revenue | $ | 241,874 | $ | 268,690 | $ | 335,878 |
(In thousands, except percentages) | Revenue | % of Total Revenue | ||||
Fiscal 2017: | ||||||
United States | $ | 127,889 | 52.9 | % | ||
Nigeria | $ | 18,147 | 7.5 | % | ||
Philippines | $ | 13,733 | 5.7 | % | ||
Fiscal 2016: | ||||||
United States | $ | 121,283 | 45.1 | % | ||
Nigeria | $ | 28,862 | 10.7 | % | ||
Fiscal 2015: | ||||||
United States | $ | 151,066 | 45.0 | % | ||
Nigeria | $ | 36,459 | 10.9 | % |
(In thousands) | June 30, 2017 | July 1, 2016 | |||||
United States | $ | 5,854 | $ | 11,353 | |||
United Kingdom | 2,727 | 2,946 | |||||
New Zealand | 6,310 | 2,618 | |||||
Other countries | 1,515 | 1,245 | |||||
Total | $ | 16,406 | $ | 18,162 |
Fiscal Year | |||||||||||
(In thousands) | 2017 | 2016 | 2015 | ||||||||
Income from operations of WiMAX | $ | — | $ | 652 | $ | 30 | |||||
Gain on disposal | — | — | 85 | ||||||||
Income taxes | — | (111 | ) | (21 | ) | ||||||
Income from discontinued operations, net of tax | $ | — | $ | 541 | $ | 94 |
Fiscal Year | |||||||||||
(In thousands) | 2017 | 2016 | 2015 | ||||||||
United States | $ | 10,979 | $ | (4,248 | ) | $ | (18,603 | ) | |||
Foreign | (11,584 | ) | (24,295 | ) | (7,355 | ) | |||||
Total loss from continuing operations before income taxes | $ | (605 | ) | $ | (28,543 | ) | $ | (25,958 | ) |
Fiscal Year | |||||||||||
(In thousands) | 2017 | 2016 | 2015 | ||||||||
Current provision (benefit): | |||||||||||
Federal | $ | (14 | ) | $ | 131 | $ | — | ||||
Foreign | (52 | ) | 1,814 | 3,378 | |||||||
State and local | 7 | 24 | 23 | ||||||||
(59 | ) | 1,969 | 3,401 | ||||||||
Deferred provision (benefit): | |||||||||||
Federal | 168 | (468 | ) | (216 | ) | ||||||
Foreign | (93 | ) | 134 | (4,495 | ) | ||||||
75 | (334 | ) | (4,711 | ) | |||||||
Total provision for (benefit from) income taxes from continuing operations | $ | 16 | $ | 1,635 | $ | (1,310 | ) |
Fiscal Year | |||||||||||
(In thousands) | 2017 | 2016 | 2015 | ||||||||
Tax benefit at statutory rate | $ | (196 | ) | $ | (9,990 | ) | $ | (9,065 | ) | ||
Valuation allowances | (1,346 | ) | 6,609 | (3,900 | ) | ||||||
Foreign non-deductible expenses | 628 | 103 | (80 | ) | |||||||
State and local taxes, net of U.S. federal tax benefit | 358 | (134 | ) | (500 | ) | ||||||
Foreign income taxed at rates less than the U.S. statutory rate | 2,062 | 6,019 | 9,970 | ||||||||
Dividend from foreign subsidiary | — | (1,781 | ) | — | |||||||
Foreign branch income/withholding taxes | 1,116 | 292 | 1,350 | ||||||||
Singapore refund | (3,778 | ) | — | — | |||||||
Change in uncertain tax positions | 1,173 | 437 | 610 | ||||||||
Other | (1 | ) | 80 | 305 | |||||||
Total provision for (benefit from) income taxes from continuing operations | $ | 16 | $ | 1,635 | $ | (1,310 | ) |
(In thousands) | June 30, 2017 | July 1, 2016 | |||||
Deferred tax assets: | |||||||
Inventory | $ | 4,390 | $ | 6,652 | |||
Accruals and reserves | 2,611 | 2,497 | |||||
Bad debts | 669 | 1,091 | |||||
Amortization | 1,870 | 3,148 | |||||
Stock compensation | 2,266 | 2,599 | |||||
Deferred revenue | 3,127 | 1,759 | |||||
Unrealized exchange gain/loss | 3,295 | 3,422 | |||||
Other | 3,715 | 6,623 | |||||
Tax credit carryforwards | 15,337 | 18,016 | |||||
Tax loss carryforwards | 168,115 | 167,468 | |||||
Total deferred tax assets before valuation allowance | 205,395 | 213,275 | |||||
Valuation allowance | (197,951 | ) | (202,824 | ) | |||
Total deferred tax assets | 7,444 | 10,451 | |||||
Deferred tax liabilities: | |||||||
Branch undistributed earnings reserve | 990 | 822 | |||||
Depreciation | 1,501 | 4,596 | |||||
Other | 456 | 462 | |||||
Total deferred tax liabilities | 2,947 | 5,880 | |||||
Net deferred tax assets | $ | 4,497 | $ | 4,571 | |||
As Reported on the Consolidated Balance Sheets | |||||||
Deferred income tax assets | $ | 6,178 | $ | 6,068 | |||
Deferred income tax liabilities | 1,681 | 1,497 | |||||
Total net deferred income taxes | $ | 4,497 | $ | 4,571 |
(In thousands) | Amount | ||
Unrecognized tax benefit as of June 27, 2014 | $ | 28,209 | |
Additions for tax positions in prior periods | 673 | ||
Decreases for tax positions in prior periods | (227 | ) | |
Decreases related to change of foreign exchange rate | (1,745 | ) | |
Unrecognized tax benefit as of July 3, 2015 | 26,910 | ||
Additions for tax positions in current periods | 397 | ||
Additions for tax positions in prior periods | 246 | ||
Decreases related to change of foreign exchange rate | (515 | ) | |
Unrecognized tax benefit as of July 1, 2016 | 27,038 | ||
Additions for tax positions in prior periods | 626 | ||
Additions for tax positions in current periods | 831 | ||
Decreases for tax positions in prior periods | (9,279 | ) | |
Decreases related to change of foreign exchange rate | (477 | ) | |
Unrecognized tax benefit as of June 30, 2017 | $ | 18,739 |
Fiscal Years | Amount | ||
(In thousands) | |||
2018 | $ | 1,997 | |
2019 | 1,431 | ||
2020 | 988 | ||
2021 | 908 | ||
2022 | 208 | ||
Thereafter | 2,023 | ||
Total | $ | 7,555 |
(In thousands, except per share amounts) | Q1 Ended 9/30/2016 | Q2 Ended 12/30/2016 | Q3 Ended 3/31/2017 | Q4 Ended 6/30/2017 | |||||||||||
Fiscal 2017 | |||||||||||||||
Revenue | $ | 58,207 | $ | 68,536 | $ | 58,700 | $ | 56,431 | |||||||
Gross margin | 17,365 | 21,116 | 17,732 | 19,259 | |||||||||||
Operating (loss) income | (2,925 | ) | 2,513 | 73 | (646 | ) | |||||||||
Net (loss) income | (601 | ) | 1,722 | (330 | ) | (1,412 | ) | ||||||||
Net (loss) income attributable to Aviat Networks | (629 | ) | 1,678 | (399 | ) | (1,473 | ) | ||||||||
Per share data: | |||||||||||||||
Basic net (loss) income per common share | $ | (0.12 | ) | $ | 0.32 | $ | (0.08 | ) | $ | (0.28 | ) | ||||
Diluted net (loss) income per common share | (0.12 | ) | 0.31 | (0.08 | ) | (0.28 | ) | ||||||||
(In thousands, except per share amounts) | Q1 Ended 10/2/2015 | Q2 Ended 1/1/2016 | Q3 Ended 4/1/2016 | Q4 Ended 7/1/2016 | |||||||||||
Fiscal 2016 | |||||||||||||||
Revenue | $ | 79,555 | $ | 70,416 | $ | 60,467 | $ | 58,252 | |||||||
Gross margin | 21,011 | 16,424 | 14,413 | 9,869 | |||||||||||
Operating loss | (1,598 | ) | (4,998 | ) | (7,594 | ) | (13,256 | ) | |||||||
Net loss | (1,154 | ) | (5,534 | ) | (7,808 | ) | (15,141 | ) | |||||||
Net loss attributable to Aviat Networks | (1,203 | ) | (5,679 | ) | (7,874 | ) | (15,151 | ) | |||||||
Per share data: | |||||||||||||||
Basic and diluted net loss per common share (1) | $ | (0.23 | ) | $ | (1.09 | ) | $ | (1.50 | ) | $ | (2.88 | ) |
(1) | All per share data in this note have been retroactively adjusted for the Reverse Stock Split discussed in Note 1. |
(In thousands) | Q1 Ended 9/30/2016 | Q2 Ended 12/30/2016 | Q3 Ended 3/31/2017 | Q4 Ended 6/30/2017 | |||||||||||
Fiscal 2017 | |||||||||||||||
Restructuring charges | $ | 160 | $ | 72 | $ | 111 | $ | 246 | |||||||
Nigeria foreign exchange loss (gain) on dividend receivable | 210 | (2 | ) | 10 | (5 | ) | |||||||||
WTM inventory recovery | — | (83 | ) | (48 | ) | (45 | ) | ||||||||
Performance bond expense | — | 365 | — | — | |||||||||||
Gain on liquidation of subsidiary | — | — | (349 | ) | — | ||||||||||
Tax refund from Inland Revenue Authority of Singapore | (3,741 | ) | — | — | — | ||||||||||
(In thousands) | Q1 Ended 10/2/2015 | Q2 Ended 1/1/2016 | Q3 Ended 4/1/2016 | Q4 Ended 7/1/2016 | |||||||||||
Fiscal 2016 | |||||||||||||||
Restructuring charges | $ | 21 | $ | 34 | $ | 804 | $ | 1,596 | |||||||
Nigeria foreign exchange loss on dividend receivable | — | — | — | 1,245 | |||||||||||
WTM inventory write-down | — | — | — | 5,057 |
(a) | The following documents are filed as part of this report. |
Schedule | Page |
Schedule II — Valuation and Qualifying Accounts for the three fiscal years ended July 1, 2016 |
(b) | Exhibits. |
AVIAT NETWORKS, INC. (Registrant) | |||||
Date: | September 6, 2017 | By: | /s/ Ralph S. Marimon | ||
Ralph S. Marimon | |||||
Senior Vice President and Chief Financial Officer |
Signature | Title | Date | ||
/s/ Michael A. Pangia | President and Chief Executive Officer (Principal Executive Officer) | September 6, 2017 | ||
Michael A. Pangia | ||||
/s/ Ralph S. Marimon | Senior Vice President and Chief Financial Officer (Principal Financial Officer) | September 6, 2017 | ||
Ralph S. Marimon | ||||
/s/ Eric Chang | Vice President, Corporate Controller and Principal Accounting Officer (Principal Accounting Officer) | September 6, 2017 | ||
Eric Chang | ||||
/s/ John Mutch | Chairman of the Board | September 6, 2017 | ||
John Mutch | ||||
/s/ Wayne Barr, Jr. | Director | September 6, 2017 | ||
Wayne Barr, Jr. | ||||
/s/ Kenneth Kong | Director | September 6, 2017 | ||
Kenneth Kong | ||||
/s/ John Quicke | Director | September 6, 2017 | ||
John Quicke | ||||
/s/ James C. Stoffel | Director | September 6, 2017 | ||
James C. Stoffel |
(In thousands) | Balance at Beginning of Period | Charged to (Credit from) Costs and Expenses | Deductions | Balance at End of Period | |||||||||||
Allowances for collection losses: | |||||||||||||||
Year ended June 30, 2017 | $ | 7,967 | $ | (484 | ) | $ | 3,564 | (A) | $ | 3,919 | |||||
Year ended July 1, 2016 | $ | 6,641 | $ | 2,431 | $ | 1,105 | (B) | $ | 7,967 | ||||||
Year ended July 3, 2015 | $ | 7,442 | $ | 1,302 | $ | 2,103 | (C) | $ | 6,641 |
Ex. # | Description | |
2.1 | ||
3.1 | ||
3.2 | ||
3.3 | ||
3.4 | ||
3.5 | ||
4.1 | ||
4.1.1 | ||
10.1 | ||
10.2 | ||
10.3 | ||
10.4* | ||
10.5 | ||
10.6 | ||
10.6.1 | ||
10.6.2 |
Ex. # | Description | |
10.6.3 | ||
10.6.4 | ||
10.6.5 | ||
10.6.6 | ||
10.6.7 | ||
10.7* | ||
10.8* | ||
10.8.1* | ||
10.9* | ||
10.10* | ||
10.11 | ||
10.12* | ||
10.13 | ||
10.14 | ||
21 | ||
23.1 | ||
31.1 | ||
31.2 | ||
32.1 | ||
32.2 | ||
101.INS | XBRL Instance Document |
Ex. # | Description | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
* | Management compensatory contract, arrangement or plan required to be filed as an exhibit pursuant to Item 15(b) of this report. |
Name of Subsidiary | State or Other Jurisdiction of Incorporation |
Aviat Networks Algeria S.A.R.L. | Algeria |
Aviat Networks (Australia) Pty. Ltd. . | Australia |
Aviat Networks (Bangladesh) Limited | Bangladesh |
Aviat Networks Brasil Servicos em Communicacoes Ltda. | Brazil |
Aviat Networks Canada ULC | Canada |
Aviat Communications Technology (Shenzhen) Company Ltd. | The People’s Republic of China |
Aviat Networks Congo | Congo - Brazzaville |
Aviat Networks France S.A.S. | France |
Aviat Networks Ghana Limited | Ghana |
Aviat Networks Holland B.V. | The Netherlands |
Aviat Networks HK Limited | Hong Kong |
Aviat Networks (India) Private Limited | India |
Telsima Communications Private Limited | India |
Pt. Aviat Networks Indonesia | Indonesia |
Aviat Networks Côte d’Ivoire | Ivory Coast |
Aviat Networks (Kenya) Limited | Kenya |
Aviat Networks Malaysia Sdn. Bhd. | Malaysia |
Digital Microwave (Mauritius) Private Limited | Mauritius |
Aviat Networks México S.A. de C.V. | Mexico |
Aviat Networks (NZ) Limited | New Zealand |
Aviat Networks Communication Solutions Limited | Nigeria |
Stratex Networks Nigeria Limited | Nigeria |
Aviat Networks (Clark) Corporation | The Philippines |
Aviat Networks Philippines, Inc. | The Philippines |
Aviat Networks Polska Sp. z.o.o. | Poland |
Aviat Networks Communications Solutions LLC | Russia |
Aviat Networks (S) Pte. Ltd. | Republic of Singapore |
Aviat storitveno podjetje, d.o.o. | Slovenia |
Aviat Networks (South Africa) (Proprietary) Limited | Republic of South Africa |
MAS Technology Holdings (Proprietary) Limited | Republic of South Africa |
DMC Stratex Networks (South Africa) (Proprietary) Limited | Republic of South Africa |
Aviat Ubuntu Telecommunication (Pty) Limited | Republic of South Africa |
Aviat Networks Tanzania Limited | Tanzania |
Aviat Networks (Thailand) Ltd. | Thailand |
Aviat Networks (UK) Limited | Delaware |
Aviat International Holdings, Inc. | Delaware |
Aviat U.S., Inc. | Delaware |
Telsima Corporation | Delaware |
Aviat Networks Telecommunications Zambia Limited | Zambia |
1. | I have reviewed this Annual Report on Form 10-K for the fiscal year ended June 30, 2017, of Aviat Networks, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | September 6, 2017 | /s/ Michael A. Pangia | ||
Name: | Michael A. Pangia | |||
Title: | President and Chief Executive Officer |
1. | I have reviewed this Annual Report on Form 10-K for the fiscal year ended June 30, 2017, of Aviat Networks, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | September 6, 2017 | /s/ Ralph S. Marimon | ||
Name: | Ralph S. Marimon | |||
Title: | Senior Vice President and Chief Financial Officer, Principal Financial Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Aviat Networks as of the dates and for the periods expressed in the Report |
Date: | September 6, 2017 | /s/ Michael A. Pangia | ||
Name: | Michael A. Pangia | |||
Title: | President and Chief Executive Officer |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Aviat Networks as of the dates and for the periods expressed in the Report |
Date: | September 6, 2017 | /s/ Ralph S. Marimon | ||
Name: | Ralph S. Marimon | |||
Title: | Senior Vice President and Chief Financial Officer, Principal Financial Officer |
Document and Entity Information Document - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2017 |
Aug. 17, 2017 |
Dec. 30, 2016 |
|
Document Information [Line Items] | |||
Entity Registrant Name | AVIAT NETWORKS, INC. | ||
Entity Central Index Key | 0001377789 | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Jun. 30, 2017 | ||
Document Fiscal Year Focus | 2017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 5,317,957 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 46.0 |
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2017 |
Jul. 01, 2016 |
Jul. 03, 2015 |
|
Statement of Comprehensive Income [Abstract] | |||
Net (loss) income | $ (621) | $ (29,637) | $ (24,554) |
Cash flow hedges: | |||
Change in unrealized loss on cash flow hedges | 0 | 0 | (314) |
Reclassification adjustments for (gain) loss included in net loss | 0 | (41) | 321 |
Net change in unrealized (loss) gain on hedging activities | 0 | (41) | 7 |
Foreign currency translation: | |||
Loss arising during period | (279) | (2,488) | (5,672) |
Reclassification of gain on liquidation of subsidiary | (349) | 0 | 0 |
Net change in cumulative translation adjustment | (628) | (2,488) | (5,672) |
Other comprehensive loss | (628) | (2,529) | (5,665) |
Comprehensive loss | (1,249) | (32,166) | (30,219) |
Comprehensive income attributable to noncontrolling interests, net of tax | 202 | 270 | 71 |
Comprehensive loss attributable to Aviat Networks | $ (1,451) | $ (32,436) | $ (30,290) |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Jun. 30, 2017 |
Jul. 01, 2016 |
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Statement of Financial Position [Abstract] | ||
Preferred Stock par value | $ 0.01 | $ 0.01 |
Preferred Stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Common stock par value | $ 0.01 | $ 0.01 |
Common stock shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 5,317,766 | 5,261,041 |
Common stock, shares outstanding | 5,317,766 | 5,261,041 |
The Company and Summary of Significant Accounting Policies |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Company and Summary of Significant Accounting Policies | The Company and Summary of Significant Accounting Policies The Company We design, manufacture and sell a range of wireless networking solutions and services to mobile and fixed telephone service providers, private network operators, government agencies, transportation and utility companies, public safety agencies and broadcast system operators across the globe. Our products include broadband wireless access base stations and customer premises equipment for fixed and mobile, point-to-point digital microwave radio systems for access, backhaul, trunking and license-exempt applications, supporting new network deployments, network expansion, and capacity upgrades. We were incorporated in Delaware in 2006 to combine the businesses of Harris Corporation’s Microwave Communications Division (“MCD”) and Stratex Networks, Inc. (“Stratex”). On January 28, 2010, we changed our corporate name from Harris Stratex Networks, Inc. to Aviat Networks, Inc. (“the Company”, “Aviat Networks,” “Aviat”, “we,” “us,” and “our”) to more effectively reflect our business and communicate our brand identity to customers. Additionally, the change of our corporate name was to comply with the termination of the Harris Corporation (“Harris”) trademark licensing agreement resulting from the spin-off by Harris of its interest in our stock to its stockholders in May 2009. Basis of Presentation The consolidated financial statements include the accounts of Aviat Networks and its wholly-owned and majority owned subsidiaries. Significant intercompany transactions and accounts have been eliminated. Certain amounts in the prior-years consolidated financial statements have been reclassified to conform to the current-year presentation Our fiscal year ends on the Friday nearest June 30. This was June 30 for fiscal 2017, July 1 for fiscal 2016 and July 3 for fiscal 2015. Fiscal years 2017 and 2016 presented each included 52 weeks, and fiscal year 2015 included 53 weeks. In these notes to consolidated financial statements, we refer to our fiscal years as “fiscal 2017”, “fiscal 2016” and “fiscal 2015.” Use of Estimates The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) requires us to make estimates, assumptions and judgments affecting the amounts reported and related disclosures. Estimates are based upon historical factors, current circumstances and the experience and judgment of our management. We evaluate our estimates and assumptions on an ongoing basis and may employ outside experts to assist us in making these evaluations. Changes in such estimates, based on more accurate information, or different assumptions or conditions, may affect amounts reported in future periods. Such estimates affect significant items, including revenue recognition, provision for uncollectible receivables, inventory valuation, valuation allowances for deferred tax assets, uncertainties in income taxes, restructuring obligations, product warranty obligations, share-based awards, contingencies, recoverability of long-lived assets and useful lives of property, plant and equipment. Reverse Stock Split On June 14, 2016, we effected a reverse stock split of all of the outstanding shares of our common stock at a ratio of 1-for-12 (“Reverse Stock Split”). The authorized shares of 300 million and par value per share of the common stock at $0.01 per share remain unchanged after the reverse stock split. All share and per-share data in our consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect this reverse stock split. To reflect the reverse stock split on shareholders' equity, we reclassified an amount equal to the par value of the reduced shares from the common stock par value account to the additional paid in capital account, resulting in no net impact to shareholders' equity on our consolidated balance sheets. Cash, Cash Equivalents, Restricted Cash and Short-Term Investments We consider all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash equivalents are carried at amortized cost, which approximates fair value due to the short-term nature of these investments. Investments with an original maturity of greater than three months and less than 12 months are accounted for as short-term investments and are classified as such at the time of purchase. We hold cash, cash equivalents and short-term investments at several major financial institutions, which often significantly exceed Federal Deposit Insurance Corporation insured limits. However, a substantial portion of the cash equivalents is invested in prime money market funds which are backed by the securities in the fund. Our short-term investments are comprised of time deposits and certificates of deposit. We classify our marketable securities as “available-for-sale” because we view our entire portfolio as available for use in our current operations. As of June 30, 2017 and July 1, 2016, all of our high-quality marketable debt securities were invested in prime money market funds and were classified as cash equivalents except for $0.3 million and $0.2 million, respectively, in short-term investments. Cash and cash equivalents that are restricted as to withdrawal or usage under the terms of contractual agreements are recorded as restricted cash. At June 30, 2017, our short-term restricted cash mainly included cash balances at one of our international subsidiaries. At July 1, 2016, our short-term restricted cash included $0.6 million of restricted cash in one of our Africa subsidiaries related to a severance amount paid to a former employee in the first quarter of fiscal 2017. We accrued the severance in restructuring liabilities as of July 1, 2016. Our long-term restricted cash included cash balance in our disability insurance voluntary plan account that cannot be used by us for any operating purposes other than to pay benefits to the insured employees and was recorded in other assets in our consolidated balance sheets and the corresponding liabilities were included in other long-term liabilities in our consolidated balance sheets. Significant Concentrations We typically invoice our customers for the sales order (or contract) value of the related products delivered at various milestones, including order receipt, shipment, installation and acceptance and for services when rendered. Our trade receivables are derived from sales to customers located in North America, Africa, Europe, the Middle East, Russia, Asia-Pacific and Latin America. Accounts receivable is presented net of allowance for estimated uncollectible accounts to reflect any loss anticipated on the collection of accounts receivable balances. We calculate the allowance based on our history of write-offs, level of past due accounts and the economic status of the customers. The fair value of our accounts receivable approximates their net realizable value. We regularly require letters of credit from some customers and, from time to time, we discount these letters of credit issued by customers through various financial institutions. The discounting of letters of credit depends on many factors, including the willingness of financial institutions to discount the letters of credit and the cost of such arrangements. Under these arrangements, collection risk is fully transferred to the financial institutions. We record the financing charges on discounting these letters of credit as interest expense. During fiscal 2017, 2016 and 2015, we had one customer in Africa, Mobile Telephone Networks Group (“MTN Group”) that accounted for 14%, 18% and 14%, respectively, of our total revenue. As of June 30, 2017 and July 1, 2016, MTN Group accounted for approximately 26% and 22%, respectively, of our accounts receivable. As of July 1, 2016, Motorola accounted for approximately 11% of our accounts receivable. No other customers accounted for more than 10% of our revenue or accounts receivable for the years presented. The loss of all business from MTN Group, Motorola, or any other significant customers, could adversely affect our results of operations, cash flows and financial position. Financial instruments that potentially subject us to a concentration of credit risk consist principally of cash equivalents, marketable debt securities, trade accounts receivable and financial instruments used in foreign currency hedging activities. We invest our excess cash primarily in prime money market funds and certificates of deposit. We are exposed to credit risks related to such instruments in the event of default or decrease in credit-worthiness of the issuers of the investments. We perform ongoing credit evaluations of our customers and generally do not require collateral on accounts receivable, as the majority of our customers are large, well-established companies. However, in certain circumstances, we may require letters of credit, additional guarantees or advance payments. We maintain allowances for collection losses, but historically have not experienced any significant losses related to any particular geographic area. Our customers are primarily in the telecommunications industry, so our accounts receivable are concentrated within one industry and exposed to concentrations of credit risk within that industry. Accounts receivable are written off when attempts to collect outstanding amounts have been exhausted or there are other indicators that the amounts are no longer collectible. We rely on third parties to manufacture our products and we purchase raw materials from third-party vendors. We outsource our manufacturing services to two independent manufacturers. In addition, we purchase certain strategic component inventory which is consigned to our third-party manufacturers. Other components included in our products are sourced from various suppliers and are principally industry standard parts and components that are available from multiple vendors. The inability of a contract manufacturer or supplier to fulfill our supply requirements or changes in their financial or business condition could disrupt our ability to supply quality products to our customers, and thereby may have a material adverse effect on our business and operating results. We have entered into agreements relating to our foreign currency contracts with Silicon Valley Bank, a multinational financial institution. The amounts subject to credit risk arising from the possible inability of any such parties to meet the terms of their contracts are generally limited to the amounts, if any, by which such party’s obligations exceed our obligations to that party. Inventories Inventories are valued at the lower of cost or market. Cost is determined using standard cost, which approximates actual cost on a weighted-average first-in-first-out basis. We regularly review inventory quantities on hand and record adjustments to reduce the cost of inventory for excess and obsolete inventory based primarily on our estimated forecast of product demand and production requirements. Inventory adjustments are measured as the difference between the cost of the inventory and estimated market value based upon assumptions about future demand and charged to the provision for inventory, which is a component of cost of sales. At the point of the loss recognition, a new, lower-cost basis for that inventory is established, and any subsequent improvements in facts and circumstances do not result in the restoration or increase in that newly established cost basis. Customer Service Inventories Our customer service inventories are stated at the lower of cost or market. We carry service parts because we generally provide product warranty for 12 to 36 months and earn revenue by providing enhanced and extended warranty and repair service during and beyond this warranty period. Customer service inventories consist of both component parts, which are primarily used to repair defective units, and finished units, which are provided for customer use permanently or on a temporary basis while the defective unit is being repaired. We record adjustments to reduce the carrying value of customer service inventories to their net realizable value. Factors influencing these adjustments include product life cycles, end of service life plans and volume of enhanced or extended warranty service contracts. Estimates of net realizable value involve significant estimates and judgments about the future, and revisions would be required if these factors differ from our estimates. Property, Plant and Equipment Property, plant and equipment are stated on the basis of cost less accumulated depreciation and amortization. We capitalize costs of software, consulting services, hardware and other related costs incurred to purchase or develop internal-use software. We expense costs incurred during preliminary project assessment, re-engineering, training and application maintenance. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the respective assets. Leasehold improvements are amortized on the straight-line method over the shorter of the remaining lease term or the estimated useful life of the improvements. The useful lives of the assets are generally as follows:
Expenditures for maintenance and repairs are charged to expense as incurred. Cost and accumulated depreciation of assets sold or retired are removed from the respective property accounts, and any gain or loss is reflected in the consolidated statements of operations. Impairment of Long-Lived Assets We evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Impairment is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the assets. If impairment exists, the impairment loss is measured and recorded based on discounted estimated future cash flows. In estimating future cash flows, assets are grouped at the lowest levels for which there are identifiable cash flows that are largely independent of cash flows from other asset groups. Our estimate of future cash flows is based upon, among other things, certain assumptions about expected future operating performance, growth rates and other factors. The actual cash flows realized from these assets may vary significantly from our estimates due to increased competition, changes in technology, fluctuations in demand, consolidation of our customers, reductions in average selling prices and other factors. Assumptions underlying future cash flow estimates are therefore subject to significant risks and uncertainties. Warranties On product sales, we provide for future warranty costs upon product delivery. The specific terms and conditions of those warranties vary depending upon the product sold and country in which we do business. In the case of products sold by us, our warranties generally start from the delivery date and continue for one to three years, depending on the terms. Many of our products are manufactured to customer specifications and their acceptance is based on meeting those specifications. Factors that affect our warranty liabilities include the number of product units subject to warranty protection, historical experience and management’s judgment regarding anticipated rates of warranty claims and cost per claim. We assess the adequacy of our recorded warranty liabilities every quarter and make adjustments to the liabilities as necessary. Noncontrolling interests A noncontrolling interest represents the equity interest in a subsidiary that is not attributable, either directly or indirectly, to Aviat Networks and is reported as our equity, separately from our controlling interests. The noncontrolling interests relate to our ownership interest in a subsidiary company in South Africa with a local partner, where we are the majority owner at 51%. Revenues, expenses, gains, losses, net loss and other comprehensive income (loss) are reported in the consolidated financial statements at the consolidated amounts, which include the amounts attributable to both the controlling and noncontrolling interests. Operating Leases We lease facilities and equipment under various operating leases. These lease agreements generally include rent escalation clauses, and many include renewal periods at our option. We recognize expense for scheduled rent increases on a straight-line basis over the lease term beginning with the date we take possession of the leased space. Leasehold improvements made either at the inception of the lease or during the lease term are amortized over the current lease term, or estimated life, if shorter. Foreign Currency Translation The functional currency of our subsidiaries located in the United Kingdom, Singapore, Mexico, Algeria and New Zealand is the United States (“U.S.”) dollar. Determination of the functional currency is dependent upon the economic environment in which an entity operates as well as the customers and suppliers the entity conducts business with. Changes in facts and circumstances may occur which could lead to a change in the functional currency of that entity. Accordingly, all of the monetary assets and liabilities of these subsidiaries are re-measured into U.S. dollars at the current exchange rate as of the applicable balance sheet date, and all non-monetary assets and liabilities are re-measured at historical rates. Income and expenses are re-measured at the average exchange rate prevailing during the period. Gains and losses resulting from the re-measurement of these subsidiaries’ financial statements are included in the consolidated statements of operations. Our other international subsidiaries use their respective local currency as their functional currency. Assets and liabilities of these subsidiaries are translated at the local current exchange rates in effect at the balance sheet date, and income and expense accounts are translated at the average exchange rates during the period. The resulting translation adjustments are included in accumulated other comprehensive loss. Gains and losses resulting from foreign exchange transactions and revaluation of monetary assets and liabilities in non-functional currencies are included in either cost of product sales and services or other income (expense) in the accompanying consolidated statements of operations, based on the nature of the transactions. Net foreign exchange loss recorded in our consolidated statements of operations during fiscal 2017, 2016 and 2015 was as follows:
Retirement Benefits As of June 30, 2017, we provided retirement benefits to substantially all employees primarily through our defined contribution retirement plans. These plans have matching and savings elements. Contributions by us to these retirement plans are based on profits and employees’ savings with no other funding requirements. We halted making matching contributions to the U.S. plan from the second quarter of fiscal 2014 through the end of fiscal 2015. We resumed making contributions to the plans in fiscal 2016. Contributions to retirement plans are expensed as incurred. Retirement plan expense amounted to $1.8 million, $2.0 million and $1.7 million in fiscal 2017, 2016 and 2015, respectively. Revenue Recognition We generate substantially all of our revenue from the sales or licensing of our microwave radio and wireless access systems, network management software, and professional services including installation, commissioning, maintenance and support services and training. Principal customers for our products and services include domestic and international wireless/mobile service providers, original equipment manufacturers, resellers, system integrators, as well as private network users such as public safety agencies, government institutions, and utility, pipeline, railroad and other industrial enterprises that operate broadband wireless networks. Our customers generally purchase a combination of our products and services as part of a multiple element arrangement. Our assessment of which revenue recognition guidance is appropriate to account for each element in an arrangement can involve significant judgment. Revenue from product sales is generated predominately from the sales of products manufactured by third-party manufacturers to whom we have outsourced our manufacturing processes. In general, printed circuit assemblies, mechanical housings, and packaged modules are manufactured by contract manufacturing partners, with periodic business reviews of material levels and obsolescence. Product assembly, product testing, complete system integration and system testing may either be performed within our own facilities or at the locations of our third-party manufacturers. Revenue from services includes certain installation, extended warranty, customer support, consulting, training and education. It also can include certain revenue generated from the resale of equipment purchased on behalf of customers for installation service contracts we perform for customers. Such equipment may include towers, antennas, and other related materials. Maintenance and support services are generally offered to our customers over a specified period of time and from sales and subsequent renewals of maintenance and support contracts. We recognize revenue when the earnings process is complete as evidenced by persuasive evidence of an arrangement, delivery has occurred, the sales price is fixed or determinable and collectability is reasonably assured. Revenue is recognized net of allowances for returns, discounts and any taxes collected from customers and subsequently remitted to governmental authorities. Delivery does not occur until products have been shipped or services have been provided to the customer, title and risk of loss has transferred to the customer, and (if applicable) either customer acceptance has been obtained or customer acceptance provisions have lapsed. The sales price is not considered to be fixed or determinable until all contingencies related to the sale have been resolved. Revenue from net product sales is recognized when title and risk of loss has transferred to the customer and there are no unfulfilled company obligations that affect the customer’s final acceptance of the arrangement. We recognize maintenance and support services revenue ratably over the maintenance or service period. Professional services revenue consists of fees we earn related to consulting and educational services. We recognize revenue from professional services as the services are performed or upon written acceptance from customers, if applicable, or acceptance provisions have lapsed assuming all other conditions for revenue recognition noted above have been met. We often enter into multiple contractual agreements with the same customer. Such agreements are reviewed to determine whether they should be evaluated as one arrangement. If an arrangement, other than a long-term contract, requires the delivery or performance of multiple deliverables or elements, we determine whether the individual elements represent “separate units of accounting”. Based on the terms and conditions of our typical product sales arrangement, we believe that our products and services can be accounted for as separate units because our products and services have value to our customers on a stand-alone basis. When a sale involves multiple deliverables, the entire fee from the arrangement is allocated to each unit of accounting based on the relative selling price of each deliverable. When applying the relative selling price method, the accounting principles establish a hierarchy to determine the selling price to be used for allocating revenue to deliverables as follows: (i) vendor-specific objective evidence (“VSOE”), (ii) third-party evidence of selling price (“TPE”) and (iii) best estimate of the selling price (“ESP”). Generally, we are not able to determine TPE because our go-to-market strategy differs from that of our peers and our offerings contain a significant level of differentiation such that the comparable pricing of products with similar functionality cannot be obtained. When we are unable to establish a selling price using VSOE or TPE, we use ESP to allocate the arrangement fees to the deliverables. Revenue allocated to each element is then recognized when the other revenue recognition criteria are met for each element. There is generally no customer right of return in our sales agreements. The sequence for typical multiple element arrangements: we deliver our products, perform installation services and then provide post-contract support services. ESP is determined by considering a number of factors including our pricing policies, internal costs and gross margin objectives, method of distribution, information gathered from experience in customer negotiations, market research and information, recent technological trends, competitive landscape and geographies. The determination of ESP is approved by our management taking into consideration our pricing strategy. We regularly review VSOE, TPE and ESP and maintain internal controls over the establishment and updating of these estimates. Revenues related to long-term contracts for customized network solutions are recognized using the percentage-of-completion method. In using the percentage-of-completion method, we generally apply the cost-to-cost method of accounting where sales and profits are recorded based on the ratio of costs incurred to estimated total costs at completion. Recognition of profit on long-term contracts requires estimates of the total contract value, the total cost at completion and the measurement of progress towards completion. Significant judgment is required when estimating total contract costs and progress to completion on the arrangements as well as whether a loss is expected to be incurred on the contract. If circumstances arise that change the original estimates of revenues, costs, or extent of progress toward completion, revisions to the estimates are made. These revisions may result in increases or decreases in estimated revenues or costs, and such revisions are reflected in income in the period in which the circumstances that gave rise to the revision become known by the company. We perform ongoing profitability analysis of our services contracts accounted for under the percentage-of-completion method in order to determine whether the latest estimates of revenues, costs and profits require updating. If at any time these estimates indicate that the contract will be unprofitable, the entire estimated loss for the remainder of the contract is recorded immediately. We establish billing terms at the time project deliverables and milestones are agreed. Revenues recognized in excess of the amounts invoiced to clients are classified as unbilled receivables in our consolidated balance sheets. We reserve for estimated product returns as an offset to revenue or deferred revenue based primarily on historical trends. Actual product returns may be different than what was estimated. These factors and unanticipated changes in the economic and industry environment could make actual results differ from our return estimates. We also consider whether contracts should be combined when specific aggregation criteria are met including when the contracts are in substance an arrangement to perform a single project with a customer; the contracts are negotiated as a package in the same economic environment with an overall profit objective; and the contracts require interrelated activities with common costs that cannot be separately identified with, or reasonably allocated to the elements, phases or units of output and the contracts are performed concurrently or in a continuous sequence under the same project management at the same location or at different locations in the same general vicinity. Cost of Product Sales and Services Cost of sales consists primarily of materials, labor and overhead costs incurred internally and amounts incurred for contract manufacturers to produce our products, personnel and other implementation costs incurred to install our products and train customer personnel, and customer service and third party original equipment manufacturer costs to provide continuing support to our customers. Shipping and handling costs are included as a component of costs of product sales in our consolidated statements of operations because they are also included in revenue that we bill our customers. Advertising Costs We expense all advertising costs as incurred. Advertising costs were immaterial during fiscal 2017, 2016 and 2015. Presentation of Transactional Taxes Collected from Customers and Remitted to Government Authorities We present transactional taxes such as sales and use tax collected from customers and remitted to governmental authorities on a net basis. Research and Development Costs Our research and development costs, which include costs in connection with new product development, improvement of existing products, process improvement, and product use technologies, are charged to operations in the period in which they are incurred. Share-Based Compensation We estimate the grant date fair value of our share-based awards and amortize this fair value to compensation expense over the requisite service period or vesting term. To estimate the fair value of our stock option awards, we use the Black-Scholes option pricing model. The determination of the fair value of stock option awards on the date of grant using an option pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. These variables include our expected stock price volatility over the expected term of the awards, actual and projected employee stock option exercise behaviors, risk-free interest rate and expected dividends. Due to the inherent limitations of option valuation models, including consideration of future events that are unpredictable and the estimation process utilized in determining the valuation of the share-based awards, the ultimate value realized by our employees may vary significantly from the amounts expensed in our financial statements. For restricted stock awards and units and performance share awards and units, we measure the grant date fair value based upon the market price of our common stock on the date of the grant. The fair value of each market-based stock unit with market conditions was estimated using the Monte-Carlo simulation model. We generally recognize compensation cost for share-based payment awards on a straight-line basis over the requisite service period. For an award that has a graded vesting schedule, compensation expense is recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in-substance, multiple awards. The amount of compensation cost recognized at any date must at least equal the portion of the grant-date value of the award that is vested at that date. For awards with a performance condition vesting feature, we recognize share-based compensation costs for the performance awards and units when achievement of the performance conditions is considered probable. Any previously recognized compensation cost would be reversed if the performance condition is not satisfied or if it is not probable that the performance conditions will be achieved. For awards with a market condition vesting feature, we recognize share-based compensation costs over the period the requisite service is rendered, regardless of when, if ever, the market condition is satisfied. During the fourth quarter of fiscal 2017, we adopted Accounting Standards Update (“ASU”) 2016-09 and elected to account for forfeitures as they occur. Refer to accounting standards adopted below for changes to the accounting for share-based compensation expense. Restructuring Charges Our restructuring charges represent expenses incurred in connection with certain cost reduction programs that we have implemented, and consisted of the costs of employee termination costs, lease and other contract termination charges and other costs of exiting activities or geographies. A liability for costs associated with an exit or disposal activity is measured at its fair value when the liability is incurred. Expenses for one-time termination benefits are recognized at the date we notify the employee, unless the employee must provide future service, in which case the benefits are expensed ratably over the future service period. We recognize severance benefits provided as part of an ongoing benefit arrangement when the payment is probable and the amounts can be reasonably estimated. Liabilities related to termination of an operating lease or contract are measured and recognized at fair value when the contract does not have any future economic benefit to the entity and the fair value of the liability is determined based on the present value of the remaining lease obligations, adjusted for the effects of deferred items recognized under the lease, and reduced by estimated sublease rentals that could be reasonably obtained for the property. The assumptions in determining such estimates include anticipated timing of sublease rentals and estimates of sublease rental receipts and related costs based on market conditions. We expense all other costs related to an exit or disposal activity as incurred. Income Taxes and Related Uncertainties We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are determined based on the estimated future tax effects of temporary differences between the financial statement and tax basis of assets and liabilities, as measured by tax rates at which temporary differences are expected to reverse as well as operating loss and tax credit carry forwards. Deferred tax expense (benefit) is the result of changes in deferred tax assets and liabilities. A valuation allowance is established to offset any deferred tax assets if, based upon the available information, it is more likely than not that some or all of the deferred tax assets will not be realized. We are required to compute our income taxes in each federal, state, and international jurisdiction in which we operate. This process requires that we estimate the current tax exposure as well as assess temporary differences between the accounting and tax treatment of assets and liabilities, including items such as accruals and allowances not currently deductible for tax purposes as well as operating loss and tax credit carry forwards. The income tax effects of the differences we identify are classified as current or long-term deferred tax assets and liabilities in our consolidated balance sheets. Our judgments, assumptions, and estimates relative to the current provision for income taxes take into account current tax laws, our interpretation of current tax laws, and possible outcomes of current and future audits conducted by foreign and domestic tax authorities. Changes in tax laws or our interpretation of tax laws and the resolution of current and future tax audits could significantly impact the amounts provided for income taxes in our consolidated balance sheets and consolidated statements of operations. We must also assess the likelihood that deferred tax assets will be realized from future taxable income and, based on this assessment, establish a valuation allowance, if required. Our determination of our valuation allowance is based upon a number of assumptions, judgments, and estimates, including forecasted earnings, future taxable income, and the relative proportions of revenue and income before taxes in the various domestic and international jurisdictions in which we operate. To the extent we establish a valuation allowance or change the valuation allowance in a period, we reflect the change with a corresponding increase or decrease to our tax provision in our consolidated statements of operations. We use a two-step process to determine the amount of tax benefit to be recognized for uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires us to estimate and measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. It is inherently difficult and subjective to estimate such amounts, as this requires us to determine the probability of various possible outcomes. We reevaluate these uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit, and new audit activity. Such a change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision in the period. Accounting Standards Adopted In May 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. The amendment provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under Accounting Standards Codification (“ASC”) 718.The guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. The amendment in this ASU should be applied prospectively to an award modified on or after the adoption date. We adopted this standard during the fourth quarter of fiscal 2017. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The guidance addresses diversity in practice that exists in the classification and presentation of changes in restricted cash and requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. We adopted this standard during the fourth quarter of fiscal 2017 with no material impact on our consolidated financial statements and disclosures. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows, Clarification of Certain Cash Receipts and Cash Payments, which provides guidance on the presentation and classification of eight specific cash flow issues. We adopted this standard during the fourth quarter of fiscal 2017. There was no reclassification impact resulted from the adoption on our consolidated statements of cash flows for fiscal year 2016 and fiscal year 2015, and such statements have been presented in accordance with this new guidance. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718), which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, forfeiture, statutory tax withholding requirements, and classification on the statement of cash flows. We adopted this standard during the fourth quarter of fiscal 2017 and elected to account for forfeitures as they occur using a modified retrospective transition method. The change from the current method of estimating forfeitures resulted in a cumulative-effect adjustment of approximately $9 thousand, which we recorded as expense in fiscal 2017. The guidance also requires companies to record excess tax benefits and tax deficiencies as income tax benefit or expense in the statement of operations prospectively when share-based awards vest or are settled. The adoption had no impact on our deferred tax assets and the fiscal 2017 opening accumulated deficit balance because we had no historical excess tax benefit related tax attributes. We also elected to apply the change in cash flow classification of excess tax benefits prospectively, resulting in no reclassification of our consolidated statements of cash flows. In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Topic 835-30), Simplifying the Presentation of Debt Issuance Costs. To simplify the presentation of debt issuance costs, the standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. This ASU includes an SEC staff announcement that the SEC staff would not object to an entity deferring and presenting the costs of securing a revolving line of credit as an asset, and amortizing the costs over the term of the line-of-credit arrangement, regardless of there are any outstanding borrowings on the line-of-credit arrangement. The subject of this ASU was not previously addressed by ASU No. 2015-03. We have adopted both accounting guidance during the first quarter of fiscal 2017 and applied its provisions retrospectively. The adoption of these standards had no material impact on our consolidated financial statements and related disclosures. Accounting Standards Not Yet Adopted In May 2014, the FASB issued ASU 2014-09 (ASC Topic 606), Revenue from Contracts with Customers, which along with amendments issued in 2015 and 2016, will supersede nearly all current U.S. GAAP guidance on this topic and eliminate industry-specific guidance. The amendments are based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additional disclosures will also be required to enable users to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. This accounting standard update, as amended, will be effective for us in the first quarter of fiscal year 2019. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized in retained earnings as of the date of adoption. We are in process of evaluating the impact of the standard update. The ultimate impact on revenue resulting from the application of the new standard will be subject to assessments that are dependent on many variables, including, but not limited to, the terms of our contractual arrangements and our mix of business. We have established a cross-functional implementation team to implement the standard update related to the recognition of revenue from contracts with customers. We have identified and are in the process of evaluating changes to our systems, processes and internal controls to meet the reporting and increased disclosure requirements associated with this standard update. We expect the timing of revenue recognition to change in certain areas, including our services segment’s installation revenue, which upon adoption will be recognized as revenue and costs over a period of time. Also, since we currently expense sales commissions as incurred, the requirement in the new standard to capitalize certain in-scope sales commissions is being evaluated to determine its potential impact in the consolidated financial statements in the year of adoption. We expect to adopt the new standard on a modified retrospective basis in the first quarter of fiscal 2019. We are continuing to assess all potential impacts of the guidance and given normal ongoing business dynamics, preliminary conclusions are subject to change. In October 2016, the FASB issued ASU 2016-16 Income Taxes (Topic 740), Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory, which requires that an entity recognizes the tax expense from the sale of intra-entity sales of assets, other than inventory, in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. The guidance will be effective for our fiscal year 2019. Early adoption is permitted. The ASU must be adopted using a modified retrospective method. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which introduces the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. This standard will become effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The guidance is required to be adopted at the earliest period presented using a modified retrospective approach. We expect that most of our operating lease commitments will be subject to the new standard and recognized as right-of-use assets and operating lease liabilities upon the adoption of ASU 2016-02. We are evaluating the effect the adoption of the standard will have on our consolidated financial statements and related disclosures. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This guidance retains the current accounting for classifying and measuring investments in debt securities and loans, but requires equity investments to be measured at fair value with subsequent changes recognized in net income, except for those accounted for under the equity method or requiring consolidation. The guidance also changes the accounting for investments without a readily determinable fair value and that do not qualify for the practical expedient to estimate fair value. A policy election can be made for these investments whereby estimated fair value may be measured at cost and adjusted in subsequent periods for any impairment or changes in observable prices of identical or similar investments. This ASU is effective for fiscal years beginning after December 15, 2017. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In July 2015, the FASB issued ASU 2015-11 Inventory (Topic 330), Simplifying the Measurement of Inventory, which provides guidance to companies who account for inventory using either the first-in, first-out (“FIFO”) or average cost methods. The guidance states that companies should measure inventory at the lower of cost and net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This ASU is effective for fiscal years beginning after December 15, 2016. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. |
Accumulated Other Comprehensive Loss |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The changes in components of our accumulated other comprehensive loss during fiscal 2017, 2016 and 2015 were as follows:
No income tax benefits were allocated to other comprehensive loss in fiscal 2017, 2016 and 2015. In fiscal 2017, 2016 and 2015, the realized gain (loss) reclassified out of accumulated other comprehensive loss were included in the following line item locations in our consolidated statements of operations:
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Net Loss per Share of Common Stock |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss per Share of Common Stock | Net Loss per Share of Common Stock Net loss per share is computed using the two-class method, by dividing net loss attributable to us by the weighted average number of common shares and participating securities outstanding during the period. Our restricted shares contain rights to receive non-forfeitable dividends and therefore are considered to be participating securities and included in the calculations of net income per basic and diluted common share. Undistributed losses are not allocated to unvested restricted shares because the unvested restricted shares are not contractually obligated to share our losses. The impact on earnings per share of the participating securities under the two-class method was immaterial. As we incurred net loss for all periods in fiscal 2017, 2016 and 2015, the effect of outstanding stock options, restricted stock awards and units and performance share awards and units were anti-dilutive and therefore were excluded from the diluted net loss per share calculations. The following table summarizes the potential shares of common stock that were excluded from the diluted net loss per share calculations:
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Balance Sheet Components |
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Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Components | Balance Sheet Components Cash, Cash Equivalents, and Restricted Cash The following table provides a summary of cash, cash equivalents, and restricted cash reported within the Consolidated Balance Sheets that reconciles to the corresponding amount in the Consolidated Statements of Cash Flows:
Accounts Receivable, net Our net accounts receivable is summarized below:
Inventories Our inventories are summarized below:
During fiscal 2017, 2016 and 2015, we recorded charges to adjust our inventory and customer service inventory due to excess and obsolete inventory resulting from lower sales forecast, product transitioning or discontinuance. Such charges incurred during fiscal 2017, 2016 and 2015 were classified in cost of product sales as follows:
Property, Plant and Equipment, net Our property, plant and equipment, net are summarized below:
Depreciation and amortization expense related to property, plant and equipment, including amortization of internal use software and capital lease equipment, was $5.8 million, $6.6 million and $7.2 million, respectively, in fiscal 2017, 2016 and 2015. Accrued Expenses Our accrued expenses are summarized below:
We accrue for the estimated cost to repair or replace products under warranty. Changes in our warranty liability, which is included as a component of accrued expenses in the consolidated balance sheets were as follows:
Advanced payments and Unearned Income Our advanced payments and unearned income are summarized below:
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Fair Value Measurements Of Assets And Liabilities |
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Fair Value Measurements Of Assets And Liabilities | Fair Value Measurements of Assets and Liabilities Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal market (or most advantageous market, in the absence of a principal market) for the asset or liability in an orderly transaction between market participants as of the measurement date. We maximize the use of observable inputs and minimize the use of unobservable inputs in measuring fair value and establish a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The three levels of inputs used to measure fair value are as follows:
The carrying amounts, estimated fair values and valuation input levels of our assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2017 and July 1, 2016 were as follows:
We classify items within Level 1 if quoted prices are available in active markets. Our Level 1 items mainly are money market funds purchased from two major financial institutions. As of June 30, 2017, these money market funds were valued at $1.00 net asset value per share by these financial institutions. We classify items in Level 2 if the observable inputs to quoted market prices, benchmark yields, reported trades, broker/dealer quotes or alternative pricing sources are available with reasonable levels of price transparency. Our bank certificates of deposit and foreign exchange forward contracts are classified within Level 2. Foreign currency forward contracts are measured at fair value using observable foreign currency exchange rates. The assets and liabilities related to our foreign currency forward contracts were not material as of June 30, 2017 and July 1, 2016. We did not have any recurring assets or liabilities that were valued using significant unobservable inputs. Our policy is to recognize asset or liability transfers among Level 1, Level 2 and Level 3 as of the actual date of the events or change in circumstances that caused the transfer. During fiscal 2017, 2016 and 2015, we had no transfers between levels of the fair value hierarchy of our assets or liabilities measured at fair value. |
Credit Facility And Debt |
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Debt Disclosure [Abstract] | |
Credit Facility And Debt | Credit Facility and Debt On March 28, 2014, we entered into a Second Amended and Restated Loan Agreement with Silicon Valley Bank (the “SVB Credit Facility”). The SVB Credit Facility was amended on September 25, 2014, October 30, 2014 and December 2, 2014 to provide for extensions to the deadline for preparing and filing our fiscal 2014 financial statements with the SEC. On February 27, 2015, the SVB Credit Facility was further amended to provide for certain amendments to the financial covenants, borrowing base and an early termination fee if the SVB Credit Facility is terminated prior to its expiration. In March 2016, we amended the SVB Credit Facility to amend financial covenants and to reduce the maximum borrowing capacity from $40.0 million to $30.0 million. In June 2016, we amended the SVB Credit Facility to amend the minimum EBITDA covenant; to create a new sub-limit for letters of credit issued under the revolving credit facility of $12.0 million; to reduce the advance rate applicable to Singapore Borrower’s eligible accounts in the calculation of the borrowing base of the revolving credit facility; to increase the interest rate margins applicable to revolving loans made to Singapore Borrower by 2.00% above the applicable margin; and to extend the maturity date to June 30, 2018. In June 2017, the SVB Credit Facility was amended to exclude certain guarantee, indemnity and similar agreements from the borrowing base calculations and to extend the effective date to July 15, 2017 for the requirement that we obtain credit insurance on the receivables of the Singapore Borrower to be included in the borrowing base. The SVB Credit Facility carries an interest rate computed at the daily prime rate as published in the Wall Street Journal plus a spread of 0.50% to 1.50%, with such spread determined based on our adjusted quick ratio. During fiscal 2017, the weighted average interest rate on our outstanding loan was 4.21%. As of June 30, 2017 and July 1, 2016, our outstanding debt balance under the SVB Credit Facility was $9.0 million, and the interest rate was 4.75% and 4.00% respectively. The SVB Credit Facility provides for a committed amount of up to $30.0 million, with a $30.0 million sublimit that can be borrowed by our Singapore subsidiary. Borrowings may be advanced under the SVB Credit Facility at the lesser of $30.0 million or a borrowing base equal to a specified percentage of the value of eligible accounts receivable and U.S. unbilled accounts of the Company, subject to certain reserves and eligibility criteria. The SVB Credit Facility can also be utilized to issue letters of credit with a $12.0 million sublimit. If the SVB Credit Facility is terminated by us in certain circumstances prior to its expiration, we are subject to an early termination fee equal to 1.00% of the revolving line. As of June 30, 2017, available credit under the SVB Credit Facility was $5.8 million reflecting the calculated borrowing base of $20.0 million less existing borrowings of $9.0 million and outstanding letters of credit of $5.2 million. The SVB Credit Facility contains quarterly financial covenants including minimum adjusted quick ratio and minimum profitability (EBITDA) requirements. In the event our adjusted quick ratio falls below a certain level, cash received in our accounts with SVB may be directly applied to reduce outstanding obligations under the SVB Credit Facility. The SVB Credit Facility also imposes certain restrictions on our ability to dispose of assets, permit a change in control, merge or consolidate, make acquisitions, incur indebtedness, grant liens, make investments, make certain restricted payments and enter into transactions with affiliates under certain circumstances. Certain of our assets, including accounts receivable, inventory, and equipment, are pledged as collateral for the SVB Credit Facility. Upon an event of default, outstanding obligations would be immediately due and payable. Under certain circumstances, a default interest rate will apply on all obligations during the existence of an event of default at a per annum rate of interest equal to 2.00% above the applicable interest rate. As of June 30, 2017, we were in compliance with the quarterly financial covenants, as amended, contained in the SVB Credit Facility. However, we have historically amended the agreement to revise financial covenants and the fact that the SVB Credit Facility contains subjective acceleration clauses that could be triggered by the lender, the $9.0 million borrowing was classified as a current liability as of June 30, 2017 and July 1, 2016. We also obtained an uncommitted short-term line of credit of $0.4 million from a bank in New Zealand to support the operations of our subsidiary located there in fiscal 2015. This line of credit provides for $0.3 million in short-term advances at various interest rates, all of which was available as of June 30, 2017. The line of credit also provides for the issuance of standby letters of credit and company credit cards, of which $0.1 million was outstanding as of June 30, 2017. This facility may be terminated upon notice, is reviewed annually for renewal or modification, and is supported by a corporate guarantee. |
Restructuring Activities |
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Restructuring Activities | Restructuring Activities The following tables summarize our restructuring related activities during fiscal year 2017, 2016 and 2015:
In June 2016, we entered into a lease termination agreement for our headquarters lease in Santa Clara, California (“Termination Agreement”). The noncash adjustments in the table above represents a $1.2 million deferred rent credit write-off to the restructuring expenses. Under the Termination Agreement, we agreed to pay a termination fee of $1.9 million payable over 14 months. The unpaid termination fee was included in the restructuring liabilities as of June 30, 2017 under the Fiscal 2014-2015 Plan and the Fiscal 2013-2014 Plan. As of June 30, 2017, $1.5 million of the accrual balance was in short-term restructuring liabilities while $0.2 million was included in other long-term liabilities on the consolidated balance sheets. Fiscal 2016-2017 Plan During the fourth quarter of fiscal 2016, we initiated a restructuring plan (the “Fiscal 2016-2017 Plan”) to streamline our operations and align expenses with current revenue levels. Activities under the Fiscal 2016-2017 Plan primarily include reductions in workforce in marketing, selling and general and administrative functions. We have substantially complete the remaining restructuring activities under the Fiscal 2016-2017 Plan by the end of fiscal 2017. Payments related to the accrued restructuring liability balance for this plan will be paid through fiscal 2018. Fiscal 2015-2016 Plan During the third quarter of fiscal 2015, with the intent to bring our operational cost structure in line with the changing dynamics of the microwave radio and telecommunications markets, we initiated a restructuring plan (the “Fiscal 2015-2016 Plan”) to lower fixed overhead costs and operating expenses and to preserve cash flow. Activities under the Fiscal 2015-2016 Plan primarily include reductions in workforce across the Company, but primarily in operations outside the United States. We have substantially completed the restructuring activities under the Fiscal 2015-2016 Plan as of July 1, 2016. Payments related to the accrued restructuring liability balance for this plan is expected to be paid through fiscal 2020. Fiscal 2014-2015 Plan During the third quarter of fiscal 2014, in line with the decrease in revenue that we experienced and our reduced forecast for the immediate future, we initiated a restructuring plan (the “Fiscal 2014-2015 Plan”) to reduce our operating costs, primarily in North America, Europe and Asia. Activities under the Fiscal 2014-2015 Plan primarily include reductions in workforce and additional facility downsizing of our Santa Clara, California headquarters. We have substantially completed the restructuring activities under the Fiscal 2014-2015 Plan as of July 1, 2016. Payments related to the accrued restructuring liability balance for this plan will be paid through fiscal 2018. Fiscal 2013-2014 Plan During the fourth quarter of fiscal 2013, we initiated a restructuring plan (the “Fiscal 2013-2014 Plan”) that was intended to reduce our operating expenses primarily in North America, Europe and Asia. Activities under the Fiscal 2013-2014 Plan included reductions in workforce and facility downsizing of our Santa Clara, California headquarters and certain international field offices. We substantially completed the restructuring activities under the Fiscal 2013-2014 Plan as of June 27, 2014. Payments related to the accrued restructuring liability balance for this plan will be paid through fiscal 2018. |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders’ Equity As discussed in Note 1, on June 14, 2016, we effected a 1-for-12 reverse stock split of our common stock. All share and per share data in this note have been retroactively adjusted to reflect this reverse stock split. Stock Incentive Programs 2007 Stock Equity Plan As of June 30, 2017, we had one stock incentive plan for our employees and nonemployee directors, the 2007 Stock Equity Plan, as amended and restated effective November 13, 2015 (the “2007 Stock Plan”). The 2007 Stock Plan provides for accelerated vesting of certain share-based awards if there is a change in control of the Company. The 2007 Stock Plan also provides for the issuance of share-based awards in the form of stock options, stock appreciation rights, restricted stock awards and units, and performance share awards and units. We have various incentive programs under the 2007 Stock Plan, including annual and long-term incentive programs (“AIP” or “LTIP”). Under the 2007 Stock Plan, option exercise prices are equal to the fair market value on the date the options are granted using our closing stock price. Options granted in fiscal 2015 would be fully vested after 3.5 years from the grant date. We did not grant any options in fiscal 2017 and 2016. After vesting, options generally may be exercised within seven years after the date of grant. Restricted stock unit is not transferable until vested and the restrictions lapse upon the achievement of continued employment or service over a specified time period. Restricted stock unit issued to employees generally vests between three to four years from the date of grant. Restricted stock unit issued to non-executive board members annually generally vests on the day before the annual stockholders’ meeting. Vesting of performance share awards and unit is subject to the achievement of pre-determined financial performance criteria and continued employment through the end of the applicable period. Market-based stock units vest upon meeting certain pre-determined share price performance criteria and continued employment through the end of the applicable period. The performance criteria of the performance share awards and units and the market-based stock units can be achieved before the end of the vesting period. We issue new shares of our common stock to our employees upon the exercise of stock options, vesting of restricted stock awards and units or vesting of performance share awards and units. All awards that are canceled prior to vesting or expire unexercised are returned to the approved pool of reserved shares under the 2007 Stock Plan and made available for future grants. Shares of our common stock remaining available for future issuance under the 2007 Stock Plan totaled 270,947 as of June 30, 2017. On September 6, 2016, the Board authorized and declared a dividend distribution of one right (a “Right”) for each outstanding share of our common stock, par value $0.01 per share (the “Common Shares”), to our stockholders of record as of the close of business on September 16, 2016. Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Participating Preferred Stock, par value $0.01 per share (the “Preferred Shares”), of the Company at an exercise price of $35.00 (the “Exercise Price”) per one one-thousandth of a Preferred Share, subject to adjustment. Until the rights become exercisable, they will not be evidenced by separate certificates and will trade automatically with shares of the Company’s common stock. The Rights have a de minimis fair value. The complete terms of the Rights are set forth in a Tax Benefit Preservation Plan (the “Plan”), dated as of September 6, 2016, between the Company and Computershare Inc., as rights agent. By adopting the Plan, we are helping to preserve the value of certain deferred tax benefits, including those generated by net operating losses (collectively, the “Tax Benefits”), which could be lost in the event of an “ownership change” as defined under Section 382 of the Internal Revenue Code of 1986, as amended. The Plan reduces the likelihood that changes in our investor base have the unintended effect of limiting our use of the Tax Benefits. Also, on September 6, 2016, our Board of Directors adopted certain amendments to our Amended and Restated Certificate of Incorporation, as amended (the “Charter Amendments”). The Charter Amendments are designed to preserve the Tax Benefits by restricting certain transfers of our common stock. Both the Plan and the Charter Amendments were approved at our 2016 annual meeting of stockholders on November 16, 2016. No actions were taken under the Plan as of June 30, 2017. Employee Stock Purchase Plan Under the Employee Stock Purchase Plan (“ESPP”), employees are entitled to purchase shares of our common stock at a 5% discount from the fair market value at the end of a three-month purchase period. As of June 30, 2017, 61,065 shares were reserved for future issuances under the ESPP. We issued 974 shares under the ESPP during fiscal 2017. Share-Based Compensation Total following table presents the compensation expense for share-based awards included in our consolidated statements of operations for fiscal 2017, 2016 and 2015:
The following table summarizes the unamortized compensation expense and the remaining years over which such expense would be expected to be recognized, on a weighted-average basis, by type of award:
Stock Options A summary of the combined stock option activity under our equity plans during fiscal 2017 is as follows:
The aggregate intrinsic value represents the total pre-tax intrinsic value or the aggregate difference between the closing price of our common stock on June 30, 2017 of $17.40 and the exercise price for in-the-money options that would have been received by the optionees if all options had been exercised on June 30, 2017. The options expected to vest are the result of applying the pre-vesting forfeiture rate assumptions to total outstanding options. The fair value of each option grant under our 2007 Stock Plan was estimated using the Black-Scholes option pricing model on the date of grant. No options were granted during fiscal 2017 and 2016. A summary of the significant weighted average assumptions we used in the Black-Scholes valuation model is as follows:
The following summarizes all of our stock options outstanding and exercisable as of June 30, 2017:
Additional information related to our stock options is summarized below:
Restricted Stock Awards and Units A summary of the status of our restricted stock as of June 30, 2017 and changes during fiscal 2017 is as follows:
The fair value of each restricted stock grant is based on the closing price of our common stock on the date of grant. The total fair value of restricted stock that vested during fiscal 2017, 2016 and 2015 was $0.5 million, $0.7 million and $0.6 million, respectively. Market -Based Stock Units A summary of the status of our market-based stock units as of June 30, 2017 and changes during fiscal 2017 is as follows:
The fair value of each market-based stock unit with market condition was estimated using the Monte-Carlo simulation model. A summary of the significant weighted average assumptions we used in the Monte Carlo simulation model is as follows:
The fair value of the market-based stock units with market condition criteria is expensed over the derived service period for each separate vesting tranche. If the derived service period is rendered, the total fair value of the award at the date of the grant is recognized as compensation expense even if the market condition is not achieved. Performance Share Awards and Units A summary of the status of our performance shares awards and units as of June 30, 2017 and changes during fiscal 2017 is as follows:
No performance shares award or unit vested during fiscal 2017 and 2016. The total fair value of performance share awards and units that vested during fiscal 2015 was $0.1 million. |
Segment and Geographic Information |
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Segment and Geographic Information | Segment and Geographic Information We operate in one reportable business segment: the design, manufacturing and sale of a range of wireless networking products, solutions and services. We conduct business globally and our sales and support activities are managed on a geographic basis. Our Chief Executive Officer is the Chief Operating Decision Maker (the “CODM”). Our CODM manages our business primarily by function globally and reviews financial information on a consolidated basis, accompanied by disaggregated information about revenues by geographic region, for purposes of allocating resources and evaluating financial performance. The profitability of our geographic region is not a determining factor in allocating resources and the CODM does not evaluate profitability below the level of the consolidated company. We report revenue by region and country based on the location where our customers accept delivery of our products and services. Revenue by region for 2017, 2016 and 2015 were as follows:
Revenue by country comprising more than 5% of our total revenue for fiscal 2017, 2016 and 2015 were as follows:
Our long-lived assets, consisting primarily of property, plant and equipment, by geographic areas based on the physical location of the assets as of June 30, 2017 and July 1, 2016 were as follows:
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Divestiture |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Divestiture | Divestiture In March 2011, our board of directors approved a plan for the sale of our WiMAX business. On September 2, 2011, we sold to EION Networks, Inc. (“EION”) our WiMAX business and related assets consisting of certain technology, inventory and equipment. As consideration for the sale of assets, EION agreed to pay us $0.4 million in cash and up to $2.8 million in additional cash payments contingent upon specific factors related to future WiMAX business performance. We had received $0.1 million in total of such contingent payments through June 27, 2014 and do not expect any further payments from EION. In addition, EION is entitled to receive cash payments up to $2.0 million upon collection of certain WiMAX accounts receivable. As of September 26, 2014, we made $1.6 million in total of such payments to EION and wrote-off the remaining $0.4 million balance resulting from the write-downs of the corresponding WiMAX accounts receivable. As of June 30, 2017 and July 1, 2016, we had no liabilities related to the disposition of WiMAX business. In the third quarter of fiscal 2011, we began accounting for the WiMAX business as a discontinued operation and, therefore, the operating results of our WiMAX business were included in discontinued operations in our consolidated financial statements for all years presented. The income recognized in fiscal 2016 was primarily due to the recovery of certain WiMAX customer receivables that was previously written down. The income recognized in fiscal 2015 was primarily due to a $0.1 million write-off of accrued liabilities due to EION. Summary results of operations for the WiMAX business were as follows:
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Income (loss) from continuing operations before provision for income taxes during fiscal year 2017, 2016 and 2015 consisted of the following:
Provision for (benefit from) income taxes from continuing operations for fiscal year 2017, 2016 and 2015 were summarized as follows:
The provision for (benefit from) income taxes from continuing operations differed from the amount computed by applying the federal statutory rate of 35% to our income before provision for income taxes as follows:
The income tax expense (benefit) from continuing operations was $16 thousand of expense for fiscal 2017, $1.6 million of expense for fiscal 2016 and $1.3 million of benefit for fiscal 2015. The difference between our income tax expense (benefit) from continuing operations and income tax expense at the statutory rate of 35% was primarily attributable to losses in tax jurisdictions in which we cannot recognize a tax benefit and increase in foreign withholding taxes. During fiscal 2017, we recorded a $3.7 million tax benefit from the audit assessment refund received from the Inland Revenue Authority of Singapore. During fiscal 2015, we released approximately $4.4 million of the deferred tax valuation allowance in jurisdictions where management believed the utilization of deferred tax assets was more likely than not based on the weighting of positive and negative evidence. The components of deferred tax assets and liabilities were as follows:
Our valuation allowance related to deferred income taxes, as reflected in our consolidated balance sheets, was $198.0 million as of June 30, 2017 and $202.8 million as of July 1, 2016. The decrease in valuation allowance in fiscal 2017 was primarily due to the release of valuation allowance in certain foreign jurisdictions, partially offset by losses in tax jurisdictions in which we cannot recognize tax benefits. Tax loss and credit carryforwards as of June 30, 2017 have expiration dates ranging between one year and no expiration in certain instances. The amount of U.S. federal tax loss carryforwards as of June 30, 2017 and July 1, 2016 were $339.8 million and $345.3 million, respectively, and begin to expire in fiscal 2023. The amount of U.S. federal and state tax credit carryforwards as of June 30, 2017 were $16.4 million, and certain credits will begin to expire in fiscal 2018. The amount of foreign tax loss carryforwards as of June 30, 2017 was $232.1 million and certain losses begin to expire in fiscal 2018. The amount of foreign tax credit carryforwards as of June 30, 2017 were $4.4 million, and certain credits will begin to expire in fiscal 2023. United States income taxes have not been provided on basis differences in foreign subsidiaries of $5.0 million and $5.6 million, respectively, as of June 30, 2017 and July 1, 2016, because of our intention to reinvest these earnings indefinitely. The residual U.S. tax liability, if such amounts were remitted, would be nominal. We entered into a tax sharing agreement with Harris effective on January 26, 2007, the date of the acquisition of Stratex. The tax sharing agreement addresses, among other things, the settlement process associated with pre-merger tax liabilities and tax attributes that are attributable to the Microwave Communication Division when it was a division of Harris. There were no settlement payments recorded in fiscal year 2017, 2016 or 2015. As of June 30, 2017 and July 1, 2016, we had unrecognized tax benefits of $18.7 million and $27.0 million, respectively, for various federal, foreign, and state income tax matters. Unrecognized tax benefits decreased by $8.3 million. Our total unrecognized tax benefits that, if recognized, would affect our effective tax rate were $2.5 million and $1.4 million, respectively, as of June 30, 2017 and July 1, 2016. These unrecognized tax benefits are presented on the accompanying consolidated balance sheets net of the tax effects of net operating loss carryforwards. We account for interest and penalties related to unrecognized tax benefits as part of our provision for income taxes. The interest accrued was $0.2 million as of June 30, 2017 and immaterial as of July 1, 2016. No penalties have been accrued. Our unrecognized tax benefit activity for fiscal 2017, 2016 and 2015 was as follows:
During the fiscal year 2014, we received an assessment letter from the Inland Revenue Authority of Singapore (“IRAS”) related to deductions claimed in prior years and made a payment of $13.2 million related to tax years 2007 through 2010, reflecting all of the taxes incrementally assessed by IRAS. While we disagreed with the IRAS assessment, the payment was a required step in order to continue our appeal. Since the initial assessment, we have continued to challenge this assessment. During the first quarter of fiscal year 2017, we received an initial refund of $3.7 million from IRAS and recognized a discrete benefit in the first quarter of fiscal year 2017. During the first quarter of fiscal 2018, we received an additional refund of $1.3 million from IRAS which represents a final settlement. We will recognize the refund as a discrete tax benefit in the first quarter of fiscal 2018. During the next twelve months, it is reasonably possible that our unrecognized tax benefits will be impacted by up to $3.0 million. We have a number of years with open tax audits which vary from jurisdiction to jurisdiction. Our major tax jurisdictions include the U.S., Singapore, Nigeria and the Ivory Coast. The earliest years still open and subject to potential audits for these jurisdictions are as follows: U.S. —2003; Singapore — 2006; Nigeria — 2011, and Ivory Coast — 2016. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Operating Lease Commitments We lease office and manufacturing facilities under non-cancelable operating leases expiring at various dates through 2024. We lease approximately 19,000 square feet of office space in Milpitas, California as our corporate headquarters with a term of 60 months. As of June 30, 2017, future minimum lease payments for our Milpitas headquarters total $1.4 million. As of June 30, 2017, our future minimum lease payments under all non-cancelable operating leases with an initial lease term in excess of one year were as follows:
These commitments do not contain any material rent escalations, rent holidays, contingent rent, rent concessions, leasehold improvement incentives or unusual provisions or conditions. We sublease a portion of our facilities to third parties and the total minimum rents to be received in the future under our non-cancelable subleases were $0.1 million as of June 30, 2017. The future minimum lease payments are not reduced by the minimum sublease rents. Rental expense for operating leases, including rentals on a month-to-month basis was $4.0 million, $5.1 million and $6.5 million in fiscal 2017, 2016 and 2015, respectively. Purchase Orders and Other Commitments From time to time in the normal course of business, we may enter into purchasing agreements with our suppliers that require us to accept delivery of, and remit full payment for, finished products that we have ordered, finished products that we requested be held as safety stock, and work in process started on our behalf in the event we cancel or terminate the purchasing agreement. Because these agreements do not specify fixed or minimum quantities, do not specify minimum or variable price provisions, and do not specify the approximate timing of the transaction, and we have no present intention to cancel or terminate any of these agreements, we currently do not believe that we have any future liability under these agreements. As of June 30, 2017, we had outstanding purchase obligations with our suppliers or contract manufacturers of $17.8 million. In addition, we had contractual obligations of approximately $1.4 million associated with software licenses as of June 30, 2017. Financial Guarantees and Commercial Commitments Guarantees issued by banks, insurance companies or other financial institutions are contingent commitments issued to guarantee our performance under borrowing arrangements, such as bank overdraft facilities, tax and customs obligations and similar transactions or to ensure our performance under customer or vendor contracts. The terms of the guarantees are generally equal to the remaining term of the related debt or other obligations and are generally limited to two years or less. As of June 30, 2017, we had no guarantees applicable to our debt arrangements. We have entered into commercial commitments in the normal course of business including surety bonds, standby letters of credit agreements and other arrangements with financial institutions primarily relating to the guarantee of future performance on certain contracts to provide products and services to customers. As of June 30, 2017, we had commercial commitments of $34.7 million outstanding that were not recorded in our consolidated balance sheets. During the second fiscal quarter, we recorded a payout in cost of revenues of $0.4 million on the performance guarantees to a contractor in the Middle East region. We believe the customer improperly drew down on the performance bond and intend to pursue all remedies available to recover the payment. We do not believe, based on historical experience and information currently available, that it is probable that any significant amounts will be required to be paid on the performance guarantees in the future. Indemnifications Under the terms of substantially all of our license agreements, we have agreed to defend and pay any final judgment against our customers arising from claims against such customers that our products infringe the intellectual property rights of a third party. As of June 30, 2017, we have not received any notice that any customer is subject to an infringement claim arising from the use of our products; we have not received any request to defend any customers from infringement claims arising from the use of our products; and we have not paid any final judgment on behalf of any customer related to an infringement claim arising from the use of our products. Because the outcome of infringement disputes is related to the specific facts of each case, and given the lack of previous or current indemnification claims, we cannot estimate the maximum amount of potential future payments, if any, related to our indemnification provisions. As of June 30, 2017, we had not recorded any liabilities related to these indemnifications. Legal Proceedings We are subject from time to time to disputes with customers concerning our products and services. In May 2016, we received notification of a claim for $1.0 million in damages from a customer in Austria alleging that certain of our products were defective. We are continuing to investigate this claim, and at this time an estimate of the reasonably possible loss or range of loss cannot be made. We believe that we have numerous contractual and legal defenses to these disputes, and we intend to dispute them vigorously. In August 2016, we received correspondence from a customer in Africa demanding that certain inventory be repurchased under the terms of an inventory management agreement that we believed had previously expired. We settled this matter for $0.2 million in April 2017. From time to time, we may be involved in various other legal claims and litigation that arise in the normal course of our operations. We are aggressively defending all current litigation matters. Although there can be no assurances and the outcome of these matters is currently not determinable, we currently believe that none of these claims or proceedings are likely to have a material adverse effect on our financial position. We expect to defend each of these disputes vigorously. There are many uncertainties associated with any litigation and these actions or other third-party claims against us may cause us to incur costly litigation and/or substantial settlement charges. As a result, our business, financial condition, results of operations, and cash flows could be adversely affected. The actual liability in any such matters may be materially different from our estimates, if any. We record accruals for our outstanding legal proceedings, investigations or claims when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated. We evaluate, at least on a quarterly basis, developments in legal proceedings, investigations or claims that could affect the amount of any accrual, as well as any developments that would result in a loss contingency to become both probable and reasonably estimable. Except for the matter above which was ultimately settled for $0.2 million, we have not recorded any accrual for loss contingencies associated with such legal claims or litigation discussed above. Contingent Liabilities We record a loss contingency as a charge to operations when (i) it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements; and (ii) the amount of the loss can be reasonably estimated. Disclosure in the notes to the financial statements is required for loss contingencies that do not meet both those conditions if there is a reasonable possibility that a loss may have been incurred. Gain contingencies are not recorded until realized. We expense all legal costs incurred to resolve regulatory, legal and tax matters as incurred. Periodically, we review the status of each significant matter to assess the potential financial exposure. If a potential loss is considered probable and the amount can be reasonably estimated, we reflect the estimated loss in our results of operations. Significant judgment is required to determine the probability that a liability has been incurred or an asset impaired and whether such loss is reasonably estimable. Further, estimates of this nature are highly subjective, and the final outcome of these matters could vary significantly from the amounts that have been included in our consolidated financial statements. As additional information becomes available, we reassess the potential liability related to our pending claims and litigation and may revise estimates accordingly. Such revisions in the estimates of the potential liabilities could have a material impact on our results of operations and financial position. |
Quarterly Financial Data (Unaudited) |
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Quarterly Financial Data [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Data (Unaudited) | Quarterly Financial Data (Unaudited) The following financial information reflects all normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of the results of the interim periods. Our fiscal quarters end on the Friday nearest the end of the calendar quarter. Summarized quarterly data for fiscal 2017 and 2016 were as follows:
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The following tables summarize notable items included in our results of operations for each of the fiscal quarters presented:
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Subsequent Events |
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Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In August 2017, we received an insurance recovery of $0.3 million which will be recorded as a reduction of operating expenses in the first quarter of 2018. During the first quarter of fiscal 2018, we received a refund of $1.3 million from IRAS which represents a final settlement. We will recognize the tax refund as a discrete tax benefit in the first quarter of fiscal 2018. For more information about the tax refund, see “Note 11. Income Taxes”. |
Schedule II - Valuation and Qualifying Accounts and Reserves |
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Schedule II - Valuation and Qualifying Accounts and Reserves | SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS AVIAT NETWORKS, INC. Years Ended June 30, 2017, July 1, 2016 and July 3, 2015
____________________________ Note A - Consisted of changes to allowance for collection losses of $607 thousand for foreign currency translation gain and $4,172 thousand for uncollectible accounts charged off, net of recoveries on accounts previously charged off. Note B - Consisted of changes to allowance for collection losses of $308 thousand for foreign currency translation losses and $797 thousand for uncollectible accounts charged off, net of recoveries on accounts previously charged off. Note C - Consisted of changes to allowance for collection losses of $250 thousand for foreign currency translation losses and $1,853 thousand for uncollectible accounts charged off, net of recoveries on accounts previously charged off. |
The Company and Summary of Significant Accounting Policies (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Aviat Networks and its wholly-owned and majority owned subsidiaries. Significant intercompany transactions and accounts have been eliminated. Certain amounts in the prior-years consolidated financial statements have been reclassified to conform to the current-year presentation Our fiscal year ends on the Friday nearest June 30. This was June 30 for fiscal 2017, July 1 for fiscal 2016 and July 3 for fiscal 2015. Fiscal years 2017 and 2016 presented each included 52 weeks, and fiscal year 2015 included 53 weeks. In these notes to consolidated financial statements, we refer to our fiscal years as “fiscal 2017”, “fiscal 2016” and “fiscal 2015.” |
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Use of Estimates | Use of Estimates The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) requires us to make estimates, assumptions and judgments affecting the amounts reported and related disclosures. Estimates are based upon historical factors, current circumstances and the experience and judgment of our management. We evaluate our estimates and assumptions on an ongoing basis and may employ outside experts to assist us in making these evaluations. Changes in such estimates, based on more accurate information, or different assumptions or conditions, may affect amounts reported in future periods. Such estimates affect significant items, including revenue recognition, provision for uncollectible receivables, inventory valuation, valuation allowances for deferred tax assets, uncertainties in income taxes, restructuring obligations, product warranty obligations, share-based awards, contingencies, recoverability of long-lived assets and useful lives of property, plant and equipment. |
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Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents, Restricted Cash and Short-Term Investments We consider all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash equivalents are carried at amortized cost, which approximates fair value due to the short-term nature of these investments. Investments with an original maturity of greater than three months and less than 12 months are accounted for as short-term investments and are classified as such at the time of purchase. We hold cash, cash equivalents and short-term investments at several major financial institutions, which often significantly exceed Federal Deposit Insurance Corporation insured limits. However, a substantial portion of the cash equivalents is invested in prime money market funds which are backed by the securities in the fund. Our short-term investments are comprised of time deposits and certificates of deposit. We classify our marketable securities as “available-for-sale” because we view our entire portfolio as available for use in our current operations. As of June 30, 2017 and July 1, 2016, all of our high-quality marketable debt securities were invested in prime money market funds and were classified as cash equivalents except for $0.3 million and $0.2 million, respectively, in short-term investments. Cash and cash equivalents that are restricted as to withdrawal or usage under the terms of contractual agreements are recorded as restricted cash. At June 30, 2017, our short-term restricted cash mainly included cash balances at one of our international subsidiaries. At July 1, 2016, our short-term restricted cash included $0.6 million of restricted cash in one of our Africa subsidiaries related to a severance amount paid to a former employee in the first quarter of fiscal 2017. We accrued the severance in restructuring liabilities as of July 1, 2016. Our long-term restricted cash included cash balance in our disability insurance voluntary plan account that cannot be used by us for any operating purposes other than to pay benefits to the insured employees and was recorded in other assets in our consolidated balance sheets and the corresponding liabilities were included in other long-term liabilities in our consolidated balance sheets. |
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Short-Term Investments | We consider all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash equivalents are carried at amortized cost, which approximates fair value due to the short-term nature of these investments. Investments with an original maturity of greater than three months and less than 12 months are accounted for as short-term investments and are classified as such at the time of purchase. We hold cash, cash equivalents and short-term investments at several major financial institutions, which often significantly exceed Federal Deposit Insurance Corporation insured limits. However, a substantial portion of the cash equivalents is invested in prime money market funds which are backed by the securities in the fund. Our short-term investments are comprised of time deposits and certificates of deposit. We classify our marketable securities as “available-for-sale” because we view our entire portfolio as available for use in our current operations. As of June 30, 2017 and July 1, 2016, all of our high-quality marketable debt securities were invested in prime money market funds and were classified as cash equivalents except for $0.3 million and $0.2 million, respectively, in short-term investments. Cash and cash equivalents that are restricted as to withdrawal or usage under the terms of contractual agreements are recorded as restricted cash. At June 30, 2017, our short-term restricted cash mainly included cash balances at one of our international subsidiaries. At July 1, 2016, our short-term restricted cash included $0.6 million of restricted cash in one of our Africa subsidiaries related to a severance amount paid to a former employee in the first quarter of fiscal 2017. We accrued the severance in restructuring liabilities as of July 1, 2016. |
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Accounts Receivables, Major Customers and Other Significant Concentrations | We typically invoice our customers for the sales order (or contract) value of the related products delivered at various milestones, including order receipt, shipment, installation and acceptance and for services when rendered. Our trade receivables are derived from sales to customers located in North America, Africa, Europe, the Middle East, Russia, Asia-Pacific and Latin America. Accounts receivable is presented net of allowance for estimated uncollectible accounts to reflect any loss anticipated on the collection of accounts receivable balances. We calculate the allowance based on our history of write-offs, level of past due accounts and the economic status of the customers. The fair value of our accounts receivable approximates their net realizable value. We regularly require letters of credit from some customers and, from time to time, we discount these letters of credit issued by customers through various financial institutions. The discounting of letters of credit depends on many factors, including the willingness of financial institutions to discount the letters of credit and the cost of such arrangements. Under these arrangements, collection risk is fully transferred to the financial institutions. We record the financing charges on discounting these letters of credit as interest expense. During fiscal 2017, 2016 and 2015, we had one customer in Africa, Mobile Telephone Networks Group (“MTN Group”) that accounted for 14%, 18% and 14%, respectively, of our total revenue. As of June 30, 2017 and July 1, 2016, MTN Group accounted for approximately 26% and 22%, respectively, of our accounts receivable. As of July 1, 2016, Motorola accounted for approximately 11% of our accounts receivable. No other customers accounted for more than 10% of our revenue or accounts receivable for the years presented. The loss of all business from MTN Group, Motorola, or any other significant customers, could adversely affect our results of operations, cash flows and financial position. Financial instruments that potentially subject us to a concentration of credit risk consist principally of cash equivalents, marketable debt securities, trade accounts receivable and financial instruments used in foreign currency hedging activities. We invest our excess cash primarily in prime money market funds and certificates of deposit. We are exposed to credit risks related to such instruments in the event of default or decrease in credit-worthiness of the issuers of the investments. We perform ongoing credit evaluations of our customers and generally do not require collateral on accounts receivable, as the majority of our customers are large, well-established companies. However, in certain circumstances, we may require letters of credit, additional guarantees or advance payments. We maintain allowances for collection losses, but historically have not experienced any significant losses related to any particular geographic area. Our customers are primarily in the telecommunications industry, so our accounts receivable are concentrated within one industry and exposed to concentrations of credit risk within that industry. Accounts receivable are written off when attempts to collect outstanding amounts have been exhausted or there are other indicators that the amounts are no longer collectible. |
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Inventories | Inventories Inventories are valued at the lower of cost or market. Cost is determined using standard cost, which approximates actual cost on a weighted-average first-in-first-out basis. We regularly review inventory quantities on hand and record adjustments to reduce the cost of inventory for excess and obsolete inventory based primarily on our estimated forecast of product demand and production requirements. Inventory adjustments are measured as the difference between the cost of the inventory and estimated market value based upon assumptions about future demand and charged to the provision for inventory, which is a component of cost of sales. At the point of the loss recognition, a new, lower-cost basis for that inventory is established, and any subsequent improvements in facts and circumstances do not result in the restoration or increase in that newly established cost basis. Customer Service Inventories Our customer service inventories are stated at the lower of cost or market. We carry service parts because we generally provide product warranty for 12 to 36 months and earn revenue by providing enhanced and extended warranty and repair service during and beyond this warranty period. Customer service inventories consist of both component parts, which are primarily used to repair defective units, and finished units, which are provided for customer use permanently or on a temporary basis while the defective unit is being repaired. We record adjustments to reduce the carrying value of customer service inventories to their net realizable value. Factors influencing these adjustments include product life cycles, end of service life plans and volume of enhanced or extended warranty service contracts. Estimates of net realizable value involve significant estimates and judgments about the future, and revisions would be required if these factors differ from our estimates. |
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Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are stated on the basis of cost less accumulated depreciation and amortization. We capitalize costs of software, consulting services, hardware and other related costs incurred to purchase or develop internal-use software. We expense costs incurred during preliminary project assessment, re-engineering, training and application maintenance. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the respective assets. Leasehold improvements are amortized on the straight-line method over the shorter of the remaining lease term or the estimated useful life of the improvements. The useful lives of the assets are generally as follows:
Expenditures for maintenance and repairs are charged to expense as incurred. Cost and accumulated depreciation of assets sold or retired are removed from the respective property accounts, and any gain or loss is reflected in the consolidated statements of operations. |
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Impairment of Long-Lived Assets | Impairment of Long-Lived Assets We evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Impairment is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the assets. If impairment exists, the impairment loss is measured and recorded based on discounted estimated future cash flows. In estimating future cash flows, assets are grouped at the lowest levels for which there are identifiable cash flows that are largely independent of cash flows from other asset groups. Our estimate of future cash flows is based upon, among other things, certain assumptions about expected future operating performance, growth rates and other factors. The actual cash flows realized from these assets may vary significantly from our estimates due to increased competition, changes in technology, fluctuations in demand, consolidation of our customers, reductions in average selling prices and other factors. Assumptions underlying future cash flow estimates are therefore subject to significant risks and uncertainties. |
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Warranties | Warranties On product sales, we provide for future warranty costs upon product delivery. The specific terms and conditions of those warranties vary depending upon the product sold and country in which we do business. In the case of products sold by us, our warranties generally start from the delivery date and continue for one to three years, depending on the terms. Many of our products are manufactured to customer specifications and their acceptance is based on meeting those specifications. Factors that affect our warranty liabilities include the number of product units subject to warranty protection, historical experience and management’s judgment regarding anticipated rates of warranty claims and cost per claim. We assess the adequacy of our recorded warranty liabilities every quarter and make adjustments to the liabilities as necessary. |
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Noncontrolling Interest | Noncontrolling interests A noncontrolling interest represents the equity interest in a subsidiary that is not attributable, either directly or indirectly, to Aviat Networks and is reported as our equity, separately from our controlling interests. The noncontrolling interests relate to our ownership interest in a subsidiary company in South Africa with a local partner, where we are the majority owner at 51%. Revenues, expenses, gains, losses, net loss and other comprehensive income (loss) are reported in the consolidated financial statements at the consolidated amounts, which include the amounts attributable to both the controlling and noncontrolling interests. |
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Operating Leases | Operating Leases We lease facilities and equipment under various operating leases. These lease agreements generally include rent escalation clauses, and many include renewal periods at our option. We recognize expense for scheduled rent increases on a straight-line basis over the lease term beginning with the date we take possession of the leased space. Leasehold improvements made either at the inception of the lease or during the lease term are amortized over the current lease term, or estimated life, if shorter. |
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Foreign Currency Translation | Foreign Currency Translation The functional currency of our subsidiaries located in the United Kingdom, Singapore, Mexico, Algeria and New Zealand is the United States (“U.S.”) dollar. Determination of the functional currency is dependent upon the economic environment in which an entity operates as well as the customers and suppliers the entity conducts business with. Changes in facts and circumstances may occur which could lead to a change in the functional currency of that entity. Accordingly, all of the monetary assets and liabilities of these subsidiaries are re-measured into U.S. dollars at the current exchange rate as of the applicable balance sheet date, and all non-monetary assets and liabilities are re-measured at historical rates. Income and expenses are re-measured at the average exchange rate prevailing during the period. Gains and losses resulting from the re-measurement of these subsidiaries’ financial statements are included in the consolidated statements of operations. Our other international subsidiaries use their respective local currency as their functional currency. Assets and liabilities of these subsidiaries are translated at the local current exchange rates in effect at the balance sheet date, and income and expense accounts are translated at the average exchange rates during the period. The resulting translation adjustments are included in accumulated other comprehensive loss. Gains and losses resulting from foreign exchange transactions and revaluation of monetary assets and liabilities in non-functional currencies are included in either cost of product sales and services or other income (expense) in the accompanying consolidated statements of operations, based on the nature of the transactions. |
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Retirement Benefits | Retirement Benefits As of June 30, 2017, we provided retirement benefits to substantially all employees primarily through our defined contribution retirement plans. These plans have matching and savings elements. Contributions by us to these retirement plans are based on profits and employees’ savings with no other funding requirements. We halted making matching contributions to the U.S. plan from the second quarter of fiscal 2014 through the end of fiscal 2015. We resumed making contributions to the plans in fiscal 2016. Contributions to retirement plans are expensed as incurred. |
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Revenue Recognition | Revenue Recognition We generate substantially all of our revenue from the sales or licensing of our microwave radio and wireless access systems, network management software, and professional services including installation, commissioning, maintenance and support services and training. Principal customers for our products and services include domestic and international wireless/mobile service providers, original equipment manufacturers, resellers, system integrators, as well as private network users such as public safety agencies, government institutions, and utility, pipeline, railroad and other industrial enterprises that operate broadband wireless networks. Our customers generally purchase a combination of our products and services as part of a multiple element arrangement. Our assessment of which revenue recognition guidance is appropriate to account for each element in an arrangement can involve significant judgment. Revenue from product sales is generated predominately from the sales of products manufactured by third-party manufacturers to whom we have outsourced our manufacturing processes. In general, printed circuit assemblies, mechanical housings, and packaged modules are manufactured by contract manufacturing partners, with periodic business reviews of material levels and obsolescence. Product assembly, product testing, complete system integration and system testing may either be performed within our own facilities or at the locations of our third-party manufacturers. Revenue from services includes certain installation, extended warranty, customer support, consulting, training and education. It also can include certain revenue generated from the resale of equipment purchased on behalf of customers for installation service contracts we perform for customers. Such equipment may include towers, antennas, and other related materials. Maintenance and support services are generally offered to our customers over a specified period of time and from sales and subsequent renewals of maintenance and support contracts. We recognize revenue when the earnings process is complete as evidenced by persuasive evidence of an arrangement, delivery has occurred, the sales price is fixed or determinable and collectability is reasonably assured. Revenue is recognized net of allowances for returns, discounts and any taxes collected from customers and subsequently remitted to governmental authorities. Delivery does not occur until products have been shipped or services have been provided to the customer, title and risk of loss has transferred to the customer, and (if applicable) either customer acceptance has been obtained or customer acceptance provisions have lapsed. The sales price is not considered to be fixed or determinable until all contingencies related to the sale have been resolved. Revenue from net product sales is recognized when title and risk of loss has transferred to the customer and there are no unfulfilled company obligations that affect the customer’s final acceptance of the arrangement. We recognize maintenance and support services revenue ratably over the maintenance or service period. Professional services revenue consists of fees we earn related to consulting and educational services. We recognize revenue from professional services as the services are performed or upon written acceptance from customers, if applicable, or acceptance provisions have lapsed assuming all other conditions for revenue recognition noted above have been met. We often enter into multiple contractual agreements with the same customer. Such agreements are reviewed to determine whether they should be evaluated as one arrangement. If an arrangement, other than a long-term contract, requires the delivery or performance of multiple deliverables or elements, we determine whether the individual elements represent “separate units of accounting”. Based on the terms and conditions of our typical product sales arrangement, we believe that our products and services can be accounted for as separate units because our products and services have value to our customers on a stand-alone basis. When a sale involves multiple deliverables, the entire fee from the arrangement is allocated to each unit of accounting based on the relative selling price of each deliverable. When applying the relative selling price method, the accounting principles establish a hierarchy to determine the selling price to be used for allocating revenue to deliverables as follows: (i) vendor-specific objective evidence (“VSOE”), (ii) third-party evidence of selling price (“TPE”) and (iii) best estimate of the selling price (“ESP”). Generally, we are not able to determine TPE because our go-to-market strategy differs from that of our peers and our offerings contain a significant level of differentiation such that the comparable pricing of products with similar functionality cannot be obtained. When we are unable to establish a selling price using VSOE or TPE, we use ESP to allocate the arrangement fees to the deliverables. Revenue allocated to each element is then recognized when the other revenue recognition criteria are met for each element. There is generally no customer right of return in our sales agreements. The sequence for typical multiple element arrangements: we deliver our products, perform installation services and then provide post-contract support services. ESP is determined by considering a number of factors including our pricing policies, internal costs and gross margin objectives, method of distribution, information gathered from experience in customer negotiations, market research and information, recent technological trends, competitive landscape and geographies. The determination of ESP is approved by our management taking into consideration our pricing strategy. We regularly review VSOE, TPE and ESP and maintain internal controls over the establishment and updating of these estimates. Revenues related to long-term contracts for customized network solutions are recognized using the percentage-of-completion method. In using the percentage-of-completion method, we generally apply the cost-to-cost method of accounting where sales and profits are recorded based on the ratio of costs incurred to estimated total costs at completion. Recognition of profit on long-term contracts requires estimates of the total contract value, the total cost at completion and the measurement of progress towards completion. Significant judgment is required when estimating total contract costs and progress to completion on the arrangements as well as whether a loss is expected to be incurred on the contract. If circumstances arise that change the original estimates of revenues, costs, or extent of progress toward completion, revisions to the estimates are made. These revisions may result in increases or decreases in estimated revenues or costs, and such revisions are reflected in income in the period in which the circumstances that gave rise to the revision become known by the company. We perform ongoing profitability analysis of our services contracts accounted for under the percentage-of-completion method in order to determine whether the latest estimates of revenues, costs and profits require updating. If at any time these estimates indicate that the contract will be unprofitable, the entire estimated loss for the remainder of the contract is recorded immediately. We establish billing terms at the time project deliverables and milestones are agreed. Revenues recognized in excess of the amounts invoiced to clients are classified as unbilled receivables in our consolidated balance sheets. We reserve for estimated product returns as an offset to revenue or deferred revenue based primarily on historical trends. Actual product returns may be different than what was estimated. These factors and unanticipated changes in the economic and industry environment could make actual results differ from our return estimates. We also consider whether contracts should be combined when specific aggregation criteria are met including when the contracts are in substance an arrangement to perform a single project with a customer; the contracts are negotiated as a package in the same economic environment with an overall profit objective; and the contracts require interrelated activities with common costs that cannot be separately identified with, or reasonably allocated to the elements, phases or units of output and the contracts are performed concurrently or in a continuous sequence under the same project management at the same location or at different locations in the same general vicinity. |
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Cost of Product Sales and Services | Cost of Product Sales and Services Cost of sales consists primarily of materials, labor and overhead costs incurred internally and amounts incurred for contract manufacturers to produce our products, personnel and other implementation costs incurred to install our products and train customer personnel, and customer service and third party original equipment manufacturer costs to provide continuing support to our customers. Shipping and handling costs are included as a component of costs of product sales in our consolidated statements of operations because they are also included in revenue that we bill our customers. |
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Advertising Costs | Advertising Costs We expense all advertising costs as incurred. |
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Presentation of Transactional Taxes Collected from Customers and Remitted to Government Authorities | Presentation of Transactional Taxes Collected from Customers and Remitted to Government Authorities We present transactional taxes such as sales and use tax collected from customers and remitted to governmental authorities on a net basis. |
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Research and Development Costs | Research and Development Costs Our research and development costs, which include costs in connection with new product development, improvement of existing products, process improvement, and product use technologies, are charged to operations in the period in which they are incurred. |
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Share-Based Compensation | Share-Based Compensation We estimate the grant date fair value of our share-based awards and amortize this fair value to compensation expense over the requisite service period or vesting term. To estimate the fair value of our stock option awards, we use the Black-Scholes option pricing model. The determination of the fair value of stock option awards on the date of grant using an option pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. These variables include our expected stock price volatility over the expected term of the awards, actual and projected employee stock option exercise behaviors, risk-free interest rate and expected dividends. Due to the inherent limitations of option valuation models, including consideration of future events that are unpredictable and the estimation process utilized in determining the valuation of the share-based awards, the ultimate value realized by our employees may vary significantly from the amounts expensed in our financial statements. For restricted stock awards and units and performance share awards and units, we measure the grant date fair value based upon the market price of our common stock on the date of the grant. The fair value of each market-based stock unit with market conditions was estimated using the Monte-Carlo simulation model. We generally recognize compensation cost for share-based payment awards on a straight-line basis over the requisite service period. For an award that has a graded vesting schedule, compensation expense is recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in-substance, multiple awards. The amount of compensation cost recognized at any date must at least equal the portion of the grant-date value of the award that is vested at that date. For awards with a performance condition vesting feature, we recognize share-based compensation costs for the performance awards and units when achievement of the performance conditions is considered probable. Any previously recognized compensation cost would be reversed if the performance condition is not satisfied or if it is not probable that the performance conditions will be achieved. For awards with a market condition vesting feature, we recognize share-based compensation costs over the period the requisite service is rendered, regardless of when, if ever, the market condition is satisfied. During the fourth quarter of fiscal 2017, we adopted Accounting Standards Update (“ASU”) 2016-09 and elected to account for forfeitures as they occur. Refer to accounting standards adopted below for changes to the accounting for share-based compensation expense. |
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Restructuring Charges | Restructuring Charges Our restructuring charges represent expenses incurred in connection with certain cost reduction programs that we have implemented, and consisted of the costs of employee termination costs, lease and other contract termination charges and other costs of exiting activities or geographies. A liability for costs associated with an exit or disposal activity is measured at its fair value when the liability is incurred. Expenses for one-time termination benefits are recognized at the date we notify the employee, unless the employee must provide future service, in which case the benefits are expensed ratably over the future service period. We recognize severance benefits provided as part of an ongoing benefit arrangement when the payment is probable and the amounts can be reasonably estimated. Liabilities related to termination of an operating lease or contract are measured and recognized at fair value when the contract does not have any future economic benefit to the entity and the fair value of the liability is determined based on the present value of the remaining lease obligations, adjusted for the effects of deferred items recognized under the lease, and reduced by estimated sublease rentals that could be reasonably obtained for the property. The assumptions in determining such estimates include anticipated timing of sublease rentals and estimates of sublease rental receipts and related costs based on market conditions. We expense all other costs related to an exit or disposal activity as incurred. |
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Income Taxes and Related Uncertainties | Income Taxes and Related Uncertainties We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are determined based on the estimated future tax effects of temporary differences between the financial statement and tax basis of assets and liabilities, as measured by tax rates at which temporary differences are expected to reverse as well as operating loss and tax credit carry forwards. Deferred tax expense (benefit) is the result of changes in deferred tax assets and liabilities. A valuation allowance is established to offset any deferred tax assets if, based upon the available information, it is more likely than not that some or all of the deferred tax assets will not be realized. We are required to compute our income taxes in each federal, state, and international jurisdiction in which we operate. This process requires that we estimate the current tax exposure as well as assess temporary differences between the accounting and tax treatment of assets and liabilities, including items such as accruals and allowances not currently deductible for tax purposes as well as operating loss and tax credit carry forwards. The income tax effects of the differences we identify are classified as current or long-term deferred tax assets and liabilities in our consolidated balance sheets. Our judgments, assumptions, and estimates relative to the current provision for income taxes take into account current tax laws, our interpretation of current tax laws, and possible outcomes of current and future audits conducted by foreign and domestic tax authorities. Changes in tax laws or our interpretation of tax laws and the resolution of current and future tax audits could significantly impact the amounts provided for income taxes in our consolidated balance sheets and consolidated statements of operations. We must also assess the likelihood that deferred tax assets will be realized from future taxable income and, based on this assessment, establish a valuation allowance, if required. Our determination of our valuation allowance is based upon a number of assumptions, judgments, and estimates, including forecasted earnings, future taxable income, and the relative proportions of revenue and income before taxes in the various domestic and international jurisdictions in which we operate. To the extent we establish a valuation allowance or change the valuation allowance in a period, we reflect the change with a corresponding increase or decrease to our tax provision in our consolidated statements of operations. We use a two-step process to determine the amount of tax benefit to be recognized for uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires us to estimate and measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. It is inherently difficult and subjective to estimate such amounts, as this requires us to determine the probability of various possible outcomes. We reevaluate these uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit, and new audit activity. Such a change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision in the period. |
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Recently Issued Accounting Standards | Accounting Standards Adopted In May 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. The amendment provides guidance on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under Accounting Standards Codification (“ASC”) 718.The guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. The amendment in this ASU should be applied prospectively to an award modified on or after the adoption date. We adopted this standard during the fourth quarter of fiscal 2017. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The guidance addresses diversity in practice that exists in the classification and presentation of changes in restricted cash and requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. We adopted this standard during the fourth quarter of fiscal 2017 with no material impact on our consolidated financial statements and disclosures. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows, Clarification of Certain Cash Receipts and Cash Payments, which provides guidance on the presentation and classification of eight specific cash flow issues. We adopted this standard during the fourth quarter of fiscal 2017. There was no reclassification impact resulted from the adoption on our consolidated statements of cash flows for fiscal year 2016 and fiscal year 2015, and such statements have been presented in accordance with this new guidance. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718), which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, forfeiture, statutory tax withholding requirements, and classification on the statement of cash flows. We adopted this standard during the fourth quarter of fiscal 2017 and elected to account for forfeitures as they occur using a modified retrospective transition method. The change from the current method of estimating forfeitures resulted in a cumulative-effect adjustment of approximately $9 thousand, which we recorded as expense in fiscal 2017. The guidance also requires companies to record excess tax benefits and tax deficiencies as income tax benefit or expense in the statement of operations prospectively when share-based awards vest or are settled. The adoption had no impact on our deferred tax assets and the fiscal 2017 opening accumulated deficit balance because we had no historical excess tax benefit related tax attributes. We also elected to apply the change in cash flow classification of excess tax benefits prospectively, resulting in no reclassification of our consolidated statements of cash flows. In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Topic 835-30), Simplifying the Presentation of Debt Issuance Costs. To simplify the presentation of debt issuance costs, the standard requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. This ASU includes an SEC staff announcement that the SEC staff would not object to an entity deferring and presenting the costs of securing a revolving line of credit as an asset, and amortizing the costs over the term of the line-of-credit arrangement, regardless of there are any outstanding borrowings on the line-of-credit arrangement. The subject of this ASU was not previously addressed by ASU No. 2015-03. We have adopted both accounting guidance during the first quarter of fiscal 2017 and applied its provisions retrospectively. The adoption of these standards had no material impact on our consolidated financial statements and related disclosures. Accounting Standards Not Yet Adopted In May 2014, the FASB issued ASU 2014-09 (ASC Topic 606), Revenue from Contracts with Customers, which along with amendments issued in 2015 and 2016, will supersede nearly all current U.S. GAAP guidance on this topic and eliminate industry-specific guidance. The amendments are based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additional disclosures will also be required to enable users to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. This accounting standard update, as amended, will be effective for us in the first quarter of fiscal year 2019. The new revenue standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized in retained earnings as of the date of adoption. We are in process of evaluating the impact of the standard update. The ultimate impact on revenue resulting from the application of the new standard will be subject to assessments that are dependent on many variables, including, but not limited to, the terms of our contractual arrangements and our mix of business. We have established a cross-functional implementation team to implement the standard update related to the recognition of revenue from contracts with customers. We have identified and are in the process of evaluating changes to our systems, processes and internal controls to meet the reporting and increased disclosure requirements associated with this standard update. We expect the timing of revenue recognition to change in certain areas, including our services segment’s installation revenue, which upon adoption will be recognized as revenue and costs over a period of time. Also, since we currently expense sales commissions as incurred, the requirement in the new standard to capitalize certain in-scope sales commissions is being evaluated to determine its potential impact in the consolidated financial statements in the year of adoption. We expect to adopt the new standard on a modified retrospective basis in the first quarter of fiscal 2019. We are continuing to assess all potential impacts of the guidance and given normal ongoing business dynamics, preliminary conclusions are subject to change. In October 2016, the FASB issued ASU 2016-16 Income Taxes (Topic 740), Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory, which requires that an entity recognizes the tax expense from the sale of intra-entity sales of assets, other than inventory, in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminated in consolidation. The guidance will be effective for our fiscal year 2019. Early adoption is permitted. The ASU must be adopted using a modified retrospective method. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which introduces the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. This standard will become effective for interim and annual periods beginning after December 15, 2018, with early adoption permitted. The guidance is required to be adopted at the earliest period presented using a modified retrospective approach. We expect that most of our operating lease commitments will be subject to the new standard and recognized as right-of-use assets and operating lease liabilities upon the adoption of ASU 2016-02. We are evaluating the effect the adoption of the standard will have on our consolidated financial statements and related disclosures. In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This guidance retains the current accounting for classifying and measuring investments in debt securities and loans, but requires equity investments to be measured at fair value with subsequent changes recognized in net income, except for those accounted for under the equity method or requiring consolidation. The guidance also changes the accounting for investments without a readily determinable fair value and that do not qualify for the practical expedient to estimate fair value. A policy election can be made for these investments whereby estimated fair value may be measured at cost and adjusted in subsequent periods for any impairment or changes in observable prices of identical or similar investments. This ASU is effective for fiscal years beginning after December 15, 2017. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In July 2015, the FASB issued ASU 2015-11 Inventory (Topic 330), Simplifying the Measurement of Inventory, which provides guidance to companies who account for inventory using either the first-in, first-out (“FIFO”) or average cost methods. The guidance states that companies should measure inventory at the lower of cost and net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This ASU is effective for fiscal years beginning after December 15, 2016. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. |
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Net Income (Loss) per Share of Common Stock | Net loss per share is computed using the two-class method, by dividing net loss attributable to us by the weighted average number of common shares and participating securities outstanding during the period. Our restricted shares contain rights to receive non-forfeitable dividends and therefore are considered to be participating securities and included in the calculations of net income per basic and diluted common share. Undistributed losses are not allocated to unvested restricted shares because the unvested restricted shares are not contractually obligated to share our losses. The impact on earnings per share of the participating securities under the two-class method was immaterial. |
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Fair Value Measurement | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal market (or most advantageous market, in the absence of a principal market) for the asset or liability in an orderly transaction between market participants as of the measurement date. We maximize the use of observable inputs and minimize the use of unobservable inputs in measuring fair value and establish a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The three levels of inputs used to measure fair value are as follows:
We classify items within Level 1 if quoted prices are available in active markets. Our Level 1 items mainly are money market funds purchased from two major financial institutions. As of June 30, 2017, these money market funds were valued at $1.00 net asset value per share by these financial institutions. We classify items in Level 2 if the observable inputs to quoted market prices, benchmark yields, reported trades, broker/dealer quotes or alternative pricing sources are available with reasonable levels of price transparency. Our bank certificates of deposit and foreign exchange forward contracts are classified within Level 2. Foreign currency forward contracts are measured at fair value using observable foreign currency exchange rates. The assets and liabilities related to our foreign currency forward contracts were not material as of June 30, 2017 and July 1, 2016. We did not have any recurring assets or liabilities that were valued using significant unobservable inputs. Our policy is to recognize asset or liability transfers among Level 1, Level 2 and Level 3 as of the actual date of the events or change in circumstances that caused the transfer. During fiscal 2017, 2016 and 2015, we had no transfers between levels of the fair value hierarchy of our assets or liabilities measured at fair value. |
The Company and Summary of Significant Accounting Policies (Tables) |
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | The useful lives of the assets are generally as follows:
Our property, plant and equipment, net are summarized below:
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Schedule of Net Foreign Exchange Loss | Net foreign exchange loss recorded in our consolidated statements of operations during fiscal 2017, 2016 and 2015 was as follows:
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Accumulated Other Comprehensive Loss (Tables) |
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | The changes in components of our accumulated other comprehensive loss during fiscal 2017, 2016 and 2015 were as follows:
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Reclassification out of Accumulated Other Comprehensive Income | In fiscal 2017, 2016 and 2015, the realized gain (loss) reclassified out of accumulated other comprehensive loss were included in the following line item locations in our consolidated statements of operations:
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Net Loss per Share of Common Stock (Tables) |
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Jun. 30, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table summarizes the potential shares of common stock that were excluded from the diluted net loss per share calculations:
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Balance Sheet Components (Tables) |
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash, Cash Equivalents and Restricted Cash | The following table provides a summary of cash, cash equivalents, and restricted cash reported within the Consolidated Balance Sheets that reconciles to the corresponding amount in the Consolidated Statements of Cash Flows:
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Schedule of Accounts Receivable | Our net accounts receivable is summarized below:
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Schedule of Inventories | Our inventories are summarized below:
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Schedule of Adjustments to Inventory | During fiscal 2017, 2016 and 2015, we recorded charges to adjust our inventory and customer service inventory due to excess and obsolete inventory resulting from lower sales forecast, product transitioning or discontinuance. Such charges incurred during fiscal 2017, 2016 and 2015 were classified in cost of product sales as follows:
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Property, Plant and Equipment | The useful lives of the assets are generally as follows:
Our property, plant and equipment, net are summarized below:
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Schedule of Accrued Expenses | Our accrued expenses are summarized below:
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Schedule of Product Warranty Liability | Changes in our warranty liability, which is included as a component of accrued expenses in the consolidated balance sheets were as follows:
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Schedule Advanced payments and Unearned Income | Our advanced payments and unearned income are summarized below:
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Fair Value Measurements Of Assets And Liabilities (Tables) |
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, by Balance Sheet Grouping | The carrying amounts, estimated fair values and valuation input levels of our assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2017 and July 1, 2016 were as follows:
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Restructuring Activities (Tables) |
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring and Related Costs | The following tables summarize our restructuring related activities during fiscal year 2017, 2016 and 2015:
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Stockholders Equity (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Compensation Expense for Share-based Compensation Awards | Total following table presents the compensation expense for share-based awards included in our consolidated statements of operations for fiscal 2017, 2016 and 2015:
The following table summarizes the unamortized compensation expense and the remaining years over which such expense would be expected to be recognized, on a weighted-average basis, by type of award:
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Schedule of Stock Options Activities | A summary of the combined stock option activity under our equity plans during fiscal 2017 is as follows:
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Schedule of Stock Options Valuation Assumptions | A summary of the significant weighted average assumptions we used in the Black-Scholes valuation model is as follows:
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Stock Options Outstanding and Exercisable | The following summarizes all of our stock options outstanding and exercisable as of June 30, 2017:
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Additional Information of Stock Options | Additional information related to our stock options is summarized below:
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Status of Restricted Stock | A summary of the status of our restricted stock as of June 30, 2017 and changes during fiscal 2017 is as follows:
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Schedule of Market Condition Award Valuation Assumptions | A summary of the significant weighted average assumptions we used in the Monte Carlo simulation model is as follows:
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Status of Performance-based Shares | A summary of the status of our performance shares awards and units as of June 30, 2017 and changes during fiscal 2017 is as follows:
A summary of the status of our market-based stock units as of June 30, 2017 and changes during fiscal 2017 is as follows:
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Segment and Geographic Information (Tables) |
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Revenue from Segments to Consolidated | Revenue by region for 2017, 2016 and 2015 were as follows:
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Revenue by Country | Revenue by country comprising more than 5% of our total revenue for fiscal 2017, 2016 and 2015 were as follows:
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Schedule of Long-Lived Assets by Country | Our long-lived assets, consisting primarily of property, plant and equipment, by geographic areas based on the physical location of the assets as of June 30, 2017 and July 1, 2016 were as follows:
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Divestiture (Tables) |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Results of Operations for the WiMax Business | Summary results of operations for the WiMAX business were as follows:
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Income Taxes (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income before Income Tax, Domestic and Foreign | oss) from continuing operations before provision for income taxes during fiscal year 2017, 2016 and 2015 consisted of the following:
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Schedule of Components of Income Tax Expense (Benefit) | Provision for (benefit from) income taxes from continuing operations for fiscal year 2017, 2016 and 2015 were summarized as follows:
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Schedule of Effective Income Tax Rate Reconciliation | The provision for (benefit from) income taxes from continuing operations differed from the amount computed by applying the federal statutory rate of 35% to our income before provision for income taxes as follows:
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Schedule of Deferred Tax Assets and Liabilities | The components of deferred tax assets and liabilities were as follows:
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Schedule of Unrecognized Tax Benefits Roll Forward | Our unrecognized tax benefit activity for fiscal 2017, 2016 and 2015 was as follows:
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Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Lease Payments Under All Non-cancelable Operating Leases | As of June 30, 2017, our future minimum lease payments under all non-cancelable operating leases with an initial lease term in excess of one year were as follows:
|
Quarterly Financial Data (Unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Data [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information | Summarized quarterly data for fiscal 2017 and 2016 were as follows:
_______________________
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Schedule of Certain Charges, Expenses and Loss (Income) from Discontinued Operations | The following tables summarize notable items included in our results of operations for each of the fiscal quarters presented:
|
The Company and Summary of Significant Accounting Policies Property, Plant and Equipment (Details) |
12 Months Ended |
---|---|
Jun. 30, 2017 | |
Buildings | |
Property, Plant and Equipment [Line Items] | |
Useful life | 40 years |
Leasehold improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 2 years |
Leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 10 years |
Software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 2 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Accumulated Other Comprehensive Loss (Reclassification out of AOCI) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 30, 2016 |
Sep. 30, 2016 |
Jul. 01, 2016 |
Apr. 01, 2016 |
Jan. 01, 2016 |
Oct. 02, 2015 |
Jun. 30, 2017 |
Jul. 01, 2016 |
Jul. 03, 2015 |
|
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Revenues | $ 56,431 | $ 58,700 | $ 68,536 | $ 58,207 | $ 58,252 | $ 60,467 | $ 70,416 | $ 79,555 | $ 241,874 | $ 268,690 | $ 335,878 |
Cost of revenues | (166,402) | (206,973) | (255,188) | ||||||||
Other income (expense) | 169 | (1,245) | 0 | ||||||||
Net income (loss) | $ (1,412) | $ (330) | $ 1,722 | $ (601) | $ (15,141) | $ (7,808) | $ (5,534) | $ (1,154) | (621) | (29,637) | (24,554) |
Reclassification out of AOCI | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||||||
Revenues | 0 | 0 | (378) | ||||||||
Cost of revenues | 0 | 41 | 57 | ||||||||
Other income (expense) | 349 | 0 | 0 | ||||||||
Net income (loss) | $ 349 | $ 41 | $ (321) |
Net Loss per Share of Common Stock (Details) - shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2017 |
Jul. 01, 2016 |
Jul. 03, 2015 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total potential shares of common stock excluded | 813 | 796 | 655 |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total potential shares of common stock excluded | 410 | 538 | 613 |
Restricted stock awards and units and performance share awards and units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total potential shares of common stock excluded | 403 | 258 | 42 |
Balance Sheet Components (Cash, Cash Equivalents and Restricted Cash) (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Jul. 01, 2016 |
Jul. 03, 2015 |
Jun. 27, 2014 |
---|---|---|---|---|
Cash and Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 35,658 | $ 30,479 | ||
Restricted cash | 541 | 558 | ||
Restricted cash included in Other assets | 370 | 388 | ||
Total cash, cash equivalents, and restricted cash in the Statements of Cash Flows | $ 36,569 | $ 31,425 | $ 35,199 | $ 49,863 |
Balance Sheet Components (Receivables) (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Jul. 01, 2016 |
---|---|---|
Balance Sheet Related Disclosures [Abstract] | ||
Accounts receivable | $ 49,864 | $ 71,416 |
Less: allowances for collection losses | (3,919) | (7,967) |
Accounts receivable, net | $ 45,945 | $ 63,449 |
Balance Sheet Components (Inventories) (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Jul. 01, 2016 |
---|---|---|
Balance Sheet Related Disclosures [Abstract] | ||
Finished products | $ 16,619 | $ 20,044 |
Work in process | 3,088 | 5,104 |
Raw materials and supplies | 2,087 | 2,145 |
Total inventories | 21,794 | 27,293 |
Deferred cost of revenue included within finished goods | 7,120 | 5,984 |
Consigned inventories included within raw materials | $ 1,268 | $ 2,035 |
Balance Sheet Components (Inventory Adjustments) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2017 |
Jul. 01, 2016 |
Jul. 03, 2015 |
|
Balance Sheet Related Disclosures [Abstract] | |||
Excess and obsolete inventory charges | $ 39 | $ 9,175 | $ 6,291 |
Customer service inventory write-downs | 1,098 | 693 | 1,752 |
Charges for inventory and customer service inventory write-downs | $ 1,137 | $ 9,868 | $ 8,043 |
As % of revenue | 0.50% | 3.70% | 2.40% |
Balance Sheet Components (Property Plant and Equipment) (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Jul. 01, 2016 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 70,129 | $ 70,004 |
Less accumulated depreciation and amortization | (53,723) | (51,842) |
Property, plant and equipment, net | 16,406 | 18,162 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 710 | 710 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 11,442 | 11,714 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 14,803 | 14,620 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 43,174 | $ 42,960 |
Balance Sheet Components (Narrative) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2017 |
Jul. 01, 2016 |
Jul. 03, 2015 |
|
Balance Sheet Related Disclosures [Abstract] | |||
Depreciation and amortization of property, plant and equipment | $ 5,840 | $ 6,648 | $ 7,242 |
Balance Sheet Components (Accrued Expenses) (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Jul. 01, 2016 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accrued compensation and benefits | $ 8,317 | $ 7,161 |
Accrued agent commissions | 1,911 | 3,551 |
Accrued warranties | 3,056 | 3,944 |
Other | 8,649 | 8,549 |
Accrued expenses | $ 21,933 | $ 23,205 |
Balance Sheet Components (Accrued Warranties) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2017 |
Jul. 01, 2016 |
Jul. 03, 2015 |
|
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | |||
Balance as of the beginning of the fiscal year | $ 3,944 | $ 4,221 | $ 3,777 |
Warranty provision recorded during the period | 1,604 | 3,462 | 5,595 |
Consumption during the period | (2,492) | (3,739) | (5,151) |
Balance as of the end of the period | $ 3,056 | $ 3,944 | $ 4,221 |
Balance Sheet Components (Advanced Payments and Unearned Income) (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Jul. 01, 2016 |
---|---|---|
Deferred Revenue and Credits [Abstract] | ||
Advanced payments | $ 8,760 | $ 12,124 |
Unearned income | 11,244 | 18,491 |
Advance payments and unearned income | $ 20,004 | $ 30,615 |
Stockholders Equity (Unamortized Expenses) (Details) - 2007 Stock Plan $ in Thousands |
12 Months Ended |
---|---|
Jun. 30, 2017
USD ($)
| |
Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unamortized Expense | 1 year 1 month 2 days |
Weighted Average Remaining Recognition Period | $ 152 |
Performance share awards and units and market-based stock units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unamortized Expense | 1 year 6 months |
Weighted Average Remaining Recognition Period | $ 900 |
Restricted stock awards and units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unamortized Expense | 1 year 9 months 15 days |
Weighted Average Remaining Recognition Period | $ 2,485 |
Stockholders Equity (Weighted Average Assumptions) (Details) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2017 |
Jul. 01, 2016 |
Jul. 03, 2015 |
|
Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividends | 0.00% | ||
Expected volatility | 53.90% | ||
Risk-free interest rate | 1.13% | ||
Expected term | 4 years 3 months | ||
Weighted average grant date fair value per share granted (dollars per share) | $ 6.60 | ||
Market Based Stock Units (MSU) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividends | 0.00% | 0.00% | |
Expected volatility | 58.10% | 52.40% | |
Risk-free interest rate | 1.20% | 1.21% | |
Weighted average grant date fair value per share granted (dollars per share) | $ 6.83 | $ 2.56 |
Stockholders Equity (Additional Option Information) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2017 |
Jul. 01, 2016 |
Jul. 03, 2015 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Intrinsic value of options exercised | $ 3 | $ 0 | $ 0 |
Fair value of options vested | $ 654 | $ 1,395 | $ 1,990 |
Stockholders Equity (Performance Share Activity) (Details) |
12 Months Ended |
---|---|
Jun. 30, 2017
$ / shares
shares
| |
Performance Share Awards, Shares [Roll Forward] | |
Granted | 72,941 |
Performance Share Awards, Weighted Average Grant Date Fair Value [Roll Forward] | |
Weighted average grant date fair value of shares vested and released | $ / shares | $ 9.18 |
Performance Shares | |
Performance Share Awards, Shares [Roll Forward] | |
Shares outstanding, beginning balance | 0 |
Forfeited | 0 |
Shares outstanding, ending balance | 72,941 |
Performance Share Awards, Weighted Average Grant Date Fair Value [Roll Forward] | |
Weighted average grant date fair value of shares outstanding, end | $ / shares | $ 9.18 |
Segment and Geographic Information (Schedule of Revenues by Geographic Region) (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2017
USD ($)
|
Mar. 31, 2017
USD ($)
|
Dec. 30, 2016
USD ($)
|
Sep. 30, 2016
USD ($)
|
Jul. 01, 2016
USD ($)
|
Apr. 01, 2016
USD ($)
|
Jan. 01, 2016
USD ($)
|
Oct. 02, 2015
USD ($)
|
Jun. 30, 2017
USD ($)
segments
|
Jul. 01, 2016
USD ($)
|
Jul. 03, 2015
USD ($)
|
|
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Number of reportable segments | segments | 1 | ||||||||||
Revenue | $ 56,431 | $ 58,700 | $ 68,536 | $ 58,207 | $ 58,252 | $ 60,467 | $ 70,416 | $ 79,555 | $ 241,874 | $ 268,690 | $ 335,878 |
North America | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 132,078 | 125,482 | 153,239 | ||||||||
Africa and Middle East | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 60,150 | 82,742 | 97,112 | ||||||||
Europe and Russia | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 14,128 | 20,539 | 35,990 | ||||||||
Latin America and Asia Pacific | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | $ 35,518 | $ 39,927 | $ 49,537 |
Segment and Geographic Information (Long-Lived Assets by Country) (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Jul. 01, 2016 |
---|---|---|
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 16,406 | $ 18,162 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 5,854 | 11,353 |
United Kingdom | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 2,727 | 2,946 |
New Zealand | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 6,310 | 2,618 |
Other countries | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 1,515 | $ 1,245 |
Divestiture (Details) - Discontinued Operations, Disposed of by Sale - WiMAX - USD ($) $ in Thousands |
12 Months Ended | 37 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 02, 2011 |
Jun. 30, 2017 |
Jul. 01, 2016 |
Jul. 03, 2015 |
Sep. 26, 2014 |
Jun. 27, 2014 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Proceeds from divestiture of businesses | $ 400 | |||||
Discontinued operations contingent consideration | 2,800 | |||||
Proceeds from contingent payments | $ 100 | |||||
Potential cash payments to EION for collections of WiMAX receivables | $ 2,000 | |||||
Payment on divestiture payables | $ 1,600 | |||||
Write-off of accrued liabilities due to EION | $ 100 | $ 400 | ||||
Accrued Liabilities related to disposition of WiMAX | $ 0 | |||||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||||
Income from operations of WiMAX | 0 | $ 652 | 30 | |||
Gain on disposal | 0 | 0 | 85 | |||
Income taxes | 0 | (111) | (21) | |||
Income from discontinued operations, net of tax | $ 0 | $ 541 | $ 94 |
Income Taxes (Loss from continuing operations) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2017 |
Jul. 01, 2016 |
Jul. 03, 2015 |
|
Income Tax Disclosure [Abstract] | |||
United States | $ 10,979 | $ (4,248) | $ (18,603) |
Foreign | (11,584) | (24,295) | (7,355) |
Loss from continuing operations before income taxes | $ (605) | $ (28,543) | $ (25,958) |
Income Taxes (Components of Income Tax Expense) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2017 |
Jul. 01, 2016 |
Jul. 03, 2015 |
|
Current provision (benefit): | |||
Federal | $ (14) | $ 131 | $ 0 |
Foreign | (52) | 1,814 | 3,378 |
State and local | 7 | 24 | 23 |
Total current provision | (59) | 1,969 | 3,401 |
Deferred provision (benefit): | |||
Federal | 168 | (468) | (216) |
Foreign | (93) | 134 | (4,495) |
Total deferred provision (benefit) | 75 | (334) | (4,711) |
Total provision for (benefit from) income taxes from continuing operations | $ 16 | $ 1,635 | $ (1,310) |
Income Taxes (Effective Income Rate Reconciliation) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2017 |
Jul. 01, 2016 |
Jul. 03, 2015 |
|
Income Tax Disclosure [Abstract] | |||
Tax benefit at statutory rate | $ (196) | $ (9,990) | $ (9,065) |
Valuation allowances | (1,346) | 6,609 | (3,900) |
Foreign non-deductible expenses | 628 | 103 | (80) |
State and local taxes, net of U.S. federal tax benefit | 358 | (134) | (500) |
Foreign income taxed at rates less than the U.S. statutory rate | 2,062 | 6,019 | 9,970 |
Dividend from foreign subsidiary | 0 | (1,781) | 0 |
Foreign branch income/withholding taxes | 1,116 | 292 | 1,350 |
Singapore refund | (3,778) | 0 | 0 |
Change in uncertain tax positions | 1,173 | 437 | 610 |
Other | (1) | 80 | 305 |
Total provision for (benefit from) income taxes from continuing operations | $ 16 | $ 1,635 | $ (1,310) |
Income Taxes (Components of Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands |
Jun. 30, 2017 |
Jul. 01, 2016 |
---|---|---|
Deferred Tax Assets: | ||
Inventory | $ 4,390 | $ 6,652 |
Accruals and reserves | 2,611 | 2,497 |
Bad debts | 669 | 1,091 |
Amortization | 1,870 | 3,148 |
Stock compensation | 2,266 | 2,599 |
Deferred revenue | 3,127 | 1,759 |
Unrealized exchange gain/loss | 3,295 | 3,422 |
Other | 3,715 | 6,623 |
Tax credit carryforwards | 15,337 | 18,016 |
Tax loss carryforwards | 168,115 | 167,468 |
Total deferred tax assets before valuation allowance | 205,395 | 213,275 |
Valuation allowance | (197,951) | (202,824) |
Total deferred tax assets | 7,444 | 10,451 |
Deferred tax liabilities: | ||
Branch undistributed earnings reserve | 990 | 822 |
Depreciation | 1,501 | 4,596 |
Other | 456 | 462 |
Total deferred tax liabilities | 2,947 | 5,880 |
Net deferred tax assets | 4,497 | 4,571 |
Deferred tax assets, noncurrent | 6,178 | 6,068 |
Deferred tax liabilities, noncurrent | $ 1,681 | $ 1,497 |
Income Taxes (Unrecognized Tax Benefit Activity) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2017 |
Jul. 01, 2016 |
Jul. 03, 2015 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefit, beginning of period | $ 27,038 | $ 26,910 | $ 28,209 |
Additions for tax positions in prior periods | 626 | 246 | 673 |
Additions for tax positions in current periods | 831 | 397 | |
Decreases for tax positions in prior periods | (9,279) | (227) | |
Decreases related to change of foreign exchange rate | (477) | (515) | (1,745) |
Unrecognized tax benefit, end of period | $ 18,739 | $ 27,038 | $ 26,910 |
Commitments and Contingencies (Details) $ in Thousands |
Jun. 30, 2017
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2018 | $ 1,997 |
2019 | 1,431 |
2020 | 988 |
2021 | 908 |
2022 | 208 |
Thereafter | 2,023 |
Total | 7,555 |
Rents receivable in the future under our non-cancelable sublease | $ 100 |
Quarterly Financial Data (Unaudited) (Summarized Quarterly Data) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 30, 2016 |
Sep. 30, 2016 |
Jul. 01, 2016 |
Apr. 01, 2016 |
Jan. 01, 2016 |
Oct. 02, 2015 |
Jun. 30, 2017 |
Jul. 01, 2016 |
Jul. 03, 2015 |
|
Quarterly Financial Data [Abstract] | |||||||||||
Revenue | $ 56,431 | $ 58,700 | $ 68,536 | $ 58,207 | $ 58,252 | $ 60,467 | $ 70,416 | $ 79,555 | $ 241,874 | $ 268,690 | $ 335,878 |
Gross margin | 19,259 | 17,732 | 21,116 | 17,365 | 9,869 | 14,413 | 16,424 | 21,011 | 75,472 | 61,717 | 80,690 |
Operating (loss) income | (646) | 73 | 2,513 | (2,925) | (13,256) | (7,594) | (4,998) | (1,598) | (985) | (27,446) | (25,930) |
Net (loss) income | (1,412) | (330) | 1,722 | (601) | (15,141) | (7,808) | (5,534) | (1,154) | (621) | (29,637) | (24,554) |
Net (loss) income attributable to Aviat Networks | $ (1,473) | $ (399) | $ 1,678 | $ (629) | $ (15,151) | $ (7,874) | $ (5,679) | $ (1,203) | $ (823) | $ (29,907) | $ (24,625) |
Per share data: | |||||||||||
Basic net (loss) income per common share | $ (0.28) | $ (0.08) | $ 0.32 | $ (0.12) | |||||||
Diluted net (loss) income per common share | $ (0.28) | $ (0.08) | $ 0.31 | $ (0.12) | |||||||
Basic and diluted net loss per common share (1) | $ (2.88) | $ (1.50) | $ (1.09) | $ (0.23) | $ (0.16) | $ (5.71) | $ (4.75) |
Quarterly Financial Data (Unaudited) (Certain Non-recurring Items on Income Statements) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 30, 2016 |
Sep. 30, 2016 |
Jul. 01, 2016 |
Apr. 01, 2016 |
Jan. 01, 2016 |
Oct. 02, 2015 |
Jun. 30, 2017 |
Jul. 01, 2016 |
Jul. 03, 2015 |
|
Restructuring charges | $ 246 | $ 111 | $ 72 | $ 160 | $ 1,596 | $ 804 | $ 34 | $ 21 | $ 589 | $ 2,455 | $ 4,867 |
Nigeria foreign exchange loss (gain) on dividend receivable | 712 | 1,801 | 3,308 | ||||||||
Inventory (recovery) write-down | 1,137 | 9,868 | 8,043 | ||||||||
Performance bond expense | 0 | 0 | 365 | 0 | |||||||
Gain on liquidation of subsidiary | 0 | (349) | 0 | 0 | $ (349) | $ 0 | $ 0 | ||||
WTM Inventory | |||||||||||
Inventory (recovery) write-down | (45) | (48) | (83) | 0 | 5,057 | 0 | 0 | 0 | |||
Inland Revenue, Singapore (IRAS) | Foreign Tax | |||||||||||
Tax refund from Inland Revenue Authority of Singapore | 0 | 0 | 0 | (3,741) | |||||||
Nigeria | |||||||||||
Nigeria foreign exchange loss (gain) on dividend receivable | $ (5) | $ 10 | $ (2) | $ 210 | $ 1,245 | $ 0 | $ 0 | $ 0 |
Subsequent Events (Details) - USD ($) $ in Thousands |
1 Months Ended | 2 Months Ended | 3 Months Ended | |||
---|---|---|---|---|---|---|
Aug. 31, 2017 |
Sep. 06, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 30, 2016 |
Sep. 30, 2016 |
|
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Insurance recovery | $ 300 | |||||
Inland Revenue, Singapore (IRAS) | Foreign Tax | ||||||
Subsequent Event [Line Items] | ||||||
Tax refund | $ 0 | $ 0 | $ 0 | $ 3,741 | ||
Inland Revenue, Singapore (IRAS) | Foreign Tax | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Tax refund | $ 1,300 |
Schedule II - Valuation and Qualifying Accounts and Reserves (Details) - Allowances for collection losses - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2017 |
Jul. 01, 2016 |
Jul. 03, 2015 |
|
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ 7,967 | $ 6,641 | $ 7,442 |
Charged to (Credit from) Costs and Expenses | (484) | 2,431 | 1,302 |
Deductions | 3,564 | 1,105 | 2,103 |
Balance at End of Period | $ 3,919 | $ 7,967 | $ 6,641 |
Schedule II - Valuation and Qualifying Accounts and Reserves Narrative (Details) - Allowances for collection losses - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2017 |
Jul. 01, 2016 |
Jul. 03, 2015 |
|
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Foreign currency translation loss | $ 607 | $ 308 | $ 250 |
Uncollectible accounts charged off, net of recoveries | $ 4,172 | $ 797 | $ 1,853 |
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