x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
AVIAT NETWORKS, INC. (Exact name of registrant as specified in its charter) | ||
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) |
Large accelerated filer | o | Accelerated filer | o | |
Non-accelerated filer | x | Smaller reporting company | o | |
Emerging growth company | o |
Page | |
Item 1. | Financial Statements |
(In thousands, except share and par value amounts) | December 28, 2018 | June 29, 2018 | |||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 31,542 | $ | 37,425 | |||
Restricted cash | 3 | 3 | |||||
Accounts receivable, net | 48,624 | 43,068 | |||||
Unbilled receivables | 32,336 | 14,167 | |||||
Inventories | 8,593 | 21,290 | |||||
Customer service inventories | 1,113 | 1,507 | |||||
Other current assets | 4,873 | 6,006 | |||||
Total current assets | 127,084 | 123,466 | |||||
Property, plant and equipment, net | 17,016 | 17,179 | |||||
Deferred income taxes | 5,127 | 5,600 | |||||
Other assets | 11,957 | 9,816 | |||||
TOTAL ASSETS | $ | 161,184 | $ | 156,061 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities: | |||||||
Short-term debt | $ | 9,000 | $ | 9,000 | |||
Accounts payable | 34,777 | 30,878 | |||||
Accrued expenses | 22,663 | 25,864 | |||||
Advance payments and unearned revenue | 15,846 | 19,300 | |||||
Restructuring liabilities | 1,567 | 1,426 | |||||
Total current liabilities | 83,853 | 86,468 | |||||
Unearned revenue | 7,721 | 6,593 | |||||
Other long-term liabilities | 1,346 | 1,250 | |||||
Reserve for uncertain tax positions | 3,403 | 2,941 | |||||
Deferred income taxes | 1,534 | 1,293 | |||||
Total liabilities | 97,857 | 98,545 | |||||
Commitments and contingencies (Note 11) | |||||||
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, 5,399,357 shares issued and outstanding at December 28, 2018; 5,351,155 shares issued and outstanding at June 29, 2018, respectively | 54 | 54 | |||||
Additional paid-in-capital | 815,392 | 816,426 | |||||
Accumulated deficit | (739,176 | ) | (746,359 | ) | |||
Accumulated other comprehensive loss | (12,943 | ) | (12,605 | ) | |||
Total equity | 63,327 | 57,516 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 161,184 | $ | 156,061 |
Three Months Ended | Six Months Ended | ||||||||||||||
(In thousands, except per share amounts) | December 28, 2018 | December 29, 2017 | December 28, 2018 | December 29, 2017 | |||||||||||
Revenues: | |||||||||||||||
Revenue from product sales | $ | 41,956 | $ | 37,719 | $ | 81,081 | $ | 72,786 | |||||||
Revenue from services | 23,132 | 24,004 | 44,511 | 45,119 | |||||||||||
Total revenues | 65,088 | 61,723 | 125,592 | 117,905 | |||||||||||
Cost of revenues: | |||||||||||||||
Cost of product sales | 26,159 | 23,784 | 52,958 | 47,447 | |||||||||||
Cost of services | 16,439 | 16,049 | 32,219 | 31,272 | |||||||||||
Total cost of revenues | 42,598 | 39,833 | 85,177 | 78,719 | |||||||||||
Gross margin | 22,490 | 21,890 | 40,415 | 39,186 | |||||||||||
Operating expenses: | |||||||||||||||
Research and development expenses | 5,316 | 5,144 | 10,253 | 9,942 | |||||||||||
Selling and administrative expenses | 14,291 | 14,104 | 27,997 | 27,826 | |||||||||||
Restructuring charges | — | (252 | ) | 796 | (250 | ) | |||||||||
Total operating expenses | 19,607 | 18,996 | 39,046 | 37,518 | |||||||||||
Operating income | 2,883 | 2,894 | 1,369 | 1,668 | |||||||||||
Interest income | 43 | 42 | 94 | 100 | |||||||||||
Interest expense | (76 | ) | (13 | ) | (81 | ) | (19 | ) | |||||||
Other (expense) income, net | — | (136 | ) | — | (166 | ) | |||||||||
Income before income taxes | 2,850 | 2,787 | 1,382 | 1,583 | |||||||||||
Provision for (benefit from) income taxes | 540 | (2,564 | ) | (178 | ) | (3,203 | ) | ||||||||
Net income | 2,310 | 5,351 | 1,560 | 4,786 | |||||||||||
Less: Net income attributable to noncontrolling interest, net of tax | — | 280 | — | 372 | |||||||||||
Net income attributable to Aviat Networks | $ | 2,310 | $ | 5,071 | $ | 1,560 | $ | 4,414 | |||||||
Net income per share of common stock outstanding: | |||||||||||||||
Basic | $ | 0.43 | $ | 0.95 | $ | 0.29 | $ | 0.83 | |||||||
Diluted | $ | 0.41 | $ | 0.90 | $ | 0.28 | $ | 0.79 | |||||||
Weighted-average shares outstanding: | |||||||||||||||
Basic | 5,397 | 5,329 | 5,382 | 5,323 | |||||||||||
Diluted | 5,627 | 5,624 | 5,663 | 5,616 |
Three Months Ended | Six Months Ended | ||||||||||||||
(In thousands) | December 28, 2018 | December 29, 2017 | December 28, 2018 | December 29, 2017 | |||||||||||
Net income | $ | 2,310 | $ | 5,351 | $ | 1,560 | $ | 4,786 | |||||||
Other comprehensive (loss) income: | |||||||||||||||
Net change in cumulative translation adjustments | (204 | ) | 556 | (338 | ) | 621 | |||||||||
Other comprehensive (loss) income | (204 | ) | 556 | (338 | ) | 621 | |||||||||
Comprehensive income | 2,106 | 5,907 | 1,222 | 5,407 | |||||||||||
Less: Comprehensive income attributable to noncontrolling interest, net of tax | — | 280 | — | 372 | |||||||||||
Comprehensive income attributable to Aviat Networks | $ | 2,106 | $ | 5,627 | $ | 1,222 | $ | 5,035 |
Six Months Ended | |||||||
(In thousands) | December 28, 2018 | December 29, 2017 | |||||
Operating Activities | |||||||
Net income | $ | 1,560 | $ | 4,786 | |||
Adjustments to reconcile net income to net cash (used in) provided by operating activities | |||||||
Depreciation and amortization of property, plant and equipment and capitalized software | 2,384 | 2,590 | |||||
(Recovery from) provision for uncollectible receivables | (212 | ) | 14 | ||||
Share-based compensation | 938 | 1,154 | |||||
Deferred tax assets, net | 169 | (2,737 | ) | ||||
Charges for inventory and customer service inventory write-downs | 156 | 205 | |||||
Loss on disposition of property, plant and equipment, net | 15 | 28 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (3,336 | ) | 3,490 | ||||
Unbilled receivables | (9,533 | ) | 2,626 | ||||
Inventories | 962 | (2,098 | ) | ||||
Customer service inventories | (23 | ) | (83 | ) | |||
Accounts payable | 4,628 | (381 | ) | ||||
Accrued expenses | (2,735 | ) | (1,672 | ) | |||
Advance payments and unearned revenue | 4,205 | 3,801 | |||||
Income taxes payable or receivable | 139 | (232 | ) | ||||
Other assets and liabilities | 117 | (2,320 | ) | ||||
Net cash (used in) provided by operating activities | (566 | ) | 9,171 | ||||
Investing Activities | |||||||
Payments for acquisition of property, plant and equipment | (3,236 | ) | (3,342 | ) | |||
Net cash used in investing activities | (3,236 | ) | (3,342 | ) | |||
Financing Activities | |||||||
Proceeds from borrowings | 18,000 | 18,000 | |||||
Repayments of borrowings | (18,000 | ) | (18,000 | ) | |||
Payments for repurchase of Company stock | (1,436 | ) | — | ||||
Payments for taxes related to net settlement of equity awards | (536 | ) | — | ||||
Proceeds from issuance of common stock under employee stock plans | — | 11 | |||||
Net cash (used in) provided by financing activities | (1,972 | ) | 11 | ||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (164 | ) | 72 | ||||
Net (decrease) increase in cash, cash equivalents, and restricted cash | (5,938 | ) | 5,912 | ||||
Cash, cash equivalents and restricted cash, beginning of period | 37,764 | 36,569 | |||||
Cash, cash equivalents and restricted cash, end of period | $ | 31,826 | $ | 42,481 |
Three Months Ended | Six Months Ended | ||||||||||||||
(In thousands, except per share amounts) | December 28, 2018 | December 29, 2017 | December 28, 2018 | December 29, 2017 | |||||||||||
Numerator: | |||||||||||||||
Net income attributable to Aviat Networks | $ | 2,310 | $ | 5,071 | $ | 1,560 | $ | 4,414 | |||||||
Denominator: | |||||||||||||||
Weighted-average shares outstanding, basic | 5,397 | 5,329 | 5,382 | 5,323 | |||||||||||
Effect of potentially dilutive equivalent shares | 230 | 295 | 281 | 293 | |||||||||||
Weighted-average shares outstanding, diluted | 5,627 | 5,624 | 5,663 | 5,616 | |||||||||||
Net income per share of common stock outstanding: | |||||||||||||||
Basic | $ | 0.43 | $ | 0.95 | $ | 0.29 | $ | 0.83 | |||||||
Diluted | $ | 0.41 | $ | 0.90 | $ | 0.28 | $ | 0.79 |
Three Months Ended | Six Months Ended | ||||||||||
(In thousands) | December 28, 2018 | December 29, 2017 | December 28, 2018 | December 29, 2017 | |||||||
Stock options | 412 | 357 | 376 | 341 | |||||||
Restricted stock units and performance stock units | 52 | — | 32 | — | |||||||
Total shares of common stock excluded | 464 | 357 | 408 | 341 |
• | Bill-and-Hold Sales: Certain customer arrangements consist of bill-and-hold characteristics under which transfer of control has been met (including the passing of title and significant risk and reward of ownership to the customers). Therefore, the customers can direct the use of the bill-and-hold inventory while we retain physical possession of the product until it is installed at a customer site at a point in time in the future. The change under ASC 606 requires consideration of the indicators of when control has been transferred and sets forth additional criteria to be met in a bill-and-hold arrangement potentially resulting in revenue being recognized earlier than under ASC 605. Upon adoption of ASC 606, we recorded a cumulative effect adjustment to June 30, 2018 opening accumulated deficit consisting of bill-and-hold backlog of $10.5 million that will not be recognized as revenue, less related cost of product sales and income taxes, resulting in a net decrease to accumulated deficit of $1.7 million. |
• | Professional Services Revenue: We historically recognized certain professional services revenue upon completion under ASC 605 which changed to over time revenue recognition under ASC 606. We use the input method based on costs incurred, where revenue is calculated based on the percentage of total costs incurred in relation to total estimated costs at completion of the contract. The input method is reasonable because the costs incurred best reflect our efforts toward |
• | Transfer of Control: Certain of our contracts include penalties, acceptance provisions or other price variability that precluded revenue recognition under ASC 605 because of the requirement for amounts to be fixed or determinable. ASC 606 requires us to estimate and account for variable consideration as a reduction of the transaction price. Upon adoption of ASC 606, we recorded a cumulative effect adjustment to June 30, 2018 opening accumulated deficit of $0.6 million that will not be recognized as revenue, less related cost of revenues and income taxes resulting in a net decrease to accumulated deficit of $0.4 million. |
December 28, 2018 | At Adoption on June 30, 2018 | ||||||
Contract Assets | |||||||
Accounts receivable, net | $ | 48,624 | $ | 45,571 | |||
Unbilled receivables | $ | 32,336 | $ | 22,794 | |||
Capitalized commissions | $ | 627 | $ | 656 | |||
Contract Liabilities | |||||||
Advance payments and unearned revenue | $ | 15,846 | $ | 12,700 | |||
Unearned revenue, long-term | $ | 7,721 | $ | 7,295 |
Three Months Ended December 28, 2018 | |||||||||||
As Reported | Adjustments | Balances without Adoption of ASC 606 | |||||||||
Income Statement | |||||||||||
Revenues: | |||||||||||
Revenue from product sales | $ | 41,956 | $ | (1,574 | ) | $ | 40,382 | ||||
Revenue from services | 23,132 | (519 | ) | 22,613 | |||||||
Total revenues | $ | 65,088 | $ | (2,093 | ) | $ | 62,995 | ||||
Cost of revenues: | |||||||||||
Cost of product sales | $ | 26,159 | $ | (357 | ) | $ | 25,802 | ||||
Cost of services | 16,439 | (744 | ) | 15,695 | |||||||
Total cost of revenues | $ | 42,598 | $ | (1,101 | ) | $ | 41,497 | ||||
Selling and administrative expenses | $ | 14,291 | $ | 52 | $ | 14,343 | |||||
Net income | $ | 2,310 | $ | (1,241 | ) | $ | 1,069 |
Six Months Ended December 28, 2018 | |||||||||||
As Reported | Adjustments | Balances without Adoption of ASC 606 | |||||||||
Income Statement | |||||||||||
Revenues: | |||||||||||
Revenue from product sales | $ | 81,081 | $ | (10,519 | ) | $ | 70,562 | ||||
Revenue from services | 44,511 | (2,143 | ) | 42,368 | |||||||
Total revenues | $ | 125,592 | $ | (12,662 | ) | $ | 112,930 | ||||
Cost of revenues: | |||||||||||
Cost of product sales | $ | 52,958 | $ | (5,728 | ) | $ | 47,230 | ||||
Cost of services | 32,219 | (1,530 | ) | 30,689 | |||||||
Total cost of revenues | $ | 85,177 | $ | (7,258 | ) | $ | 77,919 | ||||
Selling and administrative expenses | $ | 27,997 | $ | (35 | ) | $ | 27,962 | ||||
Net income (loss) | $ | 1,560 | $ | (5,320 | ) | $ | (3,760 | ) |
Balances as of June 29, 2018 | Adjustments due to ASC 606 | As Adjusted Balances at June 30, 2018 | |||||||||
Balance Sheet | |||||||||||
Assets | |||||||||||
Accounts receivable, net | $ | 43,068 | $ | 2,503 | $ | 45,571 | |||||
Unbilled receivables | $ | 14,167 | $ | 8,627 | $ | 22,794 | |||||
Inventories | $ | 21,290 | $ | (11,516 | ) | $ | 9,774 | ||||
Other current assets | $ | 6,006 | $ | 476 | $ | 6,482 | |||||
Deferred income taxes | $ | 5,600 | $ | (545 | ) | $ | 5,055 | ||||
Other assets | $ | 9,816 | $ | 180 | $ | 9,996 | |||||
Liabilities | |||||||||||
Advance payments and unearned revenue | $ | 19,300 | $ | (6,600 | ) | $ | 12,700 | ||||
Unearned revenue - long term | $ | 6,593 | $ | 702 | $ | 7,295 | |||||
Equity | |||||||||||
Accumulated deficit | $ | (746,359 | ) | $ | 5,623 | $ | (740,736 | ) |
As of December 28, 2018 | |||||||||||
As Reported | Adjustments due to ASC 606 | Balances without adoption of ASC 606 | |||||||||
Balance Sheet | |||||||||||
Assets | |||||||||||
Accounts receivable, net | $ | 48,624 | $ | (4,505 | ) | $ | 44,119 | ||||
Unbilled receivables | $ | 32,336 | $ | (15,177 | ) | $ | 17,159 | ||||
Inventories | $ | 8,593 | $ | 18,785 | $ | 27,378 | |||||
Other current assets | $ | 4,873 | $ | (375 | ) | $ | 4,498 | ||||
Deferred income taxes | $ | 5,127 | $ | 545 | $ | 5,672 | |||||
Other assets | $ | 11,957 | $ | (252 | ) | $ | 11,705 | ||||
Liabilities | |||||||||||
Accrued expenses | $ | 22,663 | $ | (80 | ) | $ | 22,583 | ||||
Advance payments and unearned revenue | $ | 15,846 | $ | 11,138 | $ | 26,984 | |||||
Unearned revenue - long term | $ | 7,721 | $ | (1,055 | ) | $ | 6,666 | ||||
Reserve for uncertain tax positions | $ | 3,403 | $ | (39 | ) | $ | 3,364 | ||||
Equity | |||||||||||
Accumulated deficit | $ | (739,176 | ) | $ | (10,943 | ) | $ | (750,119 | ) |
(In thousands) | December 28, 2018 | June 29, 2018 | |||||
Cash and cash equivalents | $ | 31,542 | $ | 37,425 | |||
Restricted cash | 3 | 3 | |||||
Restricted cash included in Other assets | 281 | 336 | |||||
Total cash, cash equivalents, and restricted cash in the Statement of Cash Flows | $ | 31,826 | $ | 37,764 |
(In thousands) | December 28, 2018 | June 29, 2018 | |||||
Accounts receivable | $ | 50,642 | $ | 44,656 | |||
Less: Allowances for collection losses | (2,018 | ) | (1,588 | ) | |||
Total accounts receivable, net | $ | 48,624 | $ | 43,068 |
(In thousands) | December 28, 2018 | June 29, 2018 | |||||
Finished products | $ | 5,371 | $ | 15,496 | |||
Work in process | — | 3,246 | |||||
Raw materials and supplies | 3,222 | 2,548 | |||||
Total inventories | $ | 8,593 | $ | 21,290 | |||
Deferred cost of revenue included within finished goods | $ | 432 | $ | 3,667 | |||
Consigned inventories included within raw materials and supplies | $ | 1,700 | $ | 1,492 |
Three Months Ended | Six Months Ended | ||||||||||||||
(In thousands) | December 28, 2018 | December 29, 2017 | December 28, 2018 | December 29, 2017 | |||||||||||
Excess and obsolete inventory (recovery) charges | $ | (221 | ) | $ | 106 | $ | (246 | ) | $ | (143 | ) | ||||
Customer service inventory write-downs | 200 | 158 | 402 | 348 | |||||||||||
Total inventory (recovery) charges | $ | (21 | ) | $ | 264 | $ | 156 | $ | 205 |
(In thousands) | December 28, 2018 | June 29, 2018 | |||||
Land | $ | 710 | $ | 710 | |||
Buildings and leasehold improvements | 11,644 | 11,597 | |||||
Software | 17,130 | 15,498 | |||||
Machinery and equipment | 47,990 | 48,076 | |||||
Total property, plant and equipment, gross | 77,474 | 75,881 | |||||
Less accumulated depreciation and amortization | (60,458 | ) | (58,702 | ) | |||
Total property, plant and equipment, net | $ | 17,016 | $ | 17,179 |
Three Months Ended | Six Months Ended | ||||||||||||||
(In thousands) | December 28, 2018 | December 29, 2017 | December 28, 2018 | December 29, 2017 | |||||||||||
Depreciation and amortization | $ | 1,096 | $ | 1,308 | $ | 2,384 | $ | 2,590 |
(In thousands) | December 28, 2018 | June 29, 2018 | |||||
Accrued compensation and benefits | $ | 7,479 | $ | 8,574 | |||
Accrued agent commissions | 1,925 | 1,774 | |||||
Accrued warranties | 3,416 | 3,196 | |||||
Other | 9,843 | 12,320 | |||||
Total accrued expenses | $ | 22,663 | $ | 25,864 |
Three Months Ended | Six Months Ended | ||||||||||||||
(In thousands) | December 28, 2018 | December 29, 2017 | December 28, 2018 | December 29, 2017 | |||||||||||
Balance as of the beginning of the period | $ | 3,216 | $ | 2,964 | $ | 3,196 | $ | 3,056 | |||||||
Warranty provision recorded during the period | 620 | 797 | 1,166 | 1,228 | |||||||||||
Consumption during the period | (420 | ) | (593 | ) | (946 | ) | (1,116 | ) | |||||||
Balance as of the end of the period | $ | 3,416 | $ | 3,168 | $ | 3,416 | $ | 3,168 |
(In thousands) | December 28, 2018 | June 29, 2018 | |||||
Advance payments | $ | 2,166 | $ | 7,151 | |||
Unearned revenue | 13,680 | 12,149 | |||||
Total advance payments and unearned revenue | $ | 15,846 | $ | 19,300 |
• | 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. |
December 28, 2018 | June 29, 2018 | Valuation Inputs | |||||||||||||||
(In thousands) | Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||
Assets: | |||||||||||||||||
Cash and cash equivalents: | |||||||||||||||||
Money market funds | $ | 14,079 | $ | 14,079 | $ | 13,871 | $ | 13,871 | Level 1 | ||||||||
Bank certificates of deposit | $ | 1,577 | $ | 1,577 | $ | 1,645 | $ | 1,645 | Level 2 | ||||||||
Other current assets: | |||||||||||||||||
Foreign exchange forward contracts | $ | 3 | $ | 3 | $ | — | $ | — | Level 2 | ||||||||
Liabilities: | |||||||||||||||||
Other accrued expenses: | |||||||||||||||||
Foreign exchange forward contracts | $ | 7 | $ | 7 | $ | 158 | $ | 158 | Level 2 |
Severance and Benefits | Facilities and Other | Total | |||||||||||||||||||||
(In thousands) | Fiscal 2018-2019 Plan | Fiscal 2016-2017 Plan | Fiscal 2015-2016 Plan | Fiscal 2013-2014 Plan | Fiscal 2015-2016 Plan | ||||||||||||||||||
Accrual balance, June 29, 2018 | $ | 1,532 | $ | 14 | $ | 36 | $ | 64 | $ | 266 | $ | 1,912 | |||||||||||
Charges, net | 796 | — | — | — | — | 796 | |||||||||||||||||
Cash payments | (227 | ) | (12 | ) | (36 | ) | — | (23 | ) | (298 | ) | ||||||||||||
Foreign exchange impact | — | — | — | — | 2 | 2 | |||||||||||||||||
Accrual balance, September 28, 2018 | 2,101 | 2 | — | 64 | 245 | 2,412 | |||||||||||||||||
Cash payments | (242 | ) | — | — | — | — | (242 | ) | |||||||||||||||
Foreign exchange impact | — | — | — | — | (6 | ) | (6 | ) | |||||||||||||||
Accrual balance, December 28, 2018 | $ | 1,859 | $ | 2 | $ | — | $ | 64 | $ | 239 | $ | 2,164 |
Three Months Ended | Six Months Ended | ||||||
(In thousands, except share amounts) | December 28, 2018 | December 28, 2018 | |||||
Number of shares repurchased | 68,006 | 91,585 | |||||
Aggregate purchase price, including commissions | $ | 1,049 | $ | 1,439 |
Three Months Ended | Six Months Ended | ||||||||||||||
(In thousands) | December 28, 2018 | December 29, 2017 | December 28, 2018 | December 29, 2017 | |||||||||||
By Expense Category: | |||||||||||||||
Cost of revenues | $ | 52 | $ | 55 | $ | 100 | $ | 99 | |||||||
Research and development | 45 | 39 | 81 | 78 | |||||||||||
Selling and administrative | 405 | 486 | 757 | 977 | |||||||||||
Total share-based compensation expense | $ | 502 | $ | 580 | $ | 938 | $ | 1,154 | |||||||
By Types of Award: | |||||||||||||||
Options | $ | 116 | $ | 34 | $ | 155 | $ | 68 | |||||||
Restricted and performance stock awards and units | 386 | 546 | 783 | 1,086 | |||||||||||
Total share-based compensation expense | $ | 502 | $ | 580 | $ | 938 | $ | 1,154 |
Three Months Ended | Six Months Ended | ||||||||||||||
(In thousands) | December 28, 2018 | December 29, 2017 | December 28, 2018 | December 29, 2017 | |||||||||||
North America (1) | $ | 37,316 | $ | 36,985 | $ | 65,079 | $ | 67,987 | |||||||
Africa and the Middle East (1) | 13,832 | 12,682 | 27,979 | 26,144 | |||||||||||
Europe and Russia (1) | 3,233 | 3,814 | 6,945 | 8,260 | |||||||||||
Latin America and Asia Pacific (1) | 10,707 | 8,242 | 25,589 | 15,514 | |||||||||||
Total revenue | $ | 65,088 | $ | 61,723 | $ | 125,592 | $ | 117,905 |
Fiscal Years | Amounts | ||
(In thousands) | |||
2019 (two quarters remaining) | $ | 1,040 | |
2020 | 1,323 | ||
2021 | 926 | ||
2022 | 196 | ||
2023 | 150 | ||
Thereafter | 1,873 | ||
Total | $ | 5,508 |
Three Months Ended | Six Months Ended | ||||||||||||||
(In thousands) | December 28, 2018 | December 29, 2017 | December 28, 2018 | December 29, 2017 | |||||||||||
Rent expense | $ | 1,008 | $ | 959 | $ | 1,921 | $ | 1,898 |
• | 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. |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
(In thousands, except percentages) | December 28, 2018 | December 29, 2017 | $ Change | % Change | December 28, 2018 | December 29, 2017 | $ Change | % Change | |||||||||||||||||||||
North America | $ | 37,316 | $ | 36,985 | $ | 331 | 0.9 | % | $ | 65,079 | $ | 67,987 | $ | (2,908 | ) | (4.3 | )% | ||||||||||||
Africa and the Middle East | 13,832 | 12,682 | 1,150 | 9.1 | % | 27,979 | 26,144 | 1,835 | 7.0 | % | |||||||||||||||||||
Europe and Russia | 3,233 | 3,814 | (581 | ) | (15.2 | )% | 6,945 | 8,260 | (1,315 | ) | (15.9 | )% | |||||||||||||||||
Latin America and Asia Pacific | 10,707 | 8,242 | 2,465 | 29.9 | % | 25,589 | 15,514 | 10,075 | 64.9 | % | |||||||||||||||||||
Total revenue | $ | 65,088 | $ | 61,723 | $ | 3,365 | 5.5 | % | $ | 125,592 | $ | 117,905 | $ | 7,687 | 6.5 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
(In thousands, except percentages) | December 28, 2018 | December 29, 2017 | $ Change | % Change | December 28, 2018 | December 29, 2017 | $ Change | % Change | |||||||||||||||||||||
Product sales | $ | 41,956 | $ | 37,719 | $ | 4,237 | 11.2 | % | $ | 81,081 | $ | 72,786 | $ | 8,295 | 11.4 | % | |||||||||||||
Services | 23,132 | 24,004 | (872 | ) | (3.6 | )% | 44,511 | 45,119 | (608 | ) | (1.3 | )% | |||||||||||||||||
Total revenue | $ | 65,088 | $ | 61,723 | $ | 3,365 | 5.5 | % | $ | 125,592 | $ | 117,905 | $ | 7,687 | 6.5 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
(In thousands, except percentages) | December 28, 2018 | December 29, 2017 | $ Change | % Change | December 28, 2018 | December 29, 2017 | $ Change | % Change | |||||||||||||||||||||
Revenue | $ | 65,088 | $ | 61,723 | $ | 3,365 | 5.5 | % | $ | 125,592 | $ | 117,905 | $ | 7,687 | 6.5 | % | |||||||||||||
Cost of revenue | 42,598 | 39,833 | 2,765 | 6.9 | % | 85,177 | 78,719 | 6,458 | 8.2 | % | |||||||||||||||||||
Gross margin | $ | 22,490 | $ | 21,890 | $ | 600 | 2.7 | % | $ | 40,415 | $ | 39,186 | $ | 1,229 | 3.1 | % | |||||||||||||
% of revenue | 34.6 | % | 35.5 | % | 32.2 | % | 33.2 | % | |||||||||||||||||||||
Product margin % | 37.7 | % | 36.9 | % | 34.7 | % | 34.8 | % | |||||||||||||||||||||
Service margin % | 28.9 | % | 33.1 | % | 27.6 | % | 30.7 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
(In thousands, except percentages) | December 28, 2018 | December 29, 2017 | $ Change | % Change | December 28, 2018 | December 29, 2017 | $ Change | % Change | |||||||||||||||||||||
Research and development | $ | 5,316 | $ | 5,144 | $ | 172 | 3.3 | % | $ | 10,253 | $ | 9,942 | $ | 311 | 3.1 | % | |||||||||||||
% of revenue | 8.2 | % | 8.3 | % | 8.2 | % | 8.4 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
(In thousands, except percentages) | December 28, 2018 | December 29, 2017 | $ Change | % Change | December 28, 2018 | December 29, 2017 | $ Change | % Change | |||||||||||||||||||||
Selling and administrative | $ | 14,291 | $ | 14,104 | $ | 187 | 1.3 | % | $ | 27,997 | $ | 27,826 | $ | 171 | 0.6 | % | |||||||||||||
% of revenue | 22.0 | % | 22.9 | % | 22.3 | % | 23.6 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
(In thousands, except percentages) | December 28, 2018 | December 29, 2017 | $ Change | % Change | December 28, 2018 | December 29, 2017 | $ Change | % Change | |||||||||||||||||||||
Restructuring charges | $ | — | $ | (252 | ) | $ | 252 | — | % | $ | 796 | $ | (250 | ) | $ | 1,046 | (418.4 | )% |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
(In thousands, except percentages) | December 28, 2018 | December 29, 2017 | $ Change | % Change | December 28, 2018 | December 29, 2017 | $ Change | % Change | |||||||||||||||||||||
Interest income | $ | 43 | $ | 42 | $ | 1 | 2.4 | % | $ | 94 | $ | 100 | $ | (6 | ) | (6.0 | )% | ||||||||||||
Interest expense | $ | (76 | ) | $ | (13 | ) | $ | (63 | ) | 484.6 | % | $ | (81 | ) | $ | (19 | ) | $ | (62 | ) | 326.3 | % | |||||||
Other (expense) income, net | $ | — | $ | (136 | ) | $ | 136 | (100.0 | )% | $ | — | $ | (166 | ) | $ | 166 | (100.0 | )% |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
(In thousands, except percentages) | December 28, 2018 | December 29, 2017 | $ Change | % Change | December 28, 2018 | December 29, 2017 | $ Change | % Change | |||||||||||||||||||||
Income before income taxes | $ | 2,850 | $ | 2,787 | $ | 63 | 2.3 | % | $ | 1,382 | $ | 1,583 | $ | (201 | ) | (12.7 | )% | ||||||||||||
Provision for (benefit from) income taxes | $ | 540 | $ | (2,564 | ) | $ | 3,104 | (121.1 | )% | $ | (178 | ) | $ | (3,203 | ) | $ | 3,025 | (94.4 | )% |
Currency | Notional Contract Amount (Local Currency) | Notional Contract Amount (USD) | ||||
(In thousands) | ||||||
Canadian dollar | 500 | $ | 372 | |||
Euro | 1,000 | 1,140 | ||||
New Zealand dollar | 900 | 604 | ||||
Great Britain pound | 500 | 632 | ||||
Total of all currency forward contracts | $ | 2,748 |
Three Months Ended | Six Months Ended | ||||||||||||||
(In thousands) | December 28, 2018 | December 29, 2017 | December 28, 2018 | December 29, 2017 | |||||||||||
Amount included in costs of revenues | $ | (48 | ) | $ | (107 | ) | $ | 171 | $ | (98 | ) | ||||
Amount included in other expense | — | (136 | ) | — | (137 | ) | |||||||||
Total foreign exchange (loss) income, net | $ | (48 | ) | $ | (243 | ) | $ | 171 | $ | (235 | ) |
Period | Total Number of Shares Repurchased | Average Price Paid per Share | Total Number of Shares Repurchased as Part of Publicly Announced Program | Approximate Dollar Value of Shares that May Yet be Repurchased Under the Program (1) (in thousands) | ||||||||||
September 29, 2018 through October 26, 2018 | 21,332 | $ | 16.37 | 21,332 | $ | 6,753 | ||||||||
October 27, 2018 through November 23, 2018 | 23,034 | $ | 15.18 | 23,034 | $ | 6,403 | ||||||||
November 24, 2018 through December 28, 2018 | 23,640 | $ | 14.80 | 23,640 | $ | 6,053 | ||||||||
Total | 68,006 |
Exhibit Number | Descriptions | |
3.1 | ||
3.2 | ||
4.1 | ||
4.2 | ||
31.1 | ||
31.2 | ||
32.1 | ||
101.INS | XBRL Instance Document | |
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 |
AVIAT NETWORKS, INC. (Registrant) |
By: | /s/ Walter Stanley Gallagher, Jr. |
Walter Stanley Gallagher, Jr. Senior Vice President, Chief Operating Officer (Principal financial officer and duly authorized officer) |
By: | /s/ Eric Chang |
Eric Chang Vice President, Corporate Controller and Principal Accounting Officer (Principal accounting officer and duly authorized officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q for the fiscal quarter ended December 28, 2018, 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: | February 11, 2019 | /s/ Michael A. Pangia | ||
Name: | Michael A. Pangia | |||
Title: | President and Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q for the fiscal quarter ended December 28, 2018, 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: | February 11, 2019 | /s/ Walter Stanley Gallagher, Jr. | ||
Name: | Walter Stanley Gallagher, Jr. | |||
Title: | Senior Vice President and Chief Operating 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: | February 11, 2019 | /s/ Michael A. Pangia |
Name: Michael A. Pangia | ||
Title: President and Chief Executive Officer |
Date: | February 11, 2019 | /s/ Walter Stanley Gallagher, Jr. |
Name: Walter Stanley Gallagher, Jr. | ||
Title: Senior Vice President and Chief Operating Officer, Principal Financial Officer |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Dec. 28, 2018 |
Jan. 31, 2019 |
|
Document And Entity Information [Abstract] | ||
Entity Registrant Name | AVIAT NETWORKS, INC. | |
Entity Central Index Key | 0001377789 | |
Current Fiscal Year End Date | --06-28 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Dec. 28, 2018 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 5,380,128 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false |
Condensed Consolidated Balance Sheets (Unaudited) - Parenthetical - $ / shares |
Dec. 28, 2018 |
Jun. 29, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock shares issued (in shares) | 0 | 0 |
Preferred stock shares outstanding (in shares) | 0 | 0 |
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock shares issued (in shares) | 5,399,357 | 5,351,155 |
Common stock shares outstanding (in shares) | 5,399,357 | 5,351,155 |
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 28, 2018 |
Dec. 29, 2017 |
Dec. 28, 2018 |
Dec. 29, 2017 |
|
Revenues: | ||||
Total revenues | $ 65,088 | $ 61,723 | $ 125,592 | $ 117,905 |
Cost of revenues: | ||||
Total cost of revenues | 42,598 | 39,833 | 85,177 | 78,719 |
Gross margin | 22,490 | 21,890 | 40,415 | 39,186 |
Operating expenses: | ||||
Research and development expenses | 5,316 | 5,144 | 10,253 | 9,942 |
Selling and administrative expenses | 14,291 | 14,104 | 27,997 | 27,826 |
Restructuring charges | 0 | (252) | 796 | (250) |
Total operating expenses | 19,607 | 18,996 | 39,046 | 37,518 |
Operating income | 2,883 | 2,894 | 1,369 | 1,668 |
Interest income | 43 | 42 | 94 | 100 |
Interest expense | (76) | (13) | (81) | (19) |
Other (expense) income, net | 0 | (136) | 0 | (166) |
Income before income taxes | 2,850 | 2,787 | 1,382 | 1,583 |
Provision for (benefit from) income taxes | 540 | (2,564) | (178) | (3,203) |
Net income | 2,310 | 5,351 | 1,560 | 4,786 |
Less: Net income attributable to noncontrolling interest, net of tax | 0 | 280 | 0 | 372 |
Net income attributable to Aviat Networks | $ 2,310 | $ 5,071 | $ 1,560 | $ 4,414 |
Net income per share of common stock outstanding: | ||||
Basic (in dollars per share) | $ 0.43 | $ 0.95 | $ 0.29 | $ 0.83 |
Diluted (in dollars per share) | $ 0.41 | $ 0.90 | $ 0.28 | $ 0.79 |
Weighted-average shares outstanding: | ||||
Basic (in shares) | 5,397 | 5,329 | 5,382 | 5,323 |
Diluted (in shares) | 5,627 | 5,624 | 5,663 | 5,616 |
Product sales | ||||
Revenues: | ||||
Total revenues | $ 41,956 | $ 37,719 | $ 81,081 | $ 72,786 |
Cost of revenues: | ||||
Total cost of revenues | 26,159 | 23,784 | 52,958 | 47,447 |
Services | ||||
Revenues: | ||||
Total revenues | 23,132 | 24,004 | 44,511 | 45,119 |
Cost of revenues: | ||||
Total cost of revenues | $ 16,439 | $ 16,049 | $ 32,219 | $ 31,272 |
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 28, 2018 |
Dec. 29, 2017 |
Dec. 28, 2018 |
Dec. 29, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 2,310 | $ 5,351 | $ 1,560 | $ 4,786 |
Other comprehensive (loss) income: | ||||
Net change in cumulative translation adjustments | (204) | 556 | (338) | 621 |
Other comprehensive (loss) income | (204) | 556 | (338) | 621 |
Comprehensive income | 2,106 | 5,907 | 1,222 | 5,407 |
Less: Comprehensive income attributable to noncontrolling interest, net of tax | 0 | 280 | 0 | 372 |
Comprehensive income attributable to Aviat Networks | $ 2,106 | $ 5,627 | $ 1,222 | $ 5,035 |
The Company and Basis of Presentation |
6 Months Ended |
---|---|
Dec. 28, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company and Basis of Presentation | The Company and Basis of Presentation The Company Aviat Networks, Inc. (the “Company,” “we,” “us,” and “our”) designs, manufactures and sells 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. Due to the volume of our international sales, especially in developing countries, we may be susceptible to a number of political, economic and geographic risks that could harm our business as outlined in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 29, 2018. 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. Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) and with the rules and regulations of the Securities and Exchange Commission (SEC) for interim financial information. Accordingly, the statements do not include all information and footnotes required by U.S. GAAP for annual consolidated financial statements. In the opinion of our management, such interim financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of financial position, results of operations and cash flows for such periods. The results for the three and six months ended December 28, 2018 are not necessarily indicative of the results that may be expected for the full fiscal year or future operating periods. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements and footnotes thereto included in our Annual Report on Form 10-K for the fiscal year ended June 29, 2018. The unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All intercompany transactions and accounts have been eliminated. We operate on a 52-week or 53-week year ending on the Friday closest to June 30. The first two quarters of fiscal 2019 and fiscal 2018 included 13 weeks in each quarter. Fiscal year 2019 will be comprised of 52 weeks and will end on June 28, 2019. Use of Estimates The preparation of unaudited condensed consolidated financial statements in accordance with 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. Summary of Significant Accounting Policies There have been no material changes in our significant accounting policies as of and for the six months ended December 28, 2018, as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended June 29, 2018, with the exception of our revenue recognition policy. Effective June 30, 2018, we adopted Accounting Standards Update (ASU) No. 2014-09 (Accounting Standards Codification 606 or ASC 606), Revenue from Contracts with Customers, as amended. See Note 3, “Revenue Recognition” to the Notes to unaudited Condensed Consolidated Financial Statements for discussion of the impact of the adoption of this standard on our policies for revenue. Comparability We adopted ASC 606, effective June 30, 2018, using the modified retrospective method. Prior-period financial statements were not retrospectively restated. The Consolidated Balance Sheet as of June 29, 2018 and results of operations for the three and six months ended December 29, 2017 were prepared using accounting standards that were different than those in effect for the three and six months ended December 28, 2018. As a result, the balance sheets as of December 28, 2018 and June 29, 2018 are not directly comparable, nor are the results of operations for the three and six months ended December 28, 2018 and December 29, 2017. Accounting Standards Adopted In May 2014, the Financial Accounting Standards Board (FASB) issued ASC 606 which supersedes nearly all current U.S. GAAP guidance on this topic and eliminates industry-specific guidance. Revenue recognition under ASC 606 depicts 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 are required to enable users to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In addition, the FASB amended its guidance related to the capitalization and amortization of the incremental costs of obtaining a contract with a customer. 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 adopted ASC 606 using the modified retrospective method as of June 30, 2018 with the cumulative effect recognized as an adjustment to the opening balance of our accumulated deficit (net of tax). Prior periods have not been retroactively adjusted and will continue to be reported under the accounting standards in effect for those periods. See Note 3, “Revenue Recognition” to the Notes to unaudited Condensed Consolidated Financial Statements for more information. 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 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 adopted this update during the first quarter of fiscal 2019. The adoption had no material impact on our unaudited Condensed Consolidated Financial Statements. Accounting Standards Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and subsequent amendments to the initial guidance: ASU 2018-10, Codification Improvements to Topic 842, Leases, and ASU 2018-11, Leases (Topic 842) Targeted Improvements, each issued in July 2018 (collectively, Topic 842), all of which provides guidance on the recognition, measurement, presentation, and disclosure of leases. Topic 842 requires 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 fiscal years beginning after December 15, 2018 including interim periods within those years, with early adoption permitted. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous guidance. Although we are currently evaluating the impact the pronouncement will have on our unaudited Condensed Consolidated Financial Statements and related disclosures, we expect that most of our operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon adoption. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation: Improvement to Nonemployees Share-Based Payment Accounting (ASU 2018-07), which expands the scope of Topic 718 to include all share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 specifies that Topic 718 applies to all share-based payment transactions in which the grantor acquires goods and services to be used or consumed in its own operations by issuing share-based payment awards. ASU 2018-07 also clarifies that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC 606. ASU 2018-07 will be effective for fiscal years beginning after December 15, 2018, including interim periods within those years, with early adoption permitted. We do not expect the adoption of this guidance will have a material impact on our unaudited Condensed Consolidated Financial Statements. In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders’ equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders’ equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. Our first presentation of changes in stockholders’ equity will be included in our Form 10-Q for the quarter ending March 29, 2019. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. This guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This standard will become effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted. The standard can be adopted either using the prospective or retrospective transition approach. We are evaluating the effect the adoption of the standard will have on our unaudited Condensed Consolidated Financial Statements. |
Net Income Per Share of Common Stock |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 28, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Share of Common Stock | Net income per share is computed using the two-class method, by dividing net income attributable to us by the weighted-average number of shares of our outstanding common stock and participating securities outstanding. 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 as 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. The following table presents the computation of basic and diluted net income per share attributable to our common stockholders:
The following table summarizes the weighted-average equity awards that were excluded from the diluted net income per share calculations since they were anti-dilutive:
|
Revenue Recognition |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 28, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition Effective June 30, 2018, we adopted ASC 606, using the modified retrospective method applied to those contracts that were not completed as of June 29, 2018. Results for the reporting periods after June 29, 2018 are presented under ASC 606, while prior‑period amounts are not adjusted and continue to be reported in accordance with our historical accounting under ASC 605. We recognize revenue by applying the following five-step approach: (1) identification of the contract with a customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, we satisfy a performance obligation. 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. 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 installation materials purchased on behalf of customers for installation service contracts we perform for customers. 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. Contracts and customer purchase orders are used to determine the existence of an arrangement. In addition, shipping documents and customer acceptances, when applicable, are used to verify delivery and transfer of control. We typically satisfy our performance obligations upon shipment or delivery of product depending on the contractual terms. Payment terms to customers generally range from net 30 to 120 days from invoice, which are considered to be standard payment terms. We assess our ability to collect from our customers based primarily on the creditworthiness and past payment history of the customer. While our customers do not have the right of return, we reserve for estimated product returns as an offset to revenue based primarily on historical trends. Actual product returns may be different than what was estimated. These factors and unanticipated changes in economic and industry condition could make actual results differ from our return estimates. We present transactional taxes such as sales and use tax collected from customers and remitted to government authorities on a net basis. ASC 606 Adoption We recorded a net reduction to the opening balance of our accumulated deficit of $5.6 million as of June 30, 2018 due to the cumulative impact of adopting ASC 606, with the impact primarily related to our bill-and-hold and services revenue. Our revenue was $65.1 million and $125.6 million for the three and six months ended December 28, 2018, respectively, under ASC 606, compared to $63.0 million and $112.9 million, respectively, under ASC 605. The details of the significant changes and quantitative impact of our adoption of ASC 606 are set out below:
In addition, revenue allocation under ASC 606 requires an allocation of revenue between deliverables, or performance obligations, within an arrangement. Under ASC 605, the allocation of revenue was restricted to the amount which was not contingent on future deliverables; however, ASC 606 removes this restriction. Upon adoption of ASC 606, we recorded a cumulative effect adjustment to decrease June 30, 2018 opening accumulated deficit by $0.5 million. Under ASC 605, we deferred revenue for stand-alone software licenses where vendor-specific objective evidence (VSOE) of fair value had not been established for undelivered items, and revenue was recognized straight line over the term of the maintenance agreement. Under ASC 606, software revenue is allocated to delivered and undelivered elements based on relative fair value resulting in more software arrangement revenue being recognized earlier. Upon adoption of ASC 606, we recorded a cumulative effect adjustment to decrease June 30, 2018 opening accumulated deficit by $0.7 million. Previously, we expensed the majority of our commission expense as incurred. Under the new standard, we capitalize and amortize incremental commission costs to obtain the contract over a benefit period. We elected a practical expedient to exclude contracts with a benefit period of a year or less from this deferral requirement. Upon adoption of ASC 606, we recorded a cumulative effect adjustment to decrease June 30, 2018 opening accumulated deficit by $0.7 million. Termination Rights The contract term is determined on the basis of the period over which the parties to the contract have present enforceable rights and obligations. Certain customer contracts include a termination for convenience clause that allows the customer to terminate services without penalty, upon advance notification. We concluded that the duration of support contracts does not extend beyond the non-cancellable portion of the contract. Variable Consideration The consideration associated with customer contracts is generally fixed. Variable consideration includes discounts, rebates, refunds, credits, incentives, penalties, or other similar items. The amount of consideration that can vary is not a substantial portion of total consideration. Variable consideration estimates will be re-assessed at each reporting period until a final outcome is determined. The changes to the original transaction price due to a change in estimated variable consideration will be applied on a retrospective basis, with the adjustment recorded in the period in which the change occurs. Changes to variable consideration will be tracked and material changes disclosed. Stand-alone Selling Price Stand-alone selling price is the price at which an entity would sell a good or service on a stand-alone (or separate) basis at contract inception. Under the model, the observable price of a good or service sold separately provides the best evidence of stand-alone selling price. However, in certain situations, stand-alone selling prices will not be readily observable and the entity must estimate the stand-alone selling price. When allocating on a relative stand-alone selling price basis, any discount provided in the contract is allocated proportionately to all of the performance obligations in the contract. The majority of products and services that we offer have readily observable selling prices. For products and services that do not, we estimate stand-alone selling price using the market assessment approach based on expected selling price and adjust those prices as necessary to reflect our costs and margins. As part of our stand-alone selling price policy, we review product pricing on a periodic basis to identify any significant changes and revise our expected selling price assumptions as appropriate. Shipping and Handling Shipping and handling costs are included as a component of costs of product sales in our unaudited Condensed Consolidated Statements of Operations because they are also included in revenue that we bill our customers. Costs to Obtain a Contract We have assessed the treatment of costs to obtain or fulfill a contract with a customer. Sales commissions have historically been expensed as incurred. Under ASC 606, we capitalize sales commissions related to multi-year service contracts and amortize the asset over the period of benefit, which is the estimated service period. Sales commissions paid on contract renewals, including service contract renewals, is commensurate with the sales commissions paid on the initial contracts. We elected ASC 606’s practical expedient to expense sales commissions as incurred when the amortization period of the related asset is one year or less. These costs are recorded as sales and marketing expense and included on the unaudited Condensed Consolidated Balance Sheet as accrued expenses until paid. Contract Balances The following table provides information about receivables and liabilities from contracts with customers (in thousands):
As of December 28, 2018, we had $23.6 million in advance payments and unearned revenue and long-term unearned revenue, of which approximately 40% is expected to be recognized as revenue in the next six months of fiscal year 2019 and the remainder thereafter. During the three and six months ended December 28, 2018, we recognized approximately $2.4 million and $5.4 million, respectively, in maintenance service revenue, which was included in unearned revenue at June 29, 2018. Impacts on Financial Statements The following tables summarize the impacts of adopting ASC 606 on the unaudited Condensed Consolidated Statements of Operations for the three and six months ended December 28, 2018 and our Consolidated Balance Sheet as of June 29, 2018 (in thousands):
See Note 9, “Segment and Geographic Information” to the Notes to unaudited Condensed Consolidated Financial Statements for discussion on the impact of additional information, including disaggregated revenue disclosures.
The effects of the adoption of the new revenue recognition guidance on our December 28, 2018 unaudited Condensed Consolidated Balance Sheet were as follows:
|
Balance Sheet Components |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 28, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Components | Balance Sheet Components Cash, Cash Equivalents and Restricted Cash The following table provides a summary of our cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets that reconciles to the corresponding amount in the Condensed Consolidated Statement of Cash Flows:
Accounts Receivable, net Our net accounts receivable are summarized below:
Inventories Our inventories are summarized below:
We record recovery or charges to adjust our inventory and customer service inventory due to excess and obsolete inventory resulting from lower sales forecast, product transitioning or discontinuance. During the three and six months ended December 28, 2018, we recorded a net recovery of $221,000 and $246,000, respectively, in each case related to previously reserved inventory due to sell through. Such recovery or charges during the three and six months ended December 28, 2018 and December 29, 2017 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 software developed for internal use, was as follows:
Accrued Expenses Our accrued expenses are summarized below:
Accrued Warranties 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 unaudited Condensed Consolidated Balance Sheets were as follows:
Advance payments and Unearned Revenue Our advance payments and unearned revenue are summarized below:
|
Fair Value Measurements of Assets and Liabilities |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 28, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 December 28, 2018 and June 29, 2018 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. As of December 28, 2018 and June 29, 2018, these money market funds were valued at $1.00 net asset value per share. 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 changes in fair value related to our foreign currency forward contracts were recorded in cost of revenues on our unaudited Condensed Consolidated Statements of Operations. As of December 28, 2018 and June 29, 2018, 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 the first six months of fiscal 2019 and 2018, we had no transfers between levels of the fair value hierarchy of our assets or liabilities measured at fair value. |
Credit Facility and Debt |
6 Months Ended |
---|---|
Dec. 28, 2018 | |
Debt Disclosure [Abstract] | |
Credit Facility and Debt | Credit Facility and Debt On June 29, 2018, we entered into a Third Amended and Restated Loan Agreement with Silicon Valley Bank (the SVB Credit Facility). The SVB Credit Facility expires on June 29, 2019. The SVB Credit Facility provides for a $30.0 million accounts receivable formula-based revolving credit facility that can be borrowed by our U.S. company, with a $30.0 million sublimit that can be borrowed by our Singapore subsidiary. Loans may be advanced under the SVB Credit Facility based on a borrowing base equal to a specified percentage of the value of eligible accounts of the borrowers under the SVB Credit Facility. The borrowing base is subject to certain eligibility criteria. Availability under the SVB Credit Facility can also be utilized to issue letters of credit with a $12.0 million sublimit. We may prepay loans under the SVB Credit Facility in whole or in part at any time without premium or penalty. As of December 28, 2018, available credit under the SVB Credit Facility was $15.7 million, reflecting the calculated borrowing base of $25.5 million less existing borrowings of $9.0 million and outstanding letters of credit of $0.8 million. The SVB Credit Facility carries an interest rate computed, at our option, based on either (i) at the prime rate reported in the Wall Street Journal plus a spread of 0.50% to 1.50%, with such spread determined based on our adjusted quick ratio; or (ii) if we satisfy a minimum adjusted quick ratio, a LIBOR rate determined in accordance with the SVB Credit Facility, plus a spread of 2.75%. Any outstanding Singapore subsidiary borrowed loans shall bear interest at an additional 2.00% above the applicable prime or LIBOR rate. During the first six months of fiscal 2019, the weighted-average interest rate on our outstanding loan was 5.89%. As of December 28, 2018 and June 29, 2018, our outstanding debt balance under the SVB Credit Facility was $9.0 million, and the interest rate was 6.00% and 5.50%, respectively. 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 Silicon Valley Bank 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 5% above the applicable interest rate. As of December 28, 2018, we were in compliance with the quarterly financial covenants, as amended, contained in the SVB Credit Facility. The $9.0 million borrowing was classified as a current liability as of December 28, 2018 and June 28, 2019. On September 28, 2018, we entered into Amendment No. 1 (the Amendment) to the Third Amended and Restated Loan and Security Agreement with Silicon Valley Bank. Among other things, the Amendment provides for the definition of Quick Assets set forth in the Agreement to be modified to include up to the lesser of (a) 50% of unbilled accounts receivable or (b) $7.0 million. In addition, we have a short-term line of credit for up to $0.4 million from a bank in New Zealand to support the operations of our subsidiary located there. This line of credit provides for up to $0.3 million in short-term advances at various interest rates, all of which was available as of December 28, 2018 and June 29, 2018. 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 December 28, 2018. This line of credit may be terminated upon notice, is reviewed annually for renewal or modification, and is supported by a corporate guarantee. |
Restructuring Activities |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 28, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Activities | Restructuring Activities The following table summarizes our restructuring-related activities during the first six months of fiscal 2019:
As of December 28, 2018, $1.6 million of the accrual balance was in short-term restructuring liabilities while $0.6 million was included in other long-term liabilities on the unaudited Condensed Consolidated Balance Sheets. We expect to substantially complete the restructuring activities under our fiscal 2018-2019 restructuring plan (Fiscal 2018-2019 Plan) by the end of fiscal 2019. Payments related to the accrued restructuring liability balance for this plan are expected to be fully paid by the end of fiscal 2020. For further information, see “Note 7. Restructuring Activities” in Part II, Item 8 of our 2018 Form 10-K. |
Equity |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 28, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Equity Stock Repurchase Program In May 2018, our board of directors approved a repurchase program, which does not have an expiration date, for the repurchase of up to $7.5 million of our common stock. The following table summarizes the repurchases of our common stock:
All repurchased shares were retired. As of December 28, 2018, $6.1 million remained available under our stock repurchase program. Stock Incentive Programs As of December 28, 2018, we had two stock incentive plans (both Plans) for our employees and nonemployee directors, the 2018 Incentive Plan and the 2007 Stock Equity Plan, as amended and restated effective November 13, 2015. The 2018 Incentive Plan was approved by the stockholders during the fiscal year 2017 Annual Stockholders’ Meeting and it added 500,000 shares to the equity pool of shares available to grant to employees. During the three months ended December 28, 2018, we issued 15,584 restricted stock units. During the three months ended September 28, 2018, we issued 78,236 performance restricted stock units and 156,466 options to purchase shares of our common stock. Total compensation expense for share-based awards included in our unaudited Condensed Consolidated Statements of Operations was as follows:
As of December 28, 2018, there was approximately $1.3 million of total unrecognized compensation expense related to nonvested stock options granted under both Plans. This expense is expected to be recognized over a weighted-average period of 2.69 years. As of December 28, 2018, there was $1.4 million of total unrecognized compensation expense related to nonvested stock awards and units granted under both Plans. This expense is expected to be recognized over a weighted-average period of 1.08 year. |
Segment and Geographic Information |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 28, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 our Chief Operating Decision Maker. 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 the three and six months ended December 28, 2018 and December 29, 2017 was as follows:
(1) Prior-period amounts have not been adjusted under the modified retrospective method for the adoption of ASC 606. During both the three and six months ended December 28, 2018, Mobile Telephone Networks Group (MTN Group) accounted for 12% of our total revenue. During the three and six months ended December 29, 2017, MTN Group accounted for 11% and 13%, respectively, of our total revenue. As of December 28, 2018 and June 29, 2018, MTN Group also accounted for 20% and 13%, respectively, of our accounts receivable. No other customers accounted for more than 10% of our revenue or accounts receivable for the periods presented. We have entered into separate and distinct contracts with MTN Group, as well as separate arrangements with their various subsidiaries. The loss of all business from MTN Group, or any other significant customers, could adversely affect our unaudited Condensed Consolidated Financial Statements. |
Income Taxes |
6 Months Ended |
---|---|
Dec. 28, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective tax rate varies from the U.S. federal statutory rate of 21% due to results of foreign operations that are subject to income taxes at different statutory rates, certain jurisdictions where we cannot recognize tax benefits on current losses, and tax benefit from release of valuation allowance. During interim periods, we accrue tax expenses for jurisdictions that are anticipated to be profitable for fiscal 2019. The determination of our income taxes for the six months ended December 28, 2018 and December 29, 2017 was based on our estimated annual effective tax rate adjusted for losses in certain jurisdictions for which no tax benefit can be recognized. The tax benefit for the six months ended December 28, 2018 was primarily due to tax expense related to profitable subsidiaries, net against the release of valuation allowance due to the potential foreign tax refund to be received from the Department of Federal Revenue of Brazil. The tax benefit for the six months ended December 29, 2017 was primarily due to the foreign tax refunds received from the Inland Revenue Authority of Singapore (IRAS) and the release of valuation allowance related to the refundable alternative minimum tax credit as provided under the Tax Cuts and Jobs Act (the Tax Act), offset by tax expense related to profitable subsidiaries. Due to the uncertainty regarding the timing and extent of our future profitability, we continue to record a full valuation allowance to offset our U.S. deferred tax assets which primarily represent future income tax benefits associated with our operating losses because we do not currently believe that it is more likely than not that these assets will be realized. In the future, if we conclude that sufficient positive evidence (including our estimate of future taxable income) exists to support a reversal of all or a portion of the valuation allowance, we expect that a significant portion of any release of the valuation allowance will be recorded as an income tax benefit at the time of release. We entered into a tax sharing agreement with Harris Corporation (Harris) effective on January 26, 2007, the acquisition date of Stratex. The sharing agreement addresses, among other things, the settlement process associated with pre-merger tax liabilities and tax attributes that were attributable to the Microwave Communication Division when it was a division of Harris. There were no settlement payments recorded since the acquisition date. During the first quarter of fiscal 2019, we received notification from the Department of Federal Revenue of Brazil that our withholding tax refund request had been approved. We recorded a net discrete income tax benefit of $1.6 million for the release of valuation allowance previously recorded as a deferred tax asset for the withholding tax credits. This consisted of an income tax benefit of $1.9 million for the refundable withholding tax credit, less tax expense of $0.3 million from recognizing an ASC 740-10 reserve previously recorded as a reduction to the withholding tax credits. During the three months ended December 28, 2018, we reduced the refundable withholding tax credit to $1.8 million, primarily due to foreign exchange differences, and recorded a discrete income tax expense of $0.1 million. We have a number of open income tax audits covering various tax years, which vary from jurisdiction to jurisdiction. Our major tax jurisdictions where audits are pending include Singapore, Nigeria, and Saudi Arabia. The earliest years that are open and subject to potential audits are as follows: U.S. - 2003; Singapore - 2011; Nigeria - 2011: Saudi Arabia - 2010, and Ivory Coast - 2016. We account for interest and penalties related to unrecognized tax benefits as part of our provision for federal, foreign and state income taxes. Such interest expense was not material for the three and six months ended December 28, 2018 and December 29, 2017. On December 22, 2017, the SEC staff issued Staff Accounting Bulletin (SAB) No. 118, which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in its financial statements. If a company cannot determine a provisional estimate to be included in its financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. In connection with our initial analysis of the impact of the Tax Act, we recorded provisional estimates related to the remeasurement of deferred taxes and the Deemed Repatriation Transition Tax in our financial statements for our fiscal year ended June 29, 2018. The measurement period ended in the second quarter of fiscal 2019. As of December 28, 2018, we have completed the accounting for the impact of the Tax Act based on the guidance, interpretations, and data available. No adjustments to these provisional estimates have been recorded. Although the measurement period has closed, the accounting for the impact of the Tax Act may change to account for additional factors such as the issuance of further regulatory guidance, changes in interpretations, the collection and analysis of additional information, and any deferred adjustments related to the filing of our 2017 federal and state income tax returns. In accordance with ASC 740, we will recognize any additional effects of the guidance in income tax expense (benefit) in the period that such guidance is issued. For tax years beginning after December 31, 2017, the Tax Act introduced new provisions of U.S. taxation of certain Global Intangible Low-Taxed Income (GILTI). As of December 28, 2018, we have not yet determined our policy election with respect to whether to record deferred taxes for temporary basis differences expected to reverse as GILTI in future periods, or account for taxes on GILTI using the period cost method. However, as of December 28, 2018, we did not expect to generate a GILTI inclusion due to a forecasted overall net loss for our foreign subsidiaries. |
Commitments and Contingencies |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 28, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 2026. We lease approximately 19,000 square feet of office space in Milpitas, California as our corporate headquarters. As of December 28, 2018, 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 December 28, 2018. The future minimum lease payments are not reduced by the minimum sublease rents. Rent expense for operating leases, including rentals on a month-to-month basis, was as follows:
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 December 28, 2018, we had outstanding purchase obligations with our suppliers or contract manufacturers of $19.4 million. In addition, we had contractual obligations of approximately $1.8 million associated with software licenses as of December 28, 2018. 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 December 28, 2018, 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 December 28, 2018, we had commercial commitments of $55.8 million outstanding that were not recorded on our unaudited Condensed Consolidated Balance Sheets. 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 December 28, 2018, 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 December 28, 2018, 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 approximately $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. 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. 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 unaudited Condensed Consolidated Financial Statements; and (ii) the amount of the loss can be reasonably estimated. Disclosure in the Notes to the unaudited Condensed Consolidated 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 unaudited Condensed Consolidated Statement 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 unaudited Condensed 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. |
The Company and Basis of Presentation (Policies) |
6 Months Ended |
---|---|
Dec. 28, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) and with the rules and regulations of the Securities and Exchange Commission (SEC) for interim financial information. Accordingly, the statements do not include all information and footnotes required by U.S. GAAP for annual consolidated financial statements. In the opinion of our management, such interim financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of financial position, results of operations and cash flows for such periods. The results for the three and six months ended December 28, 2018 are not necessarily indicative of the results that may be expected for the full fiscal year or future operating periods. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements and footnotes thereto included in our Annual Report on Form 10-K for the fiscal year ended June 29, 2018. The unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All intercompany transactions and accounts have been eliminated. We operate on a 52-week or 53-week year ending on the Friday closest to June 30. The first two quarters of fiscal 2019 and fiscal 2018 included 13 weeks in each quarter. Fiscal year 2019 will be comprised of 52 weeks and will end on June 28, 2019 |
Use of Estimates | Use of Estimates The preparation of unaudited condensed consolidated financial statements in accordance with 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. |
Accounting Standards Adopted and Accounting Standards Not Yet Adopted | Accounting Standards Adopted In May 2014, the Financial Accounting Standards Board (FASB) issued ASC 606 which supersedes nearly all current U.S. GAAP guidance on this topic and eliminates industry-specific guidance. Revenue recognition under ASC 606 depicts 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 are required to enable users to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In addition, the FASB amended its guidance related to the capitalization and amortization of the incremental costs of obtaining a contract with a customer. 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 adopted ASC 606 using the modified retrospective method as of June 30, 2018 with the cumulative effect recognized as an adjustment to the opening balance of our accumulated deficit (net of tax). Prior periods have not been retroactively adjusted and will continue to be reported under the accounting standards in effect for those periods. See Note 3, “Revenue Recognition” to the Notes to unaudited Condensed Consolidated Financial Statements for more information. 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 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 adopted this update during the first quarter of fiscal 2019. The adoption had no material impact on our unaudited Condensed Consolidated Financial Statements. Accounting Standards Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and subsequent amendments to the initial guidance: ASU 2018-10, Codification Improvements to Topic 842, Leases, and ASU 2018-11, Leases (Topic 842) Targeted Improvements, each issued in July 2018 (collectively, Topic 842), all of which provides guidance on the recognition, measurement, presentation, and disclosure of leases. Topic 842 requires 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 fiscal years beginning after December 15, 2018 including interim periods within those years, with early adoption permitted. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from previous guidance. Although we are currently evaluating the impact the pronouncement will have on our unaudited Condensed Consolidated Financial Statements and related disclosures, we expect that most of our operating lease commitments will be subject to the new standard and recognized as operating lease liabilities and right-of-use assets upon adoption. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation: Improvement to Nonemployees Share-Based Payment Accounting (ASU 2018-07), which expands the scope of Topic 718 to include all share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 specifies that Topic 718 applies to all share-based payment transactions in which the grantor acquires goods and services to be used or consumed in its own operations by issuing share-based payment awards. ASU 2018-07 also clarifies that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC 606. ASU 2018-07 will be effective for fiscal years beginning after December 15, 2018, including interim periods within those years, with early adoption permitted. We do not expect the adoption of this guidance will have a material impact on our unaudited Condensed Consolidated Financial Statements. In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders’ equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders’ equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. Our first presentation of changes in stockholders’ equity will be included in our Form 10-Q for the quarter ending March 29, 2019. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. This guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This standard will become effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted. The standard can be adopted either using the prospective or retrospective transition approach. We are evaluating the effect the adoption of the standard will have on our unaudited Condensed Consolidated Financial Statements. |
Net Income Per Share of Common Stock | Net income per share is computed using the two-class method, by dividing net income attributable to us by the weighted-average number of shares of our outstanding common stock and participating securities outstanding. 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 as 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. |
Revenue Recognition | Effective June 30, 2018, we adopted ASC 606, using the modified retrospective method applied to those contracts that were not completed as of June 29, 2018. Results for the reporting periods after June 29, 2018 are presented under ASC 606, while prior‑period amounts are not adjusted and continue to be reported in accordance with our historical accounting under ASC 605. We recognize revenue by applying the following five-step approach: (1) identification of the contract with a customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, we satisfy a performance obligation. 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. 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 installation materials purchased on behalf of customers for installation service contracts we perform for customers. 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. Contracts and customer purchase orders are used to determine the existence of an arrangement. In addition, shipping documents and customer acceptances, when applicable, are used to verify delivery and transfer of control. We typically satisfy our performance obligations upon shipment or delivery of product depending on the contractual terms. Payment terms to customers generally range from net 30 to 120 days from invoice, which are considered to be standard payment terms. We assess our ability to collect from our customers based primarily on the creditworthiness and past payment history of the customer. While our customers do not have the right of return, we reserve for estimated product returns as an offset to revenue based primarily on historical trends. Actual product returns may be different than what was estimated. These factors and unanticipated changes in economic and industry condition could make actual results differ from our return estimates. We present transactional taxes such as sales and use tax collected from customers and remitted to government authorities on a net basis. |
Fair Value Policy | We classify items within Level 1 if quoted prices are available in active markets. Our Level 1 items mainly are money market funds. As of December 28, 2018 and June 29, 2018, these money market funds were valued at $1.00 net asset value per share. 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 changes in fair value related to our foreign currency forward contracts were recorded in cost of revenues on our unaudited Condensed Consolidated Statements of Operations. As of December 28, 2018 and June 29, 2018, 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 the first six months of fiscal 2019 and 2018, we had no transfers between levels of the fair value hierarchy of our assets or liabilities measured at fair value. |
Net Income Per Share of Common Stock (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 28, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the computation of basic and diluted net income per share attributable to our common stockholders:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table summarizes the weighted-average equity awards that were excluded from the diluted net income per share calculations since they were anti-dilutive:
|
Revenue Recognition (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 28, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contract with Customer, Asset and Liability | The following table provides information about receivables and liabilities from contracts with customers (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of New Accounting Pronouncements and Changes in Accounting Principles |
The effects of the adoption of the new revenue recognition guidance on our December 28, 2018 unaudited Condensed Consolidated Balance Sheet were as follows:
The following tables summarize the impacts of adopting ASC 606 on the unaudited Condensed Consolidated Statements of Operations for the three and six months ended December 28, 2018 and our Consolidated Balance Sheet as of June 29, 2018 (in thousands):
|
Balance Sheet Components (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 28, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Related Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash, Cash Equivalents and Restricted Cash | The following table provides a summary of our cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets that reconciles to the corresponding amount in the Condensed Consolidated Statement of Cash Flows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Receivable, Net | Our net accounts receivable are summarized below:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories | Our inventories are summarized below:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Adjustments to Inventory | Such recovery or charges during the three and six months ended December 28, 2018 and December 29, 2017 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 software developed for internal use, was as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Expenses | Our accrued expenses are summarized below:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Warranty Liability | Changes in our warranty liability, which is included as a component of accrued expenses in the unaudited Condensed Consolidated Balance Sheets were as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Advance Payments and Unearned Income | Our advance payments and unearned revenue are summarized below:
|
Fair Value Measurements of Assets and Liabilities (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 28, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 December 28, 2018 and June 29, 2018 were as follows:
|
Restructuring Activities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 28, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring-Related Activities | The following table summarizes our restructuring-related activities during the first six months of fiscal 2019:
|
Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 28, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock Repurchased | The following table summarizes the repurchases of our common stock:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Compensation Expense for Share-based Compensation Awards | Total compensation expense for share-based awards included in our unaudited Condensed Consolidated Statements of Operations was as follows:
|
Segment and Geographic Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 28, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue by Region | Revenue by region for the three and six months ended December 28, 2018 and December 29, 2017 was as follows:
(1) Prior-period amounts have not been adjusted under the modified retrospective method for the adoption of ASC 606. |
Commitments and Contingencies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 28, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Lease Payments for Operating Leases | As of December 28, 2018, our future minimum lease payments under all non-cancelable operating leases with an initial lease term in excess of one year were as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Rent Expense | Rent expense for operating leases, including rentals on a month-to-month basis, was as follows:
|
The Company and Basis of Presentation (Details) |
3 Months Ended | |||
---|---|---|---|---|
Dec. 28, 2018 |
Dec. 29, 2017 |
Dec. 30, 2016 |
Sep. 30, 2016 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Fiscal period duration | 91 days | 91 days | 91 days | 91 days |
Net Income Per Share of Common Stock (Schedule of Earnings Per Share - Basic and Diluted) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 28, 2018 |
Dec. 29, 2017 |
Dec. 28, 2018 |
Dec. 29, 2017 |
|
Earnings Per Share [Abstract] | ||||
Net income attributable to Aviat Networks | $ 2,310 | $ 5,071 | $ 1,560 | $ 4,414 |
Weighted average shares outstanding, basic (in shares) | 5,397 | 5,329 | 5,382 | 5,323 |
Effect of potentially dilutive equivalent shares (in shares) | 230 | 295 | 281 | 293 |
Weighted average shares outstanding, diluted (in shares) | 5,627 | 5,624 | 5,663 | 5,616 |
Earnings Per Share, Basic and Diluted [Abstract] | ||||
Basic (in dollars per share) | $ 0.43 | $ 0.95 | $ 0.29 | $ 0.83 |
Diluted (in dollars per share) | $ 0.41 | $ 0.90 | $ 0.28 | $ 0.79 |
Net Income Per Share of Common Stock (Schedule of Common Stock Excluded Because they were Antidilutive) (Details) - shares shares in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 28, 2018 |
Dec. 29, 2017 |
Dec. 28, 2018 |
Dec. 29, 2017 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potential shares of common stock excluded (in shares) | 464 | 357 | 408 | 341 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potential shares of common stock excluded (in shares) | 412 | 357 | 376 | 341 |
Restricted stock units and performance stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total potential shares of common stock excluded (in shares) | 52 | 0 | 32 | 0 |
Revenue Recognition (Contracted Assets) (Details) - USD ($) $ in Thousands |
Dec. 28, 2018 |
Jun. 30, 2018 |
Jun. 29, 2018 |
---|---|---|---|
Revenue from Contract with Customer [Abstract] | |||
Accounts receivable, net | $ 48,624 | $ 45,571 | $ 43,068 |
Unbilled receivables | 32,336 | 22,794 | 14,167 |
Capitalized commissions | 627 | 656 | |
Advance payments and unearned revenue | 15,846 | 12,700 | 19,300 |
Unearned revenue, long-term | $ 7,721 | $ 7,295 | $ 6,593 |
Balance Sheet Components (Cash, Cash Equivalents and Restricted Cash) (Details) - USD ($) $ in Thousands |
Dec. 28, 2018 |
Jun. 29, 2018 |
Dec. 29, 2017 |
Jun. 30, 2017 |
---|---|---|---|---|
Balance Sheet Related Disclosures [Abstract] | ||||
Cash and cash equivalents | $ 31,542 | $ 37,425 | ||
Restricted cash | 3 | 3 | ||
Restricted cash included in Other assets | 281 | 336 | ||
Total cash, cash equivalents, and restricted cash in the Statement of Cash Flows | $ 31,826 | $ 37,764 | $ 42,481 | $ 36,569 |
Balance Sheet Components (Receivables) (Details) - USD ($) $ in Thousands |
Dec. 28, 2018 |
Jun. 30, 2018 |
Jun. 29, 2018 |
---|---|---|---|
Balance Sheet Related Disclosures [Abstract] | |||
Accounts receivable | $ 50,642 | $ 44,656 | |
Less: Allowances for collection losses | (2,018) | (1,588) | |
Total accounts receivable, net | $ 48,624 | $ 45,571 | $ 43,068 |
Balance Sheet Components (Inventories) (Details) - USD ($) $ in Thousands |
Dec. 28, 2018 |
Jun. 30, 2018 |
Jun. 29, 2018 |
---|---|---|---|
Balance Sheet Related Disclosures [Abstract] | |||
Finished products | $ 5,371 | $ 15,496 | |
Work in process | 0 | 3,246 | |
Raw materials and supplies | 3,222 | 2,548 | |
Total inventories | 8,593 | $ 9,774 | 21,290 |
Deferred cost of revenue included within finished goods | 432 | 3,667 | |
Consigned inventories included within raw materials and supplies | $ 1,700 | $ 1,492 |
Balance Sheet Components (Inventory Adjustments) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 28, 2018 |
Dec. 29, 2017 |
Dec. 28, 2018 |
Dec. 29, 2017 |
|
Balance Sheet Related Disclosures [Abstract] | ||||
Excess and obsolete inventory (recovery) charges | $ (221) | $ 106 | $ (246) | $ (143) |
Customer service inventory write-downs | 200 | 158 | 402 | 348 |
Total inventory (recovery) charges | $ (21) | $ 264 | $ 156 | $ 205 |
Balance Sheet Components (Property, Plant and Equipment) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Dec. 28, 2018 |
Dec. 29, 2017 |
Dec. 28, 2018 |
Dec. 29, 2017 |
Jun. 29, 2018 |
|
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | $ 77,474 | $ 77,474 | $ 75,881 | ||
Less accumulated depreciation and amortization | (60,458) | (60,458) | (58,702) | ||
Total property, plant and equipment, net | 17,016 | 17,016 | 17,179 | ||
Depreciation and amortization | 1,096 | $ 1,308 | 2,384 | $ 2,590 | |
Land | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | 710 | 710 | 710 | ||
Buildings and leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | 11,644 | 11,644 | 11,597 | ||
Software | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | 17,130 | 17,130 | 15,498 | ||
Machinery and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, plant and equipment, gross | $ 47,990 | $ 47,990 | $ 48,076 |
Balance Sheet Components (Accrued Expenses) (Details) - USD ($) $ in Thousands |
Dec. 28, 2018 |
Jun. 29, 2018 |
---|---|---|
Balance Sheet Related Disclosures [Abstract] | ||
Accrued compensation and benefits | $ 7,479 | $ 8,574 |
Accrued agent commissions | 1,925 | 1,774 |
Accrued warranties | 3,416 | 3,196 |
Other | 9,843 | 12,320 |
Total accrued expenses | $ 22,663 | $ 25,864 |
Balance Sheet Components (Accrued Warranties) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 28, 2018 |
Dec. 29, 2017 |
Dec. 28, 2018 |
Dec. 29, 2017 |
|
Warranty Liability Roll Forward | ||||
Balance as of the beginning of the period | $ 3,216 | $ 2,964 | $ 3,196 | $ 3,056 |
Warranty provision recorded during the period | 620 | 797 | 1,166 | 1,228 |
Consumption during the period | (420) | (593) | (946) | (1,116) |
Balance as of the end of the period | $ 3,416 | $ 3,168 | $ 3,416 | $ 3,168 |
Balance Sheet Components (Advance Payments and Unearned Revenue) (Details) - USD ($) $ in Thousands |
Dec. 28, 2018 |
Jun. 30, 2018 |
Jun. 29, 2018 |
---|---|---|---|
Balance Sheet Related Disclosures [Abstract] | |||
Advance payments | $ 2,166 | $ 7,151 | |
Unearned revenue | 13,680 | 12,149 | |
Total advance payments and unearned revenue | $ 15,846 | $ 12,700 | $ 19,300 |
Fair Value Measurements of Assets and Liabilities (Details) - USD ($) $ / shares in Units, $ in Thousands |
Dec. 28, 2018 |
Jun. 29, 2018 |
---|---|---|
Level 1 | Money market funds | ||
Liabilities: | ||
Money market, net asset value (in dollars per share) | $ 1.00 | $ 1.00 |
Recurring | Level 1 | Carrying Amount | Money market funds | ||
Assets: | ||
Cash equivalents | $ 14,079 | $ 13,871 |
Recurring | Level 1 | Fair Value | Money market funds | ||
Assets: | ||
Cash equivalents | 14,079 | 13,871 |
Recurring | Level 2 | Carrying Amount | Foreign exchange forward contracts | ||
Assets: | ||
Foreign exchange forward contracts | 3 | 0 |
Liabilities: | ||
Foreign exchange forward contracts | 7 | 158 |
Recurring | Level 2 | Carrying Amount | Bank certificates of deposit | ||
Assets: | ||
Cash equivalents | 1,577 | 1,645 |
Recurring | Level 2 | Fair Value | Foreign exchange forward contracts | ||
Assets: | ||
Foreign exchange forward contracts | 3 | 0 |
Liabilities: | ||
Foreign exchange forward contracts | 7 | 158 |
Recurring | Level 2 | Fair Value | Bank certificates of deposit | ||
Assets: | ||
Cash equivalents | $ 1,577 | $ 1,645 |
Equity (Schedule of Stock Repurchase) (Details) - Share Repurchase Program - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Dec. 28, 2018 |
Dec. 28, 2018 |
|
Equity, Class of Treasury Stock [Line Items] | ||
Number of shares repurchased | 68,006 | 91,585 |
Aggregate purchase price, including commissions | $ 1,049 | $ 1,439 |
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Dec. 28, 2018 |
Sep. 28, 2018 |
Dec. 29, 2017 |
Dec. 28, 2018 |
Dec. 29, 2017 |
|
Income Tax Contingency [Line Items] | |||||
Income tax expense (benefit) | $ 540 | $ (2,564) | $ (178) | $ (3,203) | |
Foreign Tax Authority | |||||
Income Tax Contingency [Line Items] | |||||
Income tax expense (benefit) | 100 | $ (1,600) | |||
Release of Valuation Allowance, Foreign Tax Credit, Income Tax Expense (Benefit) | $ (1,800) | (1,900) | |||
Current income tax expense | $ (300) |
Commitments and Contingencies (Future Minimum Lease Payments) (Details) $ in Thousands |
Dec. 28, 2018
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2019 (two quarters remaining) | $ 1,040 |
2020 | 1,323 |
2021 | 926 |
2022 | 196 |
2023 | 150 |
Thereafter | 1,873 |
Total | $ 5,508 |
Commitments and Contingencies (Rent Expense for Operating Leases) (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 28, 2018 |
Dec. 29, 2017 |
Dec. 28, 2018 |
Dec. 29, 2017 |
|
Commitments and Contingencies Disclosure [Abstract] | ||||
Rent expense | $ 1,008 | $ 959 | $ 1,921 | $ 1,898 |
L#O.L%\W9F3T5K5"KCS(JP$.;F1#[$8$6"#@C@+(]
M"R"?P!XY=/2OP,%%8+\ ]D: #1TOZ+&?'GOIL:''"WIB'8"+2/T"B5<@<>B9
M)3 B$H/HQA/&69;E&[],ZI5)'9G %1F]"E(U>,\T<9A^)R[G[S-SH/*H!6O%>[X9.ZH5 Z4OJG%MU/N0D6$"3X*
M%0+)X89WF! 527+\&8*ZXYG*.)U_1/^BDY?)'!#'.TI^5R=1YF[B.B=\1E;
MW> /!G\T>.N[AF P!(8!]&0ZU<](H")CM'-8_V^U2%T*;Q/(CWE4F_K;Z7 Q6@=
M:"G/C+WHS??M/ 0Z(UK1C=041-U.=$FK2C.I//[VI.$04SN.UV_L7XUX)>:9
M"+IDU9]R*P_S, ^#+=V18R4?V?D;[07A,.C5_Z G6BFXSD3%V+!*F&NP.0K)
MZIY%I5*3U^Y>-N9^[OG?W/P.J'= @X.*? Q83"Z7NW5K5;6Z]_H4T3
MB">0GF!\WR)$GA!]$.*;A-@3XGL) # >)"#F]ZQ-IS+IBLW;^3;\11SO7#IF![
MH9:)7#?=<-MM!*_[P=T;_CTL_P%02P,$% @ (H)+3DCI["93 P 9@X
M !D !X;"]W;W)K VXN86C,,$3F$O9Z1]Y,%(?ZPE(Z6WG.525,K[>[%-WC
MZLAL]"_09(F _A6:K)LKSSM]&PO=V]R:W-H965T
/M,W+X+^CK+7PS&?/*=%D2;U0_J7-"U,
MZ=W]4GK?FVAW.8C-2U%]#5OK?
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MT*3O",.,R&&".ID@!",31UQ