ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
For the fiscal year ended |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
☒ | Accelerated filer | ☐ | |
Non-accelerated filer | ☐ | Smaller reporting company | |
Emerging growth company |
Page | ||
Part I | ||
Part II | ||
Part III | ||
PART IV | ||
• | Wolfspeed, which consists of silicon carbide (SiC) and gallium nitride (GaN) materials, power devices and RF devices based on silicon (Si) and wide bandgap semiconductor materials. Our materials products and power devices are used in electric vehicles, motor drives, power supplies, solar and transportation applications. Our materials products and RF devices are used in military communications, radar, satellite and telecommunication applications. |
• | LED Products, which consists of LED chips and LED components. Our LED products enable our customers to develop and market LED-based products for lighting, video screens, automotive and specialty lighting applications. |
• | convert existing SiC and GaN fabrication technology to a 200mm platform; |
• | develop higher power diodes/switches and higher power/linearity RF devices; |
• | increase the quality, performance and diameter of our substrate and epitaxial materials; |
• | develop brighter, more efficient and lower cost LED chip and component products; and |
• | continually improve our manufacturing processes. |
• | achievement of technology breakthroughs required to make commercially viable products; |
• | the accuracy of our predictions for market requirements; |
• | our ability to predict, influence and/or react to evolving standards; |
• | qualification and acceptance of our new product and systems designs, specifically entering into automotive applications which require even more stringent levels of qualification and standards; |
• | acceptance of new technology in certain markets; |
• | the availability of qualified research and development personnel; |
• | our timely completion of product designs and development; |
• | our ability to develop repeatable processes to manufacture new products in sufficient quantities, with the desired specifications and at competitive costs; |
• | our ability to effectively transfer increasingly complex products and technology from development to manufacturing; |
• | our customers’ ability to develop competitive products incorporating our products; and |
• | market acceptance of our products and our customers’ products. |
• | maintain, expand, construct and purchase adequate manufacturing facilities and equipment, as well as secure sufficient third-party manufacturing resources, to meet customer demand, including specifically the expansion of our SiC capacity with the construction of a state-of-the-art, automated 200mm capable SiC and GaN fabrication facility and a large materials factory; |
• | manage an increasingly complex supply chain that has the ability to supply an increasing number of raw materials, subsystems and finished products with the required specifications and quality, and deliver on time to our manufacturing facilities, our third-party manufacturing facilities, or our logistics operations; |
• | expand the capability of information systems to support a more complex business; |
• | expand research and development, sales and marketing, technical support, distribution capabilities, manufacturing planning and administrative functions; |
• | manage organizational complexity and communication; |
• | expand the skills and capabilities of our current management team; |
• | add experienced senior level managers and executives; |
• | attract and retain qualified employees; and |
• | execute, maintain and adjust the operational and financial controls that support our business. |
• | the failure of an acquired business, investee or joint venture to meet our performance and financial expectations; |
• | identification of additional liabilities relating to an acquired business; |
• | loss of existing customers of our current and acquired businesses due to concerns that new product lines may be in competition with the customers’ existing product lines or due to regulatory actions taken by governmental agencies; |
• | that we are not able to enter into acceptable contractual arrangements with the significant customers of an acquired business; |
• | difficulty integrating an acquired business's operations, personnel and financial and operating systems into our current business; |
• | that we are not able to develop and expand customer bases and accurately anticipate demand from end customers, which can result in increased inventory and reduced orders as we experience wide fluctuations in supply and demand; |
• | diversion of management attention; |
• | difficulty separating the operations, personnel and financial and operating systems of a spin-off or divestiture from our current business; |
• | the possibility we are unable to complete the transaction and expend substantial resources without achieving the desired benefit; |
• | the inability to obtain required regulatory agency approvals; |
• | reliance on a transaction counterparty for transition services for an extended period of time, which may result in additional expenses and delay the integration of the acquired business and realization of the desired benefit of the transaction; |
• | uncertainty of the financial markets or circumstances that cause conditions that are less favorable and/or different than expected; and |
• | expenses incurred to complete a transaction may be significantly higher than anticipated. |
• | the operation of our retained businesses without the Lighting Products business unit; |
• | the restrictions on and obligations with respect to our remaining businesses following closing set forth in the transition services agreement and the LED supply agreement, in each case between us and IDEAL, including the need to provide transition services in connection with the transaction, which may result in the diversion of resources and focus from our remaining businesses; |
• | issues, delays, complications and/or additional costs associated with the transition of the operations, systems, technology infrastructure and data, third-party contracts, and personnel of the Lighting Products business unit and provision of transition services, each, as applicable, within the term of the transition services agreement; |
• | any required payments of indemnification obligations under the Purchase Agreement for retained liabilities and breaches of representations, warranties or covenants; and |
• | our failure to realize the full purchase price anticipated under the Purchase Agreement, including the ability of the Lighting Products business unit to generate adjusted EBITDA in the third year post-closing sufficient to result in payment of the targeted earnout or any earnout payment. |
• | protection of intellectual property and trade secrets; |
• | tariffs, customs, trade sanctions, trade embargoes and other barriers to importing/exporting materials and products in a cost-effective and timely manner, or changes in applicable tariffs or custom rules; |
• | the burden of complying with and changes in U.S. or international taxation policies; |
• | timing and availability of export licenses; |
• | rising labor costs; |
• | disruptions in or inadequate infrastructure of the countries where we operate; |
• | difficulties in collecting accounts receivable; |
• | difficulties in staffing and managing international operations; and |
• | the burden of complying with foreign and international laws and treaties. |
• | variability in our process repeatability and control; |
• | contamination of the manufacturing environment; |
• | equipment failure, power outages, fires, flooding, information or other system failures or variations in the manufacturing process; |
• | lack of consistency and adequate quality and quantity of piece parts, other raw materials and other bill of materials items; |
• | inventory shrinkage or human errors; |
• | defects in production processes (including system assembly) either within our facilities or at our suppliers; and |
• | any transitions or changes in our production process, planned or unplanned. |
• | pay substantial damages; |
• | indemnify our customers; |
• | stop the manufacture, use and sale of products found to be infringing; |
• | incur asset impairment charges; |
• | discontinue the use of processes found to be infringing; |
• | expend significant resources to develop non-infringing products or processes; or |
• | obtain a license to use third party technology. |
• | costs associated with the removal, collection and destruction of the product; |
• | payments made to replace product; |
• | costs associated with repairing the product; |
• | the write-down or destruction of existing inventory; |
• | insurance recoveries that fail to cover the full costs associated with product recalls; |
• | lost sales due to the unavailability of product for a period of time; |
• | delays, cancellations or rescheduling of orders for our products; or |
• | increased product returns. |
• | the jurisdiction in which profits are determined to be earned and taxed; |
• | changes in tax laws or interpretation of such tax laws and changes in generally accepted accounting principles, for example interpretations and U.S. regulations issued as a result of the significant changes to the U.S. tax law included within the Tax Cuts and Jobs Act of 2017 (the Tax Legislation); |
• | the resolution of issues arising from tax audits with various authorities; |
• | changes in the valuation of our deferred tax assets and liabilities; |
• | adjustments to estimated taxes upon finalization of various tax returns; |
• | increases in expenses not deductible for tax purposes, including impairment of goodwill in connection with acquisitions; |
• | changes in available tax credits; |
• | the recognition and measurement of uncertain tax positions; |
• | variations in realized tax deductions for certain stock-based compensation awards (such as non-qualified stock options and restricted stock) from those originally anticipated; and |
• | the repatriation of non-U.S. earnings for which we have not previously provided for taxes or any changes in legislation that may result in these earnings being taxed, regardless of our decision regarding repatriation of funds, for example, the Tax Legislation, enacted in the second quarter of fiscal 2018, included a one-time tax on deemed repatriated earnings of non-U.S. subsidiaries. |
• | regulatory penalties, fines, legal liabilities and the forfeiture of certain tax benefits; |
• | suspension of production; |
• | alteration of our fabrication, assembly and test processes; and |
• | curtailment of our operations or sales. |
• | increasing our vulnerability to downturns in our business, to competitive pressures and to adverse general economic and industry conditions; |
• | requiring the dedication of an increased portion of our expected cash flows from operations to service our indebtedness, thereby reducing the amount of expected cash flow available for other purposes, including capital expenditures, research and development and stock repurchases; |
• | limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; |
• | placing us at a competitive disadvantage compared to our peers that may have less indebtedness than we have by limiting our ability to borrow additional funds needed to operate and grow our business; and |
• | increasing our interest expense if interest rates increase. |
Size (approximate gross square footage) | ||||||||||||||||
Location | Segment Utilization1 | Total | Production | Facility Services and Warehousing | Administrative Function | Housing / Other | ||||||||||
Owned Facilities | ||||||||||||||||
Durham, NC | All | 920,096 | 472,126 | 14,037 | 433,933 | — | ||||||||||
Research Triangle Park, NC | 1 | 203,995 | 91,063 | 62,855 | 50,077 | — | ||||||||||
Huizhou, China | 2 | 823,951 | 332,271 | 116,568 | 41,764 | 333,348 | ||||||||||
Total owned | 1,948,042 | 895,460 | 193,460 | 525,774 | 333,348 | |||||||||||
Leased Facilities | ||||||||||||||||
Morgan Hill, CA | 1 | 83,828 | 54,488 | — | 29,340 | — | ||||||||||
Fayetteville, AR | 1 | 33,631 | 18,771 | — | 14,860 | |||||||||||
Hong Kong | All | 29,891 | — | 4,100 | 24,602 | 1,189 | ||||||||||
Total leased | 147,350 | 73,259 | 4,100 | 68,802 | 1,189 | |||||||||||
Total gross square footage | 2,095,392 | 968,719 | 197,560 | 594,576 | 334,537 |
6/29/2014 | 6/28/2015 | 6/26/2016 | 6/25/2017 | 6/24/2018 | 6/30/2019 | ||||||||||||||||||
Cree, Inc. | $100.00 | $55.69 | $47.83 | $50.74 | $95.39 | $112.44 | |||||||||||||||||
Nasdaq Composite Index | 100.00 | 116.85 | 106.99 | 144.05 | 178.76 | 188.12 | |||||||||||||||||
Nasdaq Electronic Components Index | 100.00 | 110.50 | 108.52 | 154.43 | 218.78 | 219.17 |
Fiscal Years Ended | |||||||||||||||||||
(in millions of U.S. Dollars, except share data) | June 30, 2019 | June 24, 2018 | June 25, 2017 | June 26, 2016 | June 28, 2015 | ||||||||||||||
Statement of Operations Data (1), (2) | |||||||||||||||||||
Revenue, net | $1,080.0 | $924.9 | $771.5 | $727.5 | $726.0 | ||||||||||||||
Operating loss | (15.9 | ) | (28.0 | ) | (20.1 | ) | (36.3 | ) | (90.4 | ) | |||||||||
Net loss from continuing operations | (57.9 | ) | (16.4 | ) | (88.1 | ) | (39.4 | ) | (75.5 | ) | |||||||||
Net (loss) income from discontinued operations | (317.2 | ) | (263.5 | ) | (10.0 | ) | 17.9 | 10.8 | |||||||||||
Net loss attributable to controlling interest | (375.1 | ) | (280.0 | ) | (98.1 | ) | (21.5 | ) | (64.7 | ) | |||||||||
Basic loss per share | |||||||||||||||||||
Continuing operations attributable to controlling interest | ($0.56 | ) | ($0.17 | ) | ($0.89 | ) | ($0.39 | ) | ($0.67 | ) | |||||||||
Net loss attributable to controlling interest | ($3.62 | ) | ($2.81 | ) | ($1.00 | ) | ($0.21 | ) | ($0.57 | ) | |||||||||
Diluted loss per share | |||||||||||||||||||
Continuing operations attributable to controlling interest | ($0.56 | ) | ($0.17 | ) | ($0.89 | ) | ($0.39 | ) | ($0.67 | ) | |||||||||
Net loss attributable to controlling interest | ($3.62 | ) | ($2.81 | ) | ($1.00 | ) | ($0.21 | ) | ($0.57 | ) | |||||||||
Weighted average shares (in thousands) | |||||||||||||||||||
Basic | 103,576 | 99,530 | 98,487 | 101,783 | 113,022 | ||||||||||||||
Diluted | 103,576 | 99,530 | 98,487 | 101,783 | 113,022 | ||||||||||||||
June 30, 2019 | June 24, 2018 | June 25, 2017 | June 26, 2016 | June 28, 2015 | |||||||||||||||
Consolidated Balance Sheet Data (1), (3) | |||||||||||||||||||
Total cash, cash equivalents and short-term investments | $1,051.4 | $387.1 | $610.9 | $605.3 | $713.2 | ||||||||||||||
Working capital | 1,144.6 | 641.8 | 888.6 | 933.7 | 1,053.5 | ||||||||||||||
Total assets | 2,816.9 | 2,637.8 | 2,649.9 | 2,766.1 | 2,948.0 | ||||||||||||||
Total long-term liabilities | 507.5 | 317.1 | 215.0 | 175.2 | 231.3 | ||||||||||||||
Total equity | 2,041.2 | 2,072.1 | 2,222.8 | 2,367.8 | 2,462.0 |
• | Overall Demand for Products and Applications using SiC power devices, GaN and Si RF devices, and LEDs. Our potential for growth depends significantly on the adoption of SiC and GaN materials and device products in the power and RF markets, the continued use of Si devices in the RF telecommunications market, the continued adoption of LEDs and LED lighting, and our ability to win new designs for these applications. Demand also fluctuates based on various market cycles, continuously evolving industry supply chains, trade and tariff terms, as well as evolving competitive dynamics in each of the respective markets. These uncertainties make demand difficult to forecast for us and our customers. |
• | Intense and Constantly Evolving Competitive Environment. Competition in the industries we serve is intense. Many companies have made significant investments in product development and production equipment. Product pricing pressures exist as market participants often undertake pricing strategies to gain or protect market share, increase the utilization of their production capacity and open new applications in the power, RF and LED markets we serve. To remain competitive, market participants must continuously increase product performance, reduce costs and develop improved ways to serve their customers. To address these competitive pressures, we have invested in research and development activities to support new product development, lower product costs and deliver higher levels of performance to differentiate our products in the market. In addition, we invest in systems, people and new processes to improve our ability to deliver a better overall experience for our customers. |
• | Governmental Trade and Regulatory Conditions. Our potential for growth, as with most multi-national companies, depends on a balanced and stable trade, political, economic and regulatory environment among the countries where we do business. Changes in trade policy such as the imposition of tariffs or export bans to specific customers or countries could reduce or limit demand for our products in certain markets. |
• | Technological Innovation and Advancement. Innovations and advancements in materials, power, RF, and LED technologies continue to expand the potential commercial application for our products. However, new technologies or standards could emerge or improvements could be made in existing technologies that could reduce or limit the demand for our products in certain markets. |
• | Intellectual Property Issues. Market participants rely on patented and non-patented proprietary information relating to product development, manufacturing capabilities and other core competencies of their business. Protection of intellectual property is critical. Therefore, steps such as additional patent applications, confidentiality and non-disclosure agreements, as well as other security measures are generally taken. To enforce or protect intellectual property rights, litigation or threatened litigation is common. |
• | Our year-over-year revenue increased by $155.1 million to $1.1 billion. |
• | Gross margin increased to 36.2% from 32.7%. Gross profit increased by $89.0 million to $391.0 million. |
• | Operating loss from continuing operations was $15.9 million in fiscal 2019 compared to operating loss from continuing operations of $28.0 million in fiscal 2018. |
• | Diluted loss per share from continuing operations attributable to controlling interest was $0.56 in fiscal 2019 compared to $0.17 in fiscal 2018. |
• | Combined cash, cash equivalents and short-term investments increased to $1,051.4 million at June 30, 2019 from $387.1 million at June 24, 2018. Cash provided by operating activities was $202.3 million in fiscal 2019 compared to $173.5 million in fiscal 2018. |
• | Purchases of property and equipment were $142.4 million in fiscal 2019 compared to $185.7 million in fiscal 2018. |
• | Wolfspeed - invest in the business to expand the scale, further develop the technologies, and accelerate the growth opportunities of SiC materials, SiC power devices and modules, and GaN and Si RF devices. |
• | LED Products - focus our efforts where our best-in-class technology and application-optimized solutions are differentiated and valued. |
• | Improve the customer experience and service levels in all of our businesses. |
Fiscal Years Ended | ||||||||||||||||||||
June 30, 2019 | June 24, 2018 | June 25, 2017 | ||||||||||||||||||
(in millions of U.S Dollars, except share data) | Amount | % of Revenue | Amount | % of Revenue | Amount | % of Revenue | ||||||||||||||
Revenue, net | $1,080.0 | 100.0 | % | $924.9 | 100.0 | % | $771.5 | 100.0 | % | |||||||||||
Cost of revenue, net | 689.0 | 63.8 | % | 622.9 | 67.3 | % | 527.5 | 68.4 | % | |||||||||||
Gross profit | 391.0 | 36.2 | % | 302.0 | 32.7 | % | 244.0 | 31.6 | % | |||||||||||
Research and development | 157.9 | 14.6 | % | 127.3 | 13.8 | % | 113.8 | 14.8 | % | |||||||||||
Sales, general and administrative | 200.7 | 18.6 | % | 170.3 | 18.4 | % | 145.7 | 18.9 | % | |||||||||||
Amortization or impairment of acquisition-related intangibles | 15.6 | 1.4 | % | 7.2 | 0.8 | % | 3.4 | 0.4 | % | |||||||||||
Loss on disposal or impairment of other assets | 4.7 | 0.4 | % | 8.4 | 0.9 | % | 1.8 | 0.2 | % | |||||||||||
Other operating expense (income) | 28.0 | 2.6 | % | 16.8 | 1.8 | % | (0.6 | ) | (0.1 | )% | ||||||||||
Operating loss | (15.9 | ) | (1.5 | )% | (28.0 | ) | (3.0 | )% | (20.1 | ) | (2.6 | )% | ||||||||
Non-operating expense (income), net | 29.3 | 2.7 | % | (10.4 | ) | (1.1 | )% | (13.0 | ) | (1.7 | )% | |||||||||
Loss before income taxes | (45.2 | ) | (4.2 | )% | (17.6 | ) | (1.9 | )% | (7.1 | ) | (0.9 | )% | ||||||||
Income tax expense (benefit) | 12.7 | 1.2 | % | (1.2 | ) | (0.1 | )% | 81.0 | 10.5 | % | ||||||||||
Net loss from continuing operations | (57.9 | ) | (5.4 | )% | (16.4 | ) | (1.8 | )% | (88.1 | ) | (11.4 | )% | ||||||||
Net loss from discontinued operations | (317.2 | ) | (29.4 | )% | (263.5 | ) | (28.5 | )% | (10.0 | ) | (1.3 | )% | ||||||||
Net loss | (375.1 | ) | (34.7 | )% | (279.9 | ) | (30.3 | )% | (98.1 | ) | (12.7 | )% | ||||||||
Net income attributable to noncontrolling interest | — | — | % | 0.1 | 0.0 | % | — | — | % | |||||||||||
Net loss attributable to controlling interest | ($375.1 | ) | (34.7 | )% | ($280.0 | ) | (30.3 | )% | ($98.1 | ) | (12.7 | )% | ||||||||
Basic loss per share | ||||||||||||||||||||
Continuing operations attributable to controlling interest | ($0.56 | ) | ($0.17 | ) | ($0.89 | ) | ||||||||||||||
Net loss attributable to controlling interest | ($3.62 | ) | ($2.81 | ) | ($1.00 | ) | ||||||||||||||
Diluted loss per share | ||||||||||||||||||||
Continuing operations attributable to controlling interest | ($0.56 | ) | ($0.17 | ) | ($0.89 | ) | ||||||||||||||
Net loss attributable to controlling interest | ($3.62 | ) | ($2.81 | ) | ($1.00 | ) |
Fiscal Years Ended | Year-Over-Year Change | ||||||||||||||||||||||||
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | June 25, 2017 | 2018 to 2019 | 2017 to 2018 | ||||||||||||||||||||
Wolfspeed | $538.2 | $328.6 | $221.2 | $209.6 | 64 | % | $107.4 | 49 | % | ||||||||||||||||
Percent of revenue | 50 | % | 36 | % | 29 | % | |||||||||||||||||||
LED Products | 541.8 | 596.3 | 550.3 | (54.5 | ) | (9 | )% | 46.0 | 8 | % | |||||||||||||||
Percent of revenue | 50 | % | 64 | % | 71 | % | |||||||||||||||||||
Total revenue | $1,080.0 | $924.9 | $771.5 | $155.1 | 17 | % | $153.4 | 20 | % |
Fiscal Years Ended | Year-Over-Year Change | ||||||||||||||||||||||||
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | June 25, 2017 | 2018 to 2019 | 2017 to 2018 | ||||||||||||||||||||
Wolfspeed gross profit | $258.7 | $158.5 | $103.5 | $100.2 | 63 | % | $55.0 | 53 | % | ||||||||||||||||
Wolfspeed gross margin | 48 | % | 48 | % | 47 | % | |||||||||||||||||||
LED Products gross profit | 150.0 | 157.9 | 151.7 | (7.9 | ) | (5 | )% | 6.2 | 4 | % | |||||||||||||||
LED Products gross margin | 28 | % | 26 | % | 28 | % | |||||||||||||||||||
Unallocated costs | (17.7 | ) | (9.0 | ) | (11.2 | ) | (8.7 | ) | (97 | )% | 2.2 | 20 | % | ||||||||||||
COGS acquisition related costs | — | (5.4 | ) | — | 5.4 | 100 | % | (5.4 | ) | (100 | )% | ||||||||||||||
Consolidated gross profit | $391.0 | $302.0 | $244.0 | $89.0 | 29 | % | $58.0 | 24 | % | ||||||||||||||||
Consolidated gross margin | 36 | % | 33 | % | 32 | % |
Fiscal Years Ended | Year-Over-Year Change | ||||||||||||||||||||||||
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | June 25, 2017 | 2018 to 2019 | 2017 to 2018 | ||||||||||||||||||||
Research and development | $157.9 | $127.3 | $113.8 | $30.6 | 24 | % | $13.5 | 12 | % | ||||||||||||||||
Percent of revenue | 15 | % | 14 | % | 15 | % |
Fiscal Years Ended | Year-Over-Year Change | ||||||||||||||||||||||||
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | June 25, 2017 | 2018 to 2019 | 2017 to 2018 | ||||||||||||||||||||
Sales, general and administrative | $200.7 | $170.3 | $145.7 | $30.4 | 18 | % | $24.6 | 17 | % | ||||||||||||||||
Percent of revenue | 19 | % | 18 | % | 19 | % |
Fiscal Years Ended | Year-Over-Year Change | ||||||||||||||||||||||||
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | June 25, 2017 | 2018 to 2019 | 2017 to 2018 | ||||||||||||||||||||
Customer relationships | $7.3 | $3.0 | $1.1 | $4.3 | 143 | % | $1.9 | 173 | % | ||||||||||||||||
Developed technology | 5.4 | 3.2 | 2.2 | 2.2 | 69 | % | 1.0 | 45 | % | ||||||||||||||||
Non-compete agreements | 2.9 | 1.0 | 0.1 | 1.9 | 190 | % | 0.9 | 900 | % | ||||||||||||||||
Total | $15.6 | $7.2 | $3.4 | $8.4 | 117 | % | $3.8 | 112 | % |
Fiscal Years Ended | Year-Over-Year Change | ||||||||||||||||||||||||
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | June 25, 2017 | 2018 to 2019 | 2017 to 2018 | ||||||||||||||||||||
Loss on disposal or impairment of other assets | $4.7 | $8.4 | $1.8 | ($3.7 | ) | (44 | )% | $6.6 | 367 | % |
Fiscal Years Ended | Year-Over-Year Change | ||||||||||||||||||||||||
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | June 25, 2017 | 2018 to 2019 | 2017 to 2018 | ||||||||||||||||||||
Factory optimization restructuring | $4.1 | $— | $— | $4.1 | 100 | % | $— | — | % | ||||||||||||||||
Severance and other restructuring | 4.2 | 3.8 | — | 0.4 | 11 | % | 3.8 | 100 | % | ||||||||||||||||
Total restructuring costs | 8.3 | 3.8 | — | 4.5 | 118 | % | 3.8 | 100 | % | ||||||||||||||||
Project and transaction costs | 16.9 | 8.5 | — | 8.4 | 99 | % | 8.5 | 100 | % | ||||||||||||||||
Executive severance | 1.3 | 4.5 | 2.2 | (3.2 | ) | (71 | )% | 2.3 | 105 | % | |||||||||||||||
Factory optimization start up costs | 1.5 | — | — | 1.5 | 100 | % | — | — | % | ||||||||||||||||
Gain from termination of Wolfspeed transaction, net | — | — | (2.8 | ) | — | — | % | 2.8 | 100 | % | |||||||||||||||
Other operating expense (income) | $28.0 | $16.8 | ($0.6 | ) | $11.2 | 67 | % | $17.4 | * |
Fiscal Years Ended | Year-Over-Year Change | ||||||||||||||||||||||||
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | June 25, 2017 | 2018 to 2019 | 2017 to 2018 | ||||||||||||||||||||
Loss (gain) on sale of investments, net | $0.1 | $0.1 | ($0.1 | ) | $— | — | % | $0.2 | 200 | % | |||||||||||||||
Loss (gain) on equity investment | 16.2 | (7.1 | ) | (7.5 | ) | 23.3 | 328 | % | 0.4 | 5 | % | ||||||||||||||
Interest expense (income), net | 12.0 | (1.8 | ) | (3.7 | ) | 13.8 | 767 | % | 1.9 | 51 | % | ||||||||||||||
Foreign currency loss (gain), net | 1.3 | (1.8 | ) | (2.3 | ) | 3.1 | 172 | % | 0.5 | 22 | % | ||||||||||||||
Other, net | (0.3 | ) | 0.2 | 0.6 | (0.5 | ) | (250 | )% | (0.4 | ) | (67 | )% | |||||||||||||
Non-operating expense (income), net | $29.3 | ($10.4 | ) | ($13.0 | ) | $39.7 | 382 | % | $2.6 | 20 | % |
Fiscal Years Ended | Year-Over-Year Change | ||||||||||||||||||||||
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | June 25, 2017 | 2018 to 2019 | 2017 to 2018 | ||||||||||||||||||
Income tax expense (benefit) | $12.7 | ($1.2 | ) | $81.0 | 13.9 | 1,158 | % | (82.2 | ) | (101 | )% | ||||||||||||
Effective tax rate | (28 | )% | 7 | % | (1,141 | )% |
Payments Due by Period | |||||||||||||||||||
(in millions of U.S. Dollars) | Total | Less than One Year | One to Three Years | Three to Five Years | More Than Five Years | ||||||||||||||
Operating lease obligations | 8.3 | 4.1 | 3.5 | 0.7 | — | ||||||||||||||
Purchase obligations | 143.3 | 129.6 | 5.7 | 4.0 | 4.0 | ||||||||||||||
Long-term debt (1) | 575.0 | — | — | 575.0 | — | ||||||||||||||
Interest payments on long-term debt (2) | 27.2 | 6.0 | 12.1 | 9.1 | — | ||||||||||||||
Other long-term liabilities (3) | — | — | — | — | — | ||||||||||||||
Total contractual obligations | $753.8 | $139.7 | $21.3 | $588.8 | $4.0 |
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | Change | ||||||||
Cash and cash equivalents | $500.5 | $118.9 | $381.6 | ||||||||
Short-term investments | 550.9 | 268.2 | 282.7 | ||||||||
Total cash, cash equivalents and short-term investments | $1,051.4 | $387.1 | $664.3 |
Three Months Ended | ||||||||
June 30, 2019 | June 24, 2018 | Change | ||||||
Days of sales outstanding (a) | 34 | 29 | 5 | |||||
Days of supply in inventory (b) | 104 | 76 | 28 | |||||
Days in accounts payable (c) | (72 | ) | (54 | ) | (18 | ) | ||
Cash conversion cycle | 66 | 51 | 15 |
a) | Days of sales outstanding (DSO) measures the average collection period of our receivables. DSO is based on the ending net trade receivables less receivable related accrued contract liabilities and the revenue, net for the quarter then ended. DSO is calculated by dividing ending accounts receivable, less receivable related accrued contract liabilities, by the average net revenue per day for the respective 90-day period. |
b) | Days of supply in inventory (DSI) measures the average number of days from procurement to sale of our product. DSI is based on ending inventory and cost of revenue, net for the quarter then ended. DSI is calculated by dividing ending inventory by average cost of revenue, net per day for the respective 90-day period. |
c) | Days in accounts payable (DPO) measures the average number of days our payables remain outstanding before payment. DPO is based on ending accounts payable and cost of revenue, net for the quarter then ended. DPO is calculated by dividing ending accounts payable and accrued expenses (less accrued salaries and wages) by the average cost of revenue, net per day for the respective 90-day period. |
Fiscal Years Ended | Year-Over-Year Change | ||||||||||||||||||
June 30, 2019 | June 24, 2018 | June 25, 2017 | 2018 to 2019 | 2017 to 2018 | |||||||||||||||
Cash provided by operating activities | $202.3 | $173.5 | $220.5 | $28.8 | ($47.0 | ) | |||||||||||||
Cash used in investing activities | (227.1 | ) | (423.9 | ) | (145.2 | ) | 196.8 | (278.7 | ) | ||||||||||
Cash provided by (used in) financing activities | 406.5 | 236.5 | (108.7 | ) | 170.0 | 345.2 | |||||||||||||
Effect of foreign exchange changes | (0.1 | ) | 0.2 | (0.1 | ) | (0.3 | ) | 0.3 | |||||||||||
Net increase (decrease) in cash and cash equivalents | $381.6 | ($13.7 | ) | ($33.5 | ) | $395.3 | $19.8 |
/s/PricewaterhouseCoopers LLP | |
Raleigh, North Carolina | |
August 21, 2019 |
June 30, 2019 | June 24, 2018 | ||||||
in millions of U.S. Dollars, except share data | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | $ | |||||
Short-term investments | |||||||
Total cash, cash equivalents and short-term investments | |||||||
Accounts receivable, net | |||||||
Income taxes receivable | |||||||
Inventories | |||||||
Prepaid expenses | |||||||
Other current assets | |||||||
Current assets held for sale | |||||||
Current assets related to discontinued operations | |||||||
Total current assets | |||||||
Property and equipment, net | |||||||
Goodwill | |||||||
Intangible assets, net | |||||||
Other long-term investments | |||||||
Deferred tax assets | |||||||
Other assets | |||||||
Long-term assets related to discontinued operations | |||||||
Total assets | $ | $ | |||||
Liabilities and Shareholders' Equity | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | $ | |||||
Income taxes payable | |||||||
Accrued contract liabilities | |||||||
Other current liabilities | |||||||
Current liabilities related to discontinued operations | |||||||
Total current liabilities | |||||||
Long-term liabilities: | |||||||
Long-term debt | |||||||
Convertible notes, net | |||||||
Deferred tax liabilities | |||||||
Other long-term liabilities | |||||||
Long-term liabilities related to discontinued operations | |||||||
Total long-term liabilities | |||||||
Commitments and contingencies (Note 16) | |||||||
Shareholders’ equity: | |||||||
Preferred stock, par value $0.01; 3,000 shares authorized at June 30, 2019 and June 24, 2018; none issued and outstanding | |||||||
Common stock, par value $0.00125; 200,000 shares authorized at June 30, 2019 and June 24, 2018; 106,570 and 101,488 shares issued and outstanding at June 30, 2019 and June 24, 2018, respectively | |||||||
Additional paid-in-capital | |||||||
Accumulated other comprehensive income | |||||||
Accumulated deficit | ( | ) | ( | ) | |||
Total shareholders’ equity | |||||||
Non-controlling interest | |||||||
Total equity | |||||||
Total liabilities and shareholders’ equity | $ | $ |
Fiscal Years Ended | |||||||||||
June 30, 2019 | June 24, 2018 | June 25, 2017 | |||||||||
in millions of U.S. Dollars, except share data | |||||||||||
Revenue, net | $ | $ | $ | ||||||||
Cost of revenue, net | |||||||||||
Gross profit | |||||||||||
Operating expenses: | |||||||||||
Research and development | |||||||||||
Sales, general and administrative | |||||||||||
Amortization or impairment of acquisition-related intangibles | |||||||||||
Loss on disposal or impairment of other assets | |||||||||||
Other operating expense (income) | ( | ) | |||||||||
Operating loss | ( | ) | ( | ) | ( | ) | |||||
Non-operating expense (income), net | ( | ) | ( | ) | |||||||
Loss before income taxes | ( | ) | ( | ) | ( | ) | |||||
Income tax expense (benefit) | ( | ) | |||||||||
Net loss from continuing operations | ( | ) | ( | ) | ( | ) | |||||
Net loss from discontinued operations | ( | ) | ( | ) | ( | ) | |||||
Net loss | ( | ) | ( | ) | ( | ) | |||||
Net income attributable to noncontrolling interest | |||||||||||
Net loss attributable to controlling interest | ($ | ) | ($ | ) | ($ | ) | |||||
Basic loss per share | |||||||||||
Continuing operations attributable to controlling interest | ($ | ) | ($ | ) | ($ | ) | |||||
Net loss attributable to controlling interest | ($ | ) | ($ | ) | ($ | ) | |||||
Diluted loss per share | |||||||||||
Continuing operations attributable to controlling interest | ($ | ) | ($ | ) | ($ | ) | |||||
Net loss attributable to controlling interest | ($ | ) | ($ | ) | ($ | ) | |||||
Weighted average shares (in thousands) | |||||||||||
Basic | |||||||||||
Diluted |
Fiscal Years Ended | |||||||||||
June 30, 2019 | June 24, 2018 | June 25, 2017 | |||||||||
in millions of U.S. Dollars | |||||||||||
Net loss | ($ | ) | ($ | ) | ($ | ) | |||||
Other comprehensive income (loss): | |||||||||||
Currency translation gain (loss) | ( | ) | |||||||||
Net unrealized gain (loss) on available-for-sale securities | ( | ) | ( | ) | |||||||
Comprehensive loss | ( | ) | ( | ) | ( | ) | |||||
Net income attributable to non-controlling interest | |||||||||||
Comprehensive loss attributable to controlling interest | ($ | ) | ($ | ) | ($ | ) |
Fiscal Years Ended | |||||||||||
June 30, 2019 | June 24, 2018 | June 25, 2017 | |||||||||
in millions of U.S. Dollars | |||||||||||
Cash flows from operating activities: | |||||||||||
Net loss | ($ | ) | ($ | ) | ($ | ) | |||||
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Amortization of debt issuance costs and discount | |||||||||||
Stock-based compensation | |||||||||||
Loss on sale of business | |||||||||||
Goodwill impairment charges | |||||||||||
Impairment of acquisition-related intangibles | |||||||||||
Impairment of inventory | |||||||||||
Loss on disposal or impairment of long-lived assets | |||||||||||
Amortization of premium/discount on investments | |||||||||||
Loss/(gain) on equity investment | ( | ) | ( | ) | |||||||
Foreign exchange loss/(gain) on equity investment | ( | ) | ( | ) | |||||||
Deferred income taxes | ( | ) | ( | ) | |||||||
Changes in operating assets and liabilities, net of effect of acquisition: | |||||||||||
Accounts receivable, net | ( | ) | |||||||||
Inventories | ( | ) | |||||||||
Prepaid expenses and other assets | ( | ) | |||||||||
Accounts payable, trade | ( | ) | |||||||||
Accrued salaries and wages and other liabilities | |||||||||||
Accrued contract liabilities | |||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Purchases of property and equipment | ( | ) | ( | ) | ( | ) | |||||
Purchases of patent and licensing rights | ( | ) | ( | ) | ( | ) | |||||
Proceeds from sale of property and equipment | |||||||||||
Purchases of short-term investments | ( | ) | ( | ) | ( | ) | |||||
Proceeds from maturities of short-term investments | |||||||||||
Proceeds from sale of short term investments | |||||||||||
Purchase of acquired business, net of cash acquired | ( | ) | |||||||||
Proceeds from sale of business, net | |||||||||||
Net cash used in investing activities | ( | ) | ( | ) | ( | ) | |||||
Cash flows from financing activities: | |||||||||||
Proceeds from issuing Cree Venture LED stock to noncontrolling interest | |||||||||||
Payment of acquisition-related contingent consideration | ( | ) | ( | ) | |||||||
Proceeds from long-term debt borrowings | |||||||||||
Payments on long-term debt borrowings | ( | ) | ( | ) | ( | ) | |||||
Proceeds from issuance of common stock | |||||||||||
Tax withholding on stock option exercises | ( | ) | ( | ) | ( | ) | |||||
Proceeds from convertible notes | |||||||||||
Payments of debt issuance costs | ( | ) | |||||||||
Repurchases of common stock | ( | ) | |||||||||
Net cash provided by (used in) financing activities | ( | ) | |||||||||
Effects of foreign exchange changes on cash and cash equivalents | ( | ) | ( | ) | |||||||
Net change in cash and cash equivalents | ( | ) | ( | ) | |||||||
Cash and cash equivalents, beginning of period | |||||||||||
Cash and cash equivalents, end of period | $ | $ | $ | ||||||||
Supplemental cash flow information | |||||||||||
Cash paid for interest | $ | $ | $ | ||||||||
Cash paid for income taxes | $ | $ | $ |
Common Stock | Additional Paid-in Capital | Accumulated deficit | Accumulated Other Comprehensive Income | Total Equity - Controlled Interest | Non controlling Interest | Total Equity | ||||||||||||||||||||||||
Number of Shares | Par Value | |||||||||||||||||||||||||||||
share data in thousands, U.S. Dollar information in millions | ||||||||||||||||||||||||||||||
Balance at June 26, 2016 | $ | $ | ($ | ) | $ | $ | $ | $ | ||||||||||||||||||||||
Net loss | — | — | — | ( | ) | — | ( | ) | — | ( | ) | |||||||||||||||||||
Currency translation loss | — | — | — | — | ( | ) | ( | ) | — | ( | ) | |||||||||||||||||||
Unrealized loss on available-for-sale securities | — | — | — | — | ( | ) | ( | ) | — | ( | ) | |||||||||||||||||||
Comprehensive loss | ( | ) | — | ( | ) | |||||||||||||||||||||||||
Income tax expense from stock option exercises | — | — | ( | ) | — | — | ( | ) | — | ( | ) | |||||||||||||||||||
Repurchased shares | ( | ) | — | — | ( | ) | — | ( | ) | — | ( | ) | ||||||||||||||||||
Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||||
Exercise of stock options and issuance of shares | — | — | — | — | ||||||||||||||||||||||||||
Balance at June 25, 2017 | $ | $ | ($ | ) | $ | $ | $ | $ | ||||||||||||||||||||||
Net loss | — | — | — | ( | ) | — | ( | ) | ( | ) | ||||||||||||||||||||
Currency translation gain | — | — | — | — | — | |||||||||||||||||||||||||
Unrealized loss on available-for-sale securities | — | — | — | — | ( | ) | ( | ) | — | ( | ) | |||||||||||||||||||
Comprehensive loss | ( | ) | ( | ) | ||||||||||||||||||||||||||
Income tax expense from stock option exercises | — | — | ( | ) | — | — | ( | ) | — | ( | ) | |||||||||||||||||||
Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||||
Exercise of stock options and issuance of shares | — | — | — | — | ||||||||||||||||||||||||||
Contributions from noncontrolling interests | — | — | — | — | — | — | ||||||||||||||||||||||||
Balance at June 24, 2018 | $ | $ | ($ | ) | $ | $ | $ | $ | ||||||||||||||||||||||
Net loss | — | — | — | ( | ) | — | ( | ) | — | ( | ) | |||||||||||||||||||
Currency translation gain | — | — | — | — | — | |||||||||||||||||||||||||
Unrealized gain on available-for-sale securities | — | — | — | — | — | |||||||||||||||||||||||||
Comprehensive loss | ( | ) | — | ( | ) | |||||||||||||||||||||||||
Income tax expense from stock option exercises | — | — | ( | ) | — | — | ( | ) | — | ( | ) | |||||||||||||||||||
Stock-based compensation | — | — | — | — | — | |||||||||||||||||||||||||
Exercise of stock options and issuance of shares | — | — | — | — | ||||||||||||||||||||||||||
Adoption of ASC 606 | — | — | — | — | — | |||||||||||||||||||||||||
Convertible note issuance | — | — | — | — | — | |||||||||||||||||||||||||
Balance at June 30, 2019 | $ | $ | ($ | ) | $ | $ | $ | $ |
• | Wolfspeed, which consists of silicon carbide (SiC) and gallium nitride (GaN) materials, power devices and RF devices based on silicon (Si) and wide bandgap semiconductor materials. The Company's materials products and power devices are used in electric vehicles, motor drives, power supplies, solar and transportation applications. The Company's materials products and RF devices are used in military communications, radar, satellite and telecommunication applications. |
• | LED Products, which consists of LED chips and LED components. The Company's LED products enable its customers to develop and market LED-based products for lighting, video screens, automotive and specialty lighting applications. |
• | Held-to-Maturity – Debt securities that the entity has the positive intent and ability to hold to maturity, which are reported at amortized cost. |
• | Trading – Debt and equity securities that are bought and held principally for the purpose of selling in the near term, which are reported at fair value, with unrealized gains and losses included in earnings. |
• | Available-for-Sale – Debt and equity securities not classified as either held-to-maturity or trading securities, which are reported at fair value with unrealized gains or losses excluded from earnings and reported as a separate component of shareholders’ equity. |
Machinery and equipment | 3 to 15 years | |
Buildings and building improvements | 5 to 40 years | |
Furniture and fixtures | 3 to 5 years | |
Aircraft and vehicles | 5 to 20 years | |
Leasehold improvements | Shorter of estimated useful life or lease term |
Fiscal Years Ended | |||||||||||
June 30, 2019 | June 24, 2018 | June 25, 2017 | |||||||||
(in millions of U.S. Dollars) | |||||||||||
Revenue, net | $ | $ | $ | ||||||||
Cost of revenue, net | |||||||||||
Gross profit | |||||||||||
Research and development | |||||||||||
Sales, general and administrative | |||||||||||
Amortization or impairment of acquisition-related intangibles | |||||||||||
Goodwill impairment charges | |||||||||||
Loss on disposal or impairment of long-lived assets | |||||||||||
Operating (loss) income | ( | ) | ( | ) | |||||||
Non-operating income | ( | ) | ( | ) | |||||||
(Loss) income before income taxes and loss on sale | ( | ) | ( | ) | |||||||
Loss on sale | |||||||||||
(Loss) income before income taxes | ( | ) | ( | ) | |||||||
Income tax expense (benefit) | ( | ) | |||||||||
Net loss | ($ | ) | ($ | ) | ($ | ) |
(in millions of U.S. Dollars) | June 24, 2018 | ||
Assets | |||
Accounts receivable, net | $ | ||
Income tax receivable | |||
Inventories | |||
Prepaid expenses | |||
Other current assets | |||
Total current assets | |||
Property and equipment, net | |||
Goodwill | |||
Intangible assets, net | |||
Deferred income taxes | |||
Other assets | |||
Total assets | $ | ||
Liabilities | |||
Accounts payable, trade | $ | ||
Accrued salaries and wages | |||
Income tax payable | |||
Other current liabilities | |||
Total current liabilities | |||
Other long term liabilities | |||
Total liabilities | $ |
Fiscal Years Ended | |||||||||||
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | June 25, 2017 | ||||||||
Cash (used in) provided by operating activities of discontinued operations | $ | ( | ) | $ | $ | ||||||
Cash used in investing activities of discontinued operations | ( | ) | ( | ) | ( | ) |
(in millions of U.S. Dollars) | Previous Balance at June 24, 2018 | Adjustments | Opening Balance at June 25, 2018 | ||||||||
Assets:(1) | |||||||||||
Accounts receivable, net | $ | $ | $ | ||||||||
Other current assets | |||||||||||
Current assets related to discontinued operations(2) | |||||||||||
Liabilities:(1) | |||||||||||
Other current liabilities(3) | ( | ) | |||||||||
Accrued contract liabilities | |||||||||||
Current liabilities related to discontinued operations(2) | |||||||||||
Long-term liabilities related to discontinued operations(2) | ( | ) | |||||||||
Shareholders' Equity:(1) | |||||||||||
Accumulated deficit | ( | ) | ( | ) |
(in millions of U.S. Dollars) | |||
Inventories | $ | ||
Property and equipment | |||
Other receivables | |||
Intangible assets | |||
Goodwill | |||
Accrued expenses and liabilities | ( | ) | |
Net assets acquired | $ |
(in millions of U.S. Dollars, except year data) | Asset Amount | Estimated Life (in years) | |||
Lease agreement | $ | ||||
Customer relationships | |||||
Developed technology | |||||
Non-compete agreements | |||||
Total identifiable intangible assets | $ |
(in millions of U.S. Dollars) | Amount | ||
Revenue | $ | ||
Net loss from continuing operations | ( | ) |
Fiscal Years Ended | |||||||
(in millions of U.S. Dollars, except share data) | June 24, 2018 | June 25, 2017 | |||||
Revenue | $ | $ | |||||
Net loss from continuing operations | ( | ) | ( | ) | |||
Basic loss per share from continuing operations | ($ | ) | ($ | ) | |||
Diluted loss per share from continuing operations | ($ | ) | ($ | ) |
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | |||||
Billed trade receivables | $ | $ | |||||
Unbilled contract receivables | |||||||
Royalties | |||||||
Allowance for sales returns, discounts and other incentives | ( | ) | |||||
Allowance for bad debts | ( | ) | ( | ) | |||
Accounts receivable, net | $ | $ |
Fiscal Years Ended | |||||||||||
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | June 25, 2017 | ||||||||
Balance at beginning of period | $ | $ | $ | ||||||||
Current period claims | ( | ) | ( | ) | |||||||
Provision for sales returns, discounts and other incentives | |||||||||||
Reclassification to contract liabilities | ( | ) | |||||||||
Balance at end of period | $ | $ | $ |
Fiscal Years Ended | |||||||||||
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | June 25, 2017 | ||||||||
Balance at beginning of period | $ | $ | $ | ||||||||
Current period provision change | ( | ) | |||||||||
Write-offs, net of recoveries | ( | ) | ( | ) | |||||||
Balance at end of period | $ | $ | $ |
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | |||||
Raw material | $ | $ | |||||
Work-in-progress | |||||||
Finished goods | |||||||
Inventories | $ | $ |
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | |||||
Furniture and fixtures | $ | $ | |||||
Land and buildings | |||||||
Machinery and equipment | |||||||
Vehicles | |||||||
Computer hardware/software | |||||||
Leasehold improvements and other | |||||||
Construction in progress | |||||||
Property and equipment, gross | |||||||
Accumulated depreciation | ( | ) | ( | ) | |||
Property and equipment, net | $ | $ |
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | |||||
Accounts payable, trade | $ | $ | |||||
Accrued salaries and wages | |||||||
Accrued expenses | |||||||
Other | |||||||
Accounts payable and accrued expenses | $ | $ |
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | |||||
Currency translation gain | $ | $ | |||||
Net unrealized loss on available-for-sale securities | ( | ) | |||||
Accumulated other comprehensive income, net of taxes | $ | $ |
Fiscal Years Ended | |||||||||||
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | June 25, 2017 | ||||||||
Factory optimization restructuring | $ | $ | $ | ||||||||
Severance and other restructuring | |||||||||||
Total restructuring costs | |||||||||||
Project and transaction costs | |||||||||||
Executive severance | |||||||||||
Factory optimization start up costs | |||||||||||
Gain from termination of Wolfspeed transaction, net | ( | ) | |||||||||
Other operating expense (income) | $ | $ | ($ | ) |
Fiscal Years Ended | |||||||||||
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | June 25, 2017 | ||||||||
Loss (gain) on sale of investments, net | $ | $ | ($ | ) | |||||||
Loss (gain) on equity investment | ( | ) | ( | ) | |||||||
Interest expense (income), net | ( | ) | ( | ) | |||||||
Foreign currency loss (gain), net | ( | ) | ( | ) | |||||||
Other, net | ( | ) | |||||||||
Non-operating expense (income), net | $ | ($ | ) | ($ | ) |
June 30, 2019 | |||||||||||||||
(in millions of U.S. Dollars) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||
Municipal bonds | $ | $ | ($ | ) | $ | ||||||||||
Corporate bonds | |||||||||||||||
U.S. agency securities | |||||||||||||||
U.S. treasury securities | |||||||||||||||
U.S. certificates of deposit | |||||||||||||||
Non-U.S. certificates of deposit | |||||||||||||||
Commercial paper | |||||||||||||||
Variable rate demand note | |||||||||||||||
Total short-term investments | $ | $ | ($ | ) | $ |
June 30, 2019 | |||||||||||||||||||||||
Less than 12 Months | Greater than 12 Months | Total | |||||||||||||||||||||
(in millions of U.S. Dollars) | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | |||||||||||||||||
Municipal bonds | $ | $ | $ | ($ | ) | $ | ($ | ) | |||||||||||||||
Corporate bonds | |||||||||||||||||||||||
U.S. agency securities | |||||||||||||||||||||||
U.S. treasury securities | |||||||||||||||||||||||
Total | $ | $ | $ | ($ | ) | $ | ($ | ) | |||||||||||||||
Number of securities with an unrealized loss |
June 24, 2018 | ||||||||||||||
(in millions of U.S. Dollars) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||
Municipal bonds | $ | ($ | ) | $ | ||||||||||
Corporate bonds | ( | ) | ||||||||||||
U.S. agency securities | ||||||||||||||
U.S. certificates of deposit | ||||||||||||||
Non-U.S. certificates of deposit | ||||||||||||||
Total short-term investments | $ | ($ | ) | $ |
June 24, 2018 | |||||||||||||||||||||||
Less than 12 Months | Greater than 12 Months | Total | |||||||||||||||||||||
(in millions of U.S. Dollars) | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | |||||||||||||||||
Municipal bonds | $ | ($ | ) | $ | $ | $ | ($ | ) | |||||||||||||||
Corporate bonds | ( | ) | ( | ) | |||||||||||||||||||
U.S. agency securities | |||||||||||||||||||||||
Total | $ | ($ | ) | $ | $ | $ | ($ | ) | |||||||||||||||
Number of securities with an unrealized loss |
(in millions of U.S. Dollars) | Within One Year | After One, Within Five Years | After Five, Within Ten Years | After Ten Years | Total | ||||||||||||||
Municipal bonds | $ | $ | $ | $ | $ | ||||||||||||||
Corporate bonds | |||||||||||||||||||
U.S. agency securities | |||||||||||||||||||
U.S. treasury securities | |||||||||||||||||||
U.S. certificates of deposit | |||||||||||||||||||
Non-U.S. certificates of deposit | |||||||||||||||||||
Commercial paper | |||||||||||||||||||
Variable rate demand note | |||||||||||||||||||
Total short-term investments | $ | $ | $ | $ | $ |
• | Level 1 - Valuations based on quoted prices in active markets for identical instruments that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. |
• | Level 2 - Valuations based on quoted prices in active markets for instruments that are similar, or quoted prices in markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. |
• | Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. |
June 30, 2019 | June 24, 2018 | ||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||
Cash equivalents: | |||||||||||||||||||||||||||||||
Money market funds | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Corporate bonds | |||||||||||||||||||||||||||||||
U.S. agency securities | |||||||||||||||||||||||||||||||
U.S. treasury securities | |||||||||||||||||||||||||||||||
Non-U.S. certificates of deposit | |||||||||||||||||||||||||||||||
Commercial paper | |||||||||||||||||||||||||||||||
Total cash equivalents | |||||||||||||||||||||||||||||||
Short-term investments: | |||||||||||||||||||||||||||||||
Municipal bonds | |||||||||||||||||||||||||||||||
Corporate bonds | |||||||||||||||||||||||||||||||
U.S. agency securities | |||||||||||||||||||||||||||||||
U.S. treasury securities | |||||||||||||||||||||||||||||||
U.S. certificates of deposit | |||||||||||||||||||||||||||||||
Non-U.S. certificates of deposit | |||||||||||||||||||||||||||||||
Commercial paper | |||||||||||||||||||||||||||||||
Variable rate demand note | |||||||||||||||||||||||||||||||
Total short-term investments | |||||||||||||||||||||||||||||||
Other long-term investments: | |||||||||||||||||||||||||||||||
Common stock of non-U.S. corporations | |||||||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | $ | $ | $ | $ |
• | Wolfspeed |
• | LED Products |
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | |||||
Wolfspeed | $ | $ | |||||
LED Products | $ | ||||||
Consolidated total | $ | $ |
June 30, 2019 | June 24, 2018 | ||||||||||||||||||||||
(in millions of U.S. Dollars) | Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | |||||||||||||||||
Intangible assets: | |||||||||||||||||||||||
Customer relationships | $ | ($ | ) | $ | $ | ($ | ) | $ | |||||||||||||||
Developed technology | ( | ) | ( | ) | |||||||||||||||||||
Non-compete agreements | ( | ) | ( | ) | |||||||||||||||||||
Trade names | ( | ) | ( | ) | |||||||||||||||||||
Patent and licensing rights | ( | ) | ( | ) | |||||||||||||||||||
Total intangible assets | $ | ($ | ) | $ | $ | ($ | ) | $ |
Fiscal Year Ending | (in millions of U.S. Dollars) | ||
June 28, 2020 | $ | ||
June 27, 2021 | |||
June 26, 2022 | |||
June 25, 2023 | |||
June 30, 2024 | |||
Thereafter | |||
Total future amortization expense | $ |
(in millions of U.S. Dollars) | June 30, 2019 | ||
Principal | $ | ||
Unamortized discount and issuance costs | ( | ) | |
Net carrying amount | $ |
(in millions of U.S. Dollars) | June 30, 2019 | ||
Discount related to value of conversion options | $ | ||
Debt issuance costs | ( | ) | |
Net carrying amount | $ |
(in millions of U.S. Dollars) | June 30, 2019 | ||
Interest expense | $ | ||
Amortization of discount and issuance costs | |||
Total interest expense | $ |
Number of Shares | ||
For exercise of outstanding common stock options | ||
For vesting of outstanding stock units | ||
For future equity awards under 2013 Long-Term Incentive Compensation Plan | ||
For future issuance under the Non-Employee Director Stock Compensation and Deferral Program | ||
For future issuance to employees under the 2005 Employee Stock Purchase Plan | ||
Total common shares reserved |
Fiscal Years Ended | |||||||||||
(in millions of U.S. Dollars, except share data) | June 30, 2019 | June 24, 2018 | June 25, 2017 | ||||||||
Net loss from continuing operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||
Net income attributable to noncontrolling interest | |||||||||||
Loss from continuing operations attributable to controlling interest | ( | ) | ( | ) | ( | ) | |||||
Net loss from discontinued operations | ( | ) | ( | ) | ( | ) | |||||
Net loss attributable to controlling interest | ( | ) | ( | ) | ( | ) | |||||
Weighted average number of common shares - basic and diluted (in thousands) | |||||||||||
Loss per share - basic: | |||||||||||
Continuing operations attributable to controlling interest | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||
Discontinued operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||
Loss per share - diluted: | |||||||||||
Continuing operations attributable to controlling interest | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||
Discontinued operations | $ | ( | ) | $ | ( | ) | $ | ( | ) |
Number of Shares | Weighted Average Exercise price | Weighted Average Remaining Contractual Term | Total Intrinsic Value (in millions of U.S. Dollars) | |||||||||
Outstanding at June 24, 2018 | $ | |||||||||||
Granted | ||||||||||||
Exercised | ( | ) | ||||||||||
Forfeited or expired | ( | ) | ||||||||||
Outstanding at June 30, 2019 | $ | |||||||||||
Vested and expected to vest at June 30, 2019 | $ | |||||||||||
Exercisable at June 30, 2019 | $ |
Options Outstanding | Options Exercisable | |||||||||||||||
Range of Exercise Price | Number | Weighted Average Remaining Contractual Life (Years) | Weighted Average Exercise Price | Number | Weighted Average Exercise Price | |||||||||||
$0.01 to $30.92 | $ | $ | ||||||||||||||
$30.93 to $43.94 | ||||||||||||||||
$43.95 to $45.13 | ||||||||||||||||
$45.14 to $54.26 | ||||||||||||||||
$54.27 to $75.55 | ||||||||||||||||
Total |
Fiscal Years Ended | |||||||||||
June 30, 2019 | June 24, 2018 | June 25, 2017 | |||||||||
Weighted average grant date fair value per share of options | $ | $ | $ | ||||||||
Total intrinsic value of options exercised (in millions of U.S. Dollars) | $ | $ | $ |
Number of RSAs/RSUs | Weighted Average Grant-Date Fair Value | |||||
Nonvested at June 24, 2018 | $ | |||||
Granted | ||||||
Vested | ( | ) | ||||
Forfeited | ( | ) | ||||
Nonvested at June 30, 2019 | $ |
Fiscal Years Ended | |||||||||||
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | June 25, 2017 | ||||||||
Cost of revenue, net | $ | $ | $ | ||||||||
Research and development | |||||||||||
Sales, general and administrative | |||||||||||
Total stock-based compensation expense | $ | $ | $ |
Fiscal Years Ended | ||||||||
June 30, 2019 | June 24, 2018 | June 25, 2017 | ||||||
Risk-free interest rate | 2.39 - 2.67% | 0.89 - 2.26% | .41 - 1.02% | |||||
Expected life, in years | 0.5 - 1.0 | 0.5 - 1.0 | 0.5 - 1.0 | |||||
Volatility | 34.5 - 39.6% | 34.5 - 40.2% | 37.9 - 42.4% | |||||
Dividend yield |
Fiscal Years Ended | |||||||
June 30, 2019 | June 24, 2018 | June 25, 2017 | |||||
Risk-free interest rate | N/A | % | % | ||||
Expected life, in years | N/A | ||||||
Volatility | N/A | % | % | ||||
Dividend yield | N/A |
Fiscal Years Ended | |||||||
June 30, 2019 | June 24, 2018 | June 25, 2017 | |||||
Risk-free interest rate | % | 1.44 - 1.59% | N/A | ||||
Expected life, in years | 2.8 - 3.0 | N/A | |||||
Average volatility of peer companies | % | % | N/A | ||||
Average correlation coefficient of peer companies | N/A | ||||||
Dividend yield | N/A |
Fiscal Years Ended | |||||||||||
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | June 25, 2017 | ||||||||
Domestic | ($ | ) | ($ | ) | ($ | ) | |||||
Foreign | |||||||||||
Loss before income taxes | ($ | ) | ($ | ) | ($ | ) |
Fiscal Years Ended | |||||||||||
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | June 25, 2017 | ||||||||
Current: | |||||||||||
Federal | $ | $ | $ | ||||||||
Foreign | |||||||||||
State | |||||||||||
Total current | |||||||||||
Deferred: | |||||||||||
Federal | ( | ) | ( | ) | |||||||
Foreign | |||||||||||
State | ( | ) | ( | ) | |||||||
Total deferred | ( | ) | ( | ) | |||||||
Income tax expense (benefit) | $ | ($ | ) | $ |
Fiscal Years Ended | ||||||||||||||||||||
(in millions of U.S. Dollars) | June 30, 2019 | % of Loss | June 24, 2018 | % of Loss | June 25, 2017 | % of Loss | ||||||||||||||
Federal income tax provision at statutory rate | ($ | ) | % | ($ | ) | % | ($ | ) | % | |||||||||||
(Decrease) increase in income tax expense resulting from: | ||||||||||||||||||||
State tax provision, net of federal benefit | ( | ) | % | ( | ) | % | ( | )% | ||||||||||||
Tax exempt interest | ( | ) | % | ( | ) | % | ( | ) | % | |||||||||||
48C investment tax credit | % | ( | ) | % | ( | ) | % | |||||||||||||
Increase (decrease) in tax reserve | ( | )% | ( | )% | ( | ) | % | |||||||||||||
Research and development credits | ( | ) | % | ( | ) | % | ( | ) | % | |||||||||||
Foreign tax credit | ( | ) | % | ( | ) | % | ( | ) | % | |||||||||||
Increase in valuation allowance | ( | )% | ( | ) | % | ( | )% | |||||||||||||
Stock-based compensation | % | ( | )% | ( | )% | |||||||||||||||
Statutory rate differences | ( | )% | ( | ) | % | ( | ) | % | ||||||||||||
Foreign earnings taxed in U.S. | ( | )% | ( | )% | ( | )% | ||||||||||||||
Foreign currency fluctuations | ( | )% | ( | ) | % | ( | )% | |||||||||||||
Other foreign adjustments | ( | ) | % | ( | ) | % | ( | )% | ||||||||||||
Net operating loss carryback | % | ( | ) | % | ( | )% | ||||||||||||||
Provision to return adjustments | ( | )% | % | ( | )% | |||||||||||||||
Tax on distributable foreign earnings | ( | )% | ( | )% | % | |||||||||||||||
Impact of rate changes | ( | )% | ( | )% | % | |||||||||||||||
Expiration of state credits | ( | )% | ( | )% | % | |||||||||||||||
Other | ( | ) | % | ( | )% | ( | ) | % | ||||||||||||
Income tax expense (benefit) | $ | ( | )% | ($ | ) | % | $ | ( | )% |
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | |||||
Deferred tax assets: | |||||||
Compensation | $ | $ | |||||
Inventories | |||||||
Sales return reserve and allowance for bad debts | |||||||
Warranty reserve | |||||||
Federal and state net operating loss carryforwards | |||||||
Federal credits | |||||||
State credits | |||||||
48C investment tax credits | |||||||
Investments | |||||||
Stock-based compensation | |||||||
Deferred revenue | |||||||
Other | |||||||
Total gross deferred assets | |||||||
Less valuation allowance | ( | ) | ( | ) | |||
Deferred tax assets, net | |||||||
Deferred tax liabilities: | |||||||
Property and equipment | ( | ) | ( | ) | |||
Intangible assets | ( | ) | ( | ) | |||
Investments | ( | ) | ( | ) | |||
Foreign earnings recapture | ( | ) | ( | ) | |||
Taxes on unremitted foreign earnings | ( | ) | ( | ) | |||
Convertible notes | ( | ) | |||||
Total gross deferred liability | ( | ) | ( | ) | |||
Deferred tax asset, net | $ | $ |
Balance at June 30, 2019 | |||||||
(in millions of U.S. Dollars) | Assets | Liabilities | |||||
U.S. federal income taxes | $ | $ | |||||
Foreign income taxes | ( | ) | |||||
Total | $ | ($ | ) |
Balance at June 24, 2018 | |||||||
(in millions of U.S. Dollars) | Assets | Liabilities | |||||
U.S. federal income taxes | $ | ($ | ) | ||||
Foreign income taxes | ( | ) | |||||
Total | $ | ($ | ) |
Fiscal Years Ended | |||||||||||
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | June 25, 2017 | ||||||||
Balance at beginning of period | $ | $ | $ | ||||||||
Decrease related to current year change in law | ( | ) | |||||||||
Increases related to prior year tax positions | |||||||||||
Decreases related to prior year tax positions | ( | ) | ( | ) | |||||||
Settlements with tax authorities | ( | ) | ( | ) | |||||||
Expiration of statute of limitations for assessment of taxes | ( | ) | ( | ) | ( | ) | |||||
Balance at end of period | $ | $ | $ |
Fiscal Years Ended | |||||||||||
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | June 25, 2017 | ||||||||
Balance at beginning of period | $ | $ | $ | ||||||||
Warranties accrued in current period | |||||||||||
Expenditures | ( | ) | ( | ) | ( | ) | |||||
Balance at end of period | $ | $ | $ |
Fiscal Years Ending | Minimum Rental Amount | ||
June 28, 2020 | $ | ||
June 27, 2021 | |||
June 26, 2022 | |||
June 25, 2023 | |||
June 30, 2024 | |||
Thereafter | |||
Total future minimum rental payments | $ |
• | Wolfspeed |
• | LED Products |
Revenue | Gross Profit and Gross Margin | ||||||||||||||||||||||
Year Ended | Year Ended | ||||||||||||||||||||||
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | June 25, 2017 | June 30, 2019 | June 24, 2018 | June 25, 2017 | |||||||||||||||||
Wolfspeed | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Wolfspeed gross margin | % | % | % | ||||||||||||||||||||
LED Products | |||||||||||||||||||||||
LED Products gross margin | % | % | % | ||||||||||||||||||||
Total segment reporting | $ | $ | $ | ||||||||||||||||||||
Unallocated costs | ( | ) | ( | ) | ( | ) | |||||||||||||||||
COGS acquisition related costs | ( | ) | |||||||||||||||||||||
Consolidated gross profit | $ | $ | $ | ||||||||||||||||||||
Consolidated gross margin | % | % | % |
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | |||||
Wolfspeed | $ | $ | |||||
LED Products | |||||||
Total segment inventories | |||||||
Unallocated inventories | |||||||
Consolidated inventories | $ | $ |
For the Years Ended | ||||||||||||||||||||
June 30, 2019 | June 24, 2018 | June 25, 2017 | ||||||||||||||||||
(in millions of U.S. Dollars) | Revenue | % of Revenue | Revenue | % of Revenue | Revenue | % of Revenue | ||||||||||||||
United States | $ | % | $ | % | $ | % | ||||||||||||||
China | % | % | % | |||||||||||||||||
Europe | % | % | % | |||||||||||||||||
Other | % | % | % | |||||||||||||||||
Total | $ | $ | $ |
(in millions of U.S. Dollars) | June 30, 2019 | June 24, 2018 | |||||
United States | $ | $ | |||||
China | |||||||
Other | |||||||
Total | $ | $ |
Capacity and overhead cost reductions | Total estimated charges | Amounts incurred in fiscal 2018 | Amounts incurred in fiscal 2019 | Cumulative amounts incurred through fiscal year 2019 | |||||||||||
Loss on disposal or impairment of long-lived assets | $ | $ | $ | $ | |||||||||||
Severance expense | |||||||||||||||
Lease termination and facility consolidation costs | |||||||||||||||
Total restructuring charges | $ | $ | $ | $ |
Factory optimization costs | Amounts incurred in fiscal 2019 | Cumulative amounts incurred through fiscal year 2019 | |||||
Loss on disposal or impairment of long-lived assets | $ | $ | |||||
Facility consolidation costs | |||||||
Total restructuring charges | $ | $ |
(in millions of U.S. Dollars, except share data) | September 23, 2018 | December 30, 2018 | March 31, 2019 | June 30, 2019 | Fiscal Year 2019 | ||||||||||||||
Revenue, net | $ | $ | $ | $ | $ | ||||||||||||||
Cost of revenue, net | |||||||||||||||||||
Gross profit | |||||||||||||||||||
Net loss from continuing operations | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Net loss from discontinued operations | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Net income (loss) attributable to noncontrolling interest | ( | ) | |||||||||||||||||
Net loss attributable to controlling interest | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Basic loss per share: | |||||||||||||||||||
Continuing operations attributable to controlling interest | ($ | ) | $ | ($ | ) | ($ | ) | ($ | ) | ||||||||||
Net loss attributable to controlling interest | ($ | ) | ($ | ) | ($ | ) | ($ | ) | ($ | ) | |||||||||
Diluted loss per share: | |||||||||||||||||||
Continuing operations attributable to controlling interest | ($ | ) | $ | ($ | ) | ($ | ) | ($ | ) | ||||||||||
Net loss attributable to controlling interest | ($ | ) | ($ | ) | ($ | ) | ($ | ) | ($ | ) | |||||||||
(in millions of U.S. Dollars, except share data) | September 24, 2017 | December 24, 2017 | March 25, 2018 | June 24, 2018 | Fiscal Year 2018 | ||||||||||||||
Revenue, net | $ | $ | $ | $ | $ | ||||||||||||||
Cost of revenue, net | |||||||||||||||||||
Gross profit | |||||||||||||||||||
Net (loss) income from continuing operations | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Net loss from discontinued operations | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
Net (loss) income | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Net income attributable to noncontrolling interest | |||||||||||||||||||
Net (loss) income attributable to controlling interest | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||
Basic (loss) earnings per share: | |||||||||||||||||||
Continuing operations attributable to controlling interest | ($ | ) | $ | ($ | ) | ($ | ) | ($ | ) | ||||||||||
Net (loss) income attributable to controlling interest | ($ | ) | $ | ($ | ) | ($ | ) | ($ | ) | ||||||||||
Diluted (loss) earnings per share: | |||||||||||||||||||
Continuing operations attributable to controlling interest | ($ | ) | $ | ($ | ) | ($ | ) | ($ | ) | ||||||||||
Net (loss) income attributable to controlling interest | ($ | ) | $ | ($ | ) | ($ | ) | ($ | ) |
(i) | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; |
(ii) | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and |
(iii) | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
Incorporated by Reference | |||||
Exhibit No. | Description | Filed Herewith | Form | Exhibit | Filing Date |
2.1^ | Purchase Agreement, dated March 14, 2019, by and between Cree, Inc. and IDEAL Industries, Inc., as amended | 8-K | 2.1 | 5/16/2019 | |
Articles of Incorporation, as amended | 10-K | 3.1 | 8/19/2002 | ||
Bylaws, as amended and restated | 8-K | 3.1 | 1/28/2015 | ||
Specimen Common Stock Certificate | 10-Q | 4.1 | 1/24/2018 | ||
Indenture, dated as of August 24, 2018, between Cree, Inc. and U.S. Bank National Association | 8-K | 4.1 | 8/24/2018 | ||
Form of Global 0.875% Convertible Senior Note due 2023 (included in Exhibit 4.2) | 8-K | 4.2 | 8/24/2018 | ||
Description of the Registered Securities | X | ||||
10.1* | 2004 Long-Term Incentive Compensation Plan, as amended ("2004 LTIP") | 8-K | 10.1 | 10/25/2012 | |
10.2* | Form of Nonqualified Stock Option Award Agreement for Non-Employee Directors under the 2004 LTIP | 10-Q | 10.3 | 10/17/2012 | |
10.3* | Form of Nonqualified Stock Option Agreement under the 2004 LTIP | 10-Q | 10.4 | 10/17/2012 | |
10.4* | 2013 Long-Term Incentive Compensation Plan, as amended ("2013 LTIP") | 8-K | 10.1 | 10/28/2016 | |
10.5* | Form of Nonqualified Stock Option Award Agreement under the 2013 LTIP | 10-Q | 10.4 | 1/22/2014 | |
10.6* | Form of Restricted Stock Unit Award Agreement under the 2013 LTIP | 10-Q | 10.5 | 1/22/2014 | |
10.7* | Form of Master Performance Unit Award Agreement under the 2013 LTIP | 8-K | 10.4 | 8/29/2014 | |
10.8* | Form of Performance Share Award Agreement - Section 16 Officer under the 2013 LTIP | 10-Q | 10.6 | 10/21/2015 | |
10.9* | Form of Stock Unit Award Agreement (Performance-Based) for Gregg A. Lowe, dated September 27, 2017, under the 2013 LTIP | 8-K | 10.3 | 9/28/2017 | |
Form of Stock Unit Award Agreement (Performance-Based) under the 2013 LTIP | 10-K | 10.41 | 8/20/2018 | ||
Form of Stock Unit Award Agreement (Time-Based) under the 2013 LTIP | 10-K | 10.42 | 8/20/2018 | ||
Notice of Grant to Gregg A. Lowe, dated September 1, 2018, under the 2013 LTIP | 8-K | 10.1 | 8/24/2018 | ||
Notice of Grant to Neill P. Reynolds, dated September 1, 2018, under the 2013 LTIP | 8-K | 10.2 | 8/24/2018 | ||
Notice of Grant to David T. Emerson, dated September 1, 2018, under the 2013 LTIP | 8-K | 10.3 | 8/24/2018 | ||
2005 Employee Stock Purchase Plan, as amended | 8-K | 10.1 | 10/24/2017 | ||
Change of Control Agreement for Chief Executive Officer between Cree, Inc. and Gregg A. Lowe, dated September 22, 2017 | 8-K | 10.1 | 9/28/2017 |
First Amendment to Change in Control Agreement (for Chief Executive Officer), dated May 4, 2018 | 8-K | 10.3 | 5/4/2018 | ||
Cree Severance Plan - Senior Leadership Team, Plan Document and Summary Plan Description, effective as of April 30, 2018 | 8-K | 10.1 | 5/4/2018 | ||
Form of Participation Agreement Under Cree Severance Plan - Senior Leadership Team | 8-K | 10.2 | 5/4/2018 | ||
Separation, General Release and Consulting Agreement, dated June 7, 2018, between Cree, Inc. and Michael E. McDevitt | 8-K | 10.1 | 6/7/2018 | ||
Schedule of Compensation of Non-Employee Directors | 10-K/A | 10.29 | 8/21/2018 | ||
Non-Employee Director Stock Compensation and Deferral Program | 10-Q | 10.3 | 10/21/2009 | ||
Amendment One to Non-Employee Director Stock Compensation and Deferral Program | 10-Q | 10.3 | 1/19/2011 | ||
Form of Cree, Inc. Indemnification Agreement for Directors and Officers | 8-K | 10.1 | 10/29/2010 | ||
Credit Agreement, dated January 9, 2015, by and among Cree, Inc., Wells Fargo Bank, National Association, as administrative agent and lender, E-conolight LLC, a domestic subsidiary of Cree, Inc., as guarantor, and the other lenders party thereto | 8-K | 10.1 | 1/12/2015 | ||
First Amendment to the Credit Agreement, dated September 10, 2015, by and among Cree, Inc., Wells Fargo Bank, National Association, as administrative agent, E-conolight LLC, a domestic subsidiary of Cree, Inc., as guarantor, and the other lenders party thereto | 10-Q | 10.4 | 1/24/2018 | ||
Credit Agreement Consent, dated as of July 13, 2016, by and among Cree, Inc., Wells Fargo Bank, National Association, as administrative agent and lender, E-conolight LLC, a domestic subsidiary of Cree, Inc., as guarantor, and the other lenders party to the Credit Agreement | 10-Q | 10.2 | 10/19/2016 | ||
Second Amendment to Credit Agreement, dated November 13, 2017, by and among Cree, Inc., Wells Fargo Bank, National Association, as administrative agent, E-conolight LLC, a domestic subsidiary of Cree, Inc., as guarantor, and the other lenders party thereto | 8-K | 10.1 | 11/16/2017 | ||
Third Amendment to the Credit Agreement, dated as of August 21, 2018, by and among Cree, Inc., Wells Fargo Bank, National Association, as administrative agent, E-conolight LLC, as guarantor, and the other lenders party thereto | 10-Q | 10.1 | 10/17/2018 | ||
Credit Agreement Consent, dated as of March 14, 2019, by and among Cree, Inc., Wells Fargo Bank, National Association, as administrative agent and lender, E-conolight LLC, a domestic subsidiary of Cree, Inc., as guarantor, and the other lenders party to the Credit Agreement | 10-Q | 10.1 | 5/3/2019 | ||
Subsidiaries of the Company | X | ||||
Consent of PricewaterhouseCoopers LLP | X | ||||
Certification by Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||
Certification by Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||
Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | ||||
Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | ||||
101 | The following materials from Cree, Inc.’s Annual Report on Form 10-K for the fiscal year ended June 30, 2019 formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statements of Comprehensive Loss; (iv) Consolidated Statements of Cash Flows; (v) Consolidated Statements of Shareholders' Equity; and (vi) Notes to Consolidated Financial Statements | X |
104 | The cover page from the Cree Inc.'s Annual Report on Form 10-K for the fiscal year ended June 30, 2019 formatted in Inline XBRL (included in Exhibit 101) |
* | Management contract or compensatory plan or arrangement |
^ | Portions of this exhibit have been omitted pursuant to Rule 601(b)(2) of Regulation S-K. The omitted information is not material and would likely cause competitive harm to the registrant if publicly disclosed. |
CREE, INC. | |
Date: | August 21, 2019 |
By: | /s/ Gregg A. Lowe |
Gregg A. Lowe | |
Chief Executive Officer and President | |
(Principal Executive Officer) |
Signature | Title | Date | ||
/s/ GREGG A. LOWE | Chief Executive Officer and President | August 21, 2019 | ||
Gregg A. Lowe | (Principal Executive Officer) | |||
/s/ NEILL P. REYNOLDS | Executive Vice President and Chief Financial Officer | August 21, 2019 | ||
Neill P. Reynolds | (Principal Financial and Principal Accounting Officer) | |||
/s/ DARREN R. JACKSON | Chairman and Director | August 21, 2019 | ||
Darren R. Jackson | ||||
/s/ JOHN C. HODGE | Director | August 21, 2019 | ||
John C. Hodge | ||||
/s/ CLYDE R. HOSEIN | Director | August 21, 2019 | ||
Clyde R. Hosein | ||||
/s/ DUY-LOAN T. LE | Director | August 21, 2019 | ||
Duy-Loan T. Le | ||||
/s/ JOHN B. REPLOGLE | Director | August 21, 2019 | ||
John B. Replogle | ||||
/s/ THOMAS H. WERNER | Director | August 21, 2019 | ||
Thomas H. Werner | ||||
/s/ ANNE C. WHITAKER | Director | August 21, 2019 | ||
Anne C. Whitaker |
1. | I have reviewed this annual report on Form 10-K of Cree, 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 controls 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. |
/s/ GREGG A. LOWE | |
Gregg A. Lowe | |
Chief Executive Officer and President |
1. | I have reviewed this annual report on Form 10-K of Cree, 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 controls 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. |
/s/ NEILL P. REYNOLDS | |
Neill P. Reynolds | |
Executive Vice President and Chief Financial Officer |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) 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 the Company. |
/s/ GREGG A. LOWE | |
Gregg A. Lowe | |
Chief Executive Officer and President | |
August 21, 2019 |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) 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 the Company. |
/s/ NEILL P. REYNOLDS | |
Neill P. Reynolds | |
Executive Vice President and Chief Financial Officer | |
August 21, 2019 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Jun. 30, 2019 |
Jun. 24, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Preferred stock authorized (shares) | 3,000,000 | 3,000,000 |
Preferred stock issued (shares) | 0 | 0 |
Preferred stock outstanding (shares) | 0 | 0 |
Common stock, par value (USD per share) | $ 0.00125 | $ 0.00125 |
Common stock authorized (shares) | 200,000,000 | 200,000,000 |
Common stock issued (shares) | 106,570,000 | 101,488,000 |
Common stock outstanding (shares) | 106,570,000 | 101,488,000 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 24, 2018 |
Jun. 25, 2017 |
|
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (375.1) | $ (279.9) | $ (98.1) |
Other comprehensive income (loss): | |||
Currency translation gain (loss) | 4.4 | 0.6 | (0.2) |
Net unrealized gain (loss) on available-for-sale securities | 4.5 | (5.9) | (2.6) |
Comprehensive loss | (366.2) | (285.2) | (100.9) |
Net income attributable to noncontrolling interest | 0.0 | 0.1 | 0.0 |
Comprehensive loss attributable to controlling interest | $ (366.2) | $ (285.3) | $ (100.9) |
Business |
12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||
Business | Business Overview Cree, Inc. (the Company) is an innovator of wide bandgap semiconductor products for power and radio-frequency (RF) applications and lighting-class light emitting diode (LED) products. The Company's products are targeted for applications such as transportation, power supplies, inverters, wireless systems, indoor and outdoor lighting, electronic signs and signals and video displays. The Company operates in two reportable segments:
Previously, the Company designed, manufactured and sold LED lighting fixtures and lamps for the commercial, industrial and consumer markets. The Company referred to these product lines as the Lighting Products business unit. As discussed in Note 3, “Discontinued Operations,” on May 13, 2019, the Company sold its Lighting Products business unit to IDEAL Industries, Inc. (IDEAL). Unless otherwise noted, discussion within these notes to the consolidated financial statements relates to the Company's continuing operations. The majority of the Company's products are manufactured at its production facilities located in North Carolina, California, Arkansas and China. The Company also uses contract manufacturers for certain products and aspects of product fabrication, assembly and packaging. The Company operates research and development facilities in North Carolina, Arizona, Arkansas, California and China (including Hong Kong). Cree, Inc. is a North Carolina corporation established in 1987, and its headquarters are in Durham, North Carolina.
|
Basis of Presentation and Summary of Significant Accounting Policies |
12 Months Ended | |||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and the joint venture. All material intercompany accounts and transactions have been eliminated. Fiscal Year The Company’s fiscal year is a 52 or 53-week period ending on the last Sunday in the month of June. The Company’s 2019 fiscal year was a 53-week fiscal year. The Company's 2018 and 2017 fiscal years were 52-week fiscal years. The Company’s 2020 fiscal year will be a 52-week fiscal year. Reclassifications Certain prior period amounts in the accompanying consolidated financial statements have been reclassified to conform to the current year presentation. These reclassifications had no effect on previously reported net loss or shareholders’ equity. Revisions The Company revised net cash provided by operating activities and net cash provided by (used in) financing activities for the years ended June 24, 2018 and June 25, 2017 to correct the presentation of tax withholding for stock option exercises. The Company increased net cash provided by operating activities by $6.2 million and $4.6 million and decreased net cash provided by (used in) financing activities by the same amounts for the years ended June 24, 2018 and June 25, 2017, respectively. The Company concluded these errors were not material individually or in the aggregate to any of the periods impacted. Additionally, the Company corrected the classification of certain money market funds which were previously disclosed as non-U.S. certificates of deposits within cash equivalents in Note 9, "Fair Value of Financial Instruments." As a result, non-U.S. certificates of deposit decreased by $40.9 million and money market funds increased by the same amount as of June 24, 2018. Total cash equivalents was not affected. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and the disclosure of contingent assets and liabilities. The Company evaluates its estimates on an ongoing basis, including those related to revenue recognition, product warranty obligations, valuation of inventories, tax related contingencies, valuation of stock-based compensation, valuation of long-lived and intangible assets, other contingencies and litigation, among others. The Company generally bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from those estimates. Segment Information U.S. GAAP requires segmentation based on an entity’s internal organization and reporting of revenue and operating income based upon internal accounting methods commonly referred to as the “management approach.” Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (CODM), or decision making group, in deciding how to allocate resources and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has determined that it currently has two operating and reportable segments. Cash and Cash Equivalents Cash and cash equivalents consist of unrestricted cash accounts and highly liquid investments with an original maturity of three months or less when purchased. Cash and cash equivalents are stated at cost, which approximates fair value. The Company holds cash and cash equivalents at several major financial institutions, which often exceed insurance limits set by the Federal Deposit Insurance Corporation (FDIC). The Company has not historically experienced any losses due to such concentration of credit risk. Investments Investments in certain securities may be classified into three categories:
The Company reassesses the appropriateness of the classification (i.e. held-to-maturity, trading or available-for-sale) of its investments at the end of each reporting period. When the fair value of an investment declines below its original cost, the Company considers all available evidence to evaluate whether the decline is other-than-temporary. Among other things, the Company considers the duration and extent of the decline and economic factors influencing the capital markets. For the fiscal years ended June 30, 2019, June 24, 2018, and June 25, 2017, the Company had no other-than-temporary declines below the cost basis of its investments. The Company utilizes specific identification in computing realized gains and losses on the sale of investments. Realized gains and losses on the sale of investments are reported in non-operating expense (income). Investments in marketable securities with maturities beyond one year may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. Other long-term investments consist of the Company's approximately 16% common stock ownership interest in Lextar Electronics Corporation (Lextar), which the Company acquired in December 2014. The Company currently utilizes the fair value option in accounting for its investment in Lextar. Inventories Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out (FIFO) method or an average cost method. The Company writes down its inventory balances for estimates of excess and obsolete amounts. These write-downs are recognized as a component of cost of revenue. At the point of the write-down, a new lower cost basis for that inventory is established, and any subsequent improvements in facts and circumstances do not result in the restoration or increase in that newly established lower cost basis. If that inventory is subsequently sold, the sale is recorded at the actual selling price and the related cost of revenue is recorded at the new lower cost basis. Property and Equipment Property and equipment are stated at cost and depreciated on a straight-line basis over the assets’ estimated useful lives. Leasehold improvements are amortized over the lesser of the asset life or the term of the related lease. In general, the Company’s policy for useful lives is as follows:
Expenditures for repairs and maintenance are charged to expense as incurred. The costs for major renewals and improvements are capitalized and depreciated over their estimated useful lives. The cost and related accumulated depreciation of the assets are removed from the accounts upon disposition and any resulting gain or loss is reflected in operating income. Shipping and Handling Costs Shipping and handling costs are included in cost of revenue, net in the consolidated statements of operations and are recognized as a period expense during the period in which they are incurred. Goodwill and Intangible Assets The Company recognizes the assets acquired and liabilities assumed in business combinations at their respective fair values at the date of acquisition, with any excess purchase price recognized as goodwill. Valuation of intangible assets entails significant estimates and assumptions including, but not limited to, estimating future cash flows from product revenue, developing appropriate discount rates, continuation of customer relationships and renewal of customer contracts, and approximating the useful lives of the intangible assets acquired. Goodwill The Company recognizes goodwill as an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. The Company tests goodwill for impairment at least annually as of the first day of the fiscal fourth quarter, or when indications of potential impairment exist. The Company monitors for the existence of potential impairment indicators throughout the fiscal year. The Company conducts impairment testing for goodwill at the reporting unit level. Reporting units may be operating segments as a whole, or an operation one level below an operating segment, referred to as a component. The Company has determined that its reporting units are its two operating and reportable segments. The Company may initiate goodwill impairment testing by considering qualitative factors to determine whether it is more likely than not that a reportable segment’s carrying value is greater than its fair value. Such factors may include the following, among others: a significant decline in the reporting unit’s expected future cash flows; a sustained, significant decline in the Company’s stock price and market capitalization; a significant adverse change in legal factors or in the business climate; unanticipated competition; and slower growth rates; as well as changes in management, key personnel, strategy and customers. If the Company's qualitative assessment indicates it is more likely than not that the estimated fair value of a reporting unit exceeds its carrying value, no further analysis is required and goodwill is not impaired. Otherwise, the Company performs a quantitative goodwill impairment test to determine if goodwill is impaired. The quantitative test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of the reportable segment exceeds the carrying value of the net assets associated with the segment, goodwill is not considered impaired. If the carrying value of the net assets associated with the reportable segment exceeds the fair value of the segment, the Company recognizes an impairment loss in an amount equal to the excess, not to exceed the carrying value of the reportable segment's goodwill. Once an impairment loss is recognized, the adjusted carrying value of the goodwill becomes the new accounting basis of the goodwill for the reporting unit. The Company derives a reportable segment’s fair value through a combination of the market approach (guideline transaction method and guideline public company method) and the income approach (a discounted cash flow analysis). The income approach utilizes a discount rate from the capital asset pricing model. If all reportable segments are analyzed, their respective fair values are reconciled back to the Company’s consolidated market capitalization. Finite-Lived Intangible Assets U.S. GAAP requires that intangible assets, other than goodwill and indefinite-lived intangibles, must be amortized over their useful lives. The Company is currently amortizing its acquired intangible assets with finite lives over periods ranging from one to 20 years. Patent rights reflect costs incurred by the Company in applying for and maintaining patents owned by the Company and costs incurred in purchasing patents and related rights from third parties. Licensing rights reflect costs incurred by the Company in acquiring licenses under patents owned by others. The Company amortizes both on a straight-line basis over the expected useful life of the associated patent rights, which is generally the lesser of 20 years from the date of the patent application or the license period. Royalties payable under licenses for patents owned by others are generally expensed as incurred. The Company reviews its capitalized patent portfolio and recognizes impairment charges when circumstances warrant, such as when patents have been abandoned or are no longer being pursued. Long-Lived Assets The Company reviews long-lived assets such as property and equipment for impairment based on changes in circumstances that indicate their carrying amounts may not be recoverable. In making these determinations, the Company uses certain assumptions, including but not limited to: (1) estimations of the fair market value of the assets and (2) estimations of future cash flows expected to be generated by these assets, which are based on additional assumptions such as asset utilization, length of service the asset will be used in the Company’s operations and estimated salvage values. Contingent Liabilities The Company recognizes contingent liabilities when it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Disclosure in the notes to the financial statements is required for loss contingencies that do not meet both these conditions if there is a reasonable possibility that a loss may have been incurred. See Note 16, “Commitments and Contingencies,” for a discussion of loss contingencies in connection with pending and threatened litigation. The Company expenses as incurred the costs of defending legal claims against the Company. Revenue Recognition Revenue is recognized when control of a good or service promised in a contract (i.e., performance obligation) is transferred to a customer. Control is obtained when a customer has the ability to direct the use of and obtain substantially all of the remaining benefits from that good or service. Substantially all of the Company's revenue is derived from product sales. Revenue is recognized at a point in time based on the Company’s evaluation of when the customer obtains control of the products, and all performance obligations under the terms of the contract are satisfied. If customer acceptance clauses are present and it cannot be objectively determined that control has been transferred based on the contract and shipping terms, revenue is only recorded when customer acceptance is received and all performance obligations have been satisfied. Sales of products typically do not include more than one performance obligation. A substantial portion of the Company’s products are sold through distributors. Distributors stock inventory and sell the Company’s products to their own customer base, which may include: value added resellers; manufacturers who incorporate the Company’s products into their own manufactured goods; or ultimate end users of the Company’s products. The Company recognizes revenue upon shipment of its products to its distributors. This arrangement is often referred to as a “sell-in” or “point-of-purchase” model as opposed to a “sell-through” or “point-of-sale” model, where revenue is deferred and not recognized until the distributor sells the product through to their customer. Master supply or distributor agreements are in place with many of the Company's customers and contain terms and conditions including, but not limited to payment, delivery, incentives and warranty. These agreements typically do not require minimum purchase commitments. If a master supply, distributor or other similar agreement is not in place with a customer, the Company considers a purchase order, which is governed by the Company’s standard terms and conditions, to be the contract governing the relationship with that customer. Pricing terms are negotiated independently on a stand-alone basis. Revenue is measured based on the amount of net consideration to which the Company expects to be entitled to receive in exchange for products or services. Variable consideration is recognized as a reduction of net revenue with a corresponding reserve at the time of revenue recognition, and consists primarily of sales incentives or rebates, price concessions and return allowances. Variable consideration is estimated based on contractual terms, historical analysis of customer purchase volumes, or historical analysis using specific data for the type of consideration being assessed. The Company offers product warranties and establishes liabilities for estimated warranty costs based upon historical experience and specific warranty provisions. Warranty liability estimates are included in cost of revenue in the Company’s consolidated statements of operations, and further detail is presented in Note 16, "Commitments and Contingencies." Certain of the Company’s distributors are provided limited rights that allow them to return a portion of inventory (product exchange rights or stock rotation rights) and receive credits for changes in selling prices (price protection rights) or customer pricing arrangements under the Company’s “ship and debit” program or other targeted sales incentives. These estimates are calculated based upon historical experience, product shipment analysis, current economic conditions, on-hand inventory at the distributor, and customer contractual arrangements. The Company believes that it can reasonably and reliably estimate the allowance for distributor credits at the time of sale. Accordingly, estimates for these rights are recognized at the time of sale as a reduction of product revenue and as a contract liability. From time to time, the Company will issue a new price book for its products, and provide a credit to certain distributors for inventory quantities on hand if required by the Company’s agreement with the distributor. This practice is known as price protection. These credits are applied against the reserve that the Company establishes upon initial shipment of product to the distributor. Under the ship and debit program, products are sold to distributors at negotiated prices and the distributors are required to pay for the products purchased within the Company’s standard commercial terms. Subsequent to the initial product purchase, a distributor may request a price allowance for a particular part number(s) for certain target customers, prior to the distributor reselling the particular part to that customer. If the Company approves an allowance and the distributor resells the product to the target customer, the Company credits the distributor according to the allowance the Company approved. These credits are applied against the reserve that the Company establishes upon initial shipment of product to the distributor. In addition, the Company runs sales incentive programs with certain distributors, such as product rebates. The Company recognizes these incentives at the time they are offered to customers and records a credit to their account with an offsetting expense as either a reduction to revenue, increase to cost of revenue, or marketing expense depending on the type of sales incentive. From time to time, the Company may enter into licensing arrangements related to its intellectual property. Revenue from licensing arrangements is recognized when earned and estimable. The timing of revenue recognition is dependent on the terms of each license agreement. Generally, the Company will recognize non-refundable upfront licensing fees related to patent licenses immediately upon receipt of the funds if the Company has no significant future obligations to perform under the arrangement. However, the Company will defer recognition for licensing fees where the Company has significant future performance requirements, the fee is not fixed (such as royalties earned as a percentage of future revenue), or the fees are otherwise contingent. Accounts Receivable For product revenue, the Company typically invoices its customers at the time of shipment for the sales order value of products shipped. Accounts receivable are recognized at the invoiced amount and are not subject to any interest or finance charges. The Company does not have any off-balance sheet credit exposure related to any of its customers. Allowance for Doubtful Accounts The Company evaluates the collectability of accounts receivable based on a combination of factors. In cases where the Company becomes aware of circumstances that may impair a specific customer’s ability to meet its financial obligations subsequent to the original sale, the Company will recognize an allowance against amounts due, and thereby reduce the net recognized receivable to the amount the Company reasonably believes will be collected. For all other customers, the Company recognizes an allowance for doubtful accounts based on the length of time the receivables are past due and consideration of other factors such as industry conditions, the current business environment and the Company’s historical experience. Advertising The Company expenses the costs of producing advertisements at the time production occurs and expenses the cost of communicating the advertising in the period in which the advertising is used. Advertising costs are included in sales, general and administrative expenses in the consolidated statements of operations and amounted to approximately $4.2 million, $3.9 million, and $5.3 million for the years ended June 30, 2019, June 24, 2018 and June 25, 2017, respectively. Research and Development Research and development activities are expensed when incurred. Loss Per Share Basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the applicable period. Diluted loss per share is determined in the same manner as basic loss per share except that the number of shares is increased to assume exercise of potentially dilutive stock options, nonvested restricted stock and contingently issuable shares using the treasury stock method, unless the effect of such increases would be anti-dilutive. Under the treasury stock method, the amount the employee must pay for exercising stock options, the amount of compensation cost for future service that the Company has not yet recognized, and the amount of tax benefits that would be recognized in additional paid-in capital when the award becomes deductible are assumed to be used to repurchase shares. Stock-Based Compensation The Company recognizes compensation expense for all share-based payments granted based on the fair value of the shares on the date of grant. Compensation expense is then recognized over the award’s vesting period. Fair Value of Financial Instruments Cash and cash equivalents, short-term investments, accounts and interest receivable, accounts payable and other liabilities approximate their fair values at June 30, 2019 and June 24, 2018 due to the short-term nature of these instruments. Taxes Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets are recognized for deductible temporary differences, along with net operating loss carryforwards and credit carryforwards, if it is more likely than not that the tax benefits will be realized. To the extent a deferred tax asset cannot be recognized under the preceding criteria, valuation allowances are established. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Taxes payable which are not based on income are accrued ratably over the period to which they apply. For example, payroll taxes are accrued each period end based upon the amount of payroll taxes that are owed as of that date; whereas taxes such as property taxes and franchise taxes are accrued over the fiscal year to which they apply if paid at the end of a period, or they are amortized ratably over the fiscal year if they are paid in advance. Sales Taxes The Company presents sales taxes collected from customers and remitted to governmental authorities on a net basis (i.e. excluded from revenue and expenses). Foreign Currency Translation Foreign currency translation adjustments are recognized in other comprehensive (loss) income in the consolidated statements of comprehensive loss for changes between the foreign subsidiaries’ functional currency and the United States (U.S.) dollar. Foreign currency translation gains and losses are included in the Company’s equity account balance of accumulated other comprehensive income, net of taxes in the consolidated balance sheets until such time that the subsidiaries are either sold or substantially liquidated. Due to the sale of the Lighting Products business unit, $5.2 million of currency translation loss was reclassified out of other comprehensive (loss) income and recognized in the consolidated statements of operations as part of the loss on transaction. The Company and its subsidiaries transact business in currencies other than the U.S. Dollar and as such, the Company will continue to experience varying amounts of foreign currency exchange gains and losses. Recently Adopted Accounting Pronouncements Nonemployee Stock Compensation In June 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-07: Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. The ASU applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor's own operations by issuing share-based payment awards. The Company early adopted this standard in the second quarter of fiscal 2019. There was no material impact upon adoption of this standard. Fair Value Measurement Disclosure In August 2018, the FASB issued ASU 2018-13: Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The ASU modifies the disclosure requirements required for fair value measurements. The Company early adopted this standard in the first quarter of fiscal 2019. Cloud Computing Arrangements In August 2018, the FASB issued ASU 2018-15: Intangibles - Goodwill and Other - Internal-Use Software (Topic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. The ASU allows companies to capitalize implementation costs incurred in a hosting arrangement that is a service contract over the term of the hosting arrangement, including periods covered by renewal options that are reasonably certain to be exercised. The Company early adopted this standard in the first quarter of fiscal 2019. There was no significant impact on the financial statements. Revenue from Contracts with Customers In May 2014, the FASB issued ASU No. 2014-09: Revenue from Contracts with Customers (Topic 606) (ASC 606). The FASB has subsequently issued multiple ASUs that amend and clarify the guidance in ASC 606. The ASU establishes a principles-based approach for accounting for revenue arising from contracts with customers and supersedes existing revenue recognition guidance. The ASU provides that an entity should apply a five-step approach for recognizing revenue, including (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation. Also, the entity must provide various disclosures concerning the nature, amount and timing of revenue and cash flows arising from contracts with customers. The Company adopted this standard on June 25, 2018. The cumulative effect of the adoption recorded to beginning accumulated deficit as of June 25, 2018 was $10.3 million. The Company did not recognize a discrete tax impact related to the opening deferred tax balance as of June 25, 2018 due to a full U.S. valuation allowance. The Company recorded $1.6 million less revenue for the fiscal year ended June 30, 2019 as a result of the adoption and expects the ongoing effect to be immaterial to the consolidated financial statements. See Note 4, "Revenue Recognition," for discussion of the impacted financial statement line items. Recently Issued Accounting Pronouncements Leases In February 2016, the FASB issued ASU No. 2016-02: Leases (Topic 842) (ASC 842), and ASU 2018-10: Codification Improvements to ASC 842, Leases. These ASU’s require that a lessee recognize in its statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term and will require enhanced disclosures about an entity’s leasing arrangements. The Company will adopt this standard on July 1, 2019, under the modified retrospective transition approach with the cumulative effect of application recognized at the effective date, without reclassification of previous financial statements. Upon adoption, the Company plans to elect the transition package of practical expedients that allows it to not reassess (1) whether any expired or existing contracts are leases, or contain leases, (2) the lease classification for any expired or existing leases, and (3) initial direct costs for any existing leases. Further, upon implementation of the new guidance, the Company intends to elect the practical expedient to not separate lease and non-lease components for all leases and account for the combined lease and non-lease components as a single lease component. The Company also plans to make an accounting policy election to exclude leases with an initial term of 12 months or less from the consolidated balance sheets. The Company expects the adoption of this standard will result in the inclusion of a significant component of the Company’s future minimum lease obligations, as disclosed in Note 16, “Commitments and Contingencies” on its consolidated balance sheets, as right-of-use assets and lease liabilities with no material impact to its consolidated statements of operations and consolidated statements of comprehensive loss. Any new lease arrangements or material modifications entered into subsequent to the adoption date will be accounted for in accordance with the new standard. The Company is continuing to assess the potential impacts of the ASC 842. The Company anticipates disclosing additional information, as necessary, to comply with the new leasing standard.
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Discontinued Operations |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations | Discontinued Operations On May 13, 2019, the Company completed the sale of (a) certain manufacturing facilities and equipment, inventory, intellectual property rights, contracts, and real estate of the Company used by the Company's Lighting Products business unit, which includes LED lighting fixtures, lamps and corporate lighting solutions for commercial, industrial and consumer applications, and (b) all of the issued and outstanding equity interests of E-conolight LLC (E-conolight), Cree Canada Corp. and Cree Europe S.r.l., each a wholly owned subsidiary of the Company (collectively, the Lighting Products business unit) to IDEAL, pursuant to the Purchase Agreement, dated March 14, 2019, as amended between Cree and IDEAL (the Purchase Agreement). The Company retained certain liabilities associated with the Lighting Products business unit arising prior to the closing of the sale. The Lighting Products business unit represented the Lighting Products segment disclosed in the Company's historical financial statements. The aggregate net proceeds from the sale of the Lighting Products business unit was $219.0 million in cash, which is subject to certain adjustments. Additionally, the Company is entitled to an earnout payment subject to the future performance of the Lighting Products business unit. In connection with the transaction, the Company and IDEAL entered into certain ancillary and related agreements, including (i) an Intellectual Property Assignment and License Agreement, which assigned to IDEAL certain intellectual property owned by the Company and licensed to IDEAL certain additional intellectual property owned by the Company; (ii) a Transition Services Agreement (the TSA), which is designed to ensure a smooth transition of the Lighting Products business unit to IDEAL; (iii) an LED Supply Agreement (the LED Supply Agreement), pursuant to which the Company will supply IDEAL with certain LED chip and component products for three years; and (iv) a Real Estate License Agreement, which will allow IDEAL to use certain premises owned by the Company to conduct the Lighting Products business unit after closing. The Company recognized a loss on the sale of $66.2 million. The Company has classified the results of the Lighting Products business unit as discontinued operations, the results of which for the fiscal years ended June 30, 2019, June 24, 2018, and June 25, 2017 are as follows:
Assets and liabilities held for sale relating to the sale of the Lighting Products business unit as of June 24, 2018 are as follows:
The cash flow impacts of the Lighting Products business unit are as follows:
The Company recognized $1.6 million in administrative fees in fiscal 2019 relating to the TSA, all of which are accrued in accounts receivable, net in the consolidated balance sheets as of June 30, 2019. These fees were recorded as a reduction of sales, general and administrative expense in the consolidated statements of operations. The Company recognized $2.1 million in revenue in fiscal 2019 related to the LED Supply Agreement. No amounts were accrued in accounts receivable, net in the consolidated balance sheets as of June 30, 2019 relating to the LED Supply Agreement. Additionally, the Company recorded a contract liability of $13.4 million relating to the LED Supply Agreement as of June 30, 2019. The contract liability is recognized in contract liabilities and other long term liabilities on the consolidated balance sheets.
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Revenue Recognition |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition In accordance with ASC 606, the Company follows a five-step approach defined by the new standard for recognizing revenue, consisting of the following: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation. Contract liabilities primarily include various rights of return and customer deposits, as well as deferred revenue, price protection guarantees and the Company's liability under the LED Supply Agreement. Contract liabilities were $80.4 million as of June 30, 2019 and $47.1 million as of June 25, 2018, the date the Company adopted ASC 606. The increase was primarily due to increased customer deposits and the related contract liability from the LED Supply Agreement. Contract liabilities are recorded within accrued contract liabilities and other long-term liabilities on the balance sheet. Before the adoption of ASC 606, liabilities relating to various rights of return were recorded as a deduction to accounts receivable. The adjustments do not impact net cash provided by operating activities; however, they do impact the changes in operating assets and liabilities for the related accounts within the disclosure of operating activities on the statement of cash flows. Practical Expedients and Exemptions The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. Incidental contract costs that are not material in context of the delivery of products are expensed as incurred. Sales commissions are expensed when the amortization period is less than one year. Contract assets, such as costs to obtain or fulfill contracts, are an insignificant component of the Company’s revenue recognition process. The majority of the Company’s fulfillment costs as a manufacturer consist of inventory, fixed assets, and intangible assets, all of which are accounted for under the respective guidance for those asset types. The Company’s accounts receivable balance represents the Company’s unconditional right to receive consideration from its customers with contracts. Payments are typically due within 30 days of the completion of the performance obligation and invoicing, and therefore do not contain significant financing components. Sales tax, value-added tax, and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue, and shipping and handling costs are treated as fulfillment activities and are included in cost of revenue in the Company’s consolidated statements of operations. Disaggregated revenue by geography is presented in Note 17, "Reportable Segments". For the fiscal year ended June 30, 2019, the Company recognized revenue of $5.0 million that was included in contract liabilities as of June 25, 2018. The amount recognized primarily related to deferred revenue and the recognition of contingent liabilities related to the LED Supply Agreement. Revenue recognized related to performance obligations that were satisfied or partially satisfied in previous periods was not material for the fiscal year ended June 30, 2019. Opening Balance Adjustments The impacts of adopting the new revenue standard on the Company's unaudited consolidated balance sheet are as follows:
(1) Adjustments are shown in debit/(credit) format for assets and (debit)/credit format for liabilities and shareholders' equity to match consolidated balance sheet presentation. (2) Adjusted amounts related to current assets were previously adjusted in accounts receivable, net, amounts related to current liabilities were previously adjusted in accrued contract liabilities and short-term deferred revenue, and amounts related to long-term liabilities were previously adjusted in long-term deferred revenue. Amounts have been classified as discontinued operations due to the sale of the Lighting Products business unit subsequent to the adoption of ASC 606. (3) As a result of ASC 606 adoption, deferred revenue was reclassified from other current liabilities to accrued contract liabilities in the consolidated balance sheets.
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Joint Venture |
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Noncontrolling Interest [Abstract] | |
Joint Venture | Joint Venture Effective July 17, 2017, the Company entered into a Shareholders Agreement with San’an Optoelectronics Co., Ltd. (San’an) and Cree Venture LED Company Limited (Cree Venture LED) pursuant to which the Company and San’an funded their contributions to Cree Venture LED and agreed upon the management and operation of Cree Venture LED. The Company contributed $5.1 million of cash for a 51% ownership interest and San’an contributed $4.9 million of cash for a 49% ownership interest. Cree Venture LED has a five-member board of directors, three of which were designated by the Company and two of which were designated by San’an. As a result of the Company's majority voting interest, the Company consolidates the operations of Cree Venture LED and reports its revenue and gross profit within the Company's LED Products segment. The Company classifies the 49% ownership interest held by San'an as noncontrolling interest on the consolidated balance sheet. The noncontrolling interest increased by $0.0 million and $0.1 million for its share of net income from Cree Venture LED, for the fiscal years ending June 30, 2019 and June 24, 2018, respectively. In connection with forming Cree Venture LED and entering into the Shareholders Agreement, Cree Venture LED and San’an also entered into a manufacturing agreement pursuant to which San'an supplies Cree Venture LED with mid-power LED products, and the Company and Cree Venture LED entered into a sales agency agreement pursuant to which the Company is the independent sales representative of Cree Venture LED in the exclusive markets, among certain other ancillary agreements related to the transaction. Cree Venture LED produces and delivers to market high performing, mid-power lighting class LEDs in an exclusive arrangement serving the expanding markets of North and South America, Europe and Japan, and serves China and the rest of the world on a non-exclusive basis. Cree Venture LED recorded its first sales to customers during the first quarter of fiscal 2018.
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Acquisition |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition | Acquisition Infineon Radio Frequency Power Business On March 6, 2018, the Company acquired certain assets of the Infineon Radio Frequency Power Business (RF Power), pursuant to an asset purchase agreement with Infineon in exchange for a base purchase price of $429.2 million, subject to certain adjustments. As part of the agreement, the Company paid $427.0 million of cash on the purchase date and agreed to purchase certain additional non-U.S. property and equipment related to the RF Power business from Infineon for approximately $2.2 million, which was completed during the fourth quarter of fiscal 2018. The acquisition allows the Company to expand its product portfolio into the wireless market. The acquisition of the RF Power business from Infineon was accounted for as a business combination. The assets, liabilities and operating results of the RF Power business have been included in the Company's consolidated financial statements from the date of acquisition. Additionally, the RF Power business's results from operations are reported as part of the Company's Wolfspeed segment. The final purchase price allocation is as follows:
The weighted average life of the acquired intangible assets is approximately 13.8 years. The components of the acquired intangible assets are as follows:
Goodwill acquired largely consists of the manufacturing and other synergies of the combined companies, and the value of the assembled workforce. For tax purposes, in accordance with Section 197 of the Internal Revenue Code of 1986, as amended (the IRC), $245.0 million of the acquired goodwill will be amortized over 15 years. The results of the RF Power business reflected in the Company's consolidated statements of operations for the fiscal year ended June 24, 2018 from the date of acquisition (March 6, 2018) are as follows:
The Company incurred total transaction costs related to the acquisition of approximately $3.8 million. These costs were primarily included in operating expenses in the consolidated statements of operations in fiscal 2018. Supplemental Pro Forma Financial Information The following supplemental pro forma information presents the consolidated financial results as if the RF Power transaction had occurred at the beginning of fiscal 2017:
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Financial Statement Details |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Statement Details | Financial Statement Details Accounts Receivable, net Accounts receivable, net consisted of the following:
Changes in the Company’s allowance for sales returns, discounts and other incentives were as follows:
Changes in the Company’s allowance for bad debts were as follows:
Inventories Inventories consisted of the following:
Property and Equipment, net Property and equipment, net consisted of the following:
Depreciation of property and equipment totaled $97.0 million, $94.8 million and $89.7 million for the years ended June 30, 2019, June 24, 2018 and June 25, 2017, respectively. During the years ended June 30, 2019, June 24, 2018 and June 25, 2017, the Company recognized approximately $1.5 million, $6.3 million and $0.9 million, respectively, as losses on disposals or impairments of property and equipment. These charges are reflected in loss on disposal or impairment of other assets in the consolidated statements of operations. Accrued property and equipment as of June 30, 2019, June 24, 2018 and June 25, 2017 was $21.3 million, $15.0 million and $10.2 million, respectively. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consisted of the following:
Accumulated Other Comprehensive Income, net of taxes Accumulated other comprehensive income, net of taxes consisted of the following:
Other Operating Expense (Income) The following table summarizes the components of other operating expense (income):
In February 2017, the Company announced that an Asset Purchase Agreement (the APA) from July 2016 with Infineon Technologies AG (Infineon), in which Infineon agreed to purchase the assets comprising the Company's power and RF product lines and certain other assets and liabilities, would be terminated due to the inability to address the national safety concerns of, and obtain approval from, the Committee on Foreign Investment in the United States, one of the closing conditions under the APA. The Company received a termination fee of $12.5 million in cash from Infineon in March 2017. The Company recognized $9.7 million of expenses relating to the APA before the termination. See Note 21, "Restructuring" for more details on the Company's restructuring costs. Non-Operating Expense (Income), net The following table summarizes the components of non-operating expense (income), net:
Reclassifications Out of Accumulated Other Comprehensive (Loss) Income The Company reclassified a net loss of $0.1 million and $0.1 million, and a net gain of $0.1 million, on available for sale securities out of accumulated other comprehensive (loss) income for the fiscal years ended June 30, 2019, June 24, 2018, and June 25, 2017, respectively. There was no tax impact for the fiscal years ended June 30, 2019, June 24, 2018, June 25, 2017, respectively, due to a full valuation allowance on U.S. operations. Amounts were reclassified to non-operating expense (income), net on the consolidated statements of operations. Additionally, the Company reclassified $5.2 million of currency translation loss out of accumulated other comprehensive (loss) income for the fiscal year ended June 30, 2019 as a result of the sale of the Lighting Products business unit. Amounts were reclassified to net loss from discontinued operations on the consolidated statement of operations.
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Investments |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Investments Investments consist of municipal bonds, corporate bonds, U.S. agency securities, U.S. treasury securities, commercial paper, certificates of deposit, and variable rate demand notes. All short-term investments are classified as available-for-sale. Other long-term investments consist of the Company's ownership interest in Lextar. Short-term investments as of June 30, 2019 consist of the following:
The following table presents the gross unrealized losses and estimated fair value of the Company’s short-term investments, aggregated by investment type and the length of time that individual securities have been in a continuous unrealized loss position:
Short-term investments as of June 24, 2018 consist of the following:
The following table presents the gross unrealized losses and estimated fair value of the Company’s short-term investments, aggregated by investment type and the length of time that individual securities have been in a continuous unrealized loss position:
The Company utilizes specific identification in computing realized gains and losses on the sale of investments. Realized losses on the sale of investments for the fiscal year ended June 30, 2019 of $0.1 million were included in non-operating expense (income), net in the consolidated statements of operations and unrealized gains and losses are included as a separate component of equity, net of tax, unless the loss is determined to be other-than-temporary. The Company evaluates its investments for possible impairment or a decline in fair value below cost basis that is deemed to be other-than-temporary on a periodic basis. It considers such factors as the length of time and extent to which the fair value has been below the cost basis, the financial condition of the investee, and its ability and intent to hold the investment for a period of time that may be sufficient for an anticipated full recovery in market value. Accordingly, the Company considered declines in its investments to be temporary in nature, and did not consider its investments to be impaired as of June 30, 2019 and June 24, 2018. The contractual maturities of short-term investments at June 30, 2019 were as follows:
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Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments Under U.S. GAAP, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the exit price) in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches, including quoted market prices and discounted cash flows. U.S. GAAP also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are obtained from independent sources and can be validated by a third party, whereas unobservable inputs reflect assumptions regarding what a third party would use in pricing an asset or liability. The fair value hierarchy is categorized into three levels based on the reliability of inputs as follows:
The financial assets for which the Company performs recurring fair value remeasurements are cash equivalents, short-term investments and long-term investments. As of June 30, 2019, financial assets utilizing Level 1 inputs included money market funds, U.S. treasury securities and U.S. agency securities, and financial assets utilizing Level 2 inputs included municipal bonds, corporate bonds, certificates of deposit, commercial paper, variable rate demand notes and common stock of non-U.S. corporations. Level 2 assets are valued based on quoted prices in active markets for instruments that are similar or using a third-party pricing service’s consensus price, which is a weighted average price based on multiple sources. These sources determine prices utilizing market income models which factor in, where applicable, transactions of similar assets in active markets, transactions of identical assets in infrequent markets, interest rates, bond or credit default swap spreads and volatility. The Company did not have any financial assets requiring the use of Level 3 inputs as of June 30, 2019. There were no transfers between Level 1 and Level 2 during the year ended June 30, 2019. Financial instruments carried at fair value were as follows:
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The Company’s reporting units for goodwill impairment testing are:
As of the first day of the fourth quarter of fiscal 2019, the Company performed a qualitative impairment test for the Wolfspeed segment and concluded that it is more likely than not that the fair value of Wolfspeed exceeds its carrying amount and a quantitative impairment test was not required. The Company performed a quantitative impairment test for the LED Products segment and concluded that there was no impairment. The Company derived each reporting unit's fair value through a combination of the market approach (guideline transaction method and guideline public company method) and the income approach (a discounted cash flow analysis). The Company utilized a discount rate from the capital asset pricing model for the discounted cash flow analysis. Once the reporting unit fair values were calculated, the Company reconciled the reporting units' relative fair values to the Company's market capitalization as of the testing date. Goodwill by reporting unit as of June 30, 2019 and June 24, 2018 was as follows:
Intangible Assets Intangible assets, net included the following:
Total amortization of intangible assets was $25.4 million, $16.8 million and $13.6 million for the years ended June 30, 2019, June 24, 2018 and June 25, 2017, respectively. The Company invested $8.0 million, $5.6 million and $7.7 million for the years ended June 30, 2019, June 24, 2018 and June 25, 2017, respectively, for patent and licensing rights. For the fiscal years ended June 30, 2019, June 24, 2018 and June 25, 2017, the Company recognized $1.0 million, $0.6 million and $0.8 million, respectively, in impairment charges related to its patent portfolio. Total future amortization expense of intangible assets is estimated to be as follows:
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Long-term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt | Long-term Debt Revolving Line of Credit As of June 30, 2019, the Company had a $500.0 million secured revolving line of credit under which the Company can borrow, repay and reborrow funds from time to time prior to its scheduled maturity date of January 9, 2022. The Company classifies balances outstanding under its line of credit as long-term debt in the consolidated balance sheets. As of June 30, 2019, the Company had $0.0 million outstanding under the Credit Agreement, $500.0 million in available commitments under the Credit Agreement and $324.2 million available for borrowing. For the year ended June 30, 2019, the average interest rate under the Credit Agreement was 2.26%. The average commitment fee percentage for the Credit Agreement was 0.19% for the year ended June 30, 2019. For the year ended June 24, 2018, the average interest rate under the Credit Agreement was 2.47%. The average commitment fee percentage for the Credit Agreement was 0.11% for the year ended June 24, 2018. The Company was in compliance with all covenants in the Credit Agreement at June 30, 2019. Convertible Notes On August 24, 2018, the Company sold $500.0 million aggregate principal amount of 0.875% convertible senior notes due September 1, 2023 to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, and an additional $75 million aggregate principal amount of such notes pursuant to the exercise in full of the over-allotment options of the underwriters (the Notes). The total net proceeds from the debt offerings was approximately $562.1 million. The conversion rate will initially be 16.6745 shares of common stock per one thousand dollars in principal amount of Notes (equivalent to an initial conversion price of approximately $59.97 per share of common stock). The conversion rate will be subject to adjustment for some events, but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date, or following the Company's issuance of a notice of redemption, the Company will increase the conversion rate for a holder who elects to convert its Notes in connection with such a corporate event, or who elects to convert any Notes called for redemption during the related redemption period in certain circumstances. The Company may not redeem the Notes prior to September 1, 2021. The Company may redeem for cash all or any portion of the Notes, at its option, on a redemption date occurring on or after September 1, 2021 and on or before the 40th scheduled trading day immediately before the maturity date, if the last reported sales price of its common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides a notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption. The redemption price will be 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. If the Company undergoes certain fundamental changes related to the Company's common stock, holders may require the Company to repurchase for cash all or any portions of their Notes at a fundamental repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. Holders may convert their Notes at their option at any time prior to the close of business on the business day immediately preceding March 1, 2023 only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending December 31, 2018 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period in which the trading price per $1.0 thousand principal amount of Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of its common stock and the conversion rate on each such trading day; (3) if the Company calls such Notes for redemption, at any time prior to the close of business on the second business day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On or after March 1, 2023 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their Notes at any time, regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver cash, shares of its common stock, or a combination of cash and shares of its common stock, at the Company's election. In accounting for the issuance of the convertible senior notes, the Company separated the Notes into liability and equity components. The carrying amount of the liability of the equity component representing the conversion option was $110.6 million and was determined by deducting the fair value of the liability component from the par value of the Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. The excess of the principal amount of the liability component over its carrying amount (the debt discount), along with related issuance fees are amortized to interest expense over the term of the Notes at an effective interest rate of 0.49%. The net carrying amount of the liability component of the Notes is as follows:
The net carrying amount of the equity component of the Notes is as follows:
The interest expense recognized related to the Notes is as follows:
There was no liability or equity carrying amounts relating to the Notes as of June 24, 2018 and no interest expense relating to the Notes was recognized for the fiscal years ended June 24, 2018 and June 25, 2017. The estimated fair value of the convertible notes is $664.4 million, as determined by a Level 2 valuation as of June 30, 2019.
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Shareholders' Equity |
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Jun. 30, 2019 | ||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||
Shareholders' Equity | Shareholders’ Equity On June 14, 2017, the Board of Directors approved the Company's fiscal 2018 stock repurchase program, authorizing the Company to repurchase shares of its common stock having an aggregate purchase price not exceeding $200.0 million for all purchases from June 26, 2017 through the expiration of the program on June 24, 2018. There were no shares repurchased under the stock repurchase program in fiscal 2018, and the Board of Directors did not approve a stock repurchase program for fiscal 2019. On August 24, 2016, the Board of Directors approved the Company's fiscal 2017 stock repurchase program, authorizing the Company to repurchase shares of its common stock having an aggregate purchase price not exceeding $300.0 million for all purchases from August 24, 2016 through the expiration of the program on June 25, 2017. The repurchase program could be implemented through open market or privately negotiated transactions at the discretion of the Company’s management. From the inception of the predecessor stock repurchase program in January 2001 through June 30, 2019, the Company has repurchased 38.7 million shares of its common stock at an average price of $28.66 per share with an aggregate value of $1.1 billion. On May 29, 2002, the Board adopted a shareholder rights plan, pursuant to which stock purchase rights were distributed to shareholders at a rate of one right with respect to each share of common stock held of record as of June 10, 2002. Subsequently issued shares of common stock also carried stock purchase rights under the plan. The rights plan was designed to enhance the Board’s ability to prevent an acquirer from depriving shareholders of the long-term value of their investment and to protect shareholders against attempts to acquire the Company by means of unfair or abusive takeover tactics. On January 29, 2013, the shareholder rights plan was amended solely to change the expiration date from September 30, 2018 to April 24, 2017. On April 24, 2017, the shareholder rights plan expired pursuant to its terms and is no longer in effect. At June 30, 2019, the Company had reserved a total of approximately 12.9 million shares of its common stock for future issuance as follows (in thousands):
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Loss Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss Per Share | Loss Per Share The details of the computation of basic and diluted loss per share are as follows:
For the fiscal years ended June 30, 2019, June 24, 2018 and June 25, 2017, 1.4 million, 4.1 million and 11.4 million of dilutive shares were excluded from the calculation of diluted loss per share because their effect would be anti-dilutive.
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Stock-Based Compensation |
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation Overview of Employee Stock-Based Compensation Plans The Company currently has one equity-based compensation plan, the 2013 Long-Term Incentive Compensation Plan (2013 LTIP), from which stock-based compensation awards can be granted to employees and directors. At June 30, 2019, there were 15.8 million shares authorized for issuance under the plan and 6.0 million shares remaining for future grants. The 2013 LTIP provides for awards in the form of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units and other awards. The Company has other equity-based compensation plans that have been terminated so that no future grants can be made under those plans, but under which stock options, restricted stock and restricted stock units are currently outstanding. The Company’s stock-based awards can be either service-based or performance-based. Performance-based conditions are generally tied to future financial and/or operating performance of the Company and/or external based market metrics. The compensation expense with respect to performance-based grants is recognized if the Company believes it is probable that the performance condition will be achieved. The Company reassesses the probability of the achievement of the performance condition at each reporting period, and adjusts the compensation expense for subsequent changes in the estimate or actual outcome. As with non-performance based awards, compensation expense is recognized over the vesting period. The vesting period runs from the date of grant to the expected date that the performance objective is likely to be achieved. For performance awards with market conditions, the Company estimates the grant date fair using the Monte Carlo valuation model and expenses the awards over the vesting period regardless of whether the market condition is ultimately satisfied. The Company also has an Employee Stock Purchase Plan (ESPP) that provides employees with the opportunity to purchase common stock at a discount. At June 30, 2019, there were 7.0 million shares authorized for issuance under the ESPP, as amended, with 1.4 million shares remaining for future issuance. The ESPP limits employee contributions to 15% of each employee’s compensation (as defined in the plan) and allows employees to purchase shares at a 15% discount to the fair market value of common stock on the purchase date two times per year. The ESPP provides for a twelve-month participation period, divided into two equal six-month purchase periods, and also provides for a look-back feature. At the end of each six-month period in April and October, participants purchase the Company’s common stock through the ESPP at a 15% discount to the fair market value of the common stock on the first day of the twelve-month participation period or the purchase date, whichever is lower. The plan also provides for an automatic reset feature to start participants on a new twelve-month participation period if the fair market value of common stock declines during the first six-month purchase period. Stock Option Awards The following table summarizes option activity as of June 30, 2019 and changes during the fiscal year then ended (shares in thousands):
The total intrinsic value in the table above represents the total pretax intrinsic value, which is the total difference between the closing price of the Company’s common stock on June 28, 2019 (the last trading day of fiscal 2019) of $56.18 and the exercise price for in-the-money options that would have been received by the holders if all instruments had been exercised on June 30, 2019. As of June 30, 2019, there was $0.5 million of unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a weighted average period of 0.21 years. The following table summarizes information about stock options outstanding and exercisable at June 30, 2019 (shares in thousands):
Other information pertaining to the Company’s stock option awards is as follows:
Restricted Stock Awards and Units A summary of nonvested restricted stock awards (RSAs) and restricted stock unit awards (RSUs) outstanding as of June 30, 2019 and changes during the year then ended is as follows (shares in thousands):
As of June 30, 2019, there was $66.8 million of unrecognized compensation cost related to nonvested awards, which is expected to be recognized over a weighted average period of 2.14 years. Stock-Based Compensation Valuation and Expense The Company accounts for its employee stock-based compensation plans using the fair value method. The fair value method requires the Company to estimate the grant-date fair value of its stock-based awards and amortize this fair value to compensation expense over the requisite service period or vesting term. The Company uses the Black-Scholes option-pricing model to estimate the fair value of the Company’s stock option and ESPP awards. The determination of the fair value of stock-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables. These variables include the expected stock price volatility over the term of the awards, actual and projected employee stock option exercise behaviors, the risk-free interest rate and expected dividends. Due to the inherent limitations of option-valuation models, future events that are unpredictable and the estimation process utilized in determining the valuation of the stock-based awards, the ultimate value realized by award holders may vary significantly from the amounts expensed in the Company’s financial statements. For RSAs and RSUs, the grant-date fair value is based upon the market price of the Company’s common stock on the date of the grant. This fair value is then amortized to compensation expense over the requisite service period or vesting term. Stock-based compensation expense is recognized net of estimated forfeitures such that expense is recognized only for those stock-based awards that are expected to vest. A forfeiture rate is estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from initial estimates. Total stock-based compensation expense was classified in the consolidated statements of operations as follows:
The Black-Scholes and Monte Carlo option pricing models require the input of highly subjective assumptions. The assumptions listed below represent management's best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if other assumptions had been used, recorded share-based compensation expense could have been materially different from that depicted above. The range of assumptions used to value stock issued under the ESPP were as follows:
The weighted average assumptions used to value stock option grants were as follows:
The range of assumptions used for issued performance units were as follows:
The following describes each of these assumptions and the Company’s methodology for determining each assumption: Risk-Free Interest Rate The Company estimates the risk-free interest rate using the U.S. Treasury bill rate with a remaining term equal to the expected life of the award. Expected Life The expected life represents the period the awards are expected to be outstanding. In determining the appropriate expected life of its stock options, the Company segregates its grantees into categories based upon employee levels that are expected to be indicative of similar option-related behavior. The expected useful lives for each of these categories are then estimated giving consideration to (1) the weighted average vesting periods, (2) the contractual lives of the stock options, (3) the relationship between the exercise price and the fair market value of the Company’s common stock, (4) expected employee turnover, (5) the expected future volatility of the Company’s common stock, and (6) past and expected exercise behavior, among other factors. Expected Volatility The Company estimates expected volatility for the options and ESPP awards giving consideration to the expected life of the respective award, the Company’s current expected growth rate, implied volatility in traded options for its common stock, and the historical volatility of its common stock. For purposes of estimating volatility for use in the Monte Carlo model for the market-based awards, the Company utilizes historical volatilities of Cree and the members of the defined peer group. Expected Dividend Yield The Company estimates the expected dividend yield by giving consideration to its current dividend policies as well as those anticipated in the future considering the Company’s current plans and projections. Correlation Coefficient The correlation coefficients are calculated based upon the price data used to calculate the historical volatilities and are used to model the way in which each entity tends to move in relation to its peers.
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes In December 2017, the Securities and Exchange Commission issued Staff Accounting Bulletin 118 (SAB 118) to provide guidance on accounting for the tax effects of the Tax Cuts and Jobs Act of 2017 (the Tax Legislation) enacted on December 22, 2017. SAB 118 allowed for a measurement period, not to extend beyond one year from the Tax Legislation date of enactment, for companies to complete the accounting under ASC 740 - Income Taxes. The SAB 118 measurement period concluded during the six months ended December 30, 2018, and consistent with the guidance provided in SAB 118, the Company has completed the accounting for the income tax effects of the Tax Legislation. The following were the components of loss before income taxes:
The following were the components of income tax expense (benefit):
Actual income tax expense (benefit) differed from the amount computed by applying each period's U.S. federal statutory tax rate to pre-tax earnings as a result of the following:
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows:
The components giving rise to the net deferred tax assets (liabilities) have been included in the consolidated balance sheets as follows:
The Company assesses all available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets by jurisdiction. The Company has concluded that it is necessary to recognize a full valuation allowance against its U.S. and Luxembourg deferred tax assets as of June 30, 2019. While the Company has concluded that a full U.S. valuation allowance is appropriate as of June 30, 2019, as a result of improving Company performance and future U.S. projected income, it is reasonably possible that the assessment of the realizability of the U.S. deferred tax assets could change within the next twelve months resulting in a full or partial release of the U.S. valuation allowance. As of June 24, 2018, the U.S. valuation allowance was $122.2 million. For the fiscal year ended June 30, 2019, the Company increased the U.S. valuation allowance by $55.4 million due to the deferred tax impact of the sale of the Lighting Products business unit including the sale of Cree Canada Corp. and Cree Europe S.r.l, offset by the deferred tax impact of the Notes issuance and the impact of the IRC Section 965(n) election related to the accounting of the Tax Legislation. As of June 24, 2018, the Luxembourg valuation allowance was $5.2 million. For the fiscal year ended June 30, 2019, the Company increased this valuation allowance by $2.4 million due to year-to-date income in Luxembourg. As of June 30, 2019, the Company had approximately $34.6 million of foreign net operating loss carryovers, of which $30.3 million are offset by a valuation allowance. Of the Company's foreign net operating loss carryovers, $24.0 million have no carry forward limitation and the remaining $10.6 million will begin to expire in fiscal 2035. As of June 30, 2019, the Company had approximately $567.3 million of federal net operating loss carryovers and $216.6 million of state net operating loss carryovers which are fully offset by a valuation allowance. Additionally, the Company had $46.4 million of federal and $3.7 million of state income tax credit carryforwards which are fully offset by a valuation allowance. The state net operating loss carryovers will begin to expire in fiscal 2020. The federal and state income tax credit carryforwards will begin to expire in fiscal 2033 and fiscal 2020, respectively. U.S. GAAP requires a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is cumulatively more than 50% likely to be realized upon ultimate settlement. As of June 24, 2018 the Company’s liability for unrecognized tax benefits was $8.6 million. During the fiscal year ended June 30, 2019, the Company recognized a $0.4 million decrease to the liability for unrecognized tax benefits resulting from a $0.5 million increase related to intercompany transactions recently challenged by the German tax authority, offset by a $0.9 million decrease due to statue expiration. As a result, the total liability for unrecognized tax benefits as of June 30, 2019 was $8.2 million. If any portion of this $8.2 million is recognized, the Company will then include that portion in the computation of its effective tax rate. Although the ultimate timing of the resolution and/or closure of audits is highly uncertain, the Company believes it is reasonably possible that $1.0 million of gross unrecognized tax benefits will change in the next 12 months as a result of statute requirements or settlement with tax authorities. The following is a tabular reconciliation of the Company’s change in uncertain tax positions:
The Company's policy is to include interest and penalties related to unrecognized tax benefits within the income tax expense (benefit) line item in the consolidated statements of operations. Interest and penalties relating to unrecognized tax benefits recognized in the consolidated statements of operations totaled less than $0.1 million for the fiscal years ending June 30, 2019, June 24, 2018, and June 25, 2017. The Company accrued less than $0.1 million for interest and penalties relating to unrecognized tax benefits in the consolidated balance sheets as of June 30, 2019 and June 24, 2018. The Company files U.S. federal, U.S. state and foreign tax returns. For U.S. federal purposes, the Company is generally no longer subject to tax examinations for fiscal years prior to 2016. For U.S. state tax returns, the Company is generally no longer subject to tax examinations for fiscal years prior to 2015. For foreign purposes, the Company is generally no longer subject to examination for tax periods prior to 2009. Certain carryforward tax attributes generated in prior years remain subject to examination, adjustment and recapture. The Company provides for income taxes on the earnings of foreign subsidiaries unless the subsidiaries’ earnings are considered indefinitely reinvested outside the United States. As of June 30, 2019, the Company has approximately $129.9 million of undistributed earnings for certain non-U.S. subsidiaries. The Company has determined that $125.5 million of the $129.9 million of undistributed foreign earnings are expected to be repatriated in the foreseeable future. The Company accrued a deferred tax liability of $2.4 million for foreign income taxes expected to be withheld upon repatriation of the $125.5 million foreign earnings. As of June 30, 2019, the Company has not provided income taxes on the remaining undistributed foreign earnings of $4.4 million as the Company continues to maintain its intention to reinvest these earnings in foreign operations indefinitely. If, at a later date, these earnings were repatriated to the United States, the Company would be required to pay approximately $0.2 million in taxes on these amounts.
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Warranties Changes in the Company’s product warranty liabilities are as follows:
Product warranties are estimated and recognized at the time the Company recognizes revenue. The warranty periods range from 90 days to 5.5 years. The Company accrues warranty liabilities at the time of sale, based on historical and projected incident rates and expected future warranty costs. The Company accrues estimated costs related to product recalls based on a formal campaign soliciting repair or return of that product when they are deemed probable and reasonably estimable. The warranty reserves are evaluated quarterly based on various factors including historical warranty claims, assumptions about the frequency of warranty claims, and assumptions about the frequency of product failures derived from quality testing, field monitoring and the Company’s reliability estimates. As of June 30, 2019, $0.4 million of the Company’s product warranty liabilities were classified as long-term. Lease Commitments The Company primarily leases manufacturing, office, housing and warehousing space under the terms of non-cancelable operating leases. These leases expire at various times through May 2024. The Company recognizes net rent expense on a straight-line basis over the life of the lease. Rent expense associated with these operating leases totaled approximately $4.6 million, $3.9 million and $2.9 million for each of the fiscal years ended June 30, 2019, June 24, 2018 and June 25, 2017, respectively. Certain agreements require that the Company pay property taxes and general property maintenance in addition to the minimum rental payments. Future minimum rental payments for leases as of June 30, 2019 are estimated as follows (in millions of U.S. Dollars):
Litigation The Company is currently a party to various legal proceedings. While management presently believes that the ultimate outcome of such proceedings, individually and in the aggregate, will not materially harm the Company’s financial position, cash flows, or overall trends in results of operations, legal proceedings are subject to inherent uncertainties, and unfavorable rulings could occur. An unfavorable ruling could include money damages or, in matters for which injunctive relief or other conduct remedies may be sought, an injunction prohibiting the Company from selling one or more products at all or in particular ways. Were unfavorable final outcomes to occur, there exists the possibility of a material adverse impact on the Company’s business, results of operation, financial position and overall trends. The outcomes in these matters are not reasonably estimable.
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Reportable Segments |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reportable Segments | Reportable Segments Reportable segments are components of the Company that the Chief Operating Decision Maker (CODM) regularly reviews when allocating resources and assessing performance. The Company’s CODM reviews segment performance and allocates resources based upon segment revenue and segment gross profit. The Company's identified CODM is the Chief Executive Officer. The Company’s operating and reportable segments are:
The Wolfspeed segment includes SiC materials, power devices and RF devices and the LED Products segment includes LED chips and LED components. Financial Results by Reportable Segment The table below reflects the results of the Company’s reportable segments as reviewed by the CODM for fiscal 2019, 2018 and 2017. The Company used the same accounting policies to derive the segment results reported below as those used in the Company’s consolidated financial statements. The Company’s CODM does not review inter-segment transactions when evaluating segment performance and allocating resources to each segment, and inter-segment transactions are not included in the segment revenue presented in the table below. As such, total segment revenue in the table below is equal to the Company’s consolidated revenue. The Company’s CODM reviews gross profit as the lowest and only level of segment profit. As such, all items below gross profit in the consolidated statements of operations must be included to reconcile the consolidated gross profit presented in the table below to the Company’s consolidated loss before income taxes. In order to determine gross profit for each reportable segment, the Company allocates direct costs and indirect costs to each segment’s cost of revenue. The Company allocates indirect costs, such as employee benefits for manufacturing employees, shared facilities services, information technology, purchasing, and customer service, when the costs are identifiable and beneficial to the reportable segment. The Company allocates these indirect costs based on a reasonable measure of utilization that considers the specific facts and circumstances of the costs being allocated. Unallocated costs in the table below consisted primarily of manufacturing employees’ stock-based compensation, expenses for profit sharing and quarterly or annual incentive plans, and matching contributions under the Company’s 401(k) plan. These costs were not allocated to the reportable segments' gross profit because the Company’s CODM does not review them regularly when evaluating segment performance and allocating resources. The cost of goods sold (COGS) acquisition related costs adjustment includes inventory fair value amortization of the fair value increase to inventory recognized at the date of acquisition, and other RF Power acquisition costs, impacting cost of revenue for fiscal 2018. These costs were not allocated to the reportable segments’ gross profit for fiscal 2018 because they represent an adjustment which does not provide comparability to the corresponding prior period and therefore were not reviewed by the Company's CODM when evaluating segment performance and allocating resources. Revenue, gross profit and gross margin for each of the Company's segments were as follows:
Assets by Reportable Segment Inventories are the only assets reviewed by the Company’s CODM when evaluating segment performance and allocating resources to the segments. The CODM reviews all of the Company's assets other than inventories on a consolidated basis. The following table sets forth the Company’s inventories by reportable segment for the fiscal years ended June 30, 2019 and June 24, 2018. Unallocated inventories in the table below were not allocated to the reportable segments because the Company’s CODM does not review them when evaluating performance and allocating resources to each segment. Unallocated inventories consisted primarily of manufacturing employees’ stock-based compensation, profit sharing and quarterly or annual incentive compensation, matching contributions under the Company’s 401(k) plan, and acquisition related costs. Inventories for each of the Company's segments were as follows:
Geographic Information The Company conducts business in several geographic areas. Revenue is attributed to a particular geographic region based on the shipping address for the products. Disaggregated revenue from external customers by geographic area is as follows:
The Company’s tangible long-lived assets by country is as follows:
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Concentrations of Risk |
12 Months Ended |
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Jun. 30, 2019 | |
Risks and Uncertainties [Abstract] | |
Concentrations of Risk | Concentrations of Risk Financial instruments, which may subject the Company to a concentration of risk, consist principally of short-term investments, cash equivalents, and accounts receivable. Short-term investments consist primarily of municipal bonds, corporate bonds, U.S. agency securities, U.S. treasury securities, commercial paper, certificates of deposit, and variable rate demand notes at interest rates that vary by security. The Company’s cash equivalents consist primarily of money market funds. Certain bank deposits may at times be in excess of the FDIC insurance limits. The Company sells its products on account to manufacturers, distributors and others worldwide and generally requires no collateral. Revenue from Arrow Electronics, Inc. represented 19%, 21% and 24% of revenue for the fiscal years ended June 30, 2019, June 24, 2018 and June 25, 2017, respectively. Arrow Electronics, Inc. is a customer of the LED Products and Wolfspeed segments. No customers individually accounted for more than 10% of the consolidated accounts receivable balance as of June 30, 2019. As of June 24, 2018, Arrow Electronics, Inc. and Allied Group Limited accounted for 14% and 14% of the accounts receivable balance, respectively. No other customers individually accounted for more than 10% of the consolidated accounts receivable balance as of June 24, 2018.
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Retirement Savings Plan |
12 Months Ended |
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Jun. 30, 2019 | |
Retirement Benefits [Abstract] | |
Retirement Savings Plan | Retirement Savings Plan The Company sponsors one employee benefit plan (the 401(k) Plan) pursuant to Section 401(k) of the IRC. All U.S. employees are eligible to participate under the 401(k) Plan on the first day of a new fiscal month after the date of hire. Under the 401(k) Plan, there is no fixed dollar amount of retirement benefits; rather, the Company matches a defined percentage of employee deferrals, and employees vest in these matching funds over time. Employees choose their investment elections from a list of available investment options. During the fiscal years ended June 30, 2019, June 24, 2018 and June 25, 2017, the Company contributed approximately $7.9 million, $5.8 million and $4.9 million to the 401(k) Plan, respectively. The Pension Benefit Guaranty Corporation does not insure the 401(k) Plan.
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Related Party Transactions |
12 Months Ended |
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Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions In July 2010, Mark Swoboda was appointed Chief Executive Officer of Intematix Corporation (Intematix) and subsequently resigned as Chief Executive Officer in 2017 when the company was sold. Mark Swoboda is the brother of the Company’s former Chairman, Chief Executive Officer and President, Charles M. Swoboda. For a number of years, the Company has purchased raw materials from Intematix pursuant to standard purchase orders in the ordinary course of business. During fiscal 2018 and 2017, the Company purchased $3.3 million and $2.3 million of raw materials from Intematix, respectively. Due to the resignation of Mark Swoboda during fiscal 2018, Intematrix is no longer considered a related party as of June 24, 2018 and as such, the Company does not have any liabilities associated with a related party on its consolidated balance sheets.
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Restructuring Restructuring |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring | Restructuring The Company has approved various operational plans that include restructuring costs. All restructuring costs are recorded in other operating expense on the consolidated statement of operations. Corporate Restructuring In April 2018, the Company approved a corporate restructuring plan. The purpose is to restructure and realign the Company's cost base with the long-range business strategy that was announced in February 2018. The restructuring activity was completed in the second quarter of fiscal 2019. The following table summarizes the charges incurred (in millions of U.S. Dollars):
An additional $3.6 million in previously reported estimated and incurred restructuring charges related to this plan were classified as discontinued operations due to the sale of the Lighting Products business unit. Factory Optimization Restructuring In May 2019, the Company started a significant, multi-year factory optimization plan anchored by a state-of-the-art, automated 200mm capable SiC and GaN fabrication facility and a large materials factory at its U.S. campus headquarters in Durham, North Carolina. As part of the plan, the Company will incur restructuring charges associated with the movement of equipment as well as disposals and impairments on certain long-lived assets. The following table summarizes the charges incurred (in millions of U.S Dollars):
The Company expects $70.0 million in restructuring charges related to the factory optimization plan to be incurred through 2024. Sales Restructuring In June 2019, the Company approved and implemented a sales restructuring plan to restructure and realign the Company's geographical sales team with the skills and experience needed to execute on the Company's business objectives. The Company recorded $1.6 million in restructuring expense relating to this plan in the fourth quarter of fiscal 2019. No additional restructuring expense relating to this plan is expected.
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Quarterly Results of Operations - Unaudited |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Results of Operations - Unaudited | Quarterly Results of Operations - Unaudited The following is a summary of the Company’s consolidated quarterly results of operations for each of the fiscal years ended June 30, 2019 and June 24, 2018:
The Company will revise the Unaudited Consolidated Statements of Cash Flows for the year to date periods ended September 23, 2018, December 30, 2018 and March 31, 2019 to correct the presentation of tax withholding for stock option exercises within the Company's future fiscal 2020 unaudited interim consolidated financial statements on Form 10-Q. The revisions will result in an increase to net cash provided by operating activities of $10.8 million, $11.9 million, and $12.4 million, and a decrease to net cash provided by (used in) financing activities by the same amounts for the year to date periods ended September 23, 2018, December 30, 2018 and March 31, 2019, respectively. The Company concluded these errors were not material individually or in the aggregate to any of the periods impacted.
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Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | ||||||||||||||||||||||
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and the joint venture. All material intercompany accounts and transactions have been eliminated.
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Fiscal Year | Fiscal Year The Company’s fiscal year is a 52 or 53-week period ending on the last Sunday in the month of June. The Company’s 2019 fiscal year was a 53-week fiscal year. The Company's 2018 and 2017 fiscal years were 52-week fiscal years. The Company’s 2020 fiscal year will be a 52-week fiscal year.
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Reclassifications | Reclassifications Certain prior period amounts in the accompanying consolidated financial statements have been reclassified to conform to the current year presentation. These reclassifications had no effect on previously reported net loss or shareholders’ equity.
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Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and the disclosure of contingent assets and liabilities. The Company evaluates its estimates on an ongoing basis, including those related to revenue recognition, product warranty obligations, valuation of inventories, tax related contingencies, valuation of stock-based compensation, valuation of long-lived and intangible assets, other contingencies and litigation, among others. The Company generally bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from those estimates.
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Segment Information | Segment Information U.S. GAAP requires segmentation based on an entity’s internal organization and reporting of revenue and operating income based upon internal accounting methods commonly referred to as the “management approach.” Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (CODM), or decision making group, in deciding how to allocate resources and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has determined that it currently has two operating and reportable segments.
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Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of unrestricted cash accounts and highly liquid investments with an original maturity of three months or less when purchased. Cash and cash equivalents are stated at cost, which approximates fair value. The Company holds cash and cash equivalents at several major financial institutions, which often exceed insurance limits set by the Federal Deposit Insurance Corporation (FDIC). The Company has not historically experienced any losses due to such concentration of credit risk.
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Investments | Investments Investments in certain securities may be classified into three categories:
The Company reassesses the appropriateness of the classification (i.e. held-to-maturity, trading or available-for-sale) of its investments at the end of each reporting period. When the fair value of an investment declines below its original cost, the Company considers all available evidence to evaluate whether the decline is other-than-temporary. Among other things, the Company considers the duration and extent of the decline and economic factors influencing the capital markets. For the fiscal years ended June 30, 2019, June 24, 2018, and June 25, 2017, the Company had no other-than-temporary declines below the cost basis of its investments. The Company utilizes specific identification in computing realized gains and losses on the sale of investments. Realized gains and losses on the sale of investments are reported in non-operating expense (income). Investments in marketable securities with maturities beyond one year may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations.
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Inventories | Inventories Inventories are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out (FIFO) method or an average cost method. The Company writes down its inventory balances for estimates of excess and obsolete amounts. These write-downs are recognized as a component of cost of revenue. At the point of the write-down, a new lower cost basis for that inventory is established, and any subsequent improvements in facts and circumstances do not result in the restoration or increase in that newly established lower cost basis. If that inventory is subsequently sold, the sale is recorded at the actual selling price and the related cost of revenue is recorded at the new lower cost basis.
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Property and Equipment | Property and Equipment Property and equipment are stated at cost and depreciated on a straight-line basis over the assets’ estimated useful lives. Leasehold improvements are amortized over the lesser of the asset life or the term of the related lease. In general, the Company’s policy for useful lives is as follows:
Expenditures for repairs and maintenance are charged to expense as incurred. The costs for major renewals and improvements are capitalized and depreciated over their estimated useful lives. The cost and related accumulated depreciation of the assets are removed from the accounts upon disposition and any resulting gain or loss is reflected in operating income.
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Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs are included in cost of revenue, net in the consolidated statements of operations and are recognized as a period expense during the period in which they are incurred.
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Goodwill and Intangible Assets | Goodwill and Intangible Assets The Company recognizes the assets acquired and liabilities assumed in business combinations at their respective fair values at the date of acquisition, with any excess purchase price recognized as goodwill. Valuation of intangible assets entails significant estimates and assumptions including, but not limited to, estimating future cash flows from product revenue, developing appropriate discount rates, continuation of customer relationships and renewal of customer contracts, and approximating the useful lives of the intangible assets acquired. Goodwill The Company recognizes goodwill as an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. The Company tests goodwill for impairment at least annually as of the first day of the fiscal fourth quarter, or when indications of potential impairment exist. The Company monitors for the existence of potential impairment indicators throughout the fiscal year. The Company conducts impairment testing for goodwill at the reporting unit level. Reporting units may be operating segments as a whole, or an operation one level below an operating segment, referred to as a component. The Company has determined that its reporting units are its two operating and reportable segments. The Company may initiate goodwill impairment testing by considering qualitative factors to determine whether it is more likely than not that a reportable segment’s carrying value is greater than its fair value. Such factors may include the following, among others: a significant decline in the reporting unit’s expected future cash flows; a sustained, significant decline in the Company’s stock price and market capitalization; a significant adverse change in legal factors or in the business climate; unanticipated competition; and slower growth rates; as well as changes in management, key personnel, strategy and customers. If the Company's qualitative assessment indicates it is more likely than not that the estimated fair value of a reporting unit exceeds its carrying value, no further analysis is required and goodwill is not impaired. Otherwise, the Company performs a quantitative goodwill impairment test to determine if goodwill is impaired. The quantitative test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of the reportable segment exceeds the carrying value of the net assets associated with the segment, goodwill is not considered impaired. If the carrying value of the net assets associated with the reportable segment exceeds the fair value of the segment, the Company recognizes an impairment loss in an amount equal to the excess, not to exceed the carrying value of the reportable segment's goodwill. Once an impairment loss is recognized, the adjusted carrying value of the goodwill becomes the new accounting basis of the goodwill for the reporting unit. The Company derives a reportable segment’s fair value through a combination of the market approach (guideline transaction method and guideline public company method) and the income approach (a discounted cash flow analysis). The income approach utilizes a discount rate from the capital asset pricing model. If all reportable segments are analyzed, their respective fair values are reconciled back to the Company’s consolidated market capitalization. Finite-Lived Intangible Assets U.S. GAAP requires that intangible assets, other than goodwill and indefinite-lived intangibles, must be amortized over their useful lives. The Company is currently amortizing its acquired intangible assets with finite lives over periods ranging from one to 20 years. Patent rights reflect costs incurred by the Company in applying for and maintaining patents owned by the Company and costs incurred in purchasing patents and related rights from third parties. Licensing rights reflect costs incurred by the Company in acquiring licenses under patents owned by others. The Company amortizes both on a straight-line basis over the expected useful life of the associated patent rights, which is generally the lesser of 20 years from the date of the patent application or the license period. Royalties payable under licenses for patents owned by others are generally expensed as incurred. The Company reviews its capitalized patent portfolio and recognizes impairment charges when circumstances warrant, such as when patents have been abandoned or are no longer being pursued.
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Long-Lived Assets | Long-Lived Assets The Company reviews long-lived assets such as property and equipment for impairment based on changes in circumstances that indicate their carrying amounts may not be recoverable. In making these determinations, the Company uses certain assumptions, including but not limited to: (1) estimations of the fair market value of the assets and (2) estimations of future cash flows expected to be generated by these assets, which are based on additional assumptions such as asset utilization, length of service the asset will be used in the Company’s operations and estimated salvage values.
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Contingent Liabilities | Contingent Liabilities The Company recognizes contingent liabilities when it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Disclosure in the notes to the financial statements is required for loss contingencies that do not meet both these conditions if there is a reasonable possibility that a loss may have been incurred. See Note 16, “Commitments and Contingencies,” for a discussion of loss contingencies in connection with pending and threatened litigation. The Company expenses as incurred the costs of defending legal claims against the Company.
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Revenue Recognition | Revenue Recognition Revenue is recognized when control of a good or service promised in a contract (i.e., performance obligation) is transferred to a customer. Control is obtained when a customer has the ability to direct the use of and obtain substantially all of the remaining benefits from that good or service. Substantially all of the Company's revenue is derived from product sales. Revenue is recognized at a point in time based on the Company’s evaluation of when the customer obtains control of the products, and all performance obligations under the terms of the contract are satisfied. If customer acceptance clauses are present and it cannot be objectively determined that control has been transferred based on the contract and shipping terms, revenue is only recorded when customer acceptance is received and all performance obligations have been satisfied. Sales of products typically do not include more than one performance obligation. A substantial portion of the Company’s products are sold through distributors. Distributors stock inventory and sell the Company’s products to their own customer base, which may include: value added resellers; manufacturers who incorporate the Company’s products into their own manufactured goods; or ultimate end users of the Company’s products. The Company recognizes revenue upon shipment of its products to its distributors. This arrangement is often referred to as a “sell-in” or “point-of-purchase” model as opposed to a “sell-through” or “point-of-sale” model, where revenue is deferred and not recognized until the distributor sells the product through to their customer. Master supply or distributor agreements are in place with many of the Company's customers and contain terms and conditions including, but not limited to payment, delivery, incentives and warranty. These agreements typically do not require minimum purchase commitments. If a master supply, distributor or other similar agreement is not in place with a customer, the Company considers a purchase order, which is governed by the Company’s standard terms and conditions, to be the contract governing the relationship with that customer. Pricing terms are negotiated independently on a stand-alone basis. Revenue is measured based on the amount of net consideration to which the Company expects to be entitled to receive in exchange for products or services. Variable consideration is recognized as a reduction of net revenue with a corresponding reserve at the time of revenue recognition, and consists primarily of sales incentives or rebates, price concessions and return allowances. Variable consideration is estimated based on contractual terms, historical analysis of customer purchase volumes, or historical analysis using specific data for the type of consideration being assessed. The Company offers product warranties and establishes liabilities for estimated warranty costs based upon historical experience and specific warranty provisions. Warranty liability estimates are included in cost of revenue in the Company’s consolidated statements of operations, and further detail is presented in Note 16, "Commitments and Contingencies." Certain of the Company’s distributors are provided limited rights that allow them to return a portion of inventory (product exchange rights or stock rotation rights) and receive credits for changes in selling prices (price protection rights) or customer pricing arrangements under the Company’s “ship and debit” program or other targeted sales incentives. These estimates are calculated based upon historical experience, product shipment analysis, current economic conditions, on-hand inventory at the distributor, and customer contractual arrangements. The Company believes that it can reasonably and reliably estimate the allowance for distributor credits at the time of sale. Accordingly, estimates for these rights are recognized at the time of sale as a reduction of product revenue and as a contract liability. From time to time, the Company will issue a new price book for its products, and provide a credit to certain distributors for inventory quantities on hand if required by the Company’s agreement with the distributor. This practice is known as price protection. These credits are applied against the reserve that the Company establishes upon initial shipment of product to the distributor. Under the ship and debit program, products are sold to distributors at negotiated prices and the distributors are required to pay for the products purchased within the Company’s standard commercial terms. Subsequent to the initial product purchase, a distributor may request a price allowance for a particular part number(s) for certain target customers, prior to the distributor reselling the particular part to that customer. If the Company approves an allowance and the distributor resells the product to the target customer, the Company credits the distributor according to the allowance the Company approved. These credits are applied against the reserve that the Company establishes upon initial shipment of product to the distributor. In addition, the Company runs sales incentive programs with certain distributors, such as product rebates. The Company recognizes these incentives at the time they are offered to customers and records a credit to their account with an offsetting expense as either a reduction to revenue, increase to cost of revenue, or marketing expense depending on the type of sales incentive. From time to time, the Company may enter into licensing arrangements related to its intellectual property. Revenue from licensing arrangements is recognized when earned and estimable. The timing of revenue recognition is dependent on the terms of each license agreement. Generally, the Company will recognize non-refundable upfront licensing fees related to patent licenses immediately upon receipt of the funds if the Company has no significant future obligations to perform under the arrangement. However, the Company will defer recognition for licensing fees where the Company has significant future performance requirements, the fee is not fixed (such as royalties earned as a percentage of future revenue), or the fees are otherwise contingent.
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Accounts Receivable | Accounts Receivable For product revenue, the Company typically invoices its customers at the time of shipment for the sales order value of products shipped. Accounts receivable are recognized at the invoiced amount and are not subject to any interest or finance charges. The Company does not have any off-balance sheet credit exposure related to any of its customers.
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Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company evaluates the collectability of accounts receivable based on a combination of factors. In cases where the Company becomes aware of circumstances that may impair a specific customer’s ability to meet its financial obligations subsequent to the original sale, the Company will recognize an allowance against amounts due, and thereby reduce the net recognized receivable to the amount the Company reasonably believes will be collected. For all other customers, the Company recognizes an allowance for doubtful accounts based on the length of time the receivables are past due and consideration of other factors such as industry conditions, the current business environment and the Company’s historical experience.
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Advertising | Advertising The Company expenses the costs of producing advertisements at the time production occurs and expenses the cost of communicating the advertising in the period in which the advertising is used.
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Research and Development | Research and Development Research and development activities are expensed when incurred.
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Loss Per Share | Loss Per Share Basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the applicable period. Diluted loss per share is determined in the same manner as basic loss per share except that the number of shares is increased to assume exercise of potentially dilutive stock options, nonvested restricted stock and contingently issuable shares using the treasury stock method, unless the effect of such increases would be anti-dilutive. Under the treasury stock method, the amount the employee must pay for exercising stock options, the amount of compensation cost for future service that the Company has not yet recognized, and the amount of tax benefits that would be recognized in additional paid-in capital when the award becomes deductible are assumed to be used to repurchase shares.
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Stock-Based Compensation | Stock-Based Compensation The Company recognizes compensation expense for all share-based payments granted based on the fair value of the shares on the date of grant. Compensation expense is then recognized over the award’s vesting period.
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Fair Value of Financial Instruments | Fair Value of Financial Instruments Cash and cash equivalents, short-term investments, accounts and interest receivable, accounts payable and other liabilities approximate their fair values at June 30, 2019 and June 24, 2018 due to the short-term nature of these instruments.
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Taxes | Taxes Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets are recognized for deductible temporary differences, along with net operating loss carryforwards and credit carryforwards, if it is more likely than not that the tax benefits will be realized. To the extent a deferred tax asset cannot be recognized under the preceding criteria, valuation allowances are established. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Taxes payable which are not based on income are accrued ratably over the period to which they apply. For example, payroll taxes are accrued each period end based upon the amount of payroll taxes that are owed as of that date; whereas taxes such as property taxes and franchise taxes are accrued over the fiscal year to which they apply if paid at the end of a period, or they are amortized ratably over the fiscal year if they are paid in advance.
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Sales Taxes | Sales Taxes The Company presents sales taxes collected from customers and remitted to governmental authorities on a net basis (i.e. excluded from revenue and expenses).
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Foreign Currency Translation | Foreign Currency Translation Foreign currency translation adjustments are recognized in other comprehensive (loss) income in the consolidated statements of comprehensive loss for changes between the foreign subsidiaries’ functional currency and the United States (U.S.) dollar. Foreign currency translation gains and losses are included in the Company’s equity account balance of accumulated other comprehensive income, net of taxes in the consolidated balance sheets until such time that the subsidiaries are either sold or substantially liquidated. Due to the sale of the Lighting Products business unit, $5.2 million of currency translation loss was reclassified out of other comprehensive (loss) income and recognized in the consolidated statements of operations as part of the loss on transaction. The Company and its subsidiaries transact business in currencies other than the U.S. Dollar and as such, the Company will continue to experience varying amounts of foreign currency exchange gains and losse
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Recently Adopted and Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements Nonemployee Stock Compensation In June 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-07: Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. The ASU applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor's own operations by issuing share-based payment awards. The Company early adopted this standard in the second quarter of fiscal 2019. There was no material impact upon adoption of this standard. Fair Value Measurement Disclosure In August 2018, the FASB issued ASU 2018-13: Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The ASU modifies the disclosure requirements required for fair value measurements. The Company early adopted this standard in the first quarter of fiscal 2019. Cloud Computing Arrangements In August 2018, the FASB issued ASU 2018-15: Intangibles - Goodwill and Other - Internal-Use Software (Topic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. The ASU allows companies to capitalize implementation costs incurred in a hosting arrangement that is a service contract over the term of the hosting arrangement, including periods covered by renewal options that are reasonably certain to be exercised. The Company early adopted this standard in the first quarter of fiscal 2019. There was no significant impact on the financial statements. Revenue from Contracts with Customers In May 2014, the FASB issued ASU No. 2014-09: Revenue from Contracts with Customers (Topic 606) (ASC 606). The FASB has subsequently issued multiple ASUs that amend and clarify the guidance in ASC 606. The ASU establishes a principles-based approach for accounting for revenue arising from contracts with customers and supersedes existing revenue recognition guidance. The ASU provides that an entity should apply a five-step approach for recognizing revenue, including (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation. Also, the entity must provide various disclosures concerning the nature, amount and timing of revenue and cash flows arising from contracts with customers. The Company adopted this standard on June 25, 2018. The cumulative effect of the adoption recorded to beginning accumulated deficit as of June 25, 2018 was $10.3 million. The Company did not recognize a discrete tax impact related to the opening deferred tax balance as of June 25, 2018 due to a full U.S. valuation allowance. The Company recorded $1.6 million less revenue for the fiscal year ended June 30, 2019 as a result of the adoption and expects the ongoing effect to be immaterial to the consolidated financial statements. See Note 4, "Revenue Recognition," for discussion of the impacted financial statement line items. Recently Issued Accounting Pronouncements Leases In February 2016, the FASB issued ASU No. 2016-02: Leases (Topic 842) (ASC 842), and ASU 2018-10: Codification Improvements to ASC 842, Leases. These ASU’s require that a lessee recognize in its statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term and will require enhanced disclosures about an entity’s leasing arrangements. The Company will adopt this standard on July 1, 2019, under the modified retrospective transition approach with the cumulative effect of application recognized at the effective date, without reclassification of previous financial statements. Upon adoption, the Company plans to elect the transition package of practical expedients that allows it to not reassess (1) whether any expired or existing contracts are leases, or contain leases, (2) the lease classification for any expired or existing leases, and (3) initial direct costs for any existing leases. Further, upon implementation of the new guidance, the Company intends to elect the practical expedient to not separate lease and non-lease components for all leases and account for the combined lease and non-lease components as a single lease component. The Company also plans to make an accounting policy election to exclude leases with an initial term of 12 months or less from the consolidated balance sheets. The Company expects the adoption of this standard will result in the inclusion of a significant component of the Company’s future minimum lease obligations, as disclosed in Note 16, “Commitments and Contingencies” on its consolidated balance sheets, as right-of-use assets and lease liabilities with no material impact to its consolidated statements of operations and consolidated statements of comprehensive loss. Any new lease arrangements or material modifications entered into subsequent to the adoption date will be accounted for in accordance with the new standard. The Company is continuing to assess the potential impacts of the ASC 842. The Company anticipates disclosing additional information, as necessary, to comply with the new leasing standard.
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Discontinued Operations (Tables) |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Discontinued Operations | The Company has classified the results of the Lighting Products business unit as discontinued operations, the results of which for the fiscal years ended June 30, 2019, June 24, 2018, and June 25, 2017 are as follows:
Assets and liabilities held for sale relating to the sale of the Lighting Products business unit as of June 24, 2018 are as follows:
The cash flow impacts of the Lighting Products business unit are as follows:
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Revenue Recognition (Tables) |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Impact of Adopting the New Revenue Standard | The impacts of adopting the new revenue standard on the Company's unaudited consolidated balance sheet are as follows:
(1) Adjustments are shown in debit/(credit) format for assets and (debit)/credit format for liabilities and shareholders' equity to match consolidated balance sheet presentation. (2) Adjusted amounts related to current assets were previously adjusted in accounts receivable, net, amounts related to current liabilities were previously adjusted in accrued contract liabilities and short-term deferred revenue, and amounts related to long-term liabilities were previously adjusted in long-term deferred revenue. Amounts have been classified as discontinued operations due to the sale of the Lighting Products business unit subsequent to the adoption of ASC 606. (3) As a result of ASC 606 adoption, deferred revenue was reclassified from other current liabilities to accrued contract liabilities in the consolidated balance sheets.
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Acquisition (Tables) |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Purchase Price Allocation | The final purchase price allocation is as follows:
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Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The weighted average life of the acquired intangible assets is approximately 13.8 years. The components of the acquired intangible assets are as follows:
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Schedule of Revenue of Acquiree since Acquisition Date | The results of the RF Power business reflected in the Company's consolidated statements of operations for the fiscal year ended June 24, 2018 from the date of acquisition (March 6, 2018) are as follows:
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Schedule of Pro Forma Information of Acquiree | The following supplemental pro forma information presents the consolidated financial results as if the RF Power transaction had occurred at the beginning of fiscal 2017:
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Financial Statement Details (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Receivable, Net | Accounts receivable, net consisted of the following:
Changes in the Company’s allowance for sales returns, discounts and other incentives were as follows:
Changes in the Company’s allowance for bad debts were as follows:
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Schedule of Inventories | Inventories consisted of the following:
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Schedule of Property and Equipment, Net | Property and equipment, net consisted of the following:
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Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consisted of the following:
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Schedule of Accumulated Other Comprehensive Income, Net of Taxes | Accumulated other comprehensive income, net of taxes consisted of the following:
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Schedule of Other Operating Expense (Income) | The following table summarizes the components of other operating expense (income):
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Schedule of Non-Operating Expense (Income), Net | The following table summarizes the components of non-operating expense (income), net:
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Investments (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Short-term Investments by Type | Short-term investments as of June 24, 2018 consist of the following:
Short-term investments as of June 30, 2019 consist of the following:
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Schedule of Gross Unrealized Losses and Fair Value of Short-term Investments by Type and Length of Time | The following table presents the gross unrealized losses and estimated fair value of the Company’s short-term investments, aggregated by investment type and the length of time that individual securities have been in a continuous unrealized loss position:
The following table presents the gross unrealized losses and estimated fair value of the Company’s short-term investments, aggregated by investment type and the length of time that individual securities have been in a continuous unrealized loss position:
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Schedule of Contractual Maturities of Short-term Investments by Type | The contractual maturities of short-term investments at June 30, 2019 were as follows:
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Fair Value of Financial Instruments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Instruments Carried at Fair Value | Financial instruments carried at fair value were as follows:
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Goodwill and Intangible Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill by Reporting Unit | Goodwill by reporting unit as of June 30, 2019 and June 24, 2018 was as follows:
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Schedule of Components of Intangible Assets | Intangible assets, net included the following:
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Schedule of Future Amortization Expense of Finite-lived Intangible Assets | Total future amortization expense of intangible assets is estimated to be as follows:
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Long-term Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Liability and Equity Components of Long-term Debt | The net carrying amount of the liability component of the Notes is as follows:
The net carrying amount of the equity component of the Notes is as follows:
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Schedule of Interest Expense | The interest expense recognized related to the Notes is as follows:
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Shareholders' Equity (Tables) |
12 Months Ended | |||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||
Schedule of Shares Reserved for Future Issuance | At June 30, 2019, the Company had reserved a total of approximately 12.9 million shares of its common stock for future issuance as follows (in thousands):
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Loss Per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Basic Earnings Per Share Computation | The details of the computation of basic and diluted loss per share are as follows:
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Schedule of Diluted Earnings Per Share Computation | The details of the computation of basic and diluted loss per share are as follows:
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Stock-Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Option Activity | The following table summarizes option activity as of June 30, 2019 and changes during the fiscal year then ended (shares in thousands):
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Schedule of Stock Options Outstanding and Exercisable | The following table summarizes information about stock options outstanding and exercisable at June 30, 2019 (shares in thousands):
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Schedule of Other Information Pertaining to Stock Option Awards | Other information pertaining to the Company’s stock option awards is as follows:
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Schedule of Nonvested Restricted Stock Awards and Restricted Stock Unit Awards Outstanding | A summary of nonvested restricted stock awards (RSAs) and restricted stock unit awards (RSUs) outstanding as of June 30, 2019 and changes during the year then ended is as follows (shares in thousands):
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Schedule of Total Stock-Based Compensation Expense | Total stock-based compensation expense was classified in the consolidated statements of operations as follows:
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Schedule of Weighted Average Assumptions Utilized to Value Stock-Based Compensation | The range of assumptions used to value stock issued under the ESPP were as follows:
The weighted average assumptions used to value stock option grants were as follows:
The range of assumptions used for issued performance units were as follows:
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Income Taxes (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Before Income Taxes | The following were the components of loss before income taxes:
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Schedule of Components of Income Tax Expense | The following were the components of income tax expense (benefit):
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Schedule of Effective Income Tax Rate and Amount Reconciliation | Actual income tax expense (benefit) differed from the amount computed by applying each period's U.S. federal statutory tax rate to pre-tax earnings as a result of the following:
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Schedule of Tax Effects of Temporary Differences that Give Rise to Significant Portions of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows:
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Schedule of Components Giving Rise to Net Deferred Tax Assets (Liabilities) Included in Accompanying Consolidated Balance Sheet | The components giving rise to the net deferred tax assets (liabilities) have been included in the consolidated balance sheets as follows:
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Schedule of Reconciliation of the Change in Uncertain Tax Positions | The following is a tabular reconciliation of the Company’s change in uncertain tax positions:
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Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Product Warranty Liability | Changes in the Company’s product warranty liabilities are as follows:
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Schedule of Future Minimum Rental Payments | Future minimum rental payments for leases as of June 30, 2019 are estimated as follows (in millions of U.S. Dollars):
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Reportable Segments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenues, Gross Profit and Gross Margin by Segment | Revenue, gross profit and gross margin for each of the Company's segments were as follows:
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Schedule of Inventories by Segment | Inventories for each of the Company's segments were as follows:
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Schedule of Percentage of Revenues from External Customers by Geographic Area | Disaggregated revenue from external customers by geographic area is as follows:
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Schedule of Tangible Long-Lived Assets by Country | The Company’s tangible long-lived assets by country is as follows:
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Restructuring (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Charges Incurred | The following table summarizes the charges incurred (in millions of U.S Dollars):
The following table summarizes the charges incurred (in millions of U.S. Dollars):
|
Quarterly Results of Operations - Unaudited (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Results of Operations | The following is a summary of the Company’s consolidated quarterly results of operations for each of the fiscal years ended June 30, 2019 and June 24, 2018:
The Company will revise the Unaudited Consolidated Statements of Cash Flows for the year to date periods ended September 23, 2018, December 30, 2018 and March 31, 2019 to correct the presentation of tax withholding for stock option exercises within the Company's future fiscal 2020 unaudited interim consolidated financial statements on Form 10-Q. The revisions will result in an increase to net cash provided by operating activities of $10.8 million, $11.9 million, and $12.4 million, and a decrease to net cash provided by (used in) financing activities by the same amounts for the year to date periods ended September 23, 2018, December 30, 2018 and March 31, 2019, respectively. The Company concluded these errors were not material individually or in the aggregate to any of the periods impacted.
|
Business - Narrative (Details) |
12 Months Ended |
---|---|
Jun. 30, 2019
reportable_segments
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 2 |
Discontinued Operations - Narrative (Details) - Discontinued Operations, Held-for-sale or Disposed of by Sale - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 24, 2018 |
Jun. 25, 2017 |
May 13, 2019 |
|
Lighting Products | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Aggregate net proceeds from sale of business unit | $ 219,000,000.0 | |||
Loss on sale | $ 66,200,000 | $ 0 | $ 0 | |
Accounts receivable, net | $ 67,500,000 | |||
Transmission Service Agreement | Sales, general and administrative | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Accrued administrative fees | 1,600,000 | |||
LED Supply Agreement | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenue | 2,100,000 | |||
Accounts receivable, net | 0 | |||
Contract liability | $ 13,400,000 |
Discontinued Operations - Assets and Liabilities Held-for-Sale (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Jun. 24, 2018 |
---|---|---|
Assets | ||
Total current assets | $ 0.0 | $ 223.4 |
Liabilities | ||
Total current liabilities | $ 0.0 | 80.8 |
Lighting Products | Discontinued Operations, Held-for-sale or Disposed of by Sale | ||
Assets | ||
Accounts receivable, net | 67.5 | |
Income tax receivable | 0.4 | |
Inventories | 144.4 | |
Prepaid expenses | 3.8 | |
Other current assets | 7.3 | |
Total current assets | 223.4 | |
Property and equipment, net | 72.2 | |
Goodwill | 90.3 | |
Intangible assets, net | 174.3 | |
Deferred income taxes | 0.7 | |
Other assets | 0.2 | |
Total assets | 561.1 | |
Liabilities | ||
Accounts payable, trade | 44.7 | |
Accrued salaries and wages | 11.6 | |
Income tax payable | 0.3 | |
Other current liabilities | 24.2 | |
Total current liabilities | 80.8 | |
Other long term liabilities | 21.5 | |
Total liabilities | $ 102.3 |
Discontinued Operations - Cash Flow Impacts (Details) - Lighting Products - Discontinued Operations, Held-for-sale or Disposed of by Sale - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 24, 2018 |
Jun. 25, 2017 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Cash (used in) provided by operating activities of discontinued operations | $ (17.9) | $ 61.0 | $ 85.2 |
Cash used in investing activities of discontinued operations | $ (15.4) | $ (17.9) | $ (16.9) |
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 25, 2018 |
|
Revenue from Contract with Customer [Abstract] | ||
Contract liabilities | $ 80.4 | $ 47.1 |
Revenue recognized during period | $ 5.0 |
Acquisition - Narrative (Details) - RF Power $ in Millions |
Mar. 06, 2018
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Base purchase price | $ 429.2 |
Cash consideration | 427.0 |
Additional consideration to purchase property and equipment | $ 2.2 |
Weighted-average useful life of acquired intangible assets | 13 years 9 months 18 days |
Goodwill acquired subject to tax | $ 245.0 |
Goodwill amortization period | 15 years |
Transaction costs | $ 3.8 |
Acquisition - Purchase Price Allocation (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Jun. 24, 2018 |
Mar. 06, 2018 |
---|---|---|---|
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract] | |||
Goodwill | $ 530.0 | $ 530.0 | |
RF Power | |||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract] | |||
Inventories | $ 22.5 | ||
Property and equipment | 11.7 | ||
Other receivables | 0.4 | ||
Intangible assets | 149.0 | ||
Goodwill | 249.0 | ||
Accrued expenses and liabilities | (3.4) | ||
Net assets acquired | $ 429.2 |
Acquisition - Intangible Assets (Details) - RF Power $ in Millions |
Mar. 06, 2018
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Asset Amount | $ 149.0 |
Estimated Life (in years) | 13 years 9 months 18 days |
Lease agreement | |
Business Acquisition [Line Items] | |
Asset Amount | $ 1.0 |
Estimated Life (in years) | 10 years |
Customer relationships | |
Business Acquisition [Line Items] | |
Asset Amount | $ 92.0 |
Estimated Life (in years) | 15 years |
Developed technology | |
Business Acquisition [Line Items] | |
Asset Amount | $ 44.0 |
Estimated Life (in years) | 14 years |
Non-compete agreements | |
Business Acquisition [Line Items] | |
Asset Amount | $ 12.0 |
Estimated Life (in years) | 4 years |
Acquisition - Results of Acquiree since Acquisition Date (Details) - RF Power $ in Millions |
4 Months Ended |
---|---|
Jun. 24, 2018
USD ($)
| |
Business Acquisition [Line Items] | |
Revenue | $ 29.0 |
Net loss from continuing operations | $ (11.7) |
Acquisition - Supplemental Pro Forma Financial Information (Details) - RF Power - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | |
---|---|---|
Jun. 24, 2018 |
Jun. 25, 2017 |
|
Business Acquisition [Line Items] | ||
Revenue | $ 990.3 | $ 879.1 |
Net loss from continuing operations | $ (20.8) | $ (97.3) |
Basic loss per share from continuing operations (USD per share) | $ (0.21) | $ (0.99) |
Diluted loss per share from continuing operations (USD per share) | $ (0.21) | $ (0.99) |
Financial Statement Details - Narrative (Details) - USD ($) $ in Millions |
1 Months Ended | 8 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Mar. 31, 2017 |
Feb. 28, 2017 |
Jun. 30, 2019 |
Jun. 24, 2018 |
Jun. 25, 2017 |
|
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||||
Depreciation of property and equipment | $ 97.0 | $ 94.8 | $ 89.7 | ||
Losses on disposals or impairments of property and equipment | 1.5 | 6.3 | 0.9 | ||
Accrued property and equipment | 21.3 | 15.0 | 10.2 | ||
Reclassification out of Accumulated Other Comprehensive Income | |||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||||
Gain (loss) on available for sale securities | (0.1) | $ (0.1) | $ 0.1 | ||
Currency translation gains (losses) reclassified to earnings | $ (5.2) | ||||
Infineon | |||||
Reclassification out of Accumulated Other Comprehensive Income [Line Items] | |||||
Contract termination fee | $ 12.5 | ||||
Asset Purchase Agreement expenses | $ 9.7 |
Financial Statement Details - Accounts Receivable, Net (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Jun. 24, 2018 |
---|---|---|
Accounts Receivable, after Allowance for Credit Loss [Abstract] | ||
Gross receivables | $ 129.3 | $ 129.9 |
Allowance for sales returns, discounts and other incentives | 0.0 | (42.7) |
Allowance for bad debts | (0.4) | (0.8) |
Accounts receivable, net | 128.9 | 86.4 |
Royalties | ||
Accounts Receivable, after Allowance for Credit Loss [Abstract] | ||
Gross receivables | 2.8 | 0.0 |
Billed trade receivables | ||
Accounts Receivable, after Allowance for Credit Loss [Abstract] | ||
Gross receivables | 125.8 | 128.9 |
Unbilled contract receivables | ||
Accounts Receivable, after Allowance for Credit Loss [Abstract] | ||
Gross receivables | $ 0.7 | $ 1.0 |
Financial Statement Details - Activity of Allowance for Sales Returns and Other Incentives (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 24, 2018 |
Jun. 25, 2017 |
|
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | $ 42.7 | ||
Balance at end of period | 0.0 | $ 42.7 | |
Sales Returns, Discounts and Other Incentives | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | 42.7 | 36.7 | $ 36.2 |
Current period claims | 0.0 | (145.0) | (153.6) |
Provision for sales returns, discounts and other incentives | 0.0 | 151.0 | 154.1 |
Reclassification to contract liabilities | (42.7) | 0.0 | 0.0 |
Balance at end of period | $ 0.0 | $ 42.7 | $ 36.7 |
Financial Statement Details - Activity of Allowance for Bad Debts (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 24, 2018 |
Jun. 25, 2017 |
|
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at beginning of period | $ 0.8 | ||
Balance at end of period | 0.4 | $ 0.8 | |
Allowance for Bad Debts | |||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at beginning of period | 0.8 | 1.6 | $ 1.5 |
Current period provision change | (0.3) | 0.4 | 0.1 |
Write-offs, net of recoveries | (0.1) | (1.2) | 0.0 |
Balance at end of period | $ 0.4 | $ 0.8 | $ 1.6 |
Financial Statement Details - Inventories (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Jun. 24, 2018 |
---|---|---|
Inventory, Net [Abstract] | ||
Raw material | $ 42.4 | $ 35.1 |
Work-in-progress | 101.1 | 86.2 |
Finished goods | 43.9 | 30.3 |
Inventories | $ 187.4 | $ 151.6 |
Financial Statement Details - Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Jun. 24, 2018 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts payable, trade | $ 90.7 | $ 68.4 |
Accrued salaries and wages | 70.9 | 41.9 |
Accrued expenses | 34.0 | 32.8 |
Other | 5.3 | 5.4 |
Accounts payable and accrued expenses | $ 200.9 | $ 148.5 |
Financial Statement Details - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Jun. 24, 2018 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Currency translation gain | $ 9.5 | $ 5.1 |
Net unrealized loss on available-for-sale securities | 0.0 | (4.5) |
Accumulated other comprehensive income, net of taxes | $ 9.5 | $ 0.6 |
Financial Statement Details - Other Operating Expense (Income) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 24, 2018 |
Jun. 25, 2017 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Factory optimization restructuring | $ 4.1 | $ 0.0 | $ 0.0 |
Severance and other restructuring | 4.2 | 3.8 | 0.0 |
Total restructuring costs | 8.3 | 3.8 | 0.0 |
Project and transaction costs | 16.9 | 8.5 | 0.0 |
Executive severance | 1.3 | 4.5 | 2.2 |
Factory optimization start up costs | 1.5 | 0.0 | 0.0 |
Gain from termination of Wolfspeed transaction, net | 0.0 | 0.0 | (2.8) |
Other operating expense (income) | $ 28.0 | $ 16.8 | $ (0.6) |
Financial Statement Details - Non-Operating Expense (Income), Net (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 24, 2018 |
Jun. 25, 2017 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Loss (gain) on sale of investments, net | $ 0.1 | $ 0.1 | $ (0.1) |
Loss (gain) on equity investment | 16.2 | (7.1) | (7.5) |
Interest expense (income), net | 12.0 | (1.8) | (3.7) |
Foreign currency loss (gain), net | 1.3 | (1.8) | (2.3) |
Other, net | (0.3) | 0.2 | 0.6 |
Non-operating expense (income), net | $ 29.3 | $ (10.4) | $ (13.0) |
Goodwill and Intangible Assets - Goodwill by Reportable Segment (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Jun. 24, 2018 |
---|---|---|
Goodwill [Line Items] | ||
Goodwill | $ 530.0 | $ 530.0 |
Wolfspeed | ||
Goodwill [Line Items] | ||
Goodwill | 349.7 | 349.7 |
LED Products | ||
Goodwill [Line Items] | ||
Goodwill | $ 180.3 | $ 180.3 |
Goodwill and Intangible Assets - Components of Intangible Assets (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Jun. 24, 2018 |
---|---|---|
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 356.8 | $ 355.6 |
Accumulated Amortization | (158.9) | (139.8) |
Net | 197.9 | 215.8 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross | 147.8 | 147.8 |
Accumulated Amortization | (63.8) | (56.6) |
Net | 84.0 | 91.2 |
Developed technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross | 75.9 | 75.9 |
Accumulated Amortization | (24.5) | (19.0) |
Net | 51.4 | 56.9 |
Non-compete agreements | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross | 12.2 | 12.2 |
Accumulated Amortization | (4.1) | (1.1) |
Net | 8.1 | 11.1 |
Trade names | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross | 0.5 | 0.5 |
Accumulated Amortization | (0.5) | (0.5) |
Net | 0.0 | 0.0 |
Patent and licensing rights | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross | 120.4 | 119.2 |
Accumulated Amortization | (66.0) | (62.6) |
Net | $ 54.4 | $ 56.6 |
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 24, 2018 |
Jun. 25, 2017 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of intangible assets | $ 25.4 | $ 16.8 | $ 13.6 |
Investments in intangible assets | 8.0 | 5.6 | 7.7 |
Impairment charges related to patent portfolio | $ 1.0 | $ 0.6 | $ 0.8 |
Goodwill and Intangible Assets - Future Amortization Expense of Intangible Assets (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Jun. 24, 2018 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
June 28, 2020 | $ 20.7 | |
June 27, 2021 | 20.4 | |
June 26, 2022 | 19.0 | |
June 25, 2023 | 16.1 | |
June 30, 2024 | 15.2 | |
Thereafter | 106.5 | |
Total future amortization expense | $ 197.9 | $ 215.8 |
Long-term Debt - Liability and Equity Component of Convertible Notes (Details) - Convertible Notes - Convertible Notes due September 1, 2023 - USD ($) |
Jun. 30, 2019 |
Jun. 24, 2018 |
---|---|---|
Liability Component: | ||
Principal | $ 575,000,000.0 | |
Unamortized discount and issuance costs | (105,900,000) | |
Net carrying amount | 469,100,000 | $ 0 |
Equity Component: | ||
Discount related to value of conversion options | 113,300,000 | |
Debt issuance costs | (2,700,000) | |
Net carrying amount | $ 110,600,000 | $ 0 |
Long-term Debt - Interest Expense (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 24, 2018 |
Jun. 25, 2017 |
|
Debt Instrument [Line Items] | |||
Amortization of discount and issuance costs | $ 18,300,000 | $ 0 | $ 0 |
Convertible Notes | Convertible Notes due September 1, 2023 | |||
Debt Instrument [Line Items] | |||
Interest expense | 4,300,000 | ||
Amortization of discount and issuance costs | 18,300,000 | ||
Total interest expense | $ 22,600,000 | $ 0 | $ 0 |
Shareholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands |
1 Months Ended | 12 Months Ended | 186 Months Ended | |||
---|---|---|---|---|---|---|
May 29, 2002 |
Jun. 25, 2017 |
Jun. 26, 2016 |
Jun. 30, 2019 |
Jun. 14, 2017 |
Aug. 24, 2016 |
|
Class of Stock [Line Items] | ||||||
Stock repurchased (shares) | 38,700 | |||||
Average price of treasury stock acquired (USD per share) | $ 28.66 | |||||
Aggregate value of repurchased shares | $ 104,000,000.0 | $ 1,100,000,000 | ||||
Stock purchase right, rate to share of common stock | one | |||||
Common stock reserved for future issuance (shares) | 12,949 | |||||
June 24, 2018 Expiration | Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Authorized amount of stock repurchase program | $ 200,000,000.0 | |||||
June 25, 2017 Expiration | Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Authorized amount of stock repurchase program | $ 300,000,000.0 |
Shareholders' Equity - Shares Reserved for Future Issuance (Details) shares in Thousands |
Jun. 30, 2019
shares
|
---|---|
Class of Stock [Line Items] | |
For exercise of outstanding common stock options (shares) | 2,418 |
For vesting of outstanding stock units (shares) | 3,081 |
Total common shares reserved (shares) | 12,949 |
2013 Long-Term Incentive Compensation Plan | |
Class of Stock [Line Items] | |
For future issuance (shares) | 6,014 |
Non-Employee Director Stock Compensation and Deferral Program | |
Class of Stock [Line Items] | |
For future issuance (shares) | 52 |
Loss Per Share - Summary (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 30, 2018 |
Sep. 23, 2018 |
Jun. 24, 2018 |
Mar. 25, 2018 |
Dec. 24, 2017 |
Sep. 24, 2017 |
Jun. 30, 2019 |
Jun. 24, 2018 |
Jun. 25, 2017 |
|
Earnings Per Share [Abstract] | |||||||||||
Net loss from continuing operations | $ (34.6) | $ (22.3) | $ (0.2) | $ (0.8) | $ (28.9) | $ (9.9) | $ 32.0 | $ (9.6) | $ (57.9) | $ (16.4) | $ (88.1) |
Net income attributable to noncontrolling interest | (0.1) | 0.1 | 0.0 | 0.0 | 0.0 | 0.1 | 0.0 | 0.0 | 0.0 | 0.1 | 0.0 |
Loss from continuing operations attributable to controlling interest | (57.9) | (16.5) | (88.1) | ||||||||
Net loss from discontinued operations | (99.2) | (205.4) | (2.3) | (10.3) | (4.4) | (230.4) | (18.3) | (10.4) | (317.2) | (263.5) | (10.0) |
Net loss attributable to controlling interest | $ (133.7) | $ (227.8) | $ (2.5) | $ (11.1) | $ (33.3) | $ (240.4) | $ 13.7 | $ (20.0) | $ (375.1) | $ (280.0) | $ (98.1) |
Weighted average number of common shares - basic and diluted (in thousands) | 103,576 | 99,530 | 98,487 | ||||||||
Loss per share - basic: | |||||||||||
Continuing operations attributable to controlling interest - basic (USD per share) | $ (0.33) | $ (0.22) | $ 0 | $ (0.01) | $ (0.29) | $ (0.10) | $ 0.32 | $ (0.10) | $ (0.56) | $ (0.17) | $ (0.89) |
Discontinued operations - basic (USD per share) | (3.06) | (2.65) | (0.10) | ||||||||
Loss per share - diluted: | |||||||||||
Continuing operations attributable to controlling interest - diluted (USD per share) | $ (0.33) | $ (0.22) | $ 0 | $ (0.01) | $ (0.29) | $ (0.10) | $ 0.32 | $ (0.10) | (0.56) | (0.17) | (0.89) |
Discontinued operations - diluted (USD per share) | $ (3.06) | $ (2.65) | $ (0.10) |
Loss Per Share - Narrative (Details) - shares shares in Millions |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 24, 2018 |
Jun. 25, 2017 |
|
Common Stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive potential common shares excluded from diluted earnings per share calculation (shares) | 1.4 | 4.1 | 11.4 |
Stock-Based Compensation - Other Information Pertaining to Stock-Based Awards of Options (Details) - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 24, 2018 |
Jun. 25, 2017 |
|
Share-based Payment Arrangement [Abstract] | |||
Weighted average grant date fair value per share of options (USD per share) | $ 0 | $ 8.02 | $ 8.20 |
Total intrinsic value of options exercised (in millions of U.S. Dollars) | $ 63.3 | $ 24.3 | $ 0.3 |
Stock-Based Compensation - Nonvested Shares of Restricted Stock Awards and Restricted Stock Units Outstanding (Details) shares in Thousands |
12 Months Ended |
---|---|
Jun. 30, 2019
$ / shares
shares
| |
Number of RSAs/RSUs | |
Nonvested at end of period (shares) | 3,081 |
Restricted Stock Awards and Restricted Stock Units | |
Number of RSAs/RSUs | |
Nonvested at beginning of period (shares) | 3,689 |
Granted (shares) | 1,374 |
Vested (shares) | (1,297) |
Forfeited (shares) | (685) |
Nonvested at end of period (shares) | 3,081 |
Weighted Average Grant-Date Fair Value | |
Nonvested at beginning of period (USD per share) | $ / shares | $ 27.53 |
Granted (USD per share) | $ / shares | 47.51 |
Vested (USD per share) | $ / shares | 28.89 |
Forfeited (USD per share) | $ / shares | 31.98 |
Nonvested at end of period (USD per share) | $ / shares | $ 34.99 |
Stock-Based Compensation - Total Stock-Based Compensation Expense (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 24, 2018 |
Jun. 25, 2017 |
|
Employee Service share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | $ 49.6 | $ 37.9 | $ 35.3 |
Cost of revenue, net | |||
Employee Service share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 8.8 | 6.5 | 7.8 |
Research and development | |||
Employee Service share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | 7.7 | 6.8 | 7.5 |
Sales, general and administrative | |||
Employee Service share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total stock-based compensation expense | $ 33.1 | $ 24.6 | $ 20.0 |
Income Taxes - Components of Income from Continuing Operations (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 24, 2018 |
Jun. 25, 2017 |
|
Income Tax Disclosure [Abstract] | |||
Domestic | $ (69.4) | $ (50.4) | $ (42.5) |
Foreign | 24.2 | 32.8 | 35.4 |
Loss before income taxes | $ (45.2) | $ (17.6) | $ (7.1) |
Income Taxes - Components of Income Tax Expense from Continuing Operations (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 24, 2018 |
Jun. 25, 2017 |
|
Current: | |||
Federal | $ 2.4 | $ 36.0 | $ 9.0 |
Foreign | 10.1 | 4.5 | 6.0 |
State | 0.3 | 1.1 | 0.5 |
Total current | 12.8 | 41.6 | 15.5 |
Deferred: | |||
Federal | (1.9) | (45.8) | 59.4 |
Foreign | 2.0 | 6.1 | 0.4 |
State | (0.2) | (3.1) | 5.7 |
Total deferred | (0.1) | (42.8) | 65.5 |
Income tax expense (benefit) | $ 12.7 | $ (1.2) | $ 81.0 |
Income Taxes - Components Giving Rise to Net Deferred Tax Assets (Liabilities) included in Accompanying Consolidated Balance Sheet (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Jun. 24, 2018 |
---|---|---|
Operating Loss Carryforwards [Line Items] | ||
Assets | $ 5.6 | $ 5.8 |
Liabilities | (2.0) | (3.1) |
U.S. federal income taxes | ||
Operating Loss Carryforwards [Line Items] | ||
Assets | 0.0 | 0.0 |
Liabilities | 0.0 | (2.1) |
Foreign income taxes | ||
Operating Loss Carryforwards [Line Items] | ||
Assets | 5.6 | 5.8 |
Liabilities | $ (2.0) | $ (1.0) |
Income Taxes - Reconciliation of Change in Uncertain Tax Positions (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 24, 2018 |
Jun. 25, 2017 |
|
Reconciliation of Changes in Uncertain Tax Positions [Roll Forward] | |||
Balance at beginning of period | $ 8.6 | $ 13.3 | $ 17.7 |
Decrease related to current year change in law | 0.0 | (4.7) | 0.0 |
Increases related to prior year tax positions | 0.5 | 0.6 | 0.0 |
Decreases related to prior year tax positions | 0.0 | (0.1) | (0.1) |
Settlements with tax authorities | 0.0 | (0.1) | (0.6) |
Expiration of statute of limitations for assessment of taxes | (0.9) | (0.4) | (3.7) |
Balance at end of period | $ 8.2 | $ 8.6 | $ 13.3 |
Commitments and Contingencies - Product Warranty Liability (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 24, 2018 |
Jun. 25, 2017 |
|
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | |||
Balance at beginning of period | $ 1.8 | $ 1.6 | $ 0.1 |
Warranties accrued in current period | 0.5 | 0.3 | 1.6 |
Expenditures | (1.0) | (0.1) | (0.1) |
Balance at end of period | $ 1.3 | $ 1.8 | $ 1.6 |
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 24, 2018 |
Jun. 25, 2017 |
|
Loss Contingencies [Line Items] | |||
Product warranty liabilities classified as long-term | $ 0.4 | ||
Rent expense associated with operating leases | $ 4.6 | $ 3.9 | $ 2.9 |
Minimum | |||
Loss Contingencies [Line Items] | |||
Product warranty period | 90 days | ||
Maximum | |||
Loss Contingencies [Line Items] | |||
Product warranty period | 5 years 6 months |
Commitments and Contingencies - Future Minimum Rental Payments (Details) $ in Millions |
Jun. 30, 2019
USD ($)
|
---|---|
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
June 28, 2020 | $ 4.1 |
June 27, 2021 | 2.3 |
June 26, 2022 | 1.2 |
June 25, 2023 | 0.7 |
June 30, 2024 | 0.0 |
Thereafter | 0.0 |
Total future minimum rental payments | $ 8.3 |
Reportable Segments - Financial Results by Segment (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 30, 2018 |
Sep. 23, 2018 |
Jun. 24, 2018 |
Mar. 25, 2018 |
Dec. 24, 2017 |
Sep. 24, 2017 |
Jun. 30, 2019 |
Jun. 24, 2018 |
Jun. 25, 2017 |
|
Segment Reporting Information [Line Items] | |||||||||||
Revenue | $ 251.2 | $ 274.1 | $ 280.5 | $ 274.2 | $ 265.8 | $ 225.2 | $ 223.2 | $ 210.7 | $ 1,080.0 | $ 924.9 | $ 771.5 |
Gross profit | 88.7 | $ 100.5 | $ 103.5 | $ 98.3 | 87.6 | $ 75.1 | $ 70.3 | $ 69.0 | $ 391.0 | $ 302.0 | $ 244.0 |
Gross margin (as a percent) | 36.00% | 33.00% | 32.00% | ||||||||
Operating Segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | $ 1,080.0 | $ 924.9 | $ 771.5 | ||||||||
Gross profit | 408.7 | 316.4 | 255.2 | ||||||||
Operating Segments | Wolfspeed | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 538.2 | 328.6 | 221.2 | ||||||||
Gross profit | $ 258.7 | $ 158.5 | $ 103.5 | ||||||||
Gross margin (as a percent) | 48.00% | 48.00% | 47.00% | ||||||||
Operating Segments | LED Products | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | $ 541.8 | $ 596.3 | $ 550.3 | ||||||||
Gross profit | $ 150.0 | $ 157.9 | $ 151.7 | ||||||||
Gross margin (as a percent) | 28.00% | 26.00% | 28.00% | ||||||||
Segment Reconciling Items | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Gross profit | $ (17.7) | $ (9.0) | $ (11.2) | ||||||||
Transaction costs | $ 0.0 | $ (5.4) | $ 0.0 | $ (5.4) | $ 0.0 |
Reportable Segments - Inventory by Reportable Segment (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Jun. 24, 2018 |
---|---|---|
Segment Reporting Information [Line Items] | ||
Inventories | $ 187.4 | $ 151.6 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Inventories | 180.8 | 147.7 |
Operating Segments | Wolfspeed | ||
Segment Reporting Information [Line Items] | ||
Inventories | 81.6 | 47.2 |
Operating Segments | LED Products | ||
Segment Reporting Information [Line Items] | ||
Inventories | 99.2 | 100.5 |
Segment Reconciling Items | ||
Segment Reporting Information [Line Items] | ||
Inventories | $ 6.6 | $ 3.9 |
Reportable Segments - Long-Lived Assets including Net Property and Equipment by Country (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Jun. 24, 2018 |
---|---|---|
Long-Lived Assets by Location [Line Items] | ||
Tangible long-lived assets | $ 625.2 | $ 589.1 |
United States | ||
Long-Lived Assets by Location [Line Items] | ||
Tangible long-lived assets | 558.6 | 508.3 |
China | ||
Long-Lived Assets by Location [Line Items] | ||
Tangible long-lived assets | 61.8 | 76.1 |
Other | ||
Long-Lived Assets by Location [Line Items] | ||
Tangible long-lived assets | $ 4.8 | $ 4.7 |
Concentrations of Risk - Narrative (Details) - Customer Concentration Risk |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019 |
Jun. 24, 2018 |
Jun. 25, 2017 |
|
Arrow Electronics, Inc. | Revenue Benchmark | |||
Concentration Risk [Line Items] | |||
% of Revenue | 19.00% | 21.00% | 24.00% |
Arrow Electronics, Inc. | Accounts Receivable Benchmark | |||
Concentration Risk [Line Items] | |||
% of Revenue | 14.00% | ||
Allied Group Limited | Accounts Receivable Benchmark | |||
Concentration Risk [Line Items] | |||
% of Revenue | 14.00% |
Retirement Savings Plan - Narrative (Details) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2019
USD ($)
plans
|
Jun. 24, 2018
USD ($)
|
Jun. 25, 2017
USD ($)
|
|
Retirement Benefits [Abstract] | |||
Number of employee benefit plans | plans | 1 | ||
Employer discretionary contribution amount | $ | $ 7.9 | $ 5.8 | $ 4.9 |
Related Party Transactions - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Jun. 24, 2018 |
Jun. 25, 2017 |
|
Intematix Corporation | ||
Related Party Transaction [Line Items] | ||
Purchases from related party | $ 3.3 | $ 2.3 |
Restructuring - Charges Incurred (Details) - USD ($) $ in Millions |
12 Months Ended | 24 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 24, 2018 |
Jun. 25, 2017 |
Jun. 30, 2019 |
|
Restructuring Cost and Reserve [Line Items] | ||||
Loss on disposal or impairment of long-lived assets | $ 4.7 | $ 8.4 | $ 1.8 | |
Severance expense | 4.2 | 3.8 | 0.0 | |
Total restructuring charges | 8.3 | 3.8 | $ 0.0 | |
Capacity and overhead cost reductions | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Loss on disposal or impairment of long-lived assets | 0.0 | 0.2 | $ 0.2 | |
Severance expense | 0.7 | 3.5 | 4.2 | |
Lease termination and facility consolidation costs | 1.9 | 0.1 | 2.0 | |
Total restructuring charges | 2.6 | $ 3.8 | $ 6.4 | |
Factory optimization costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Loss on disposal or impairment of long-lived assets | 2.3 | |||
Lease termination and facility consolidation costs | 1.8 | |||
Total restructuring charges | $ 4.1 |
Restructuring - Narrative (Details) - USD ($) |
3 Months Ended | 12 Months Ended | 24 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
Jun. 24, 2018 |
Jun. 25, 2017 |
Jun. 30, 2019 |
|
Restructuring Cost and Reserve [Line Items] | |||||
Total restructuring costs | $ 8,300,000 | $ 3,800,000 | $ 0 | ||
Factory optimization costs | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges expected to be incurred | $ 70,000,000.0 | 70,000,000.0 | $ 70,000,000.0 | ||
Total restructuring costs | 4,100,000 | ||||
Sales Restructuring | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges expected to be incurred | 0 | $ 0 | 0 | ||
Total restructuring costs | $ 1,600,000 | ||||
Lighting Products | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Restructuring charges classified as discontinued operations | $ 3,600,000 |
Quarterly Results of Operations - Unaudited - Summary (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 30, 2018 |
Sep. 23, 2018 |
Jun. 24, 2018 |
Mar. 25, 2018 |
Dec. 24, 2017 |
Sep. 24, 2017 |
Jun. 30, 2019 |
Jun. 24, 2018 |
Jun. 25, 2017 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue, net | $ 251.2 | $ 274.1 | $ 280.5 | $ 274.2 | $ 265.8 | $ 225.2 | $ 223.2 | $ 210.7 | $ 1,080.0 | $ 924.9 | $ 771.5 |
Cost of revenue, net | 162.5 | 173.6 | 177.0 | 175.9 | 178.2 | 150.1 | 152.9 | 141.7 | 689.0 | 622.9 | 527.5 |
Gross profit | 88.7 | 100.5 | 103.5 | 98.3 | 87.6 | 75.1 | 70.3 | 69.0 | 391.0 | 302.0 | 244.0 |
Net loss from continuing operations | (34.6) | (22.3) | (0.2) | (0.8) | (28.9) | (9.9) | 32.0 | (9.6) | (57.9) | (16.4) | (88.1) |
Net loss from discontinued operations | (99.2) | (205.4) | (2.3) | (10.3) | (4.4) | (230.4) | (18.3) | (10.4) | (317.2) | (263.5) | (10.0) |
Net loss | (133.8) | (227.7) | (2.5) | (11.1) | (33.3) | (240.3) | 13.7 | (20.0) | (375.1) | (279.9) | (98.1) |
Net income attributable to noncontrolling interest | (0.1) | 0.1 | 0.0 | 0.0 | 0.0 | 0.1 | 0.0 | 0.0 | 0.0 | 0.1 | 0.0 |
Net loss attributable to controlling interest | $ (133.7) | $ (227.8) | $ (2.5) | $ (11.1) | $ (33.3) | $ (240.4) | $ 13.7 | $ (20.0) | $ (375.1) | $ (280.0) | $ (98.1) |
Basic loss per share | |||||||||||
Continuing operations attributable to controlling interest - basic (USD per share) | $ (0.33) | $ (0.22) | $ 0 | $ (0.01) | $ (0.29) | $ (0.10) | $ 0.32 | $ (0.10) | $ (0.56) | $ (0.17) | $ (0.89) |
Net loss attributable to controlling interest - basic (USD per share) | (1.26) | (2.20) | (0.02) | (0.11) | (0.33) | (2.40) | 0.14 | (0.20) | (3.62) | (2.81) | (1.00) |
Diluted loss per share | |||||||||||
Continuing operations attributable to controlling interest - diluted (USD per share) | (0.33) | (0.22) | 0 | (0.01) | (0.29) | (0.10) | 0.32 | (0.10) | (0.56) | (0.17) | (0.89) |
Net loss attributable to controlling interest - diluted (USD per share) | $ (1.26) | $ (2.20) | $ (0.02) | $ (0.11) | $ (0.33) | $ (2.40) | $ 0.14 | $ (0.20) | $ (3.62) | $ (2.81) | $ (1.00) |
Quarterly Results of Operations - Unaudited - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Mar. 31, 2019 |
Dec. 30, 2018 |
Sep. 23, 2018 |
Jun. 30, 2019 |
Jun. 24, 2018 |
Jun. 25, 2017 |
|
Condensed Financial Statements, Captions [Line Items] | ||||||
Net cash provided by (used in) operating activities | $ 202.3 | $ 173.5 | $ 220.5 | |||
Net cash provided by (used in) financing activities | $ 406.5 | 236.5 | (108.7) | |||
Restatement Adjustment | ||||||
Condensed Financial Statements, Captions [Line Items] | ||||||
Net cash provided by (used in) operating activities | $ 12.4 | $ 11.9 | $ 10.8 | 6.2 | 4.6 | |
Net cash provided by (used in) financing activities | $ (12.4) | $ (11.9) | $ (10.8) | $ (6.2) | $ (4.6) |
Label | Element | Value |
---|---|---|
Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 10,300,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 10,300,000 |
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