Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 30, 2016 | Oct. 31, 2016 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | MRCY | |
Entity Registrant Name | MERCURY SYSTEMS INC | |
Entity Central Index Key | 1,049,521 | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 41,014,934 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Jun. 30, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 77,314 | $ 81,691 |
Accounts receivable, net of allowance for doubtful accounts of $140 and $92 at September 30, 2016 and June 30, 2016, respectively | 62,158 | 73,427 |
Unbilled receivables and costs in excess of billings | 23,574 | 22,467 |
Inventory | 58,443 | 58,284 |
Prepaid income taxes | 2,804 | 3,401 |
Prepaid expenses and other current assets | 7,665 | 6,122 |
Total current assets | 231,958 | 245,392 |
Restricted cash | 0 | 264 |
Property and equipment, net | 31,376 | 28,337 |
Estimated fair value of goodwill | 344,525 | 344,027 |
Intangible assets, net | 112,071 | 116,673 |
Other non-current assets | 2,231 | 1,803 |
Total assets | 722,161 | 736,496 |
Current liabilities: | ||
Accounts payable | 19,283 | 26,723 |
Accrued expenses | 8,970 | 10,273 |
Accrued compensation | 14,355 | 13,283 |
Deferred revenues and customer advances | 3,566 | 7,365 |
Total current liabilities | 56,174 | 67,644 |
Deferred income taxes | 9,575 | 11,842 |
Income taxes payable | 700 | 700 |
Long-term debt | 180,246 | 182,275 |
Other non-current liabilities | 927 | 991 |
Total liabilities | 247,622 | 263,452 |
Commitments and contingencies (Note L) | ||
Shareholders' equity: | ||
Preferred stock, $0.01 par value; 1,000,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Common stock, $0.01 par value; 85,000,000 shares authorized; 39,053,991 and 38,675,340 shares issued and outstanding at September 30, 2016 and June 30, 2016, respectively | 391 | 387 |
Additional paid-in capital | 355,164 | 357,500 |
Retained earnings | 118,029 | 114,210 |
Accumulated other comprehensive income | 955 | 947 |
Total shareholders' equity | 474,539 | 473,044 |
Total liabilities and shareholders' equity | 722,161 | 736,496 |
Long-term Debt, Current Maturities | $ 10,000 | $ 10,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2016 | Jun. 30, 2016 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 140 | $ 92 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 85,000,000 | 85,000,000 |
Common Stock, Shares, Issued | 39,053,991 | 38,675,340 |
Common stock, shares outstanding | 39,053,991 | 38,675,340 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||
Net revenues | $ 87,649 | $ 58,409 |
Cost of revenues | 48,205 | 30,107 |
Gross margin | 39,444 | 28,302 |
Operating expenses: | ||
Selling, general and administrative | 17,544 | 12,126 |
Research and development | 12,838 | 8,866 |
Amortization of intangible assets | 4,602 | 1,713 |
Restructuring and other charges | 297 | 338 |
Acquisition costs and other related expenses | 421 | 2,128 |
Total operating expenses | 35,702 | 25,171 |
Income from operations | 3,742 | 3,131 |
Interest income | 40 | 24 |
Interest expense | (1,822) | (2) |
Other income, net | 600 | 71 |
Income before income taxes | 2,560 | 3,224 |
Tax (benefit) provision | (1,259) | 368 |
Net income | $ 3,819 | $ 2,856 |
Basic net earnings per share (in dollars per share) | $ 0.10 | $ 0.09 |
Diluted net earnings per share (in dollars per share) | $ 0.10 | $ 0.08 |
Weighted-average shares outstanding: | ||
Basic (in shares) | 38,865 | 32,778 |
Diluted (in shares) | 39,865 | 33,616 |
Comprehensive income: | ||
Net income | $ 3,819 | $ 2,856 |
Foreign currency translation adjustments | 8 | 17 |
Total comprehensive income | $ 3,827 | $ 2,873 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 3,819 | $ 2,856 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 7,320 | 3,301 |
Stock-based compensation expense | 3,632 | 2,702 |
Benefit for deferred income taxes | (2,606) | (412) |
Non-cash interest expense | 471 | 0 |
Other non-cash items | (51) | (121) |
Changes in operating assets and liabilities, net of effects of businesses acquired: | ||
Accounts receivable, unbilled receivable, and cost in excess of billings | 10,111 | (12,781) |
Inventory | (104) | (2,739) |
Prepaid income taxes | 597 | 706 |
Prepaid expenses and other current assets | (1,553) | 3,378 |
Other non-current assets | (86) | 37 |
Accounts payable and accrued expenses | (7,377) | 9,017 |
Deferred revenues and customer advances | (3,816) | 659 |
Income taxes payable | (35) | 0 |
Other non-current liabilities | (39) | (21) |
Net cash provided by operating activities | 10,283 | 6,582 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (6,050) | (1,867) |
Increase in other investing activities | (111) | (185) |
Net cash used in investing activities | (6,161) | (2,052) |
Cash flows from financing activities: | ||
Proceeds from employee stock plans | 80 | 629 |
Payments for retirement of common stock | (6,128) | (3,708) |
Payments of capital lease obligations | (2,500) | 0 |
Net cash used in financing activities | (8,548) | (3,079) |
Effect of exchange rate changes on cash and cash equivalents | 49 | 36 |
Net (decrease) increase in cash and cash equivalents | (4,377) | 1,487 |
Cash and cash equivalents at beginning of period | 81,691 | 77,586 |
Cash and cash equivalents at end of period | 77,314 | 79,073 |
Cash paid during the period for: | ||
Interest | 1,351 | 2 |
Income taxes | 717 | 65 |
Supplemental disclosures-non-cash activities: | ||
Issuance of restricted stock awards to employees | $ 15,002 | $ 7,114 |
Description of Business
Description of Business | 3 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business Mercury Systems, Inc. (the “Company” or “Mercury”) is a leading commercial provider of secure processing subsystems designed and made in the U.S.A. Optimized for customer and mission success, its solutions power a wide variety of critical defense and intelligence programs. Headquartered in Chelmsford, Massachusetts, it is pioneering a next-generation defense electronics business model specifically designed to meet the industry's current and emerging technology and business needs. The Company delivers affordable innovative solutions, rapid time-to-value and service and support to its defense prime contractor customers. The Company's products and solutions have been deployed in more than 300 programs with over 25 different defense prime contractors. Key programs include Aegis, Patriot, Surface Electronic Warfare Improvement Program ("SEWIP"), Gorgon Stare, Predator, F-35, Reaper and Digital Electronic Warfare System ("DEWS"). The Company's organizational structure allows it to deliver capabilities that combine technology building blocks and deep domain expertise in the defense sector. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies B ASIS OF P RESENTATION The accompanying consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to the Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures, normally included in annual consolidated financial statements have been condensed or omitted pursuant to those rules and regulations; however, in the opinion of management the financial information reflects all adjustments, consisting of adjustments of a normal recurring nature, necessary for fair presentation. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the fiscal year ended June 30, 2016 which are contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on August 16, 2016. The results for the three months ended September 30, 2016 are not necessarily indicative of the results to be expected for the full fiscal year. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. U SE OF E STIMATES The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. R ECLASSIFICATION The Company has restated the income tax provision amount for the three months ended September 30, 2015 for the adoption of FASB Accounting Standards Update ("ASU") 2016-09, Improvements to Employee Share-Based Payment Accounting . The Company’s Consolidated Statements of Operations and Comprehensive Income and Consolidated Statements of Cash Flows have been updated to reflect this change. The Company included costs related to the sustainment of its product portfolio as research and development expense, which was previously included as costs of revenue on the Consolidated Statements of Operations and Comprehensive Income. For comparative purposes, for the three months ended September 30, 2015, the Company has reclassified $773 from costs of revenues to research and development expense. B USINESS C OMBINATIONS The Company utilizes the acquisition method of accounting under FASB ASC 805, Business Combinations , (“FASB ASC 805”), for all transactions and events which it obtains control over one or more other businesses, to recognize the fair value of all assets and liabilities acquired, even if less than one hundred percent ownership is acquired, and in establishing the acquisition date fair value as the measurement date for all assets and liabilities assumed. The Company also utilizes FASB ASC 805 for the initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in business combinations. R EVENUE R ECOGNITION The Company relies upon FASB ASC 605, Revenue Recognition, to account for its revenue transactions. Revenue is recognized upon shipment provided that title and risk of loss have passed to the customer, there is persuasive evidence of an arrangement, the sales price is fixed or determinable, collection of the related receivable is reasonably assured, and customer acceptance criteria, if any, have been successfully demonstrated. Out-of-pocket expenses that are reimbursable by the customer are included in revenue and cost of revenue. Certain contracts with customers require the Company to perform tests of its products prior to shipment to ensure their performance complies with the Company’s published product specifications and, on occasion, with additional customer-requested specifications. In these cases, the Company conducts such tests and, if they are completed successfully, includes a written confirmation with each order shipped. As a result, at the time of each product shipment, the Company believes that no further customer testing requirements exist and that there is no uncertainty of acceptance by its customer. The Company uses FASB ASU No. 2009-13 (“FASB ASU 2009-13”), Multiple-Deliverable Revenue Arrangements . FASB ASU 2009-13 establishes a selling price hierarchy for determining the selling price of a deliverable, which includes: (1) vendor-specific objective evidence (“VSOE”) if available; (2) third-party evidence (“TPE”) if VSOE is not available; and (3) best estimated selling price (“BESP”), if neither VSOE nor TPE is available. Additionally, FASB ASU 2009-13 expands the disclosure requirements related to a vendor’s multiple-deliverable revenue arrangements. The Company enters into multiple-deliverable arrangements that may include a combination of hardware components, related integration or other services. These arrangements generally do not include any performance-, cancellation-, termination- or refund-type provisions. Total revenue recognized under multiple-deliverable revenue arrangements was 35% and 48% of total revenues in the three months ended September 30, 2016 , and 2015, respectively. In accordance with the provisions of FASB ASU 2009-13, the Company allocates arrangement consideration to each deliverable in an arrangement based on its relative selling price. The Company generally expects that it will not be able to establish VSOE or TPE due to limited single element transactions and the nature of the markets in which the Company competes, and, as such, the Company typically determines its relative selling price using BESP. The objective of BESP is to determine the price at which the Company would transact if the product or service were sold by the Company on a standalone basis. The Company's determination of BESP involves the consideration of several factors based on the specific facts and circumstances of each arrangement. Specifically, the Company considers the cost to produce the deliverable, the anticipated margin on that deliverable, the selling price and profit margin for similar parts, the Company’s ongoing pricing strategy and policies (as evident from the price list established and updated by management on a regular basis), the value of any enhancements that have been built into the deliverable and the characteristics of the varying markets in which the deliverable is sold. The Company analyzes the selling prices used in its allocation of arrangement consideration at a minimum on an annual basis. Selling prices will be analyzed on a more frequent basis if a significant change in the Company’s business necessitates a more timely analysis or if the Company experiences significant variances in its selling prices. Each deliverable within the Company’s multiple-deliverable revenue arrangements is accounted for as a separate unit of accounting under the guidance of FASB ASU 2009-13 if both of the following criteria are met: the delivered item or items have value to the customer on a standalone basis; and for an arrangement that includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company. The Company's revenue arrangements generally do not include a general right of return relative to delivered products. The Company considers a deliverable to have standalone value if the item is sold separately by the Company or another vendor or if the item could be resold by the customer. Deliverables not meeting the criteria for being a separate unit of accounting are combined with a deliverable that does meet that criterion. The appropriate allocation of arrangement consideration and recognition of revenue is then determined for the combined unit of accounting. The Company also engages in long-term contracts for development, production and services activities which it accounts for consistent with FASB ASC 605-35, Accounting for Performance of Construction-Type and Certain Production-Type Contracts , and other relevant revenue recognition accounting literature. The Company considers the nature of these contracts and the types of products and services provided when determining the proper accounting for a particular contract. Generally for fixed-price contracts, other than service-type contracts, revenue is recognized primarily under the percentage of completion method or, for certain short-term contracts, by the completed contract method. Revenue from service-type fixed-price contracts is recognized ratably over the contract period or by other appropriate input or output methods to measure service provided, and contract costs are expensed as incurred. The Company establishes billing terms at the time project deliverables and milestones are agreed. The risk to the Company on a fixed-price contract is that if estimates to complete the contract change from one period to the next, profit levels will vary from period to period. For time and materials contracts, revenue reflects the number of direct labor hours expended in the performance of a contract multiplied by the contract billing rate, as well as reimbursement of other billable direct costs. For all types of contracts, the Company recognizes anticipated contract losses as soon as they become known and estimable. The Company also considers whether contracts should be combined or segmented in accordance with the applicable criteria under GAAP. The Company combines closely related contracts when all the applicable criteria under GAAP are met. The combination of two or more contracts requires judgment in determining whether the intent of entering into the contracts was effectively to enter into a single project, which should be combined to reflect an overall profit rate. Similarly, the Company may separate a project, which may consist of a single contract or group of contracts, with varying rates of profitability, only if the applicable criteria under GAAP are met. Judgment also is involved in determining whether a single contract or group of contracts may be segmented based on how the arrangement was negotiated and the performance criteria. The decision to combine a group of contracts or segment a contract could change the amount of revenue and gross profit recorded in a given period. The use of contract accounting requires significant judgment relative to estimating total contract revenues and costs, including assumptions relative to the length of time to complete the contract, the nature and complexity of the work to be performed, anticipated increases in wages and prices for subcontractor services and materials, and the availability of subcontractor services and materials. The Company’s estimates are based upon the professional knowledge and experience of its engineers, program managers and other personnel, who review each long-term contract monthly to assess the contract’s schedule, performance, technical matters and estimated cost at completion. Changes in estimates are applied retrospectively and when adjustments in estimated contract costs are identified, such revisions may result in current period adjustments to earnings applicable to performance in prior periods. Contract costs also may include estimated contract recoveries for matters such as contract changes and claims for unanticipated contract costs. The Company records revenue associated with these matters only when the amount of recovery can be estimated reliably and realization is probable. The Company defines service revenues as revenue from activities that are not associated with the design, development, production, or delivery of tangible assets, software or specific capabilities sold. Examples of the Company's service revenues include: analyst services and systems engineering support, consulting, maintenance and other support, testing and installation. The Company combines its product and service revenues into a single class as service revenues are less than 10 percent of total revenues. The Company does not provide its customers with rights of product return, other than those related to warranty provisions that permit repair or replacement of defective goods. The Company accrues for anticipated warranty costs upon product shipment. Revenues from product royalties are recognized upon invoice by the Company. Additionally, all revenues are reported net of government assessed taxes (e.g., sales taxes or value-added taxes). W EIGHTED -A VERAGE S HARES Weighted-average shares were calculated as follows: Three Months Ended September 30, 2016 2015 Basic weighted-average shares outstanding 38,865 32,778 Effect of dilutive equity instruments 1,000 838 Diluted weighted-average shares outstanding 39,865 33,616 Equity instruments to purchase 22 and 356 shares of common stock were not included in the calculation of diluted net earnings per share for the three months ended September 30, 2016 , and 2015, respectively, because the equity instruments were anti-dilutive. September 30, 2016 basic shares outstanding include the impact of 5,175 shares from the underwritten common stock public offering on April 4, 2016. |
Acquisitions
Acquisitions | 3 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions C ARVE- O UT B USINESS A QUISITION On March 23, 2016, the Company and Microsemi Corporation (“Microsemi”) entered into a Stock Purchase Agreement, pursuant to which, Microsemi agreed to sell all the membership interests in its custom microelectronics, RF and microwave solutions and embedded security operations (the "Carve-Out Business”) to the Company for $300,000 in cash on a cash-free, debt-free basis, subject to a working capital adjustment. On May 2, 2016, the transaction closed and the Company acquired the Carve-Out Business. Pursuant to the terms of the Stock Purchase Agreement, all outstanding Carve-Out Business employee stock awards that were unvested at the closing were replaced by Mercury. The replacement stock awards granted were determined based on a conversion ratio provided in the Stock Purchase Agreement. Mercury funded the acquisition with a combination of a new $200,000 bank term loan facility (see Note I) and cash on hand, which included net proceeds of approximately $92,788 raised from an underwritten common stock public offering. The following table presents the net purchase price and the preliminary fair values of the assets and liabilities of the Carve-Out Business: Amounts Consideration transferred Cash paid at closing $ 300,000 Value allocated to replacement awards 407 Net purchase price $ 300,407 Estimated fair value of tangible assets acquired and liabilities assumed Accounts receivable and cost in excess of billings $ 17,023 Inventory 25,477 Fixed assets 13,996 Other current and non-current assets 524 Current liabilities (4,677 ) Non-current deferred tax liabilities (25,477 ) Estimated fair value of net tangible assets acquired 26,866 Estimated fair value of identifiable intangible assets 102,800 Estimated goodwill 170,741 Estimated fair value of assets acquired $ 300,407 Net purchase price $ 300,407 The amounts above represent the preliminary fair value estimates as of September 30, 2016 and are subject to subsequent adjustment as the Company obtains additional information during the measurement period and finalizes its fair value estimates. The preliminary identifiable intangible asset estimates include customer relationships of $70,900 , completed technology of $29,700 and backlog of $2,200 . Any subsequent adjustments to these fair value estimates occurring during the measurement period will result in an adjustment to goodwill. The goodwill of $170,741 largely reflects the potential synergies and expansion of the Company's offerings across product lines and markets complementary to the Company's existing products and markets. The Carve-Out Business provides the Company with additional capability and expertise related to embedded security custom microelectronics, and microwave and radio frequency technology. The acquisition is directly aligned with the Company's strategy of expanding its capabilities, services and offerings along the sensor processing chain. The goodwill from this acquisition is reported under the Carve-Out Business reporting unit. As of September 30, 2016 , the Company had $29,266 of goodwill deductible for tax purposes. The revenues and net loss from the Carve-Out Business included in the Company's consolidated results for the three months ended September 30, 2016 were $24,311 and $(2,419) , respectively. Pro Forma Financial Information The following tables summarize the supplemental statements of operations information on an unaudited pro forma basis as if the Carve-Out Business acquisition had occurred on July 1, 2015: Three Months ended September 30, 2015 Pro forma net revenues $ 83,103 Pro forma net income $ 2,039 Basic pro forma net earnings per share $ 0.05 Diluted pro forma net earnings per share $ 0.05 The unaudited pro forma results presented above are for illustrative purposes only for the applicable periods and do not purport to be indicative of the actual results which would have occurred had the transaction been completed as of the beginning of the period, nor are they indicative of results of operations which may occur in the future. L EWIS I NNOVATIVE T ECHNOLOGIES A CQUISITION On December 16, 2015, the Company entered into a share purchase agreement (the “Share Purchase Agreement”) with Lewis Innovative Technologies, Inc. (“LIT”) and the holders of the equity interests of LIT. Pursuant to the Share Purchase Agreement, the Company completed its purchase of all of the equity interests in LIT, and LIT became a wholly-owned subsidiary of the Company. Based in Decatur, Alabama, LIT provides advanced security technology and development services necessary for protecting systems critical to national security while meeting strict Department of Defense (“DoD”) program protection requirements. The Company acquired LIT for a cash purchase price of $9,756 . The Company funded the purchase with cash on hand. The purchase price was subject to a post-closing adjustment based on a determination of LIT's closing net working capital. In accordance with the Share Purchase Agreement, $1,000 of the purchase price was placed into escrow to support the post-closing working capital adjustment and the sellers' indemnification obligations. The escrow is available for indemnification claims through June 16, 2017. The Company acquired LIT free of debt. The preliminary fair value estimates of LIT's assets and liabilities have not changed since June 30, 2016. The fair value estimates are subject to subsequent adjustment as the Company obtains additional information until the measurement period ends on December 15, 2016. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The following table summarizes the Company’s financial assets measured at fair value on a recurring basis at September 30, 2016 : Fair Value Measurements September 30, 2016 Level 1 Level 2 Level 3 Assets: Certificates of deposit $ 30,104 $ — $ 30,104 $ — Total $ 30,104 $ — $ 30,104 $ — The carrying values of cash and cash equivalents, including money market funds, restricted cash, accounts receivable and payable, and accrued liabilities approximate fair value due to the short-term maturities of these assets and liabilities. The fair value of the Company’s certificates of deposit are determined through quoted prices for identical or similar instruments in markets that are not active or are directly or indirectly observable. The Company determined the face value of its long-term debt approximates fair value at September 30, 2016 due to the recent issuance and stability of interest rates during this period. The cost-method investment, which is presented within other non-current assets in the accompanying consolidated balance sheets, does not have a readily determinable fair value, as such the Company recorded the investment at cost and will continue to evaluate the asset for impairment on a quarterly basis. |
Inventory
Inventory | 3 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Inventory is stated at the lower of cost (first-in, first-out) or market value, and consists of materials, labor and overhead. On a quarterly basis, the Company uses consistent methodologies to evaluate inventory for net realizable value. Once an item is written down, the value becomes the new inventory cost basis. The Company reduces the value of inventory for excess and obsolete inventory, consisting of on-hand inventory in excess of estimated usage. The excess and obsolete inventory evaluation is based upon assumptions about future demand, history, product mix and possible alternative uses. Inventory was comprised of the following: September 30, 2016 June 30, 2016 Raw materials $ 33,603 $ 31,205 Work in process 15,401 15,967 Finished goods 9,439 11,112 Total $ 58,443 $ 58,284 There are no amounts in inventory relating to contracts having production cycles longer than one year. |
Goodwill
Goodwill | 3 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The following table sets forth the changes in the carrying amount of goodwill by reporting unit for the three months ended September 30, 2016 : MCE MDS Carve-out Business Total Balance at June 30, 2016 $ 134,378 $ 39,406 $ 170,243 $ 344,027 Goodwill adjustment for the Carve-Out Business acquisition — — 498 498 Balance at September 30, 2016 $ 134,378 $ 39,406 $ 170,741 $ 344,525 During the three months ended September 30, 2016 , the Company recorded a $498 adjustment to goodwill related to the acquisition of the Carve-out Business. The adjustment was the result of changes in fair value estimates derived from additional information obtained during the measurement period. In the three months ended September 30, 2016 , there were no triggering events, as defined by FASB ASC 350, Intangibles - Goodwill and Other , which required an interim goodwill impairment test. The Company performs its annual goodwill impairment test in the fourth quarter of each fiscal year. |
Restructuring Plan
Restructuring Plan | 3 Months Ended |
Sep. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Plan | Restructuring The following table presents the detail of activity for the Company’s restructuring plans: Severance & Facilities Total Restructuring liability at June 30, 2016 $ 190 $ 736 $ 926 Restructuring and other charges 214 83 297 Cash paid (63 ) (272 ) (335 ) Restructuring liability at September 30, 2016 $ 341 $ 547 $ 888 During the three months ended September 30, 2016 , the Company incurred net restructuring and other charges of $297 . In the event that the Company is unable to sublease the unoccupied portion of its headquarters complex in Chelmsford, Massachusetts, it will incur nominal, periodic restructuring charges through fiscal 2017. All of the restructuring and other charges are classified as operating expenses in the consolidated statements of operations and comprehensive income and any remaining severance obligations are expected to be paid within the next twelve months. The restructuring liability is classified as accrued expenses in the consolidated balance sheets. |
Income Taxes
Income Taxes | 3 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company recorded an income tax (benefit) provision of $(1,259) and of $368 on income from operations before income taxes of $2,560 and $3,224 for the three months ended September 30, 2016 and 2015 , respectively. The effective tax rate for the three months ended September 30, 2016 differed from the federal statutory rate primarily due to federal research and development credits, domestic manufacturing deduction, excess tax benefits related to stock compensation, and state taxes. The effective tax rate for the three months ended September 30, 2015 differed from the federal statutory rate primarily due to domestic manufacturing deduction, excess tax benefits related to stock compensation, and state taxes. No material changes in the Company’s unrecognized tax positions occurred during the three months ended September 30, 2016 . The Company is currently under audit by the Internal Revenue Service for fiscal year 2013. There have been no significant changes to the status of this examination during the three months ended September 30, 2016 . It is reasonably possible that within the next 12 months the Company’s unrecognized tax benefits, exclusive of interest, may decrease by up to $757 at the conclusion of the audit. The Company expects that the decrease, if recognized, would not affect the effective tax rate. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies L EGAL C LAIMS The Company is subject to litigation, claims, investigations and audits arising from time to time in the ordinary course of our business. Although legal proceedings are inherently unpredictable, the Company believes that it has valid defenses with respect to any matters currently pending against the Company and intends to defend itself vigorously. The outcome of these matters, individually and in the aggregate, is not expected to have a material impact on the Company’s cash flows, results of operations, or financial position. I NDEMNIFICATION O BLIGATIONS The Company’s standard product sales and license agreements entered into in the ordinary course of business typically contain an indemnification provision pursuant to which the Company indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party in connection with any patent, copyright or other intellectual property infringement claim by any third party with respect to the Company’s products. Such provisions generally survive termination or expiration of the agreements. The potential amount of future payments the Company could be required to make under these indemnification provisions is, in some instances, unlimited. P URCHASE C OMMITMENTS As of September 30, 2016 , the Company has entered into non-cancelable purchase commitments for certain inventory components and services used in its normal operations. The purchase commitments covered by these agreements are for less than one year and aggregate to $39,344 . O THER As part of the Company's strategy for growth, the Company continues to explore acquisitions or strategic alliances. The associated acquisition costs incurred in the form of professional fees and services may be material to the future periods in which they occur, regardless of whether the acquisition is ultimately completed. The Company may elect from time to time to purchase and subsequently retire shares of common stock in order to settle an individual employees’ tax liability associated with vesting of a restricted stock award or exercise of stock options. These transactions would be treated as a use of cash in financing activities in the Company's statement of cash flows. |
Debt
Debt | 3 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Debt | Debt T ERM L OAN A ND R EVOLVING C REDIT F ACILITIES On May 2, 2016, the Company and certain of its subsidiaries, as guarantors, entered into a Credit Agreement (the “Credit Agreement”) with a syndicate of commercial banks and Bank of America, N.A acting as the administrative agent. The Credit Agreement provides for a $200,000 term loan facility ("Term Loan") and a $100,000 revolving credit facility ("Revolver"). As of September 30, 2016, the Company’s outstanding balance on the Term Loan was $197,500 , net of $7,254 of unamortized debt issuance costs. The stated interest rate of the Term Loan was 2.8% as of September 30, 2016. The Company was in compliance with all covenants and conditions under the Credit Agreement. There were no borrowings against the Revolver; however, there were outstanding letters of credit of $1,938 under this Credit Agreement as of September 30, 2016 . |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation S TOCK O PTION P LANS The number of shares authorized for issuance under the Company’s 2005 Stock Incentive Plan, as amended and restated (the “2005 Plan”), is 15,252 shares at September 30, 2016 . The 2005 Plan provides for the grant of non-qualified and incentive stock options, restricted stock, stock appreciation rights and deferred stock awards to employees and non-employees. All stock options are granted with an exercise price of not less than 100% of the fair value of the Company’s common stock at the date of grant and the options generally have a term of seven years. There were 1,580 shares available for future grant under the 2005 Plan at September 30, 2016 . As part of the Company's ongoing annual equity grant program for employees, the Company grants performance-based restricted stock awards to certain executives pursuant to the 2005 Plan. Performance awards vest based on the requisite service period subject to the achievement of specific financial performance targets. Based on the performance targets, some of these awards require graded vesting which results in more rapid expense recognition compared to traditional time-based vesting over the same vesting period. The Company monitors the probability of achieving the performance targets on a quarterly basis and may adjust periodic stock compensation expense accordingly. E MPLOYEE S TOCK P URCHASE P LAN The number of shares authorized for issuance under the Company’s 1997 Employee Stock Purchase Plan, as amended and restated (“ESPP”), is 1,800 shares. Under the ESPP, rights are granted to purchase shares of common stock at 85% of the lesser of the market value of such shares at either the beginning or the end of each six-month offering period. The ESPP permits employees to purchase common stock through payroll deductions, which may not exceed 10% of an employee’s compensation as defined in the ESPP. There were no shares issued under the ESPP during the three months ended September 30, 2016 and 2015 , respectively. Shares available for future purchase under the ESPP totaled 398 at September 30, 2016 . S TOCK O PTION AND A WARD A CTIVITY The following table summarizes activity of the Company’s stock option plans since June 30, 2016 : Options Outstanding Number of Weighted Average Weighted Average Outstanding at June 30, 2016 258 $ 13.34 1.06 Granted — — Exercised (6 ) 13.07 Cancelled — — Outstanding at September 30, 2016 252 $ 13.35 0.81 The following table summarizes the status of the Company’s non-vested restricted stock awards since June 30, 2016 : Non-vested Restricted Stock Awards Number of Weighted Average Outstanding at June 30, 2016 1,666 $ 13.09 Granted 633 23.69 Vested (633 ) 10.89 Forfeited (18 ) 16.66 Outstanding at September 30, 2016 1,648 $ 17.97 S TOCK - BASED C OMPENSATION E XPENSE The Company recognized the full expense of its share-based payment plans in the consolidated statements of operations for the three months ended September 30, 2016 and 2015 in accordance with FASB ASC 718, Compensation - Stock Compensation . The Company had $177 of capitalized stock-based compensation expense on the consolidated balance sheets as of September 30, 2016 . In the prior year, the Company did not capitalize any such costs on the consolidated balance sheets, as such costs that qualified for capitalization were not material. Under the fair value recognition provisions of FASB ASC 718, stock-based compensation cost is measured at the grant date based on the value of the award and is recognized as expense over the service period, net of estimated forfeitures. The following table presents share-based compensation expenses from continuing operations included in the Company’s consolidated statements of operations: Three Months Ended September 30, 2016 2015 Cost of revenues $ 75 $ 149 Selling, general and administrative 3,039 2,128 Research and development 518 425 Share-based compensation expense before tax 3,632 2,702 Income taxes (1,389 ) (1,041 ) Share-based compensation expense, net of income taxes $ 2,243 $ 1,661 |
Operating Segment, Geographic I
Operating Segment, Geographic Information and Significant Customers | 3 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Operating Segment, Geographic Information and Significant Customers | Operating Segment, Geographic Information and Significant Customers Operating segments are defined as components of an enterprise evaluated regularly by the Company's chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. The Company is comprised of one operating and reportable segment. The Company utilized the management approach for determining its operating segment in accordance with FASB ASC 280. The geographic distribution of the Company’s revenues is summarized as follows: US Europe Asia Pacific Eliminations Total T HREE M ONTHS E NDED SEPTEMBER 30, 2016 Net revenues to unaffiliated customers $ 83,048 $ 854 $ 3,747 $ — $ 87,649 Inter-geographic revenues 3,286 15 — (3,301 ) — Net revenues $ 86,334 $ 869 $ 3,747 $ (3,301 ) $ 87,649 T HREE M ONTHS E NDED SEPTEMBER 30, 2015 Net revenues to unaffiliated customers $ 57,362 $ 458 $ 589 $ — $ 58,409 Inter-geographic revenues 1,254 31 — (1,285 ) — Net revenues $ 58,616 $ 489 $ 589 $ (1,285 ) $ 58,409 Foreign revenue is based on the country in which the Company’s legal subsidiary is domiciled. The geographic distribution of the Company’s long-lived assets is summarized as follows: US Europe Asia Pacific Eliminations Total September 30, 2016 $ 31,226 $ 129 $ 21 $ — $ 31,376 June 30, 2016 $ 28,187 $ 127 $ 23 $ — $ 28,337 Identifiable long-lived assets exclude goodwill and intangible assets. Customers comprising 10% or more of the Company’s revenues for the periods shown below are as follows: Three Months Ended September 30, 2016 2015 Lockheed Martin Corporation 25 % 16 % Raytheon Company 15 % 38 % 40 % 54 % While the Company typically has customers from which it derives 10% or more of its revenue, the sales to each of these customers are spread across multiple programs and platforms. Programs comprising 10% or more of the Company’s revenues for the periods shown below are as follows: Three Months Ended 2016 2015 Aegis 14 % * Patriot * 17 % 14 % 17 % * Indicates that the amount is less than 10% of the Company’s revenues for the respective period. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On November 3, 2016, the Company signed a definitive agreement to acquire CES Creative Electronic Systems, S.A., a leading provider of embedded solutions for military and aerospace mission-critical computing applications. The purchase price is expected to be approximately $38,000 , subject to net working capital and net debt adjustments, plus foreign currency, and transaction related expenses, all of which are expected to be funded with cash on hand. The Company expects to close the transaction during the second fiscal quarter ending December 31, 2016. The Company has evaluated subsequent events from the date of the consolidated balance sheet through the date the consolidated financial statements were issued. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | B ASIS OF P RESENTATION The accompanying consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to the Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures, normally included in annual consolidated financial statements have been condensed or omitted pursuant to those rules and regulations; however, in the opinion of management the financial information reflects all adjustments, consisting of adjustments of a normal recurring nature, necessary for fair presentation. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the fiscal year ended June 30, 2016 which are contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on August 16, 2016. The results for the three months ended September 30, 2016 are not necessarily indicative of the results to be expected for the full fiscal year. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation |
Business Combinations | B USINESS C OMBINATIONS The Company utilizes the acquisition method of accounting under FASB ASC 805, Business Combinations , (“FASB ASC 805”), for all transactions and events which it obtains control over one or more other businesses, to recognize the fair value of all assets and liabilities acquired, even if less than one hundred percent ownership is acquired, and in establishing the acquisition date fair value as the measurement date for all assets and liabilities assumed. The Company also utilizes FASB ASC 805 for the initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in business combinations. |
Use of Estimates | U SE OF E STIMATES The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Reclassification | R ECLASSIFICATION The Company has restated the income tax provision amount for the three months ended September 30, 2015 for the adoption of FASB Accounting Standards Update ("ASU") 2016-09, Improvements to Employee Share-Based Payment Accounting . The Company’s Consolidated Statements of Operations and Comprehensive Income and Consolidated Statements of Cash Flows have been updated to reflect this change. The Company included costs related to the sustainment of its product portfolio as research and development expense, which was previously included as costs of revenue on the Consolidated Statements of Operations and Comprehensive Income. |
Revenue Recognition | R EVENUE R ECOGNITION The Company relies upon FASB ASC 605, Revenue Recognition, to account for its revenue transactions. Revenue is recognized upon shipment provided that title and risk of loss have passed to the customer, there is persuasive evidence of an arrangement, the sales price is fixed or determinable, collection of the related receivable is reasonably assured, and customer acceptance criteria, if any, have been successfully demonstrated. Out-of-pocket expenses that are reimbursable by the customer are included in revenue and cost of revenue. Certain contracts with customers require the Company to perform tests of its products prior to shipment to ensure their performance complies with the Company’s published product specifications and, on occasion, with additional customer-requested specifications. In these cases, the Company conducts such tests and, if they are completed successfully, includes a written confirmation with each order shipped. As a result, at the time of each product shipment, the Company believes that no further customer testing requirements exist and that there is no uncertainty of acceptance by its customer. The Company uses FASB ASU No. 2009-13 (“FASB ASU 2009-13”), Multiple-Deliverable Revenue Arrangements . FASB ASU 2009-13 establishes a selling price hierarchy for determining the selling price of a deliverable, which includes: (1) vendor-specific objective evidence (“VSOE”) if available; (2) third-party evidence (“TPE”) if VSOE is not available; and (3) best estimated selling price (“BESP”), if neither VSOE nor TPE is available. Additionally, FASB ASU 2009-13 expands the disclosure requirements related to a vendor’s multiple-deliverable revenue arrangements. The Company enters into multiple-deliverable arrangements that may include a combination of hardware components, related integration or other services. These arrangements generally do not include any performance-, cancellation-, termination- or refund-type provisions. Total revenue recognized under multiple-deliverable revenue arrangements was 35% and 48% of total revenues in the three months ended September 30, 2016 , and 2015, respectively. In accordance with the provisions of FASB ASU 2009-13, the Company allocates arrangement consideration to each deliverable in an arrangement based on its relative selling price. The Company generally expects that it will not be able to establish VSOE or TPE due to limited single element transactions and the nature of the markets in which the Company competes, and, as such, the Company typically determines its relative selling price using BESP. The objective of BESP is to determine the price at which the Company would transact if the product or service were sold by the Company on a standalone basis. The Company's determination of BESP involves the consideration of several factors based on the specific facts and circumstances of each arrangement. Specifically, the Company considers the cost to produce the deliverable, the anticipated margin on that deliverable, the selling price and profit margin for similar parts, the Company’s ongoing pricing strategy and policies (as evident from the price list established and updated by management on a regular basis), the value of any enhancements that have been built into the deliverable and the characteristics of the varying markets in which the deliverable is sold. The Company analyzes the selling prices used in its allocation of arrangement consideration at a minimum on an annual basis. Selling prices will be analyzed on a more frequent basis if a significant change in the Company’s business necessitates a more timely analysis or if the Company experiences significant variances in its selling prices. Each deliverable within the Company’s multiple-deliverable revenue arrangements is accounted for as a separate unit of accounting under the guidance of FASB ASU 2009-13 if both of the following criteria are met: the delivered item or items have value to the customer on a standalone basis; and for an arrangement that includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company. The Company's revenue arrangements generally do not include a general right of return relative to delivered products. The Company considers a deliverable to have standalone value if the item is sold separately by the Company or another vendor or if the item could be resold by the customer. Deliverables not meeting the criteria for being a separate unit of accounting are combined with a deliverable that does meet that criterion. The appropriate allocation of arrangement consideration and recognition of revenue is then determined for the combined unit of accounting. The Company also engages in long-term contracts for development, production and services activities which it accounts for consistent with FASB ASC 605-35, Accounting for Performance of Construction-Type and Certain Production-Type Contracts , and other relevant revenue recognition accounting literature. The Company considers the nature of these contracts and the types of products and services provided when determining the proper accounting for a particular contract. Generally for fixed-price contracts, other than service-type contracts, revenue is recognized primarily under the percentage of completion method or, for certain short-term contracts, by the completed contract method. Revenue from service-type fixed-price contracts is recognized ratably over the contract period or by other appropriate input or output methods to measure service provided, and contract costs are expensed as incurred. The Company establishes billing terms at the time project deliverables and milestones are agreed. The risk to the Company on a fixed-price contract is that if estimates to complete the contract change from one period to the next, profit levels will vary from period to period. For time and materials contracts, revenue reflects the number of direct labor hours expended in the performance of a contract multiplied by the contract billing rate, as well as reimbursement of other billable direct costs. For all types of contracts, the Company recognizes anticipated contract losses as soon as they become known and estimable. The Company also considers whether contracts should be combined or segmented in accordance with the applicable criteria under GAAP. The Company combines closely related contracts when all the applicable criteria under GAAP are met. The combination of two or more contracts requires judgment in determining whether the intent of entering into the contracts was effectively to enter into a single project, which should be combined to reflect an overall profit rate. Similarly, the Company may separate a project, which may consist of a single contract or group of contracts, with varying rates of profitability, only if the applicable criteria under GAAP are met. Judgment also is involved in determining whether a single contract or group of contracts may be segmented based on how the arrangement was negotiated and the performance criteria. The decision to combine a group of contracts or segment a contract could change the amount of revenue and gross profit recorded in a given period. The use of contract accounting requires significant judgment relative to estimating total contract revenues and costs, including assumptions relative to the length of time to complete the contract, the nature and complexity of the work to be performed, anticipated increases in wages and prices for subcontractor services and materials, and the availability of subcontractor services and materials. The Company’s estimates are based upon the professional knowledge and experience of its engineers, program managers and other personnel, who review each long-term contract monthly to assess the contract’s schedule, performance, technical matters and estimated cost at completion. Changes in estimates are applied retrospectively and when adjustments in estimated contract costs are identified, such revisions may result in current period adjustments to earnings applicable to performance in prior periods. Contract costs also may include estimated contract recoveries for matters such as contract changes and claims for unanticipated contract costs. The Company records revenue associated with these matters only when the amount of recovery can be estimated reliably and realization is probable. The Company defines service revenues as revenue from activities that are not associated with the design, development, production, or delivery of tangible assets, software or specific capabilities sold. Examples of the Company's service revenues include: analyst services and systems engineering support, consulting, maintenance and other support, testing and installation. The Company combines its product and service revenues into a single class as service revenues are less than 10 percent of total revenues. The Company does not provide its customers with rights of product return, other than those related to warranty provisions that permit repair or replacement of defective goods. The Company accrues for anticipated warranty costs upon product shipment. Revenues from product royalties are recognized upon invoice by the Company. Additionally, all revenues are reported net of government assessed taxes (e.g., sales taxes or value-added taxes). |
Weighted-Average Shares | W EIGHTED -A VERAGE S HARES Weighted-average shares were calculated as follows: Three Months Ended September 30, 2016 2015 Basic weighted-average shares outstanding 38,865 32,778 Effect of dilutive equity instruments 1,000 838 Diluted weighted-average shares outstanding 39,865 33,616 Equity instruments to purchase 22 and 356 shares of common stock were not included in the calculation of diluted net earnings per share for the three months ended September 30, 2016 , and 2015, respectively, because the equity instruments were anti-dilutive. September 30, 2016 basic shares outstanding include the impact of 5,175 shares from the underwritten common stock public offering on April 4, 2016. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basic and Diluted Weighted Average Shares Outstanding | W EIGHTED -A VERAGE S HARES Weighted-average shares were calculated as follows: Three Months Ended September 30, 2016 2015 Basic weighted-average shares outstanding 38,865 32,778 Effect of dilutive equity instruments 1,000 838 Diluted weighted-average shares outstanding 39,865 33,616 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Schedule of the Net Purchase Price and Fair Values of Assets and Liabilities Acquired | The following table presents the net purchase price and the preliminary fair values of the assets and liabilities of the Carve-Out Business: Amounts Consideration transferred Cash paid at closing $ 300,000 Value allocated to replacement awards 407 Net purchase price $ 300,407 Estimated fair value of tangible assets acquired and liabilities assumed Accounts receivable and cost in excess of billings $ 17,023 Inventory 25,477 Fixed assets 13,996 Other current and non-current assets 524 Current liabilities (4,677 ) Non-current deferred tax liabilities (25,477 ) Estimated fair value of net tangible assets acquired 26,866 Estimated fair value of identifiable intangible assets 102,800 Estimated goodwill 170,741 Estimated fair value of assets acquired $ 300,407 Net purchase price $ 300,407 |
Business Acquisition, Pro Forma Information | The following tables summarize the supplemental statements of operations information on an unaudited pro forma basis as if the Carve-Out Business acquisition had occurred on July 1, 2015: Three Months ended September 30, 2015 Pro forma net revenues $ 83,103 Pro forma net income $ 2,039 Basic pro forma net earnings per share $ 0.05 Diluted pro forma net earnings per share $ 0.05 |
Fair Value of Financial Instr22
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets Measured at Fair Value | The following table summarizes the Company’s financial assets measured at fair value on a recurring basis at September 30, 2016 : Fair Value Measurements September 30, 2016 Level 1 Level 2 Level 3 Assets: Certificates of deposit $ 30,104 $ — $ 30,104 $ — Total $ 30,104 $ — $ 30,104 $ — |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory was comprised of the following: September 30, 2016 June 30, 2016 Raw materials $ 33,603 $ 31,205 Work in process 15,401 15,967 Finished goods 9,439 11,112 Total $ 58,443 $ 58,284 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Amount of Goodwill | The following table sets forth the changes in the carrying amount of goodwill by reporting unit for the three months ended September 30, 2016 : MCE MDS Carve-out Business Total Balance at June 30, 2016 $ 134,378 $ 39,406 $ 170,243 $ 344,027 Goodwill adjustment for the Carve-Out Business acquisition — — 498 498 Balance at September 30, 2016 $ 134,378 $ 39,406 $ 170,741 $ 344,525 |
Restructuring Plan (Tables)
Restructuring Plan (Tables) | 3 Months Ended |
Sep. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Expenses by Reportable Segment for Restructuring Plans | The following table presents the detail of activity for the Company’s restructuring plans: Severance & Facilities Total Restructuring liability at June 30, 2016 $ 190 $ 736 $ 926 Restructuring and other charges 214 83 297 Cash paid (63 ) (272 ) (335 ) Restructuring liability at September 30, 2016 $ 341 $ 547 $ 888 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock Option Plans | The following table summarizes activity of the Company’s stock option plans since June 30, 2016 : Options Outstanding Number of Weighted Average Weighted Average Outstanding at June 30, 2016 258 $ 13.34 1.06 Granted — — Exercised (6 ) 13.07 Cancelled — — Outstanding at September 30, 2016 252 $ 13.35 0.81 |
Summary of Nonvested Restricted Stock | The following table summarizes the status of the Company’s non-vested restricted stock awards since June 30, 2016 : Non-vested Restricted Stock Awards Number of Weighted Average Outstanding at June 30, 2016 1,666 $ 13.09 Granted 633 23.69 Vested (633 ) 10.89 Forfeited (18 ) 16.66 Outstanding at September 30, 2016 1,648 $ 17.97 |
Stock Based Compensation Expenses | The following table presents share-based compensation expenses from continuing operations included in the Company’s consolidated statements of operations: Three Months Ended September 30, 2016 2015 Cost of revenues $ 75 $ 149 Selling, general and administrative 3,039 2,128 Research and development 518 425 Share-based compensation expense before tax 3,632 2,702 Income taxes (1,389 ) (1,041 ) Share-based compensation expense, net of income taxes $ 2,243 $ 1,661 |
Operating Segment, Geographic27
Operating Segment, Geographic Information and Significant Customers (Tables) | 3 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Geographic Distribution of Revenues and Long Lived Assets from Continuing Operations | The geographic distribution of the Company’s revenues is summarized as follows: US Europe Asia Pacific Eliminations Total T HREE M ONTHS E NDED SEPTEMBER 30, 2016 Net revenues to unaffiliated customers $ 83,048 $ 854 $ 3,747 $ — $ 87,649 Inter-geographic revenues 3,286 15 — (3,301 ) — Net revenues $ 86,334 $ 869 $ 3,747 $ (3,301 ) $ 87,649 T HREE M ONTHS E NDED SEPTEMBER 30, 2015 Net revenues to unaffiliated customers $ 57,362 $ 458 $ 589 $ — $ 58,409 Inter-geographic revenues 1,254 31 — (1,285 ) — Net revenues $ 58,616 $ 489 $ 589 $ (1,285 ) $ 58,409 Foreign revenue is based on the country in which the Company’s legal subsidiary is domiciled. The geographic distribution of the Company’s long-lived assets is summarized as follows: US Europe Asia Pacific Eliminations Total September 30, 2016 $ 31,226 $ 129 $ 21 $ — $ 31,376 June 30, 2016 $ 28,187 $ 127 $ 23 $ — $ 28,337 |
Customers Comprising Ten Percent or More Revenues | Customers comprising 10% or more of the Company’s revenues for the periods shown below are as follows: Three Months Ended September 30, 2016 2015 Lockheed Martin Corporation 25 % 16 % Raytheon Company 15 % 38 % 40 % 54 % |
Schedules of Concentration of Risk, by Risk Factor | Programs comprising 10% or more of the Company’s revenues for the periods shown below are as follows: Three Months Ended 2016 2015 Aegis 14 % * Patriot * 17 % 14 % 17 % * Indicates that the amount is less than 10% of the Company’s revenues for the respective period. |
Description of Business (Detail
Description of Business (Details) | 3 Months Ended |
Sep. 30, 2016programcontractor | |
Accounting Policies [Abstract] | |
Number of programs using products and services | program | 300 |
Number of contractors using products and services | contractor | 25 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Reclassification) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Research and development | $ 12,838 | $ 8,866 |
Cost of revenues | $ 48,205 | 30,107 |
Restatement Adjustment | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Research and development | 773 | |
Cost of revenues | $ (773) |
Summary of Significant Accoun30
Summary of Significant Accounting Policies - Additional Information (Detail) - shares | Apr. 13, 2016 | Sep. 30, 2016 | Sep. 30, 2015 |
Significant Accounting Policies [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 22,000 | 356,000 | |
Multiple Delivery Revenue [Member] | |||
Significant Accounting Policies [Line Items] | |||
Percentage Of Revenue Recognized | 35.00% | 48.00% | |
Over-Allotment Option [Member] | |||
Significant Accounting Policies [Line Items] | |||
Sale of Stock, Number of Shares Issued in Transaction | 5,175,000 |
Basic and Diluted Weighted Aver
Basic and Diluted Weighted Average Shares Outstanding (Detail) - shares shares in Thousands | 3 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Earnings Per Share [Abstract] | ||
Basic weighted-average shares outstanding | 38,865 | 32,778 |
Effect of dilutive equity instruments | 1,000 | 838 |
Diluted weighted-average shares outstanding | 39,865 | 33,616 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 22 | 356 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | May 02, 2016 | Apr. 13, 2016 | Dec. 16, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2016 |
Business Acquisition [Line Items] | ||||||
Estimated fair value of goodwill | $ 344,525 | $ 344,027 | ||||
Carve-out Business | ||||||
Business Acquisition [Line Items] | ||||||
Cash paid at closing | $ 300,000 | |||||
Estimated fair value of goodwill | 170,741 | |||||
Business Acquisition, Goodwill, Expected Tax Deductible Amount | 29,266 | |||||
Revenue of acquiree since acquisition date | 24,311 | |||||
Net loss of acquiree since acquisition date | $ (2,419) | |||||
Business Acquisition, Pro Forma Revenue | $ 83,103 | |||||
Business Acquisition, Pro Forma Net Income (Loss) | $ 2,039 | |||||
Business Acquisition, Pro Forma Earnings Per Share, Basic | $ 0.05 | |||||
Business Acquisition, Pro Forma Earnings Per Share, Diluted | $ 0.05 | |||||
Lewis Innovative Technologies, Inc. (LIT) [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Net purchase price | $ 9,756 | |||||
Escrow deposit | $ 1,000 | |||||
Developed Technology Rights [Member] | Carve-out Business | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived Intangible Assets Acquired | 29,700 | |||||
Customer Relationships [Member] | Carve-out Business | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived Intangible Assets Acquired | 70,900 | |||||
Backlog [Member] | Carve-out Business | ||||||
Business Acquisition [Line Items] | ||||||
Finite-lived Intangible Assets Acquired | $ 2,200 | |||||
Over-Allotment Option [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Sale of Stock, Consideration Received on Transaction | $ 92,788 |
Acquisitions - Net Purchase Pri
Acquisitions - Net Purchase Price and Fair Values of Assets and Liabilities Acquired (Details) - USD ($) $ in Thousands | May 02, 2016 | Dec. 16, 2015 | Sep. 30, 2016 | Jun. 30, 2016 |
Estimated fair value of tangible assets acquired and liabilities assumed | ||||
Estimated fair value of goodwill | $ 344,525 | $ 344,027 | ||
Carve-out Business | ||||
Consideration transferred | ||||
Cash paid at closing | $ 300,000 | |||
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable | 407 | |||
Estimated fair value of tangible assets acquired and liabilities assumed | ||||
Accounts receivable and cost in excess of billings | 17,023 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory | 25,477 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment | 13,996 | |||
Business Combination, Recognized Identifiable Assets Acquired And Liabilities Assumed, Other Assets, Current And Noncurrent | 524 | |||
Current liabilities | (4,677) | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities Noncurrent | (25,477) | |||
Business Combination, Recognized Identifiable Assets Acquired And Liabilities Assumed, Tangible Assets | 26,866 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 102,800 | |||
Estimated fair value of goodwill | 170,741 | |||
Estimated fair value of assets acquired | 300,407 | |||
Business Combination, Consideration Transferred | $ 300,407 | |||
Lewis Innovative Technologies, Inc. (LIT) [Member] | ||||
Consideration transferred | ||||
Net purchase price | $ 9,756 |
Fair Value of Financial Instr34
Fair Value of Financial Instruments - Summary of Financial Assets Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] $ in Thousands | Sep. 30, 2016USD ($) |
Level 1 | |
Assets: | |
Fair value measurement disclosure | $ 0 |
Level 2 | |
Assets: | |
Fair value measurement disclosure | 30,104 |
Level 3 | |
Assets: | |
Fair value measurement disclosure | 0 |
Certificates of Deposit [Member] | Level 1 | |
Assets: | |
Fair value measurement disclosure | 0 |
Certificates of Deposit [Member] | Level 2 | |
Assets: | |
Fair value measurement disclosure | 30,104 |
Certificates of Deposit [Member] | Level 3 | |
Assets: | |
Fair value measurement disclosure | 0 |
Fair Value | |
Assets: | |
Fair value measurement disclosure | 30,104 |
Fair Value | Certificates of Deposit [Member] | |
Assets: | |
Fair value measurement disclosure | $ 30,104 |
Inventory (Detail)
Inventory (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | Jun. 30, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 33,603 | $ 31,205 |
Work in process | 15,401 | 15,967 |
Finished goods | 9,439 | 11,112 |
Total | $ 58,443 | $ 58,284 |
Inventory - Additional Informat
Inventory - Additional Information (Detail) | 3 Months Ended |
Sep. 30, 2016USD ($) | |
Schedule of Inventory [Line Items] | |
Production Cycle Term | Longer than one year |
Product | |
Schedule of Inventory [Line Items] | |
Inventory relating to contracts having production cycles longer than one year | $ 0 |
Changes in Carrying Amount of G
Changes in Carrying Amount of Goodwill (Detail) $ in Thousands | 3 Months Ended |
Sep. 30, 2016USD ($) | |
Goodwill [Roll Forward] | |
Beginning Balance | $ 344,027 |
Goodwill, Other Changes | 498 |
Ending Balance | 344,525 |
MCE | |
Goodwill [Roll Forward] | |
Beginning Balance | 134,378 |
Ending Balance | 134,378 |
MDS | |
Goodwill [Roll Forward] | |
Beginning Balance | 39,406 |
Ending Balance | 39,406 |
Carve-out Business | |
Goodwill [Roll Forward] | |
Beginning Balance | 170,243 |
Goodwill, Other Changes | 498 |
Ending Balance | $ 170,741 |
Restructuring Plan - Additional
Restructuring Plan - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Other Income and Expenses [Abstract] | ||
Restructuring expenses | $ 297 | $ 338 |
Expenses by Reportable Segment
Expenses by Reportable Segment for Restructuring Plans (Detail) $ in Thousands | 3 Months Ended |
Sep. 30, 2016USD ($) | |
Restructuring Reserve [Roll Forward] | |
Restructuring liability at beginning of period | $ 926 |
Restructuring, Settlement and Impairment Provisions | 297 |
Cash paid | (335) |
Restructuring liability at end of period | 888 |
Severance & Related [Member] | |
Restructuring Reserve [Roll Forward] | |
Restructuring liability at beginning of period | 190 |
Restructuring, Settlement and Impairment Provisions | 214 |
Cash paid | (63) |
Restructuring liability at end of period | 341 |
Facility & Other [Member] | |
Restructuring Reserve [Roll Forward] | |
Restructuring liability at beginning of period | 736 |
Restructuring, Settlement and Impairment Provisions | 83 |
Cash paid | (272) |
Restructuring liability at end of period | $ 547 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | ||
Income tax (benefit) expense | $ (1,259) | $ 368 |
(Loss) income from operations before income taxes | 2,560 | $ 3,224 |
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit | $ 757 |
Commitments And Contingencies -
Commitments And Contingencies - Additional Information (Detail) $ in Thousands | Sep. 30, 2016USD ($) |
Non-cancelable purchase commitments | |
Long-term Purchase Commitment [Line Items] | |
Purchase commitments for less than one year | $ 39,344 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 30, 2016 | May 02, 2016 |
Debt Instrument [Line Items] | ||
Long-term Debt | $ 197,500 | |
Amount of outstanding letter of credit | 1,938 | |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 100,000 | |
Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Debt Issuance Costs, Gross | $ 7,254 | |
Debt Instrument, Interest Rate, Stated Percentage | 2.80% | |
Secured Debt [Member] | Term Loan A [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 200,000 |
Stock Based Compensation - Addi
Stock Based Compensation - Additional Information (Detail) shares in Thousands, $ in Thousands | 3 Months Ended |
Sep. 30, 2016USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs, Capitalized Amount | $ | $ 177 |
Employee Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares authorized for issuance under stock incentive plan | 1,800 |
Shares available for future grant | 398 |
Purchase price as a percentage of the lesser of the market value of such shares at either the beginning or the end of each nine-month offering period | 85.00% |
Percentage of employee compensation that may be uses to purchase common stock through payroll deductions, maximum | 10.00% |
2005 Stock Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares authorized for issuance under stock incentive plan | 15,252 |
Exercise price of stock option, percentage | 100.00% |
Shares available for future grant | 1,580 |
2005 Stock Incentive Plan | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Term of stock option | 7 years |
Summary of Stock Option Plans (
Summary of Stock Option Plans (Detail) - Stock Options - $ / shares shares in Thousands | 3 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Jun. 30, 2016 | |
Number of Shares | ||
Outstanding at beginning of period | 258 | |
Granted | 0 | |
Exercised | (6) | |
Cancelled | 0 | |
Outstanding at end of period | 252 | 258 |
Weighted Average Exercise Price | ||
Outstanding at beginning of period | $ 13.34 | |
Granted | 0 | |
Exercised | 13.07 | |
Cancelled | 0 | |
Outstanding at end of period | $ 13.35 | $ 13.34 |
Weighted Average Remaining Contractual Term (Years) | ||
Outstanding at end of period | 9 months 22 days | 1 year 22 days |
Summary of Nonvested Restricted
Summary of Nonvested Restricted Stock (Detail) - Restricted Stock shares in Thousands | 3 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Number of Shares | |
Beginning Balance | shares | 1,666 |
Granted | shares | 633 |
Vested | shares | (633) |
Forfeited | shares | (18) |
Ending Balance | shares | 1,648 |
Weighted Average Grant Date Fair Value | |
Beginning Balance | $ / shares | $ 13.09 |
Granted | $ / shares | 23.69 |
Vested | $ / shares | 10.89 |
Forfeited | $ / shares | 16.66 |
Ending Balance | $ / shares | $ 17.97 |
Stock Based Compensation Expens
Stock Based Compensation Expenses (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense before tax | $ 3,632 | $ 2,702 |
Income taxes | (1,389) | (1,041) |
Net compensation expense | 2,243 | 1,661 |
Cost of revenues | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense before tax | 75 | 149 |
Selling, general and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense before tax | 3,039 | 2,128 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense before tax | $ 518 | $ 425 |
Operating Segment, Geographic47
Operating Segment, Geographic Information and Significant Customers - Geographic Distribution of Revenues and Long Lived Assets from Continuing Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2016 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Net revenues | $ 87,649 | $ 58,409 | |
Identifiable long-lived assets | 31,376 | $ 28,337 | |
US | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Net revenues | 83,048 | 57,362 | |
Europe | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Net revenues | 854 | 458 | |
Asia Pacific | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Net revenues | 3,747 | 589 | |
Reportable Geographical Components [Member] | US | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Net revenues | 86,334 | 58,616 | |
Identifiable long-lived assets | 31,226 | 28,187 | |
Reportable Geographical Components [Member] | Europe | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Net revenues | 869 | 489 | |
Identifiable long-lived assets | 129 | 127 | |
Reportable Geographical Components [Member] | Asia Pacific | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Net revenues | 3,747 | 589 | |
Identifiable long-lived assets | 21 | 23 | |
Geography Eliminations [Member] | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Net revenues | (3,301) | (1,285) | |
Identifiable long-lived assets | 0 | $ 0 | |
Geography Eliminations [Member] | US | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Net revenues | (3,286) | (1,254) | |
Geography Eliminations [Member] | Europe | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Net revenues | (15) | (31) | |
Geography Eliminations [Member] | Asia Pacific | |||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||
Net revenues | $ 0 | $ 0 |
Operating Segment, Geographic48
Operating Segment, Geographic Information and Significant Customers - Customers Comprising Ten Percent or more Revenues (Detail) - Sales Revenue, Net [Member] | 3 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 14.00% | 17.00% |
Customer Concentration Risk [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 40.00% | 54.00% |
Customer Concentration Risk [Member] | Raytheon Company [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 15.00% | 38.00% |
Customer Concentration Risk [Member] | Lockheed Martin Corporation [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 25.00% | 16.00% |
Operating Segment, Geographic49
Operating Segment, Geographic Information and Significant Customers - Programs Comprising Ten Percent or more of Company's Revenue (Detail) - Sales Revenue, Net [Member] | 3 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015Rate | |
Segment Reporting Information [Line Items] | ||
Concentration risk, percentage | 14.00% | 17.00% |
Aegis Program [Member] | Program Concentration Risk [Member] | ||
Segment Reporting Information [Line Items] | ||
Concentration risk, percentage | 14.00% | |
Patriot Program [Member] | Program Concentration Risk [Member] | ||
Segment Reporting Information [Line Items] | ||
Concentration risk, percentage | 17.00% |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) $ in Thousands | 3 Months Ended |
Dec. 31, 2016USD ($) | |
Scenario, Forecast | |
Subsequent Event [Line Items] | |
Payments to acquire business | $ 38,000 |