Balance Sheet Components | Balance Sheet Components The following tables provide details of the selected balance sheet items (in thousands): Inventories: September 30, 2020 June 30, 2020 Finished goods $ 553,950 $ 656,817 Work in process 68,322 38,146 Purchased parts and raw materials 151,584 156,535 Total inventories $ 773,856 $ 851,498 The Company recorded a (recovery) provision for excess and obsolete inventory to cost of sales totaling $(0.8) million and $10.1 million in the three months ended September 30, 2020 and 2019, respectively. These amounts exclude a provision (recovery) for adjusting the cost of certain inventories to net realizable value of $0.9 million and $(1.8) million for the three months ended September 30, 2020 and 2019, respectively. The recovery is recognized when previously reserved inventories are sold. Prepaid Expenses and Other Current Assets: September 30, 2020 June 30, 2020 Other receivables (1) $ 40,417 $ 94,859 Prepaid income tax 13,846 14,323 Prepaid expenses 5,832 7,075 Deferred service costs 4,431 4,161 Restricted cash 250 250 Others 17,955 6,317 Total prepaid expenses and other current assets $ 82,731 $ 126,985 __________________________ (1) Includes other receivables from contract manufacturers based on certain buy-sell arrangements of $33.6 million and $83.8 million as of September 30, 2020 and June 30, 2020, respectively. Cash, cash equivalents and restricted cash: September 30, 2020 June 30, 2020 Cash and cash equivalents $ 300,089 $ 210,533 Restricted cash included in prepaid expenses and other current assets 250 250 Restricted cash included in other assets 1,613 1,607 Total cash, cash equivalents and restricted cash $ 301,952 $ 212,390 Property, Plant, and Equipment: September 30, 2020 June 30, 2020 Buildings $ 86,930 $ 86,930 Land 75,264 75,251 Machinery and equipment 87,876 85,381 Buildings construction in progress (1) 54,555 46,311 Building and leasehold improvements 24,886 24,517 Software 22,616 20,597 Furniture and fixtures 21,769 21,544 373,896 360,531 Accumulated depreciation and amortization (132,044) (126,746) Property, plant and equipment, net $ 241,852 $ 233,785 __________________________ (1) Primarily relates to the development and construction costs associated with the Company’s Green Computing Park located in San Jose, California, and new building in Taiwan. Other Assets: September 30, 2020 June 30, 2020 Operating lease right-of-use asset $ 24,075 $ 23,784 Deferred service costs, non-current 4,828 4,632 Restricted cash, non-current 1,613 1,607 Investment in auction rate security 1,571 1,571 Deposits 1,252 1,201 Non-marketable equity securities 128 128 Prepaid expense, non-current 1,706 1,576 Total other assets $ 35,173 $ 34,499 Accrued Liabilities: September 30, 2020 June 30, 2020 Accrued payroll and related expenses $ 34,059 $ 33,577 Contract manufacturing liabilities 20,366 36,249 Accrued warranty costs 11,057 9,984 Customer deposits 10,306 9,942 Operating lease liability 7,027 6,310 Accrued cooperative marketing expenses 5,818 5,925 Accrued professional fees 2,630 5,661 Accrued legal liabilities (Note 11) — 18,114 Others (accrued liabilities) 30,447 29,639 Total accrued liabilities $ 121,710 $ 155,401 Performance Awards Liability In March 2020, the Board of Directors (the “Board”) approved performance bonuses for the Chief Executive Officer, a senior executive and two members of the Board, which payments will be earned when specified market and performance conditions are achieved. The Chief Executive Officer’s aggregate cash bonuses of up to $8.1 million are earned in two tranches. The first 50% is payable if the average closing price for the Company’s common stock equals or exceeds $31.61 for any period of 20 consecutive trading days following the date of the agreement and ending prior to September 30, 2021 and the Chief Executive Officer remains employed with the Company through the date that such common stock price goal is determined to have been achieved and the date that the payment is made. This payment can be reduced at the discretion of the Board to the extent the Company has not made adequate progress in remediating its material weaknesses in its internal control over financial reporting as determined by the Board. The second 50% is payable if the average closing price for the Company’s common stock equals or exceeds $32.99 for any period of 20 consecutive trading days following the date of the agreement and ending prior to June 30, 2022 and the Chief Executive Officer remains employed with the Company through the date that such common stock price goal is achieved and the date that the payment is made. Performance bonuses for a senior executive and two members of the Board are earned based on achieving a specified target average closing price for the Company’s common stock over the specified period as determined by the Board at the grant dates and continuous services through the payment dates. A senior executive earned an aggregate cash payment of $0.1 million when the target average closing price was met in the fourth quarter of fiscal year 2020. The two members of the Board can earn aggregate cash payments of $0.3 million in two tranches if the target average closing price reaches $31.61 for the first tranche and $32.99 per share for the second tranche. These awards expire in two equal amounts at September 30, 2021 and June 30, 2022 for the two Board members' awards. The Company accounts for the outstanding performance bonuses as liabilities and estimates fair value of payable amounts using a Monte-Carlo simulation model. The awards are re-measured at each period end with changes in fair value recorded in the Company’s consolidated statement of operations in operating expenses. The cumulative recorded expense at each period end is trued-up to the expected payable amount vested through the period end. The requisite service periods over which expenses are recognized are derived from the Monte-Carlo model for all performance awards, except for the first 50% of the Chief Executive Officer’s award that includes a performance condition. The Company estimates if it is probable that the performance condition will be met through the expiration date of this award. If at the measurement date it is determined to be probable, the Company estimates the requisite period as the longer of the service period derived by the Monte-Carlo model and the implicit service period when the Company expects to make adequate progress in remediating its material weaknesses in its internal control over financial reporting, as reported by the Company's Audit Committee. If it is determined to not be probable, then the Company will reverse any previously recognized expense for this award in the period when it is no longer probable that the performance condition will be achieved. As of September 30, 2020 and June 30, 2020, the fair value of these performance bonuses was $2.2 million and $2.1 million, respectively, of which $2.2 million and $1.5 million, respectively, was recorded within accrued liabilities and $0.0 million and $0.6 million, respectively, was recorded within other long-term liabilities on the Company's consolidated balance sheet. An unrecognized compensation expense of $2.3 million will be recorded over the remaining service periods from 0.26 years to 0.93 years. The fair value of these awards is remeasured each reporting period. The expense recognized during the three months ended September 30, 2020 and September 30, 2019 was $0.1 million and $0.0 million respectively. Other Long-term Liabilities: September 30, 2020 June 30, 2020 Operating lease liability, non-current $ 17,892 $ 18,102 Accrued unrecognized tax benefits including related interest and penalties 16,067 15,496 Accrued warranty costs, non-current 2,670 2,395 Others 8,078 6,002 Total other long-term liabilities $ 44,707 $ 41,995 Product Warranties: Three Months Ended 2020 2019 Balance, beginning of the period $ 12,379 $ 11,034 Provision for warranty 8,347 5,872 Costs utilized (7,607) (7,662) Change in estimated liability for pre-existing warranties 608 2,041 Balance, end of the period 13,727 11,285 Current portion 11,057 8,655 Non-current portion $ 2,670 $ 2,630 |